2017 annual report - ctci corporation report_2017.pdf2017 annual report printed on march 31, 2018...

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2017 Annual Report

Printed on March 31, 2018

中鼎工程股份有限公司CTCI Corporation

Notice to readers This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail. Spokesperson Name: Ming-Cheng Hsiao Title: Executive Vice President Tel: 886-2-2833-9999 ext. 10099 E-mail: [email protected] Deputy Spokesperson Name: Patrick Lin Title: Chief Financial Officer Tel: 886-2-2833-9999 ext. 16011 E-mail: [email protected] Headquarters and Branches Headquarters Address: 89, Sec. 6, Zhongshan North Rd., Taipei, Taiwan Tel: 886-2- 2833-9999 Branch CTCI CORPORATION ABU DHABI BRANCH Address: Shaikh Sultan Bin Srour Al Dhaheri Building, Al Salam Street, Abu Dhabi Tel: 971-26711572 CTCI CORPORATION ITALY BRANCH Address: Via G. Carducci, 1221013 Gallarate(VA), Italy Tel: 39- 0331 771026 CTCI CORPORATION QATAR BRANCH Address: Office No.6, 1st Floor, Al-Emadi Business Centre, C-Ring Road, Doha City, State of Qatar P.O Box: 30261 Tel: (+974) 4451-7383 CTCI CORPORATION JAPAN BRANCH Address: NO.806, Ark Hills Front Tower RoP, 2-23-1 Akasaka, Minato-ku, Tokyo, Japan Stock Transfer Agent KGI Securities Co. Ltd. Address: 5th Fl., No.2, Sec. 1, Chung Ching South Rd., Taipei, Taiwan Website: http://www.kgieworld.com.tw Tel: 886-2-2389-2999 Auditors PriceWaterHouseCoopers Auditors: Shu-Chiung Chang, Shih-Jung Weng Address: 27th Fl., No.333, Sec. 1, Keelung Rd., Taipei, Taiwan Website: http://www.pwc.tw Tel.: 886-2-2729-6666 Overseas Trade Places for Listed Negotiable Securities None. Corporate Website http://www.ctci.com

Contents I. Letter to Shareholders ........................................................................................................ 1 II. Company Profile 2.1 Date of Incorporation .................................................................................................................. 5 2.2 Company History .......................................................................................................................... 5 III. Corporate Governance Report 3.1 Organization ................................................................................................................................. 6 3.2 Directors and Management Team ............................................................................................. 10 3.3 Remuneration of Directors and Management Team ................................................................. 24 3.4 Implementation of Corporate Governance ............................................................................... 30 3.5 Information on CPA’s Fees ......................................................................................................... 90 3.6 Alternation of CPA ...................................................................................................................... 90 3.7 The Company's Chairman, President and any Managerial Officer in charge of Finance or Accounting matters has held a position within CTCI’s CPA firm or its affiliated enterprise in the most recent year. ............................................................................................................. 90 3.8 Changes in Shareholding of Directors, Managers and Major Shareholders .............................. 91 3.9 Relationship among the Top Ten Shareholders ......................................................................... 94 3.10 Ownership of Shares in Affiliated Enterprises ........................................................................... 95 IV. Capital Overview 4.1 Capital and Shares ...................................................................................................................... 96 4.2 Corporate Bonds ...................................................................................................................... 100 4.3 Preferred Shares ...................................................................................................................... 100 4.4 Global Depository Receipts ...................................................................................................... 100 4.5 Employee Stock Options .......................................................................................................... 101 4.6 Employee Restricted Stock ...................................................................................................... 103 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions ....................... 103 4.8 Financing Plans and Implementation ....................................................................................... 103 V. Operational Highlights 5.1 Business Activities .................................................................................................................... 104 5.2 Market and Sales Overview ..................................................................................................... 111 5.3 Human Resources .................................................................................................................... 116 5.4 Environmental Protection Expenditure ................................................................................... 119 5.5 Labor Relations......................................................................................................................... 119 5.6 Important Contracts ................................................................................................................. 127 VI. Financial Information 6.1 Five-Year Financial Summary ................................................................................................... 130 6.2 Five-Year Financial Analysis ..................................................................................................... 134 6.3 Audit Committee’s Review Report in the Most Recent Year ................................................... 137 6.4 Annual Consolidated Financial Report in the Most Recent Year ............................................. 138 6.5 Annual Parent Company only Financial Report in the Most Recent Year ............................... 138 6.6 Impact of the Financial Distress Occurred to the Company and Affiliates in the Recent Years until the Annual Report being published ....................................................................... 138

VII. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status ...................................................................................................... 139 7.2 Analysis of Financial Performance ........................................................................................... 140 7.3 Analysis of Cash Flow ............................................................................................................... 140 7.4 Major Capital Expenditure Items ............................................................................................. 141 7.5 Investment Policy in Most Recent Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year.............................................................. 141 7.6 Analysis of Risk Management .................................................................................................. 141 7.7 Other Important Information .................................................................................................. 147 VIII. Special Disclosure 8.1 Summary of Affiliated Companies ........................................................................................... 148 8.2 Private Placement Securities in the Most Recent Years .......................................................... 170 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years .. 170 8.4 Other Supplementary Information .......................................................................................... 174 Appendices 1. Annual Consolidated Financial Report in the Most Recent Year ............................................. 175 2. Annual Parent Company only Financial Report in the Most Recent Year ............................... 298

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I. Letter to Shareholders Dear Shareholders, Friends and Colleagues, I would hereby like to report the 2017 business review, the 2018 strategic plan and blueprint for CTCI as follows: A. 2017 Business Review a) Operation Results The consolidated sales revenue for 2017 amounted to NTD71.6 billion, increased by NTD1.09 billion, or a 1.56% growth compared to that of 2016. The consolidated operating expenses were NTD2.09 billion, while the consolidated non-operating income was NTD976.32 million. The consolidated net income was reported at NTD2.80 billion, and the earnings per share (EPS) was at NTD3.68. b) Business Achievement We produce outstanding results at 2017, securing over NTD44.4 billion worth of new contracts, while the backlog of contracts reaching NTD166.3 billion. Major new contracts in 2017 include Malaysia-SPG 1,440MW Track 4A IPP Project EPC Project, Malaysia- RAPID P28B Euro 5 EPC Project, Malaysia-KLLRT3 Power Supply Project EPC Project, Thailand-GPSC CUP 4 Co-generation EPC Project, Philippines-JG Summit Aromatics and Butadiene Extraction Units EPC Project, and Vietnam-Van Phong 1, 1,320MW Coal-Fired Power Plant EPC Project. C) Innovation and R&D In 2017, CTCI’s Innovation R&D Center continuously improved iEPC intelligent solution on Tag Platform. We implement the distributed schedule control and agile reaction on the project management, pay attention to the application and development of new technologies of VR/AR, Big Data, IoT, Robotic, etc., study how to apply the knowledge to EPC industry to reinforce our competitiveness and to differentiate from our competitors. In terms of iEPC intelligent development, inter-discipline data exchange is one of the most important activities, Tag Platform plays an important role here. Each EPC disciplines standardize the information to be exchanged and built their own data center as data repository, so all information will go through Tag Platform to integrate and connect with each other. All traditional procedures and the engineering information management are going to shift the manner from batch processing to agile reaction. Therefore, for the design automation, we have reviewed the design rules and then developed programs to automate and to reprogram design rules, e.g. safety valve emissions calculation, equipment data sheet fill in automation, equipment support structure and pipe rack load automation, Instrument and Electrical 3D/2D design automation, fire sprinkler system MTO automation, plot plan layout intelligence and piping layout automation, to improve CTCI design capability and design quality. Furthermore, we have studied the application of VR technology in 3D model review, which had made model review more realistic. In the procurement phase, we established a vendor information mechanism with CAP (CTCI Alliance Partner) vendors to standardize transparent information and processes, accelerate the acquisition of design information and manufacturing progress, strengthen supply chain management and enhance the implementation of project procurement. In the construction phase, we continuously promote site mobile management to improve the site operation efficiency, study automatic welding equipment to reduce the impact of welder shortage, cooperate with National Chiao Tung University to study IoT applications in site management, e.g. using BLE (Bluetooth Low Energy) technology in confined space for personnel motion detection to prevent site incidents from happening, using Beacon for wooden box locating and tracing at laydown area to assist with the site material control and warehousing management. We had implemented the software, SPC, and Navisowrks for 4D construction

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sequence and rigging simulation that will enhance the construction planning and management capabilities. For technology expertise, we have completed developing auto-identification and inspection planning system for corrosion and deterioration mechanisms, the P&ID templates for Raw/Pure water treatment system, the dynamic calculation of Flare/ Steam Network, the CFD (Computational Fluid Dynamics) analysis for evaluating hot-air recirculation affection in air-cooled heat exchanger, the analysis of FBT (Fast-Bus Transfer) scheme for its impact on power system and protective relay co-ordination, the research and development of technology for railway track engineering, etc. Through industry–university cooperation and self-developed software, we update and integrate design specification, and modify the internal design guidelines and existing engineering software that improve and enhance quality, speed, accuracy in EPC project implementation. B. Operational Plan for 2018 In the upcoming year, CTCI will set its focus on "intelligent EPC (iEPC)" projects and the development of intelligent engineering systems. By extending original EPC services vertically and horizontally, we will continue to cultivate domestic and international markets to maximize existing group operation, improve group synergy and consolidate team engineering skills. In terms of iEPC development goals, engineering design (E) is aimed at delegating a large number and main tasks to robots and replacing human operation. Procurement (P) is aimed at information sharing with all manufacturers and the creation of a connecting procurement model that is both fast and cost-efficient. Construction (C) is aimed at the utilization of intelligent module manufacturing and smart installation management. Lastly, project management will be marked by the creation of intelligent application platforms via real-time and agile information management. In light of the changing international energy landscape where shale gas from the United States has led to less energy dependence on the Middle East, as well as the impact of the Trump administration has on international relations and global industry trends, the growth strategy from CTCI will focus on both vertical and horizontal extension of turn-key transfer. Existing EPC service areas will be extended upwards to consolidate front-end engineering design and downwards for repairs and maintenance technology. The continuous cultivation of engineering markets will include existing domestic projects in hydrocarbon, power plants and MRT. Internationally, emerging markets with high potential will be selected based on the latest trends in intelligent technology and carbon reduction engineering. In order to enhance integration and operation capabilities of lump sum turn-key projects, CTCI has continuously worked on improving areas such as engineering technology, procurement, innovation and research as well as QHSE. Examples include the implementation of intelligent information technology for iEPC or intelligence of turn-key projects. Intelligent engineering systems and big data foundation for various projects have also been developed. This allows our group engineering management capabilities to stay up-to-date, and improves team synergy at the same time.

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Major planned developments of 2017 consist of completing the design of smart engineering as soon as possible, forging end-to-end EPC lump sum service, as well as leveraging high-tech products such as robots to differentiate ourselves from the competitors, widen our lead and satisfy our customers with optimized engineering services, in order to become irreplaceable partners. Another important task is to precisely implement CTCI's internal corporate culture: Professionalism, Integrity, Teamwork and Innovation so that it takes root. Corporate culture is competitiveness that others cannot copy. If all the employees locally and overseas in the Group can relate to and materialize what the corporate culture represents through their behavior, we can then stimulate a vast strength internally. There are actions to be taken tactically and strategically: First of all, we tactically need to strengthen the soft power of the CTCI brand by tying up the corporate culture and our employees' personal behavior to demonstrate and deliver the image of "Most Reliable" all the time. Secondly, we have to reinforce CTCI's hard power by introducing robots and VR (virtual reality) to engineering applications to provide smart engineering service. Thirdly, we shall aggressively step into the US market. Lead only by one senior executive from headquarters, a senior local management team are fully dedicated to CTCI Americas operation, who are professional and capable to deal local clients efficiently and execute EPC project confidently and profitably in U.S. Being an international engineering company, we have to elevate the communication capability, and request employees be capable to communicate with others in English. Strategically, we continue to cultivate talents internally, including inter-BU (business unit) talent rotation and development. In the meantime, we need to review our manpower/resources of the Group and to get a synergy in reaching the goal of 2017. C. Future Development Strategy To meet the challenges of the global engineering market, CTCI Group has built a global brand and initiated organizational reforms. Three major business groups of Group Engineering Business, Group Intelligent Solutions Business, Group Resource Cycling Business and Group Shared Services, were established to stimulate business development in various aspects. The Group Engineering Business will continue to expand and internationalize in various fields such as hydrocarbon and infrastructure, environmental, and power business. A new world of engineering with international management will be made possible through improved international outlook, better linguistic and cultural understanding, as well as Chinese/English standard operating procedures established. The aim of the Group Intelligent Solutions Business is to become a “solution provider + service provider". It seeks business opportunities through innovative service, and adds value to intelligent service through differentiation from market competition. Finally, the Group Resource Cycling Business has a mission of "applying technical knowhow to advance efficiencies in ‘resource cycling’", in addition to a core concept of "every resource counts". With the idea of sharing a new future of green economy, it strives to improve the efficiency of resource recycling. The Group Shared Services provides solid logistical support for all business groups, and actively works to ensure the implementation and upgrade of the management system. For CTCI Group, talent is the most valuable asset of the organization. For one thing, with respect to talent cultivation, CTCI actively sets up and plans future job vacancies for key positions, along with step-by-step plans to cultivate full-time professionals; for another, CTCI provides career development planning to current staff and empower them to excel in their talents and aptitudes through diversified vertical and horizontal internal promotions and rotation channels. With all these in place, CTCI expects to establish a full range of all-around elite engineering workforce equipped with mature decision-making ability and international perspective for them to meet up challenges in a globalized era.

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The intelligence wave is sweeping the globe, and the world we live in is ever changing. Robots have replaced bank tellers, while IoT has broken the limits of time and space. Now customers may go on a shopping spree without leaving the house. Innovation and change have become inextricably linked to our everyday life. In the past the abundance of manpower and cheap products constituted a niche in business operation. With the current trends of industry 4.0, intelligence has become the key that allows businesses to stay ahead of their competition. In the future, team members in CTCI construction sites will be assisted by robots and drones. At office design labs, engineers will be the first ones to get a preview of the actual petrochemical plants through the use of VR headsets and cloud technology. We understand that simply following the trend is no longer enough to keep pace with the changes in the global market. Formulating policies on innovation for the future before the waves of change arrive is the surest way to win the world with “intelligence”! Sincerely,

John T. Yu Chairman

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II. Company Profile 2.1 Date of Incorporation: April 6, 1979 2.2 Company History Year Milestones

2017.01 CTCI SAMAC MMA/PMMA Project Awarded SABIC Green Flag for Best EHSS Performance Three Times. 2017.05 CTCI Corporation, CTCI Advanced Systems Inc., and ECOVE Environment Corporation Evaluated as Top 5% in the “2016 Corporate Governance Evaluation System”. 2017.05 In terms of the overall ranking in the Top 650 Service Enterprises by Common Wealth Magazine 2017, CTCI ranked as 24th retained Top 1 spot in the contractor sector for years in a row. It also ranked as 28th in Top 50 Most Profitable Companies (net profit after tax). 2017.06 CTCI Corporation held its Annual General Meeting of Shareholders on June 28, 2017 and the 12 directors (including 3 independent directors) for the 14th Term Board of Directors were elected in the Meeting. At the same day, Chairman John T. Yu was re-elected. The current President Michael Yang was elected as Vice Chairman and re-elected as President. 2017.08 CTCI and ECOVE Environment ranked the 22nd and 3rd in the categories of “large enterprise” and “mid-size enterprise” respectively in Corporate Social Responsibility” by Common Wealth Magazine in 2017. 2017.08 CTCI group ranked the 71st among “The International Design Firms”, the 99th among “The International Contractors”, the 126th among “The Global Design Firms”, and the 125th among “The Global Contractors” in the 2017 ENR Rankings. CTCI Group has moved itself upwards in all rankings. 2017.09 From the latest evaluation results of the Dow Jones Sustainability Index (DJSI), CTCI has once again been selected in the Emerging Markets index for three years in a row, and is the only enterprise selected in Taiwan’s Engineering & Construction industry. 2017.11 CTCI Group won 10 awards at the 2017 Taiwan Corporate Sustainability Awards (TCSA):

CTCI won the most prestigious award, "The Most Prestigious Sustainability Awards - Top Ten Domestic Corporate" award in the overall performance category, "Top 50 Service Industry Group Report Gold Award" in the Sustainability Report category, "Transparency and Integrity Award", "Growth through Innovation Award", and "Social Inclusion Award" in individual performance category. ECOVE Environment won the "TOP 50 Corporate Sustainability Award", "Service Industry Group Report Gold Award", "Transparency and Integrity Award" and “Circular Economy Leadership Award". CTCI Advanced System won the "TOP 50 Service Industry Group Report Gold Award".

2017.12 Group Chairman John T. Yu Honored with the 2nd “National Outstanding CEO Award” from the Chinese Professional Management Association (CPMA).

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III. Corporate Governance Report 3.1 Organization 3.1.1 Organization Chart

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3.1.2 Operations and functions of the various departments Department Operations & Functions

Immediate Board of Directors

Secretariat of The Board Responsible for furnishing information required for business execution by directors, assisting directors with legal compliance, and handling matters relating to functional committees meetings, board meetings and shareholders meetings according to laws.

Audit Dept. Responsible for inspecting and reviewing defects in the internal control systems for the Company and its subsidiaries’ business continuity, providing timely recommendations for improvements to reasonably ensure the sustained operating effectiveness of the systems.

Immediate President QHSE Division

Responsible for establishing the Company’s quality management system, guiding various projects to establish the quality activity documents, leading the quality auditing operation of various permanent departments and projects, researching various corrective actions against QHSE, and supervising group QHSE management. Research and Innovation Center Responsible for applying innovative technology, developing intelligent platform and researching new operating technology.

Executive Management Operations (EMO)

IT Division Responsible for defining the company’s information policy, planning and promoting the information systems, supervising the information dept. affairs of various affiliates. Legal Dept. Responsible for handling disputes, litigation, arbitration, non-litigation. Contract Management Dept. Responsible for contract reviewing. Investment Relation Office

Responsible for liaising with shareholders, corporate investors and the media, and providing investors with timely and correct information about the company’s operation. Corporate Administration Dept.

Responsible for auditing the project cost, releasing commodity price information and helping the cost-related system development. Finance Dept. Responsible for supporting the project’s achievement of financial objectives, planning and executing important financial tasks and controlling the project risk to increase the company’s earnings. Accounting Dept. Responsible for verifying the company’s income, providing the actual accounting information in a timely manner, and well-founding various financial management systems. Strategy and Business Development Dept. Responsible for corporate strategy and developing new business. Human Resources Dept.

Responsible for human resource’s strategies and management, providing the talents corporate needs to meet corporate’s mission. AGS & PR Dept.

Responsible for managing the general affairs, administration, and external public relations to ensure corporate administration running well and keep good relations with external customers and medias.

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Department Operations & Functions

Project Site Administration Dept.

Responsible for the administrative general affairs of overseas and domestic construction project sites to ensure the operation of administrative management at the site. Brand Management Dept.

Responsible for establishing brand structure of the group, promoting brand strategies and planning external brand marketing campaigns.

Hydrocarbon Business Operations (HBO)

Marketing & Sales Division

Responsible for developing the market, collecting business information, establishing cooperative relations, striving for bidding and winning opportunities, analyzing competitors’ status, planning strategic alliances, preparing qualification proposals and reviewing & suggesting tender documentation, participating in tender opening, negotiating for contracts and maintaining after-sales service. Project Division I Responsible for executing various projects in Taiwan and Mainland China. Project Division II Responsible for executing various projects in South East Asia and India. Project Division III Responsible for executing various projects in the Middle East. LNG Project Division Responsible for executing LNG projects and proposal related business. Project Service Division

Responsible for controlling the various information about refining and petro-chemical projects, and achieving the objectives together with the projects.

Proposal & Estimating Division

Responsible for defining the quotation strategies and work plans, organizing the quotation taskforce, drafting the project execution strategies and development execution plan, executing the project risk assessment, preparing technical and business tender documentation, clarifying and negotiating after tender submission, and preparing case closure report of the quotation. Technology Development Division

Responsible for collecting refining and petro-chemical production process technical information, providing technical advice, assisting projects/business to seek jobs, assisting the project planning test run taskforce of the Business Dept., executing the test run to complete projects as scheduled.

Infrastructure, Environment & Power Business Operations (IEPBO)

Marketing & Sales Division

Responsible for developing the market, collecting business information, establishing cooperative relations, striving for bidding and winning opportunities, analyzing competitors’ status, planning strategic alliances, preparing qualification proposals and reviewing & suggesting tender documentation, participating in tender opening, negotiating for contracts and maintaining after-sale service. Infrastructure Division Responsible for executing the projects about MRT, HSR, light rail, steel plant, and air separation plant. Power & Environment Resources Division I

Responsible for executing the projects about gas power plants, cogeneration plants, coal-fired power plants, incinerators, sewage and pure water treatment plants, water recycling and seawater desalination plants.

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Department Operations & Functions

Power & Environment Resources Division II Responsible for executing the projects about coal-fired power plants, desulfuration and De-NOx.

EPC Operations

Engineering Management Division Responsible for executing quality, HSE and cost control of project engineering management.

Engineering Division Responsible for coordinating and integrating the human resources, quotation, execution of projects, and multi-departmental technology of various design departments and Hydrocarbon projects’ commissioning, also planning and executing the training programs for various projects.

Procurement Division Responsible for the procurement, inspection and transportation business, and supervising and confirming the quality/SHE requirements about all of the procurement documents.

Construction Division Responsible for supporting interaction of various business divisions and subsidiaries, and supervising the compliance of various quotations and project site operations with the company’s requirement.

Plant Maintenance Business Operations Responsible for power plants and hydrocarbon plants maintenance business.

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3.2 Directors and Management Team 3.2.1 Directors March 31st, 2018

Title Nationality Name Gender Date Elected Term (Years) Date First Elected (Rep. of juridical person)

Shareholding when Elected Current Shareholding (Rep. of juridical person)

Spouse & Minor Shareholding Shareholding by Nominee Arrangement Experience (Education) Other Position

Executives, Directors or Supervisors who are spouses or within two degrees of kinship Shares % Shares % Shares % Shares % Title Name Relation

Chairman R.O.C. John T. Yu (Rep. of CTCI Development Corporation)

Male Jun. 28, 2017 3 Feb. 8, 2002 (Feb. 9, 1999)

912,170 0.12 912,170 (1,103,471) 0.12 (0.14) 2,020,000 0.26 0 0

-PMD 61, Harvard Business School, USA -B.S., Electrical Engineering, National Taiwan University -Senior Vice President / Executive Vice President / President, CTCI Corporation

Note 1 - - -

Vice Chairman R.O.C. Michael Yang

(Rep. of CTCI Development Corporation) Male Jun. 28, 2017 3

Feb. 8, 2002 (Mar. 7, 2016) 912,170 0.12 912,170 (0) 0.12 (0) 392,097 0.05 0 0

-EMBA, Business Administration, National Taiwan University of Science and Technology -M.S., Mechanical Engineering, National Taiwan University -B.S., Mechanical engineering, Tatung University - Senior Vice President/ Executive Vice President, CTCI Corporation

Note 2 - - -

Independent Director and Managing Director R.O.C. Jack Huang Male Jun. 28, 2017 3 Jun. 26, 2014 0 0 0 0 0 0 0 0 S.J.D., Harvard University Note 3 - - -

Independent Director R.O.C. Yen-Shiang Shih Male Jun. 28, 2017 3 Jun. 28, 2017 0 0 0 0 0 0 0 0 Note 4 Note 5 - - -

Independent Director R.O.C. Frank Fan Male Jun. 28, 2017 3 Jun. 26, 2014 0 0 0 0 0 0 0 0

-M.S., Institute of traffic and Transportation, National Chiao Tung University -Minister without Portfolio & Chairperson of Public Construction Commission, Executive Yuan

None - - -

Director R.O.C. Teng-Yaw Yu (Rep. of CTCI Foundation)

Male Jun. 28, 2017 3 Apr. 6, 1979 (Jun. 26, 2014)

60,862,051 7.97 60,862,051 (36,650) 7.97 (0.00) 818 0.00 0 0 -MBA, University of Leicester, UK -CEO, Taiwan Green Productivity Foundation

- CEO,CTCI Foundation - - -

Director R.O.C. Quintin Wu Male Jun. 28, 2017 3 Jun. 23, 2006 0 0 0 0 0 0 0 0 -Chairman, USI Corporation Note 6 - - -

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Title Nationality Name Gender Date Elected Term (Years) Date First Elected (Rep. of juridical person)

Shareholding when Elected Current Shareholding (Rep. of juridical person)

Spouse & Minor Shareholding Shareholding by Nominee Arrangement Experience (Education) Other Position

Executives, Directors or Supervisors who are spouses or within two degrees of kinship Shares % Shares % Shares % Shares % Title Name Relation

Director R.O.C. Bing Shen Male Jun. 28, 2017 3 Mar. 26, 1999 (Note 7)

0 0 0 0 0 0 0 0

-MBA, Harvard Business School -Executive Director, Morgan Stanley Group -Executive Vice President, China Development Industrial Bank -President, CDIB & Partners Investment Holding Corp.

-Independent Director, Far Eastern International Bank -Independent Director, Far Eastern New Century Corporation -Independent Director, ELITE MATERIAL CO., LTD.

- - -

Director R.O.C. Johnny Shih Male Jun. 28, 2017 3 Feb. 8, 2002 (Note 8)

0 0 0 0 0 0 0 0 -Columbia University, USA. Master in Computer Science and Business Administration -Vice Chairman, Far eastern International Bank

Note 9 - - -

Director R.O.C. Yancey Hai Male Jun. 28, 2017 3 Feb. 8, 2002 0 0 0 0 0 0 0 0

-MA, the University of Texas at Dallas -Country Manager, G.E. Capital -Vice President, J.P. Morgan -CEO, Delta Electronics Foundation

-Chairman, Delta Electronics Inc. - Independent Director, USI Corporation - - -

Director R.O.C. An-Ping Chang Male Jun. 28, 2017 3 Jun. 28, 2017 0 0 0 0 0 0 0 0 -MBA, New York University, U.S.A -Vice Chairman, Taiwan Cement Corporation -Chairman, Chia Hsin Cement Corporation

Note 10 - - -

Director R.O.C. Wenent Pan Male Jun. 28, 2017 3 Apr. 1, 2012 0 0 0 0 0 0 0 0

-M.S. & Ph.D., Chemical Engineering, University of Wyoming, USA -President & Chairman, CPC Corporation -Chairman & CEO, Kuo Kuang Power Co.

Note 11 - - -

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Note 1: Chairman, CTCI Corporation / Chairman, CTCI Development Corporation /Director, CTCI Overseas Corporation Limited / Director, CTCI Education Foundation / Managing Director, CTCI Foundation / Director, Gintech Energy Corporation / Director, Utech Solar Co., Ltd. / Supervisor, China Steel Chemical Corporation / Director, Taiwan Cement Co., Ltd. / Director, TSRC Corporation Note 2: Vice Chairman & President, CTCI Corporation / Chairman, CTCI Overseas Corporation Limited / Chairman, Crown Asia 2 Investment Limited / Director, CTCI Education Foundation / Director, CTCI Americas, Inc. / Director, MIE Industrial Sdn. Bhd. Note 3: Partner, Jones Day Taipei Office / Independent director, Taiwan Mobile Co., Ltd. / Independent director, WPG Holdings Limited / Independent director, Systex Corporation Note 4: Ph.D., Chemistry, Massachusetts Institute of Technology, U.S.A. / Professor and Chief of Chemical Engineering, National Taiwan University of Science and Technology / Director General, Small and Medium Enterprise Administration, Ministry of Economic Affairs (MOEA) / Director General, Industrial Development Bureau, MOEA / Minister & Vice Minister & Deputy Minister, MOEA / Director General, Taiwan Tobacco & Wine Bureau / Chairman, Sinotech Engineering Consultants, Inc. Note 5: Chair Professor, Chung Yuan Christian University / Policy Advisor, Taiwan Electrical and Electronic Manufacturers’ Association / Council Minister and the Convener of the Group of Energy, Petroleum & Chemical, and Accouterments, Cross-Strait CEO Summit / Chairman, Sustainable Circulation Economy Development Association / Independent Director, AU Optronics Corp. / Director, Taiwan Institute of Economic Research / Director, USI Corporation Note 6: Chairman, USI Corporation / Chairman, China General Plastics Corporation / Chairman, Asia Polymer Corporation / Chairman, Taita Chemical Company, Limited / Chairman, Acme Electronics Corporation Note 7: Mr. Bing Shen is not the director or supervisor of the Company during these periods: Nov. 28, 2001 ~ Jun. 13, 2005 / May 16, 2006 ~ Jun. 22, 2006 / May 11, 2011 ~ Jun. 21, 2011. Note 8: Mr. Johnny Shih is not the director or supervisor of the Company during the period from Jun. 15, 2005 to Jun. 25, 2014. Note 9: Vice Chairman, Far Eastern New Century Corporation / Vice Chairman, Oriental Union Chemical Corporation / Chairman, Everest Textile Company Limited / Director, Asia Cement Corporation Note 10: Chairman, Taiwan Cement Corporation(TCC) / Chairman, China Synthetic Rubber Corporation / Chairman, Taiwan Prosperity Chemical Corporation / Chairman, TCC International Holdings Ltd. / Chairman, Hong Kong Cement Manufacturing Co., Ltd. / Independent Director, Synnex Technology International Corp. / Managing Director, O-Bank Co., Ltd. / Director, Taiwan Stock Exchange Corporation Note 11: Chairman, CTCI Foundation / Chairman, Gintech Energy Corporation / Independent Director, UPC Technology Corp. / Independent Director, China Petrochemical Development Corporation

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Major shareholders of the institutional shareholders March 31st, 2018

Name of institutional shareholders Major shareholders of the institutional shareholders CTCI Development Corporation CTCI Corporation (100%)

CTCI Foundation None Major shareholders of the major shareholders that are juridical persons

March 31st, 2018 Name of juridical persons Major shareholders of the juridical persons

CTCI Corporation CTCI Foundation (7.97%), Fubon Life Insurance Co., Ltd.(6.70%), CTBC Bank Co., Ltd. (CTCI Corporation Employee Stock Ownership Trust)(6.41%), Blackrock Global Funds-Asian Growth Leaders(4.13%), CTBC Bank Co., Ltd. (Sustainability Employee Stock Ownership Trust)(3.44%), Chunghwa Post Co., Ltd.(2.83%), Cathay Life Insurance Co., Ltd.(2.39%), KGI Bank(2.20%), American Funds Developing World Growth And Income Fund(2.18%), USI Corporation(1.99%)

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Professional qualifications and independence analysis of directors

Criteria Name

Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience Independence Criteria(Note) Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director

An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University

A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company

Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company 1 2 3 4 5 6 7 8 9 10

John T. Yu - - V V V V V V 0 Michael Yang - - V V V V V V V 0 Jack Huang V V V V V V V V V V V V V 3

Yen-Shiang Shih V - V V V V V V V V V V V 1 Frank Fan - - V V V V V V V V V V V 0

Teng-Yaw Yu - - V V V V V V V V V 0 Quintin Wu - - V V V V V V V V V V V 0 Bing Shen - - V V V V V V V V V V V 3

Johnny Shih - - V V V V V V V V V V V 0 Yancey Hai - - V V V V V V V V V V V 1

An-Ping Chang - - V V V V V V V V V V V 1 Wenent Pan - - V V V V V V V V V 2

1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company’s affiliates. The same does not apply, however, in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares. 3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings. 4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs. 5. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings. 6. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company. 7. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof, provided that this restriction does not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies Whose Stock is Listed on the TWSE or Traded on the GTSM. 8. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. 9. Not been a person of any conditions defined in Article 30 of the Company Law. 10. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

15

3.2.2 Management Team March 31st, 2018

Title Nationality Name Gender Date Effective Shareholding Spouse & Minor Shareholding

Shareholding by Nominee Arrangement Experience(Education) Other Position Managers who are spouses or within two degrees of kinship

Shares % Shares % Shares % Title Name Relation

Vice Chairperson of Management Strategy Committee R.O.C. Andy Sheu Male Jun. 23, 2009 1,031,281 0.14 1,966 0.00 0 0

-MBA, EMBA Program in International Business Management, National Taiwan University -B.S., Power Mechanical Engineering, National Tsing-Hua University -Managing Director, CTCI (Thailand) Co., Ltd. - Senior Vice President / Executive Vice President / President, CTCI Corporation

-Chairman, CTCI Overseas (BVI) Corporation -Director, CTCI Overseas Corporation Limited -Chairman, CTCI Americas, Inc. - - -

President R.O.C. Michael Yang Male Jun. 28, 2017 0 0 392,097 0.05 0 0

-EMBA, Business Administration, National Taiwan University of Science and Technology -M.S., Mechanical Engineering, National Taiwan University -B.S., Mechanical engineering, Tatung University -Vice President/ Senior Vice President/ Executive Vice President, CTCI Corporation

-Chairman, CTCI Overseas Corporation Limited -Chairman, Crown Asia 2 Investment Limited -Director, CTCI Education Foundation -Director, CTCI Americas, Inc. -Director, MIE Industrial Sdn. Bhd.

- - -

Executive Vice President R.O.C. Mark W. H. Yang (Note 1) Male Jan. 1, 2010 208,732 0.03 281,205 0.04 0 0 -MBA, Global EMBA of National Chengchi University -Mechanical Engineering, National Taipei Institute of Technology -Vice President/ Senior Vice President, CTCI Corporation

None - - -

16




Executive Vice President R.O.C. M. H. Wang Male Jan. 1, 2013 0 0 261,212 0.03 0 0

-MBA, Chulalongkorn University, Thailand -B.S., Civil Engineering, Feng-Chia University -Vice President/ Senior Vice President, CTCI Corporation -Deputy Managing Director/ Managing Director, CTCI (Thailand) Co., Ltd.

-Chairman, CTCI Arabia Ltd. -Director, CTCI Chemicals Corporation -Director, CTCI Machinery Corporation -Director, CTCI Americas, Inc. -Director, CCJV P1 Engineering & Construction Sdn. Bhd.

- - -

Executive Vice President R.O.C. Pao-Yao Pan Male Jan. 1, 2016 12,628 0.00 326,000 0.04 0 0 -M.S., Management, National Sun Yat-sen University -B.S., Mechanical Engineering, Tatung University - Vice President/ Senior Vice President, CTCI Corporation

-Chairman, CTCI (Thailand) Co., Ltd. -Vice Chairman, CIMAS Engineering Company Limited -Director, CTCI Americas, Inc. -Director, Superiority (Thailand) Co., Ltd. -Chairman, CTCI&HEC Water Business Corporation -Director, Metro Consulting Service Corporation

- - -

17




Executive Vice President R.O.C. Ming-Cheng Hsiao Male Jan. 1, 2016 2,000 0.00 118,000 0.02 0 0

-Ph.D., Chemical Engineering, National Tsin Hua University -MBA, EMBA Program in Accounting, National Taiwan University -M.S., Chemical Engineering, National Tsin Hua University -B.S., Chemical Engineering Tamkang University -President, Unisurpass Technology Co., Ltd. -President, Uniplus Electronics Co., Ltd. - Senior Vice President, CTCI Corporation

-Chairman, CTCI Engineering & Construction Sdn. Bhd. -Director, CTCI Americas, Inc. -Chairman, Universal Engineering (BVI) Corporation -Chairman, CIPEC Construction Inc. -Director, Crown Asia 2 Investment Limited -Chairman, Accuracy International Inc. -Director, Powertec Energy Corporation -Director, Unisurpass Technology Co., Ltd. -Director, Unimighty Co., Ltd.

- - -

Executive Vice President R.O.C. Todd Chen Male Jan. 1, 2018 0 0 115,099 0.02 0 0

-M.S., Mechanical Engineering, National Chiao Tung University -B.S., Mechanical Engineering, National Chiao Tung University -Senior General Manager/ Vice President/ Senior Vice President, CTCI Corporation

- Chairman, CTCI Investment Corporation -Director, CTCI Beijing Co., Ltd. -Director, CTCI Americas, Inc. -Chairman, CINDA Engineering & Construction Private Limited

- - -

18




Senior Vice President R.O.C. Andrew Tsai (Note 2) Male Jan. 1, 2013 30,250 0.00 230,575 0.03 0 0

-Ph.D., Business Administration, Macau University of Science and Technology -M.S., Business Administration, Macau University of Science and Technology -Executives Program, Graduate School of Business Administration, NCCU -B.S., Feng Chia University -President, CTCI Smart Engineering Corporation -Chairman, CTCI Shanghai Co., Ltd.

None - - -

Senior Vice President R.O.C. Jung-Yu Han Male Jan. 1, 2016 11,604 0.00 240,000 0.03 0 0 -B.S., National Taipei University of Technology -Senior General Manager/ Vice President, CTCI Corporation

-Supervisor, ECOVE Miaoli Energy Corporation -Director, CTCI Machinery Corporation - - -

Senior Vice President R.O.C. Chen-San Hu (Note 3) Male Jan. 1, 2016 100,116 0.01 400,000 0.05 0 0 -B.S., Department of Naval Architecture, National Kaohsiung Marine University -Senior General Manager/Vice President, CTCI Corporation

-Chairman, CTCI Machinery Corporation - - -

Senior Vice President & CFO R.O.C. Patrick Lin Male Jan. 1, 2017 53,280 0.01 245,000 0.03 0 0

-MBA, EMBA Program in Finance, National Taiwan University -MBA, University of Massachusetts-Boston, USA -B.S., Business Administration, Tamkang University -Director, Financial Division, Coretronic Corporation -Manager, Financial Division, Powerchip Technology Corporation -Director, Societe Generale Corporate & Investment Banking -Vice President, CTCI Corporation

-Director and President, CTCI Investment Corporation -Director, SINOGAL - Waste Services Co., Ltd. -Supervisor, ECOVE Environment Consulting Corporation -Supervisor, Yuan Ding Resources Corp. -President, CTCI Development Corporation

- - -

19




Senior Vice President R.O.C. T. C. Huang Male Mar. 17, 2017 246,273 0.03 0 0 0 0

-Executive Master of Business Administration, National Sun Yat-Sen University -B.S., Mechanical engineering, Chinese Culture University - President/Chairman, CTCI Machinery Corporation

None - - -

Senior Vice President R.O.C. Casey Yeh Male Nov. 2, 2017 6,000 0 0 0 0 0

-M.S., Industrial Engineering and Management, University of Iowa, U.S.A. -B.S., Aeronautical Engineering, National Cheng Kung University, Taiwan -Senior Program Manager, Autodesk -Senior Program Manager, Kaspick & Company -Senior Engineering Manager, Intuit, Mountain View -Director , VISA

None - - -

Vice President R.O.C. Teh-Ming Tao Male Jan. 1, 2006 316,064 0.04 0 0 0 0

-Ph.D., Chemical Engineering, TAMU, USA -M.S., Chemical Engineering, TAMU, USA -B.S., Chemistry, National Tsing-Hua University, Taiwan -Senior Research Engineer, Dowell Schlumberger (USA) SR-RE -CEO, CTCI Foundation -Project Manager, CTCI Foundation -Director, Industrial Safety and Health, CPC Corporation

-Director, CTCI Investment Corporation - - -

20




Vice President R.O.C. Steve Jean Male Jan. 1, 2011 1,668 0.00 183,000 0.02 0 0

-EMBA, Executive Master of Business Administration of National Cheng Chi University -M.S., Mechanical Engineering, National Central University -B.S., Civil Engineering , National Taipei Institute of Technology -General Director, CIMAS Engineering Company Limited

None - - -

Vice President R.O.C. M. G. Lee Male Jan. 1, 2013 0 0 153,029 0.02 0 0 -M.S., Management, National Taiwan University of Science and Technology -B.S., Ming Chi University of Technology -Senior General Manager, CTCI Corporation

None - - -

Vice President R.O.C. Po-Chien Wang Male Jan. 1, 2013 155,144 0.02 0 0 0 0 -LL.M., Legal Studies, University of Illinois Springfield -LL.B., Department of Law, Soochow University -Senior General Manager, CTCI Corporation

-Chairman, CTCI Singapore Pte. Ltd. -Director, CTCI Overseas (BVI) Corporation -Supervisor, CTCI&HEC Water Business Corporation - - -

Vice President R.O.C. Ching-Hsiang Tseng (Note 4) Male Jan. 1, 2014 244,904 0.03 30,000 0.00 0 0 -B.S., Civil Engineering, National Cheng Kung University -Senior General Manager, CTCI Corporation

None - - -

Vice President R.O.C. Shen-Peng Liao (Note 5) Male Apr. 1, 2014 10,000 0.00 166,289 0.02 0 0

-M.S., Mechanical Engineering, National Taiwan University of Science and Technology -Mechanical Engineering, St. John's University of Technology -Executive Vice President, CTCI Beijing Co., Ltd.

-Vice Chairman and President, CTCI Smart Engineering Corporation - - -

21




Vice President R.O.C. Tsai-Ming Wang Male Apr. 1, 2014 0 0 316,767 0.04 0 0 -B.S., Mechanical Engineering, Tamkang University -Chemical Engineering, National Taipei Institute of Technology -Senior General Manager, CTCI Corporation

-Director, CINDA Engineering & Construction Private Limited - - -

Vice President R.O.C. Min-Li Lee Male Apr. 1, 2014 95,156 0.01 33,000 0.00 0 0 -M.S., Chemical Engineering, National Central University -B.S., Chemical Engineering, Chung-Yuan Christian University -Senior General Manager, CTCI Corporation

-Director, CTCI Chemicals Corporation - - -

Vice President R.O.C. Jing-Shing Wu Male Apr. 1, 2014 252,000 0.03 0 0 0 0

-Executive Master of Business Administration, National Sun Yat-Sen University -Chemical Engineering, National Taipei University of Technology -Senior General Manager, CTCI Corporation

None - - -

Vice President R.O.C. J.H. Chen (Note 6) Male Jan. 5, 2015 30,000 0.00 0 0 0 0

-EMBA, Executive Master of Business Administration of National Central University -B.A., Economics, Soochow University, Taiwan -VP, Human Resources Center, Integrated Business Services Center, Coretronic Corporation -CHO, WPG Holdings

None - - -

Vice President R.O.C. Y. S. Liao Male Mar. 12, 2015 0 0 98,000 0.01 0 0 -B.S. in Nuclear Engineering, National Tsing-Hua University -President, CTCI Smart Engineering Corporation

-Director, CTCI Beijing Co., Ltd. -Director, CTCI&HEC Water Business Corporation -Director, Blue Whale Water Technology Co., Ltd. - - -

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Vice President R.O.C. S.H. Lin Male Jan. 1, 2017 5,000 0.00 180,649 0.02 0 0 -EMBA, National Chengchi University -B.S., Accounting, Soochow University -Senior General Manager, CTCI Corporation

- Director, Pan Asia Corporation -Supervisor, CDIB Partners Investment Holding Corp. -Supervisor, G.D. Development Corporation - - -

Vice President R.O.C. Ting-Kuo Li Male Jan. 1, 2017 101,751 0.01 0 0 0 0 -B.S., Mechanical engineering, Tatung University -Senior General Manager, CTCI Corporation

-Director, CTCI Machinery Corporation - - -

Vice President R.O.C. Connie Lin Female May 12, 2017 18,000 0 0 0 0 0

-MBA, EMBA of National Central University, Taiwan -B.S., International Business and Trade, Chinese Culture University, Taiwan -HR Consultant, Delta Research Institute Delta Electronics, Inc. -Senior HR Manager, Corp. HR, Delta Electronics, Inc.

-Supervisor, CTCI Smart Engineering Corporation - - -

Vice President R.O.C. Vincent Liu Male Jun. 28, 2017 11,575 0 0 0 0 0 -M.S., Chemical Engineering, National Taiwan University, Taiwan -B.S., Chemical Engineering, National Central University, Taiwan -Executive Vice President/ President, CTCI Advanced Systems Inc.

None - - -

Vice President R.O.C. Ho-Chuang Lee Male Jan. 1, 2018 199,076 0.03 0 0 0 0

-MBA, EMBA Program in Industrial Management, National Taiwan University of Science and Technology, Taiwan -B.S., Marine Engineering, National Taiwan Ocean University, Taiwan -Senior Manager, CTCI Corporation

-Director and President, CTCI Beijing Co., Ltd. -Director and President, CTCI Shanghai Co., Ltd. - - -

Vice President R.O.C. Shih-Wei Chung Male Jan. 1, 2018 36,033 0 15,000 0 0 0 -Mechanical Engineering, National Kaohsiung Industrial of Institute

-Senior General Manager, CTCI Corporation -Director, CTCI Development Corporation - - -

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Accounting Officer R.O.C. Ai-Cheng Ho Male Mar. 18, 2017 58,225 0.01 5,000 0 0 0 -MBA, EMBA Program in Finance, National Taiwan University -MBA in Finance, West Coast University, California, USA -General Manager, CTCI Corporation

-Supervisor, CTCI Beijing Co., Ltd. -Director, Century Ahead Ltd. -Supervisor, CTCI Advanced Systems Shanghai Inc. -Supervisor, CTCI Trading Shanghai Co., Ltd.

- - -

Note 1: EVP Mark W. H. Yang is dismissed on Jul. 20, 2017, and disclose the information during his tenure of office only. Note 2: SVP Andrew Tsai is dismissed on Jun. 14, 2017, and disclose the information during his tenure of office only. Note 3: SVP Chen-San Hu is dismissed on Mar. 13, 2017, and disclose the information during his tenure of office only. Note 4: VP Ching-Hsiang Tseng is dismissed on Aug. 19, 2017, and disclose the information during his tenure of office only. Note 5: VP Shen-Peng Liao is dismissed on Nov. 1, 2017, and disclose the information during his tenure of office only. Note 6: VP J.H. Chen is dismissed on May 13, 2017, and disclose the information during his tenure of office only.

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3.3 Remuneration of Directors and Management Team 3.3.1 Remuneration of Directors December 31st, 2017; Unit: NT$ thousands; thousand shares

Title Name

Compensation Ratio of total remuneration (A+B+C+D) to net income (%) Relevant remuneration received by directors who are also employees Ratio of total compensation (A+B+C+D+E+F+G) to net income(%)

Compensation paid to directors from an invested company other than the company’s subsidiary

Base Remuneration (A) Pension Fund(B) Directors’ Remuneration (C) Allowances(D) Salary, Bonuses, and Allowances (E) Pension Fund(F) (Note 3) Employees’ Compensation (G)

CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities Cash Stock Cash Stock

Chairman John T. Yu (Note1) 602 890 0 0 0 0 14,344 15,929 0.53 0.60 0 0 0 0 0 0 0 0 0.53 0.60 0

Juristic- person Director

CTCI Development Corporation

10,932 11,270 0 0 16,537 16,537 8,530 9,970 1.28 1.35 15,406 17,548 395 395 256 0 256 0 1.85 2.00 0

CTCI Investment Corporation (Note2) ECOVE Environment Services Corporation (Note2) Crown Asia 2 Investment Limited (Note2) CTCI Foundation Vice Chairman John H. Lin (Note1&2) Managing Director Andy Sheu (Note1&2) Director/ Vice Chairman Michael Yang (Note1)

Independent Director Jack Huang Yen-Shiang Shih Frank Fan

Director

Teng-Yaw Yu (Note1) Quintin Wu Bing Shen Johnny Shih Yancey Hai Leslie Koo (Note2) An-Ping Chang Wenent Pan Note 1: Mr. John T. Yu is representative of CTCI Development Corporation; Mr. John H. Lin is representative of CTCI Investment Corporation; Mr. Andy Sheu is representative of ECOVE Environment Services Corporation; Mr. Teng-Yaw Yu is representative of CTCI Foundation; Mr. Michael Yang was representative of Crown Asia 2 Investment Limited until June 28th 2017, and he has representative of CTCI Development Corporation as Vice Chairman from June 28th 2017. Note 2: Mr. Leslie Koo is dismissed on January 23rd 2017; CTCI Investment Corporation, ECOVE Environment Services Corporation, Crown Asia 2 Investment Limited, John H. Lin and Andy Sheu are dismissed on June 28th 2017. The above-mentioned directors disclose the Remuneration during their tenure of office only. Note 3: NT$ 395 thousand are allocated to the pension plan in 2017.

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Bracket Name of Directors

Total of (A+B+C+D) Total of (A+B+C+D+E+F+G) CTCI All Consolidated Entities CTCI All Consolidated Entities

Under NT$ 2,000,000

CTCI Investment Corporation / ECOVE Environment Services Corporation / Crown Asia 2 Investment Limited / CTCI Foundation /Andy Sheu/ Michael Yang / Leslie Koo/ Teng-Yaw Yu/Yen-Shiang Shih / An-Ping Chang

CTCI Investment Corporation / ECOVE Environment Services Corporation / Crown Asia 2 Investment Limited / CTCI Foundation /Andy Sheu/ Michael Yang / Leslie Koo/ Teng-Yaw Yu/Yen-Shiang Shih / An-Ping Chang

CTCI Investment Corporation / ECOVE Environment Services Corporation / Crown Asia 2 Investment Limited / CTCI Foundation / Leslie Koo/ Teng-Yaw Yu/Yen-Shiang Shih / An-Ping Chang

CTCI Investment Corporation / ECOVE Environment Services Corporation / Crown Asia 2 Investment Limited / CTCI Foundation / Leslie Koo/ Teng-Yaw Yu/Yen-Shiang Shih / An-Ping Chang

NT$2,000,000 ~ NT$5,000,000 CTCI Development Corporation / Quintin Wu / Johnny Shih / Yancey Hai / Wenent Pan / Jack Huang / Frank Fan / Bing Shen

CTCI Development Corporation / Quintin Wu / Johnny Shih / Yancey Hai / Wenent Pan / Jack Huang / Frank Fan / Bing Shen

CTCI Development Corporation / Quintin Wu / Johnny Shih / Yancey Hai / Wenent Pan / Jack Huang / Frank Fan / Bing Shen

CTCI Development Corporation / Quintin Wu / Johnny Shih / Yancey Hai / Wenent Pan / Jack Huang / Frank Fan / Bing Shen NT$5,000,000 ~ NT$10,000,000 John H. Lin John H. Lin John H. Lin / Andy Sheu John H. Lin / Andy Sheu NT$10,000,000 ~ NT$15,000,000 John T. Yu - John T. Yu / Michael Yang Michael Yang NT$15,000,000 ~ NT$30,000,000 - John T. Yu - John T. Yu NT$30,000,000 ~ NT$50,000,000 - - - - NT$50,000,000 ~ NT$100,000,000 - - - - Over NT$100,000,000 - - - - Total - - - -

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3.3.2 Compensation of President and Executive Vice President December 31st, 2017; Unit: NT$ thousands; thousand shares

Title Name Salary(A) Pension Fund (B) (Note1) Bonuses and Allowances (C) Employees’ Compensation (D) Ratio of total compensation (A+B+C+D) to net income (%)

Compensation paid to the president and executive vice president from an invested company other than the company’s subsidiary CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities CTCI All Consolidated Entities Cash Stock Cash Stock

Vice Chairperson of Management Strategy Committee Andy Sheu

19,934 25,444 1,037 1,037 35,380 35,380 696 0 696 0 2.03 2.23 0 President Michael Yang

Executive Vice President

Mark W. H. Yang(Note2) M. H. Wang Pao-Yao Pan Ming-Cheng Hsiao

Note1: Pension contributed according to actuaries’ report and resolution of board of directors’ meeting. Note2: Mr. Mark W. H. Yang is retired on July 20th 2017. Bracket Name of President and Executive Vice President

CTCI All Consolidated Entities Under NT$ 2,000,000 - - NT$2,000,000 ~ NT$5,000,000 - - NT$5,000,000 ~ NT$10,000,000 Mark W. H. Yang / M. H. Wang / Pao-Yao Pan / Ming-Cheng Hsiao Mark W. H. Yang / M. H. Wang / Pao-Yao Pan / Ming-Cheng Hsiao NT$10,000,000 ~ NT$15,000,000 Andy Sheu / Michael Yang Andy Sheu / Michael Yang NT$15,000,000 ~ NT$30,000,000 - - NT$30,000,000 ~ NT$50,000,000 - - NT$50,000,000 ~ NT$100,000,000 - - Over NT$100,000,000 - - Total - -

27

Employees’ Compensation Granted to Management Team Unit: NT$ thousands Title Name Employee Bonus - in Stock (Fair Market Value)

Employee Bonus - in Cash Total Ratio of Total Amount to Net Income (%)

Executive Officers


0 2,010 2,010 0.07

President Michael Yang Executive Vice President Mark W. H. Yang Executive Vice President M. H. Wang Executive Vice President Pao-Yao Pan Executive Vice President Ming-Cheng Hsiao

Senior Vice President Todd Chen Senior Vice President Andrew Tsai Senior Vice President Jung-Yu Han Senior Vice President Chen-San Hu

Senior Vice President & CFO Patrick Lin Senior Vice President T. C. Huang Senior Vice President Casey Yeh

Vice President Teh-Ming Tao Vice President Steve Jean Vice President M. G. Lee Vice President Po-Chien Wang Vice President Ching-Hsiang Tseng Vice President Shen-Peng Liao Vice President Tsai-Ming Wang Vice President Min-Li Lee Vice President Jing-Shing Wu Vice President J.H. Chen Vice President Y. S. Liao Vice President S.H. Lin Vice President Ting-Kuo Li Vice President Connie Lin Vice President Vincent Liu

Accounting Officer Ai-Cheng Ho Note: The distributed amount is based on the total amount (NT$84,160 thousand) approved by Board of Directors in 2018 and calculated accordingly to each executive officers’ on-job days in the previous year.

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3.3.3 Comparison of Remuneration for Directors, Presidents and Executive Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy, for Directors, Presidents and Executive Vice Presidents a. Analysis of total remuneration of ratio to net income in accordance with CTCI’s Directors, President and Executive Vice President by CTCI and all consolidated entities’ financial statements in the most recent two fiscal years Unit: NT$ thousands

Year Title

2016 2017 CTCI All Consolidated Entities CTCI All Consolidated Entities

Total remuneration Ratio to net income (%) Total remuneration Ratio to net income (%) Total remuneration Ratio to net income (%) Total remuneration Ratio to net income (%) Directors

109,567 4.93 119,587 5.38 106,750 3.81 115,194 4.11 Presidents and Executive Vice President b. The remuneration’s policies, standards, combinations, the procedures for determining the remuneration, and the relation to business performance and future risks (a)CTCI’s Directors’ Compensation is categorized into Base Remuneration, Remuneration and Allowance: Directors’ Base Remuneration: Pursuant to Article 35 of Articles of Incorporation, the remuneration of directors, chairman and vice chairman shall be determined by the Board of Directors in reference to the industry standard and their respective contribution. The base remuneration of Chairman and Independent Directors is stipulated with the Company’s performance (Consolidated Revenue, EPS, ROE) Directors’ Remuneration: It is paid according to Article 37 of Articles of Incorporation, “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 no more than 1.5% of the income before tax to pay to the board of directors as remuneration” and Company’s performance (Consolidated Revenue, EPS, ROE). The Directors’ remuneration will not be paid to Independent Directors. Allowance: It includes traveling allowance and attendance fee which are stipulated with reference to the typical pay levels adopted by other public listed companies or companies within the similar industry field. The remuneration of Directors/Supervisors who hold concurrent positions in the affiliates is stipulated under the same standard.

29

(b)The structure of remuneration of the President and Executive Vice Presidents is categorized into fixed and variable ones. The fixed remuneration is salary paid monthly, while the variable one includes employee remuneration, year-end bonus and Employee Stock Options, with the standards based on individual’s annual key performance index (KPI) assessment. The aforementioned assessment includes qualitative indicators (e.g. core competencies, potential development, etc.) and quantitative indicators (e.g. the achievement of the individual's goals, the rate of achievement or the degree of achievement of the expected target value, etc.) Employee remuneration is paid based on the Company’s Articles of Incorporation. The year-end bonus is determined based on the annual operating performance of the Company, and shall be decided after suggestion of Company's personnel development committee / Remuneration Committee and approval by Board of Directors. The grant of Employee Stock Option is categorized into regular and reward. The regular number of options will be determined by corporate title, seniority and job performance. The employees who have directly contribution to the Company or outstanding performance are eligible for the grant of reward stock options which is decided after suggestion of Chairman / Remuneration Committee and approval by Board of Directors. (c) The procedure for setting remuneration is in accordance with “Procedure for Performance Assessment and Remuneration Standard of the directors and Management Officers “. It refers to the typical pay levels adopted by other public listed companies and companies within the similar industry field, and considered about Company’s business performance, individual performance and their respective contribution to Company in order to prescribe reasonable remuneration. Remuneration committee and Board will periodically review the reasonableness of the remuneration and make timely adjustment of the remuneration system based on the Company’s business and relevant laws. It also shall not produce an incentive for the Directors, President and Executive Vice Presidents to engage in activity to pursue remuneration exceeding the risks that the Company may tolerate in order to avoid the Company loss suffering even after the compensation payment.

30

3.4 Implementation of Corporate Governance 3.4.1 Board of Directors Directors’ attendance was as follows:(As of March 31st, 2018)

Title Name Attendance in Person By Proxy Attendance rate (%) Remarks A total of 2 meetings of the 13th Term Board of Directors

Chairman John T. Yu (Rep. of CTCI Development Corporation) 2 0 100 Vice Chairman

John H. Lin (Rep. of CTCI Investment Corporation) 2 0 100 Managing Director

Andy Sheu (Rep. of Sino Environmental Services Corporation) 2 0 100 Independent Director and Managing Director

Johnny Shih 0 2 0 Independent Director Frank Fan 2 0 100 Independent Director Jack Huang 2 0 100

Director Teng-Yaw Yu (Rep. of CTCI Foundation) 2 0 100 Director Quintin Wu 2 0 100 Director Bing Shen 2 0 100 Director Yancey Hai 0 2 0

Director Leslie Koo 0 0 0 Be dismissed on January 23, 2017 and shall not present.

Director Michael Yang (Rep. of Crown Asia 2 Investment Limited) 2 0 100 Director Wenent Pan 2 0 100

A total of 6 meetings of the 14th Term Board of Directors Chairman John T. Yu (Rep. of CTCI Development Corporation) 6 0 100

Vice Chairman Michael Yang (Rep. of CTCI Development Corporation) 6 0 100

31

Title Name Attendance in Person By Proxy Attendance rate (%) Remarks Independent Director and Managing Director

Jack Huang 6 0 100 Independent Director Yen-Shiang Shih 6 0 100 Independent Director Frank Fan 6 0 100

Director Teng-Yaw Yu (Rep. of CTCI Foundation) 6 0 100 Director Quintin Wu 5 1 83 Director Bing Shen 6 0 100 Director Johnny Shih 5 1 83 Director Yancey Hai 6 0 100 Director An-Ping Chang 3 3 50 Director Wenent Pan 5 1 83

Independent Directors’ attendance of each meeting of board of directors was as follows: (As of March 31st, 2018)

◎:Attendance in Person; ☆:By Proxy; ●:Not present Name

the 19th Meeting of the 13th Term Board of Directors (2017.03.17)


Johnny Shih ☆ ☆ Frank Fan ◎ ◎

Jack Huang ◎ ◎

Name the 1st Meeting of the 14th Term Board of Directors (2017.06.28)

the 2nd Meeting of the 14th Term Board of Directors (2017.06.28)

the 3rd Meeting of the 14th Term Board of Directors (2017.08.11)



the 6th Meeting of the 14th Term Board of Directors (2018.03.09) Jack Huang ◎ ◎ ◎ ◎ ◎ ◎ Yen-Shiang Shih ◎ ◎ ◎ ◎ ◎ ◎ Frank Fan ◎ ◎ ◎ ◎ ◎ ◎

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Other mentionable items: 1. If there are the matter referred to as below in the directors’ meetings, the dates of meetings, sessions, contents of motions, all independents’ opinion and the Company’s response to independent directors’ opinion should be specified. (1) the matters referred to in Article 14-3 of Securities and Exchange Act. (2) resolutions of the directors’ meetings objected to by Independent Directors or subject to qualified opinion and recorded or declared in writing. The Company has already established the Audit Committee, please refer to the section 3.4.2 “The State of operations of the Audit Committee” for the matters referred to in Article 14-5 of Securities and Exchange Act. Until the annual report on printed, the resolutions of the directors’ meetings were unanimously approved as proposed by all present Board members. 2. If there is Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motions, causes for avoidance and voting should be specified: (1) Directors’ Names: Andy Sheu and Michael Yang Contents of motion: The 19th meeting of the 13th term Board of Directors (2017.03.17): Approval of the subscribers and the exercisable units of the 2017 Employee Stock Options. Causes for avoidance and voting should be specified: Manager Director Andy Sheu and Director Michael Yang recused themselves during discussion of and voting on this item because of the interested party relationship. (2) Directors’ Names: Michael Yang Contents of motion: The 1st meeting of the 14th term Board of Directors (2017.06.28): Approval of appointment of the President. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship. (3) Directors’ Names: John T. Yu and Michael Yang Contents of motion: The 1st meeting of the 14th term Board of Directors (2017.06.28): Approval of the appointment of the Chairperson and Vice Chairpersons of Management Strategy Committee. Causes for avoidance and voting should be specified: Chairman John T. Yu and Vice Chairman Michael Yang recused themselves during discussion of and voting on this item because of the interested party relationship. (4) Directors’ Names: John T. Yu Contents of motion: The 2nd meeting of the 14th term Board of Directors (2017.06.28): Approval of the adoption of the Chairman’s Remuneration. Causes for avoidance and voting should be specified: Chairman John T. Yu recused himself during discussion of and voting on this item because of the interested party relationship. (5) Directors’ Names: Michael Yang Contents of motion: The 5th meeting of the 14th term Board of Directors (2017.12.15): Approval of the issuance of the 2018 employee stock options plan. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.

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(6) Directors’ Names: Michael Yang Contents of motion: The 5th meeting of the 14th term Board of Directors (2017.12.15): Approval of the average salary increase rate of 2018. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship. (7) Directors’ Names: Michael Yang Contents of motion: The 5th meeting of the 14th term Board of Directors (2017.12.15): Approval of the remuneration of the management officers. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship. (8) Directors’ Names: John T. Yu Contents of motion: The 5th meeting of the 14th term Board of Directors (2017.12.15): Approval of the amendment to the Chairman’s remuneration. Causes for avoidance and voting should be specified: Chairman John T. Yu recused himself during discussion of and voting on this item because of the interested party relationship. (9) Directors’ Names: Michael Yang Contents of motion: The 6th meeting of the 14th term Board of Directors (2018.03.09): Approval of the subscribers and the exercisable units of the 2018 Employee Stock Options. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship. 3. Measures taken to strengthen the functionality of the Board: (1) CTCI has elected three independent directors and established the Audit Committee which is composed of all independent directors on June 26, 2014. Please refer to the section 3.4.2 “The State of Operations of the Audit Committee”. (2) CTCI has established the Nomination Committee under the resolution of the directors’ meeting on December 13, 2016. The 2nd term Nomination Committee is composed by 3 Independent Directors and Chairman. (3) From 2011, CTCI has disclosed the major resolutions of the Board meeting voluntarily on the Company website. (4) In accordance with the Articles of Association, CTCI has purchased D&O insurance for directors and supervisors in order to reduce and diversify major damage risks of CTCI and the shareholders.

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3.4.2 The State of operations of the Audit Committee The meetings of the Audit Committee were held 7 times, Independent Directors’ attendance was as follows: (As of March 31st, 2018)

Title Name Attendance in Person By Proxy Attendance rate (%) Remarks A total of 3 meetings of the 1st Term Audit Committee during the most recent fiscal year

Independent Director Johnny Shih 2 1 67 Independent Director Jack Huang 3 0 100 Independent Director Frank Fan 3 0 100

A total of 4 meetings of the 2nd Term Audit Committee during the most recent fiscal year Independent Director Jack Huang 4 0 100 Independent Director Yen-Shiang Shih 4 0 100 Independent Director Frank Fan 4 0 100

Other mentionable items: 1. If there are the matter referred to as below in the Audit Committee, the dates of directors’ meetings, sessions, contents of motions, the Audit Committee’ resolutions and the Company’s response to the Audit Committee’s opinion should be specified. (1) the matters referred to in Article 14-5 of Securities and Exchange Act. (2) resolution that was not approved by the Audit Committee but be undertaken upon the consent of two-thirds or more of all directors.

BOD Meetings Contents of Motions and the Response In Article 14-5 of Securities and Exchange Act

Not approved by the Audit Committee but be undertaken upon the consent of two-thirds or more of all directors

The 19th meeting of the 13th term Board of Directors (2017.03.17)

Approval of the distribution plan of the 2016 directors’ and employees’ remuneration. V None Approval of the Fiscal 2016 business report, financial reports and consolidated reports. V None Approval of the distribution plan of Fiscal 2016 earnings. V None Approval of “Statement of Internal Control System for the Year 2016”. V None Approval of the amendment to the Company’s “Internal Control Systems”. V None Approval on loans to subsidiaries for working capital requirement granted by the Company. V None Approval of the incorporation of a joint venture in Malaysia. V None Approval of the incorporation of a joint venture in Netherlands and establishing the branch in Oman. V None Approval in the cash injection of subsidiaries. V None Approval of changing the accounting officer. V None Resolutions of the Audit Committee(2017.03.16): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.

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BOD Meetings Contents of Motions and the Response In Article 14-5 of Securities and Exchange Act

Not approved by the Audit Committee but be undertaken upon the consent of two-thirds or more of all directors


Approval of the amendment to the Company’s “Internal Control Systems”. V None Approval in the cash injection of subsidiaries. V None Resolutions of the Audit Committee(2017.05.10 and 2017.05.12): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.

The 3rd meeting of the 14th term Board of Directors (2017.08.11)

Report on the consolidated financial reports as of June 30, 2017. V None Approval on loans to subsidiaries for working capital requirement granted by the Company. V None Approval of the amendment to the Company’s “Internal Control Systems”. V None Resolutions of the Audit Committee(2017.08.11): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.


Approval on loans to subsidiaries for working capital requirement granted by the Company. V None Approval in the cash injection of subsidiaries. V None Approval of the incorporation of a joint venture in Malaysia. V None Approval of the amendment to the Company’s “Internal Control Systems”. V None Approval of the amendment to the Company’s “Audit Committee Charter”. V None Approval of the real estate acquisition to build the 2nd headquarters building by subsidiaries. V None Resolutions of the Audit Committee(2017.11.02): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.


Approval of the budget of 2018. V None Approval of the Year 2018 Audit Plan. V None Approval on loans to subsidiaries for working capital requirement granted by the Company. V None Approval of the amendment to the Company’s “Internal Control Systems”. V None Approval of donating to CTCI Education Foundation. V None Approval of the issuance of 2018 Employee Stock Options. V None Approval of the amendment to the remuneration of the Chairman. V None Resolutions of the Audit Committee(2017.12.15): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.


Approval of the distribution plan of the 2017 directors’ and employees’ remuneration. V None Approval of the Fiscal 2017 business report, financial reports and consolidated reports. V None Approval of the distribution plan of Fiscal 2017 earnings. V None Approval of “Statement of Internal Control System for the Year 2017”. V None Approval on loans to subsidiaries for working capital requirement granted by the Company. V None Approval of CTCI Corporation to close its Italian branch. V None Resolutions of the Audit Committee(2018.03.09): unanimously approved by all present Audit Committee members. The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.

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2. If there is Independent Directors’ avoidance of motions in conflict of interest, the Independent Directors’ names, contents of motions, causes for avoidance and voting should be specified: None. 3. Communications between Independent Directors and the Company's Internal Audit officer and CPA A. After having presented the audit and follow-up reports to the Chairman, the Internal Audit officer submitted the same reports via e-mail for review by the Independent Directors on a monthly basis. The Internal Audit officer communicated with the Independent Directors in person at least quarterly in 2017. There were no objections raised by independent directors in 2017. B. The Internal Audit officer presents the findings of audit reports in the meetings of the Audit Committee and Board of Directors. All the Independent Directors have adequate access to how audit performs. During 2017, the communication channel between Independent Directors and the Internal Audit officer functioned well. C. The CPAs present audit reports and findings to the Independent Directors. CFO, Finance manager, Accounting manager and Internal Audit officer attend the Audit Committee meetings and reply to Independent Directors immediately if they have any questions. During 2017, the communication channel between Independent Directors and CPAs functioned well.

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3.4.3 Corporate Governance and Operation, Differences from the Corporate Governance Best Practice Principles for the TWSE/ GTSM Listed Companies and Reasons

Evaluation Item Operation Status Deviations from “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and reasons Yes No Summary Statement

1. Does the Company establish and disclose the Corporate Governance Practice Principals in accordance with the Corporate Governance Best Practice Principles for the TWSE/ GTSM Listed Companies?

V In the 10th meeting of the 10th term board of directors, the establishment of the Corporate Governance Practice Principals was decided on 24 July 2006, which had been modified in accordance with the regulations and real practice in these years. The latest revision was made in the 15th meeting of the 13th term board of directors on 5 August 2016 and was published in the Market Observatory Post System (MOPS) and CTCI’s website.

None.

2. Ownership structure and shareholder’s equity (1) Does the Company set up the internal standard operation procedure to handle issues such as shareholder’s advices, questions, disputes and accusations for implementation accordingly? (2) Does the Company have control over the major shareholders, who control the Company and have the name list of the major shareholders who have the ultimate control over the Company? (3) Does the Company set up and implement the risk control and firewall mechanism with the subsidiaries and affiliates?

V (1)The Company has set up spokesman and investor relation office as the liaison channel to handle issues like the shareholders’ advices or disputes. (2) The Company has been submitting monthly report to the Market Observatory Post System, assigned by the Securities and Futures Bureau about the change of the shareholding of the insiders (directors, managers and shareholders who have more than 10% of the total shares) in accordance with the 25th article of the Securities and Exchange Act. (3) In addition to establishing the “Supervision and Management of Subsidiaries” based on the “Regulations Governing Establishment of Internal Control System by Public Companies” set by the Financial Supervisory

None.

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(4) Does the Company stipulate internal regulation, prohibiting the insiders of the company to make use of the unpublished information for the trading of securities?

Committee, the Company also stipulated the internal basic principles for cooperation between the parent company and the subsidiaries like ”the Basic Principles for Joint- Venture contract and Cooperation between the Parent Company and Subsidiaries of the CTCI Group”, “the Common Operation Procedure to maintain the rights and interest of the CTCI Group”, etc., which are inspected by departments like the Auditing Department and QHSE Division to ensure the thorough implementation of the system and good mechanism of the risk- control for the subsidiaries and affiliates. (4) The Company has set up the “Measures to Prevent Insider Trading” and “CTCI Code of Ethics and Conduct”, prohibiting use of the unpublished information for the trading of securities. 3. Composition and Responsibilities of Board of Directors (1) Is there establishment of the diversification and thorough implementation about the composition of board of directors?

V

(1) The Company has established the diversification of board of directors in its “Corporate Governance Principles “. In consideration of diversity and fairness, the members of board of directors include practicing lawyer, business professionals, and listed company operators from various industries such as electronics, plastics, optoelectronic, textile, cement, etc.

None.

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(2) In addition to the establishment of the Remuneration Committee and Audit Committee, does the Company have other functional committees?

V

The implementation about the composition of board of directors is as below: Diversity Name Operation Management Industry knowledge Law Financial Accounting Economics

John T. Yu V V Michael Yang V V Jack Huang V Yen-Shiang Shih V V V Frank Fan V Teng-Yaw Yu V V Quintin Wu V V Bing Shen V Johnny Shih V V V Yancey Hai V V An-Ping Chang V V Wenent Pan V V

(2) In addition to the establishment of the Remuneration Committee and Audit Committee regulated by law, the Company also established the Corporate Governance Committee whose major jobs include the assessment of the company risk control policy and risk evaluation criteria/ tracing of the major risk accidents and revision of the performance regarding the implementation of the company governance system, etc. The committee is composed of 9 directors and has held 3 meetings during the most recent fiscal year and current fiscal year up to the date of publication of the annual report. It works strictly and plays a decisive role in the major company policy decisions. Moreover, the Company established the Nominating Committee on 13 December, 2016. The 2nd term

None.

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(3) Is there performance appraisal of the board of directors, which is carried out annually?

V

Nominating Committee is composed of 3 independent directors and Chairman, whose major jobs include the programming of the composition of board of directors/ functional committees, the qualification assessment of the directors, the programming of the succession of the managing echelon, etc. The meeting was held once during the most recent fiscal year and current fiscal year up to the date of publication of the annual report. (3) The Company has set up the “Regulations Governing the board Performance Evaluation“ by the resolution of the Boards on 13 December, 2016. By the regulations, the Company shall conduct a board performance evaluation at least once a year. The board performance evaluation for the current year shall be conducted at the end of each year according to the evaluation procedures and the evaluation indexes of the regulations. The criteria for evaluating the performance of the board of directors include the following aspects: a. Participation in the operation of the Company; b. Improvement of the quality of the board of directors' decision making; c. Composition and structure of the board of directors; d. Election and continuing education of the directors; e. Internal control; and f. Others. The 2017 board performance evaluation has been completed via self-evaluation by members of Board of Directors in early 2018 and the result has been reported

None.

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(4) Is there regular assessment of the independence of the certified public accountant every year?

V

to the 6th meeting of the 14th term Board of Directors on 9 March, 2018. The operation of CTCI’s Board of Directors is evaluated well base on the result of the 2017 board performance evaluation. (4) To fulfill Corporate Governance, the Company has established “Evaluation of engaged Certified Public Accountant Regulation” in the 11th meeting of the 12th term board of director on December 20, 2012. According to this regulation, the Company exams and evaluates CPA’s independence and capability annually, and submit a report to the Audit Committee and Board meeting. The report was approved by the 4th meeting of the 2rd term Audit Committee on March 9, 2018 and the 6th meeting of the 14th term Board of Directors on March 9, 2018, the evaluation items please refer to the【Note 1】. After assessed, CPAs Shu-Chiung Chang and Shih-Jung Weng from PricewaterhouseCoopers were qualified. Both CPAs do not have any direct or indirect interest relationship with either Board of Directors or CTCI, and believed to have more than sufficient capabilities on auditing, taxation and time cost efficiency.

None.

4. Does the company set up the corporate governance units or personnel responsible for matters related corporate governance?(including but not limited to providing the business-required information to the directors and supervisor, handling the matters related to the meetings of the Board and the shareholders' meeting, the

V CTCI has set up the Secretariat of the Board (STB) under the Board of Directors which is in charge of corporate governance affairs. Mr. Ming-Cheng Hsiao, the Executive Vice President of Executive Management Operations, is the head of STB. Chief Financial Officer (CFO) and Chief Legal Officer (CLO) are the deputy heads of the STB. Mr. Hsiao, CFO and CLO all have at least three years' management experience gained at a public company in handling stock

None.

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registration of the company and the minutes of the Board and the shareholders' meeting) affairs, financial affairs and legal affairs respectively. The main job responsibilities of STB includes furnishing information required for business execution by directors, assisting directors with legal compliance, and handling matters relating to functional committees meetings, board meetings and shareholders meetings according to laws. The business developments in 2017 are as following: a. Draw up the meeting schedule for functional committees meetings and Board meetings; consolidate proposals from related divisions and give the notice, agenda and related information to each director no later than 7 days prior to the scheduled meeting date; convene the said meetings and provide meeting materials; remind directors who have conflicts of interest of recusing themselves; and complete meeting minutes within 20 days after the functional committees meetings and board meetings. b. Draw up and have prior booking for the date of Shareholders’ meeting; assist director candidates with the procedure of nominations and audit; process the stock affairs; prepare meeting notice, handbook, annual report and minutes within statutory period; and report to MOPS and apply the certificate from Ministry of Economic Affairs after Directors’ re-election. c. Plan the 3 hours of on-site course for directors of CTCI group’s listed company in May and August respectively and plan the training course for the

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directors, supervisors and management officers of the non-public company on an irregular basis. d. Renew the Directors’ and Officers’ Liability Insurance in September, and report the insured amount, coverage, premium rate, and other major contents of the liability insurance at the board meeting in November. e. Inform the related information of laws or announcements to insiders on irregular basis. f. Offer the manuals which include CTCI Profile, Internal Control system, management regulations, etc. to new directors in order to assist them with knowing well with CTCI Group’s business and operations before exercising their authority. g. Prepare the Self-evaluation of Corporate Governance Evaluation and assist related divisions to follow up Corporate Governance Evaluation Indicators and related regulations by the Competent Authority published.

5. Does the Company establish communication channel for stakeholders which including but not limited to shareholders, employees, customers and suppliers, set up a dedicated section in its corporate website for stakeholders, and properly respond to CSR-related issues concerned by stakeholders?

V The Company establishes "CSR" and "Investor Relations" sections in its corporate website to explain to stakeholders the conducts for fulfilling CSR and may be contacted via its corporate website when needed. The Company will give proper feedback to any reasonable concerns raised by the stakeholders.

None.

6. Does the Company entrust the professional stock affair agency for the shareholder affairs? V The Company has entrusted the department of the stock affair agency of the KGI Securities Co. Ltd. to assist us in the stock affairs.

None.

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7. Information Disclosure (1) Does the Company set up a website to disclose information regarding the Company’s finance, business and corporate governance status? (2) Is there any other information disclosure channels (e.g., maintaining an English-language website, appointing responsible people to handle information collection and disclosure, appointing spokespersons, webcasting investors conference)?

V (1) a) The Company has set up a Chinese/English website (www.ctci.com) to disclose information regarding the Company’s finance and business status and update information regularly. b) The Company has disclosed information regarding the organization and function of Internal Auditing Dept., “Rules Governing Procedure for Making of Endorsements or Guarantees”, “Rules Governing Acquisition and Disposal of Assets” and “Rules Governing Procedure for Loaning of Funds” on the Company website. (2) a) The Company has set up a Chinese/English website and has appointed Brand Management Dept. to handle information collection and disclosure. b) The Company has appointed the Head of Executive Management Office as the spokesperson, CFO as deputy spokesperson and they are responsible for speaking to the public. The Company will hold investors conference presentation according to practical needs. c) The audio-visual record of investor conference has been posted on the Company website. The Company has disclosed finance and business information revealed in inventor conference on the Company website and the Market Observation Post System pursuant to regulations of Taiwan Stock Exchange.

None.

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8. Is there other important information, which helps to understand the governance and operation of the company, which includes but not limited to the rights and interest of the staff, cares for the employees, investor relations, relation with the suppliers, rights of the stakeholders, trainings received by the directors and supervisors, the implementation of the risk management policy and risk assessment criteria, the liability insurance policies taken out for the directors and supervisors, etc.?

V Please refer to the【Note 2】. None.

9. According to the last Corporate Governance Evaluation by TWSE, please indicate the situation has been improved and the priority and measures for the non-improved ones.

V The result of the 4th Corporate Governance Evaluation System was announced. Please refer to the【Note 3】for the specific improvements.

None.

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【Note 1】

No. Evaluation Item Result Qualify for Independence 1 The engaged auditors should not accept the engagement when they may have involved in any direct or material indirect interests which may impair their impartiality and independence.

Yes Yes

2

An audit or review of financial statements delivers high or medium (but not absolute) assurance to potential users of financial statements. In addition to the maintenance of independence in appearance, the maintenance of independence in mind is more important for an independent auditor. Therefore, the members of audit engagement team, the partners of the accounting firm, and accounting firm and its affiliates must be independent to us.

Yes Yes

3

If the engaged auditor fulfills any of the below requirements:

Yes Yes

(1) Integrity: an independent auditor shall be straightforward and honest during his/her provision of professional services. (2) Objectivity: During his/her provision of professional services, an independent auditor shall be objective and avoid any conflict of interests to override his/her independence. (3) Independence: an independent auditor shall have independence in mind and in appearance on an audit or review of financial statements.

4 Independence is related to the integrity and objectivity. During the engagement, if an independent auditor isn’t in the lack/impairment of independence and thus affects his/her integrity and objectivity. Yes Yes

5 If the independence of an auditor isn’t impaired by self-interest, self-review advocacy, familiarity, and intimidation. Yes Yes

6

Self-interest could impair an auditor’s independence. Self-interest means acquiring a financial interest in an audit client (i.e. CTCI Corporation) or having another conflict of interests created by other interests or relationships with us. If our engaged independent auditor isn’t in any of the below situations: Yes Yes

(1) Having a direct or material indirect financial interest from us. (2) Having financing or guarantee relationship with us or our directors. (3) Concerned about the possibility of losing CTCI Corporation as a client. (4) Having a significant and close business relationship with us. (5) Entering into a potential employment negotiations with us. (6) Entering into a contingent fee arrangement relating to our audit engagement.

7

Independence influenced by self-review means an independent auditor uses a report or judgment resulting from a non-audit service as an important factor to conclude the result in an audit or review of financial information, or a member of the audit engagement team is our former director, or is in our key position with significant influence over the subject matter of the audit engagement. If the engaged auditor isn’t in any of the below situations: Yes Yes (1) A member of the audit engagement team is/was our director, supervisor, manager, or employed by us in a position with significant influence over the subject matter of the audit engagement within last two years.

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No. Evaluation Item Result Qualify for Independence (2) The accounting firm of the audit engagement team provides us non-audit services which would directly affect a material item of the audit engagement.

8

Independence influenced by advocacy means that a member of the audit team acting as an advocate of our position so the objectivity of the independent auditor could be challenged. If the engaged auditor isn’t in any of the below situations: Yes Yes (1) Promoting or brokering shares or other securities issued by us. (2) Acting as an advocate on behalf of us in litigation or disputes with third parties.

9

The effects of familiarity to independence means a close relationship with our directors, supervisors, and/or managers will cause an independent auditor to excessively concern or sympathize about our interest. If the engaged auditor isn’t in any of the below situations:

Yes Yes (1) Having a family relationship with our directors, supervisors, managers, or employees in a position with significant influence over the subject matter of the audit engagement. (2) A former partner, who was disassociated with the engaged accounting firm within a year, joins us as a director, supervisor, manager, or employee in a key position with significant influence over the subject matter of the audit engagement. (3) Accepting gifts or preferential treatment from our directors, managers, or us.

10

Independence influenced by intimidation means an independent auditor is deterred from being objective due to actual or perceived pressures, including the attempts to exercise undue influences. if engaged auditor isn’t in any of the below situations: Yes Yes (1) Requesting an independent auditor to agree with our inappropriate accounting treatments and disclosures. (2) Compelling an independent auditor to reduce the extent of work performed in order to lower the audit fee.

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【Note 2】 1. The system about employee rights and interests and the care for the employees adopted by the Company is implemented in accordance with the related regulations and specified clearly in the working regulations of the employee manual, which include the gender equality at work, sexual harassment prevention and treatment, the compensation and pension for the disaster, injury and disease, subsidy principals the for weddings /funerals, etc. The labor management meeting is held as well to communicate with each other for issues concerned by the labor regularly each quarter. There are other measurements like the mail box for the employee opinion and special line against the sexual harassment to give trust to the employees thoroughly and to carry out the self- governance of the employee. 2. The first principle for the sound corporate administration is to protect the shareholder rights and interests and to treat all shareholders fairly. To encourage the investors to participate in the corporate governance and to implement the shareholder activism, the Company has uploaded the minute of the shareholder meeting on the website and released the major information in English and Chinese simultaneously to protect the rights and interests of the domestic and international investors. Moreover, the Company holds the corporate conference regularly and uploads the video of the conference to the website to increase the understanding of the corporation about the Company to maintain the shareholder rights and interests accordingly. 3. The Company offers the relevant laws and regulations requiring attention and seminar information for further study to directors and make presentation about the business regularly in the meeting of board of directors. (For detailed information, please refer to the important information concerning the corporate governance and operation.) 4. All directors will attend the meeting of board of directors except for special situation and their attendance of the meeting will be reported in the Market Observatory Post System. 5. The Directors of the Company will recuse themselves to avoid conflicts of interests in the Board Meeting. 6. The Company purchased D&O insurance for its directors and supervisors. 7. We strictly conduct supplier management. Only those qualified and registered in the CTCI Group PSSCM (Project Service Supply Chain Management) System have the chance for quote and to be contracted for plant construction. Issues regarding the scope of the integration work, the work regulation, the project schedule, the quality inspection, QHSE Management are well- explained to the contractors during the inquiry and quote for them to understand completely the content of work, responsibilities and obligations in the contract. The total amount of the contract, the payment term, the responsibilities, obligations and penalties for the mutual parties are specified in the contract as base for the implementation of the contract of the corporative contractor. Upon the delivered equipment, materials or services, project team will evaluate vendor performance, including quality, HSE and schedule. The performance evaluation will be referred to future vendor selection for inquiry. In case of any inappropriate-issue caused by vendor during on-going contraction, project team also could initiate vendor performance evaluation in time in order for earlier countermeasure. With the sound finance of the company, all contractors get paid in due course and according to the payment term. Besides, the function to check the payment is established for the contractors to know the review procedure of the invoice. The company treats all contracted contractors fairly and honestly and negotiates with them for cooperation, mutual harmony and prosperity. 8. “Implementation of risk management policies and risk measuring criteria” Risk management policies: Declarations: All kinds of risks will affect the achievement of objective of the company. The understanding and management of risk can assist the company to prepare countermeasure and improve performance, so as to achieve stable growth and pursue the sustainable operation. Descriptions: Through constructing proper risk management procedure, the risk management of the company will integrate into the daily operating activities to manage the operating risks effectively. For this purpose, the company will:

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Establish enterprise risk management system consistent with company strategy; Define the roles and responsibilities of all employees in enterprise risk management, and communicate with all employees; Prepare systematized enterprise risk assessment method to ensure that risks significantly affecting the company can be identified effectively; Ensure that information related to enterprise risk can be passed through explicit and effective channel; Integrate enterprise risk management mechanism into daily operating activities. Enterprise risk management is a continuous activity; all employees of the company are responsible for understanding and carrying out risk management system of the company. All colleagues shall properly perform the duty of risk management; each management level shall also comply with relevant requirements of this risk management system. CTCI follows the “Risk Management Regulations” which defines the risk management process and risk measuring criteria to perform the risk management tasks. Each risk management unit regularly performs risk identification and risk evaluation and proposes the improvement plan. The report is submitted to the Risk Management Executive Committee to control and to reduce the risks. 9. “To Satisfy Our Customers with Optimized Engineering Services” is CTCI’s corporate mission, and we stress customers’ feedback highly. For years, we have been collecting customers’ feedback based on “Customer Service Enhancement Regulations” in a timely fashion and proactively conducting customer satisfaction survey twice a year. Besides, a cross-departmental “Customers Services Feedback Group” coordinated by the President was established. The Group would review the customer feedback raised in the questionnaire survey, proposed correction actions, and instructed the departments concerned to fulfill their tasks accordingly to make sure our customers’ trust and expectations are met.

【Note 3】 No. Evaluation Item Specific Improvements 2.6 Was the Annual General Meeting convened before the end of May? CTCI’s Annual General Meeting will be convened on 29th May, 2018.

3.31 Is there performance appraisal of board of directors, which is carried out annually and posted on the Company website or the annually report?

The Company has formulated the “Regulations Governing the board Performance Evaluation“ on 13th December, 2016. The internal board performance evaluation for the current year shall be conducted at the end of each year. The results of performance evaluation for 2017 were reported to Board of Directors on 9th March, 2018 and disclosed on the Company’s website. 4.2 Did the company announce the Chinese and English versions of material information in synchronization?

Requiring the concerned departments announce the Chinese and English versions of material information in synchronization.

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3.4.4 The Remunerate committee’s composition, responsibilities and operation: A. Remuneration Committee members’ information

Identity (Note1)

Criteria Name

Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience Independence Criteria(Note 2) Number of Other Public Companies in Which the Individual is Concurrently Serving as a member of Remuneration Committee

Remark

An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University

A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company

Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company 1 2 3 4 5 6 7 8

Independent Director Frank Fan — — V V V V V V V V V 0 Independent Director Yen-Shiang Shih V — V V V V V V V V V 0 Independent Director Jack Huang V V V V V V V V V V V 3 Note 1: Please fill out director, independent director, or other. Note 2: 1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares. 3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings. 4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs. 5. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings. 6. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company. 7. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. 8. Not been a person of any conditions defined in Article 30 of the Company Law.

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B. The state of operations of the Remuneration Committee a. This committee is comprised of 3 members. b. The term of current committee members is from June 28, 2017 to June 27, 2020. A total of 5 meetings of the Remuneration Committee were held during the most recent fiscal year: (As of March 31st, 2018) Title Name Attendance in Person By Proxy Attendance rate (%) Remarks

Convener Johnny Shih 1 0 100 The members of the 2nd Term Remuneration Committee should attend once until 27th June, 2017.

Member Jack Huang 1 0 100 Member Frank Fan 1 0 100

Convener Frank Fan 4 0 100 The members of the 3rd Term Remuneration Committee were appointed on 28th June, 2017 and should attend 4 times.

Member Yen-Shiang Shih 4 0 100

Member Jack Huang 4 0 100 Other mentionable items: 1. If board of directors declined to adopt, or modified, a recommendation of the remuneration committee, the dates of meetings, sessions, contents of motions, resolutions of the Board Meeting and the Company’s response to remuneration committee’ opinion should be specified (If the remuneration passed by board of directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. If there are objections or reservations to any discussion matters or extraordinary motions expressed by any member of the Committee, recorded or provided in written forms, the dates of meetings, sessions, contents of motions, all members’ opinion and the Company’s response to members’ opinion should be specified: None.

52

3.4.5 Corporate Social Responsibility (CSR)

Evaluation Item

Implementation Status Deviations from “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and reasons

Yes No Summary Statement

1. Corporate Management Practices (1) Does the Company formulate CSR policy or systems and review the implementation status? (2) Does the Company arrange CSR trainings regularly? (3)Does the Company establish exclusively (or concurrently) dedicated units with senior management authorized by the Board to be in charge of CSR Promotion and report to the Board?

V (1) CTCI established the CSR Promotion and CSR Report Publication Procedure in November 2009 to define the organizational framework, responsibility and authority of the CSR Committee, and to specify the cautions and rules for promoting CSR within CTCI. When setting issues to be promoted within CTCI, these issues are considered in accordance with the Global Reporting Initiatives (GRI) Standard in terms of corporate governance, environmental protection and social participation as well as AA1000 International Standards, including the concern for stakeholders and impacts on CTCI; and systematic procedures for determining such have been established. (2) The Company holds environmental education courses irregularly, and promotes the concept of corporate social responsibilities through various approaches, such as trainings, public announcement and activities held. (3) To continuously strengthen corporate sustainability, the functional committee of the board—Corporate Governance Committee is established to administer CSR related activities and policies and the promotion of them. Meanwhile, to carry out every policy, a CSR Task Force was set up under the Corporate Governance Committee which shall report to the Board on a yearly basis. The President and the GSS CEO act as the Chief Officer and the Coordinator of the CSR Task Force, respectively. Alongside them are the Social Participation Group, the Environmental Protection Group and the Operation & Governance Group. Their members are, the heads of EPC Operations (EPCO), Hydrocarbon Business Operations (HBO), and Infrastructure, Environment & Power Business Operations (IEPBO), leaders of the three group, head of Brand Management Department, and other personnel designated by the

None.

53

Evaluation Item



(4)Does the Company make a reasonable remuneration policy; combine performance assessment of employees with CSR policy; and regulate an explicit and effective system of

President. CTCI CSR Task Force holds meetings either routinely or occasionally, and it reports to the Corporate Governance Committee, a functional committee under the Board of Directors at the end of every year. The scheduled meeting is held every October, and the Coordinator is responsible for organizing the meeting. The annual budget of the subsequent year is proposed, and agendas are set and discussed. Other meetings are held as the Chief Officer sees fit. The members of the Committee and department supervisors that are relevant to the topics for discussion should either be present or appoint representatives to attend the meetings. The primary roles of the committee are as follows: Establish CSR Policy. Review operations of the CSR Management System. Review CSR targets, strategies, and action plans of the Company, and guide and track the developments, performances, and improvements of each action plan. Supervise communication plans with each stakeholder (e.g. the writing of the CSR Report), and invite stakeholders to join in discussions with committee members or host stakeholder meetings as the need arises. Supervise that the writing and compilation of the CSR Report is accomplished within the set timeframe.

(4) CTCI values employee welfare and care. Apart from offering a base salary higher than the minimum local wage, CTCI also appeals in internal and external fairness as well as individual fairness. In terms of external fairness, we have external professionals surveying the salary and benefit survey with fully understanding of the market rate while analyzing the employment environment as the foundation of our salary design. For internal fairness, the salary structure is designed based on the evaluation of skills and duties of employees so as to insure that the

54

Evaluation Item



reward and punishment? salary standard is appropriate and irrespective of gender difference. To encourage better performance of colleagues, CTCI also combines one's payment with his/her performance, especially for variable bonus, to realize individual fairness in salary with one's organizational performance, departmental performance, and personal performance. Additionally, salary review is performed according to the market salary survey and personal performance ever year. Aside from specifying in Topic 1, Performance, Rewards and Discipline of Chapter 6 Work Rule in the Employees Manual, we also speculated CTCI Employees Reward and Punishment Regulations accordingly, so as to boost morale and strengthen disciplines with fairness, justice, openness, and rationality. 2. Sustainable Environment Development (1) Does the company dedicate itself to improve the efficiency of all kinds of resources and use the renewable materials that impact on the environment less? (2) Does the company set up an environmental management system that suits the nature of industry?

V (1) As a member of the society, CTCI shall spare no pain to save energy and reduce carbon emissions. In terms of engineering expertise, CTCI has been making continuous innovation of engineering technologies to reduce energy consumption and reduce pollution. For routine affairs, CTCI urges employees to save energy and resources and emphasize the importance of saving paper, electricity, water and petroleum consumption. (2) CTCI has long been dedicating to the R&D of green engineering technologies. The aims are to provide owners with economical, feasible environmental and energy-saving solutions, to reduce pollution, to lower impacts to human health and environment risk, and to bring innovation and enhance the industry’s green competitiveness based on the core technology of CTCI, with a full life cycle perspective starting from engineering design, procurement, construction, commissioning, operation and decommissioning. Hence, we can attain a multi-win scenario among CTCI, cooperative partners, stakeholders and social environment.

None.

55

Evaluation Item



(3) Does the Company pay attention to the impact of climate change on its operations; carry out the investigation of greenhouse gas inventory; and make strategies of energy efficiency, carbon and greenhouse gas reduction for the company?

(3) CTCI dedicates to working on the greenhouse gas (GHG) inventory, controlling GHG emissions, submitting solutions to GHG reductions and implementing projects of GHG reductions in respect of GHG emissions management policies. To show the world its resolution to mitigate climate change, CTCI absorb the issues regarding greenhouse gases and climate change into the primary missions of CSR and the environmental protection group subordinate to the Board of Directors. Not only yearly routineness of GHG inventory but also promotion of energy conservation and carbon reduction projects, assessment of climate change risks and proposals of emergent strategies are the main accountability and responsibility of environmental protection task group. The environmental protection task group reports the management benefits of GHG and the results of climate change solutions to the general manager via routine work conferences. Due to the fact that supervision is exerted by the Corporate Governance Committee, an affiliation to Board of Directors, strategic suggestions regarding climate change shall be reported to Board of Directors regularly as the basis of long-term strategies. The Global Risks Report 2017 and 2018 published by World Economic Forum indicate that extreme weather events, natural disasters and failures of climate change mitigation are the top three risks for two consecutive years. With serious global climate change and the increase in energy consumption, enterprise transformation and low carbon business models became the key elements to improve competitiveness of all activities. Therefore, by introducing Task Force on Climate-related Financial Disclosure (TCFD) framework and by taking physics, obligation and transformation risks into account, CTCI will be able to evaluate efficiently the climate change risks that value chain partners, suppliers and CTCI itself encountered. It would accelerate the promotion of CTCI's climate-related financial disclosures and facilitate communication with stakeholders. In order to cope proactively with market needs, CTCI adopted the risk analysis of=TCFD to discover the risks and opportunities of business potentials in the future. In this way, we can evaluate the potential impact on finances and

56

Evaluation Item



propose relevant methods of management. It has been more than five years that the headquarters building of CTCI conducted the ISO 14064-1 GHG Emissions Inventories and Verification each year. In 2017, the headquarters building's emissions of CO2e in the Scope 1 and Scope 2 are 162.48 and 3,070.59 tons respectively. After it has been introduced and implemented by the headquarters building since 2012 until 2015, Tunghsiao Power Plant was changed into a demonstration site in 2016, which was later absorbed into external audit. In 2017, CTCI absorbed all domestic sites into the scope of inventory, which became an important milestone on the road towards the green engineering and management. According to the inventory results in 2017, all the domestic sites' emissions of CO2e in the Scope 1 and Scope 2 are 2,465.65 and 3,410.24 tons respectively. Our main objective of GHG reductions each year is: the average emissions of greenhouse gases shall not surpass those of former two years. With nearly 40 years of expertise and experience, CTCI seeks to create a better future with clients by introducing and researching innovative engineering technologies. Meanwhile, we keep improving our environmental technology in order to seize the opportunities brought by environmental risks when developing and adopting constructions with relevant technologies. Since the introduction of green engineering, we have always been the pioneer in the engineering industry. Enhancing the competitive advantage in green technology is one of our sustainable development goals, and we will make sure that our competitiveness has the advantage in the future market. These new leading technologies include the process, supply chains, construction and plant commissioning; they allowed the Company to play an important role in competing in the international Engineering-Procurement-Construction (EPC) turnkey projects.

57

Evaluation Item



Key Indicators for Green Engineering

1. Total electricity saved is 4,385.53 million kWh, which is equivalent to 15.05 days of Taipower Thermal Power Plant's total generating capacity. 2. Total amount of CO2e reduced is 64.64 million tons, which is equivalent to the annual carbon absorption of 166,174 Daan Forest Parks. 3. Total amount of water saved is 990,059,000 m³, which is equivalent to 3 years and 5 days of the total water usage of Taipei City. 4. Total amount of volatile organic material emitted is 117,346.2 tons. Note 1: From 2013 to 2017, green engineering has assisted project owners in achieving the results and benefits of energy saving and carbon reduction. Note 2: The energy conservation, CO2e emission, water conservation offered by green engineering are all part of the project to assist project owners in achieving their preset goals. It is calculated based on the annual savings, multiplied by the total savings in the plant's life cycle. The data collected by green engineering does not include the water, electricity and oil savings of the CTCI building and construction sites. Note 3: Considering the 30-year life cycle of a petrochemical plant and its long-term benefit of a 40-year life cycle, it is also common in other companies. Note 4: The generating capacity of Taipower Thermal Power Plant was 8,742 million kWh in January 2015. Note 5: Taipei City Government's official reply on March 30, 2015 states that the annual CO2e emission reduction of all the trees in Daan Forest Park is 389 tons. Note 6: According to statistics from Water Resources Agency, MOEA in 2016, the annual water use of Taipei City is 328,568,000 m³.

3. Social Welfare Protection (1) Does the company formulate management policies and procedures in accordance with relevant regulations as well as

V (1) In compliance with the United Nations Global Compact regarding regulations over human rights, labor standards, environment and anti-corruption, in addition to ensuring all daily operations conforming to corporate ethics, CTCI develops basic conduct standards of compliance for all board directors, managers, employees and procurement staff. This set of

None.

58

Evaluation Item



International Covenant on Human Rights? (2) Does the company create a mechanism and channel for employees’ complaint and settle it properly? (3) Does the company provide employees with a safe and healthy working environment as well as the regular tutorials regarding the knowledge of safety and health?

standards Corporate Governance Norms, Business Ethical Behavior Norms for Board Members and Managers, Code of Employee Ethics and Behavior, and Work Ethical Behavior Rules for Procurement Staff. (2) The company has stipulated “Guidelines for Ethical Conduct“ and specifically defined the guidelines and penalties in “Prohibition of Bribes Offering and Acceptance, and Blackmailing”, “Preventing Conflicts of Interest”, and “Protection of Business Confidentiality and Intellectual Property Rights”. The company established an investigation team and complaint hotline for corruption and briberies, which accept reporting from persons inside and outside of the organization at all time. The reporting and consulting hotline is (02-2835-5936) or the email address: [email protected]. The department in charge of the complaints is the Human Resource Department. We encourage employees to notify any infringement of law, regulation or staff regulations through named reporting. The company should by any means hold confidentiality of the identity of the person submitting this report to avoid threats. In cases that one is suspicious of corrupt practices but could not be verified of the action violating the law, the consulting hotline is available for immediate report. Colleagues can even write e-mails to the feedback box, which will be directly responded by the manager of Human Resource Department or related departments for further handling. (3) CTCI’s HSE Policy Statement stresses “Safety First” and works on aspects including “Promote Personal Health and Wellbeing”, “Protect the Environment and Pursue Sustainability”, “Implement Effective Risk Management”, “Comply with Legal and Contractual Requirements” , “Encourage Training and Engagement”, and “Continuously Improve Our HSE Management System” to provide employees with a safe work environment. CTCI established a health center in 2013. We advocate health promotion through inviting physicians or nutritionists as well as

59

Evaluation Item



(4) Does the company create a mechanism of regular communication for employees and notify them of any significant operational changes that might impact on them?

other experts to hold health promotion seminars and provide physician on-site services every month. The topics of health promotion seminars feature mental, physical and spiritual wellbeing. Related contents will be published on CTCI Monthly and posted on the corporate website as well. Moreover, to create a friendly workplace, we set up a breastfeeding room for female colleagues who become new moms. (4) To enhance the industrial relation and guarantee rights of the labor, CTCI sets up an “Employment Coordination Meeting” on a quarterly basis (i.e., 4 meetings for a year). Issues concerned by employees of the quarter are reported or discussed in the meetings. Major issues raised are CTCI business development and the employees’ health, safety, welfare, salary, reward and punishments. The “Employment Coordination Meeting” is composed of 6 management representatives and 6 labor representatives. The head of the Group Shared Services serves as the chairman who would assign personnel familiar with business operations and labor situations as management representatives. The 6 labor representatives are elected by the constituency (units of business operations) and each term is 3 years. Wherein, supervisors above the rank of senior vice president are not allowed to serve as labor representatives, and female representatives must not be less than one-third of the total labor representatives. In internal communication, we hold “Forum with Executives” regularly for employees to discuss with higher level supervisors face to face and raise opinions and questions about company operation or management. The forum attracts 50 to 60 employees to participate each time. During the discussion, employees raised questions enthusiastically and feedbacks are directly provided. At the forum, managers can hear the voice of employees, and employees can understand better about company policy and direction. Furthermore, higher-level supervisors will also discuss with recruits regularly to understand opinions and ideas of them through face to face communications. We also conducted anonymous personal

60

Evaluation Item



(5) Does the company draw up workable plans of vocational skills development for employees? (6) Does the company formulate policies and a complaint procedure regarding consumer rights protection based on the workflow of R&D, procurement, production, operation and service?

surveys on employees who have resigned, in order to understand employee satisfaction rate, loyalty, and stability from various perspectives. The senior management routinely conducted seminars with new entrants, in order to understand their ideas and suggestions for the Company and their work through face-to-face communications. (5) To provoke the passion for work in every employee and in consideration of the need for the organization to satisfy employees with self-realization, CTCI started promoting Individual Development Plant (IDP) for all employees since 2014. Each employee may develop different learning development plans according to the corporate development, competency required for the function and individual development intent, which urges the employees to increase their own KSA (knowledge, skill and attitude) while employees can develop training, experience, disciplines, and refinement based on their own strength and weakness through communication with the coach. Consequently the overall competitiveness in employees is enhanced to reach win-win situation between the employees and the company, which forms an unconstrained work environment with infinite development opportunities. (6)The company conducts customer satisfaction survey on the projects in progress and the projects during its closing to warrantee period semiannually. The Brand Management Department will send out the questionnaire to customers. Then, the “Customers Services Feedback Group” will make analysis on the survey results and seek effective solutions for further improvement by respective departments following acquiring approval by the President. This has ensured CTCI's quality standard can win customers' trust and meet their expectations.

61

Evaluation Item



(7) Does the Company abide by relevant regulations and international standards in the marketing and labeling of their products and services? (8) Does the Company check if the suppliers had any record of affecting environment and society in the past before doing business with them? (9) Do the contracts signed between the Company and suppliers contain the terms that the contract can be terminated or canceled at any time if the supplier violate against its policy of CSR and has significant impact on environment and society?

(7) A commitment to quality is the key that enables CTCI to operate sustainably, it is also a promise that CTCI has kept to its clients. To do so, we established Quality Management System based on ISO 9001:2008 to make sure all vital stages of project management, engineering, procurement, construction, fabrication, commissioning and maintenance are in compliance with engineering and regulation requirements. We had been certified since 1996. (8) All vendors have to sign "Contractor’s Commitments on Corporate Sustainable Management", promising to be in compliance with the sustainable operation practice. For new vendors requested by the management to undergo plant visiting survey, "Self-Assessment Sheet of Contractor's Corporate Sustainable Management" will be distributed and filled in beforehand for evaluations of their social and environmental performances. As of 2016, vendors listed in Tier 1 will have to fill in "Self-Assessment Sheet of Contractor's Corporate Sustainable Management". We are scheduled to complete the survey within 3 years by surveying over 200 vendors each year to evaluate the possible environmental and social impacts of the Tier 1 suppliers. (9) Since 2011, we began to incorporate "Corporate Social Responsibilities" with vendor evaluations; while beginning with 2014, we add more items including "Environmental Management", "Labor Conditions", "Human Rights" and "Social Impact" to the list to ensure the vendor is qualified with ISO14001/OHSAS 18001certification, and comply with requirements for quality, price, delivery period, safety, health, environmental management, labor conditions, health management, and employee welfare. Disqualified vendors will be suspended for cooperation following such stringent review process.

62

Evaluation Item



4. Information Disclosure Enhancement (1) Does the Company disclose any relevant and reliable information regarding CSR on its official website and Market Observatory Post System?

V (1) (a) Being one of the leading transparent companies, we participated in the “Information Disclosure and Transparency Ranking System” launched by TWSE and Gre Tai since 2004, and were ranked as a listed company with rather transparent information disclosure. From 2009 , CTCI has been ranked as an A++ company for 6 consecutive years, the top ranking a company can ever receive. Since the year 2014, TWSE and Taipei Exchange (formerly Gre Tai Securities Market) has been holding “Corporate Governance Evaluation”, and CTCI has been upholding the highly transparent principle for corporate governance and been listed as Top 5% for 3 consecutive years. The fact proved our rigor in corporate governance and effort to maintain information transparency. (b) CTCI has been providing correct, open and transparent important operational information for investors to make the correct choice. We also assign a spokesperson, organize conference calls, publish periodic reports, and make important announcements over the CTCI website to make active communication with investors. In addition to the corporate website, we also disclose relevant information over the Market Information Post System of the Taiwan Stock Exchange. Since March 2010, the English version of important announcements has been made available. We also organize overseas investor conferences for foreign investors or participate in the investor conferences organized by securities companies, in order to improve and increase communication and exchange with overseas corporate investors.

None.

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Evaluation Item



(c) In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI CSR Report in 2008 to disclose the information concerning our materiality issues according to the GRI Guideline. We also regularly submit the report to the British Standards Institution (BSI) for verification. In fact, we are the first private business in Taiwan to have our CSR report pass the BSI verification. For more details, Please refer to the item 7 “If the corporate social responsibility reports have received assurance from external institutions, they should state so below“ of this table. 5. If the Company has established corporate social responsibility principles based on “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies,” please describe any discrepancy between the principles and their implementation: verified by BSI, a third party, CTCI CSR Report is in compliance with the three major principles of AA1000 Assurance Standard, which are Inclusivity, Materiality and Responsiveness. 6. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices: (1) CSR Policy Statement: To fulfill corporate social responsibilities with due faith has been a target of operation for our company; aside from pursuing the largest profits for our shareholders, we aim to attend at the same time the rights of the stakeholders, conform to the ethical codes considered the social norms, and promote energy saving and carbon reduction to slow the pace of climate change. It is hoped that with such actions we can construct a society of justice and fairness jointly with the stakeholders while creating a sustainable living environment. Thereby, the implementation directives of CSR promoted by CTCI Corporation include the three aspects, "Operation and Governance," "Environmental Protection," and "Social Participation," committing to developing a robust organizational structure, realizing the vision of green engineering with due diligence, and performing CSR with due faith.

Developing a Robust Organizational Structure Steady growth and sustainable development are the basic requirements for performing CSR. Without them, no enterprise is capable of promoting social welfare and environmental protection. For this reason, besides legal compliance, we will continue to develop an effective internal control system, maintain information security, carry out risk management, ensure accessibility and transparency in disclosure, uphold business self-discipline, and optimize organizational structure, while at the same time provide employees with steady career development, shareholders with stable long-term profits, and clients with satisfactory project service quality.

64

Evaluation Item



Performing CSR with Due Faith "Cultivating engineering talent for the enhancement of engineering service quality" has been the corporate mission of CTCI since its inception, and it is the most straightforward method to requite society. The Company has been in full compliance with the labor laws, dedicated to protecting and respecting the principles of globally recognized basic labor rights, ensured such rights applied for all without discrimination, and provide diversified communication channels as well as a healthy and safe workplace for employees. Also, we maintain good neighbor relationship with citizens in local communities and promote social welfare in the best way possible. Realizing the Vision of Green Engineering with Due Diligence CTCI has long been emphasizing the technological development for green engineering, and dedicating efforts to minimize pollution, and lower the impacts made to human health and the environment during the whole life cycle of project executions, including engineering (E), procurement (P), construction (C), commissioning (K), operation and maintenance after plant turnover to the owners. All the procedures are taken with approaches that are economical and viable with an aim to bring innovation and enhance the green competitiveness of the industry to create a multi-win scenario among CTCI, cooperative partners, stakeholders, and the social environments, and to contribute its share to the creation of a sustainable eco environment. (2) Methods of communication, frequency, and key responses:

Stakeholders Channels of communication Frequency of communication Major issues of concern How does CTCI respond Employees Labor Relations Conference Every quarter Coordination of industrial relations, promotion of labor-management cooperation and increase in work efficiency.

Representatives of employer and employee shall do their best to cooperate with each other, in order to improve the employment and protect the equity of labor. Senior Management Seminar Every quarter Enhance communication between managers and employees.

Allow employees to express their opinions, offer suggestions and also have communication and dialogue with their managers.

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Evaluation Item

Implementation Status Deviations from

“Corporate Governance Best-Practice

Principles for

TWSE/GTSM Listed

Companies” and reasons


Workplace Safety and Health Committee

Each quarter Participate in deliberation meeting and offer suggestions on company ESH policies and other ESH management and measures.

Reorganize the inquiry system of individual safety and health training record.

Committee report and meeting minutes will be announced to all employees through EIP when over.

Besides the existing inquiry system, the EIP system is now easier for our employees to access the record of their personal occupational safety and health training.

Employee Opinion Platform Dedicated Phone Number Dedicated E-mail Address

Any time Create an effective communication environment, listen carefully the voice of employees, and provide employees with effective communication channels.

Set up different channels for different issues in order to facilitate opinion expressions of employees. We integrated these channels into a single channel: "Employee Opinion Platform".

CTCI E-Newsletter Every quarter Get the latest news and information about the Group and the Company.

Since 2017, CTCI has launched the CTCI Reliable Quarterly E-Newsletter in both Chinese and English to communicate quickly and efficiently with its stakeholders all over the world.

Employee Benefits Committee

Any time Promotion of Authorized Vendors and Peripheral Stores.

Lunar New Year Party Satisfaction Survey.

The contract with authorized stores is officially signed, and the latest information will be published on the website of Employee Benefits Committee for personnel to verify.

The survey is accomplished, and the concrete suggestions will be delivered to AGS and PR Department as the information for the future activities.

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Evaluation Item

Implementation Status Deviations from

“Corporate Governance Best-Practice

Principles for

TWSE/GTSM Listed

Companies” and reasons


Shareholders/ investors

Shareholders' Meeting

Every year Understand the latest

operating situations and

financial performance of the

Company.

For questions regarding our

operating situations, financial

performance or media report,

you can contact us directly to

have a reply.

Report the latest operating situations and

financial performance to the shareholders/

investors through domestic and overseas

investor conferences and MOPS, and also have

in-depth discussions with them.

The Investor's section on our company website

discloses contact information of all

spokespeople, and we established an Investor

Relations Office for shareholders/investors to

ask questions any time.

Investor Conference Every 6 months

Overseas Investor Conference

From time to time

Investor's section Any time

Visit the top 10 shareholders

Every year

Telephone, fax, e-mail, website

Any time

Community Hold large-scale cultural/ charity events

Every year Invite to organize Shilin

Cultural Festival together to

cultivate community culture.

We provide funds, space and personnel to help

organize community cultural events, and

enhance the promotion of environmental

education to improve overall community culture

and the awareness of cherishing earth

information.


Any time

Suppliers/ downstream contractors

Visit factories Irregularly Care if CTCI will choose

vendors based on a "vendor

CSR assessment" in the future

Want CTCI to hold a "supplier

conference" to get to know

each other

High CSR risk vendors will be audited in the

future

A "suppliers meeting" has been held in 2018 Factory visits Irregularly


Any time

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Evaluation Item



Customers Client satisfaction survey Every 6 months Express your thoughts on CTCI's overall service through our satisfaction rate survey. We collect customer feedback in real time, and conduct secondary customer satisfaction questionnaires every year. We established the interdepartmental "customer feedback operating team," chaired by our president. The team discuss and review upon the questionnaires and offer suggestions to make improvements, while other departments carry them out.

Telephone, fax, email Any time Personal visits Any time

Media Important Information Press Release Any time Obtain correct information on issues that cared by the public.

Clarify and explain the information shown in the press release regarding the CTCI's bidding indicator engineering projects.

Establish global key locations, final presentations and major group events for our bidding indicator engineering projects and received awards, and publish press release in order to inform the public. Provide explanations according to media's questions.

(3)Corporate social responsibility implementation planning and effectiveness CTCI will continue to invest in social charity. To review the benefits from the investment, we adopt the London Benchmark Group (LBG) as our evaluation mechanism. Each category of investment is divided by activity goals and cost. We evaluate the positive benefits generated from the investment, measure the impact of social participation to assist with the corporation in reasonable resource distribution, and review the benefits of the resource input, so as to effectively integrate financial and non-financial information, while at the same time meet the expectation of multiple stakeholders and create shared values.

68

Evaluation Item



Item Content Cost (TWD) Proportion (%) Charity activity 1. Building neighborhood relations.

2. Offering charity sales opportunities to underprivileged groups such as LoveSoap. 3. Volunteers participating in the "Eat Well at Year's End" event. 4. Donating old computers to the Taiwan Bone Marrow Transplantation Association. 5. Participating in "Your Old Computers, His New Hope" campaign organized by the Triple-E Institute. 6. Long-term association with Children Are Us Foundation, providing venue for charity sales and assisting it with promotional campaigns.

658,980 2%

Community investment 1. Long-term cooperation with Syin-Lu Social Welfare Foundation, providing the dormitory cleaning service. 2. Donation to Taiwan Fund for Children and Families. 3. Long-term co-host of Zhishan Cultural Festival. 4. Professionally assisting local construction with necessary resources (project construction sites).

788,400 3%

Commercial activities 1. Assist non-profit organizations through engineering expertise and skills: participating in editors' meeting of the welded piping connector design manual. Sharing of practical experience with the EPC project management.

26,658,471 95%

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Evaluation Item



Inviting proprietors (clients) to share their practical experience Inviting government officials and personnel in academia to share their practical experience. Sharing of Golden Quality Award case experience. Sharing of experience of Private Participation in Infrastructure Projects (PPIP). Exchange experience on the New Southbound Policy. Expand overseas market and engineering industry plan in accordance with government policies.

2. Nurturing Students: Corporate Visit. Awarding scholarship. Engineering Experience Exchanges.

3. Industry-academia cooperation in engineering technology: Offering students part-time jobs. Industry-academia cooperation programs

4. Support non-profit organizations with annual fees/membership fees: Participate in 40 non-profit organizations either as a group member or as an individual member.

5. Support the operation of non-profit organizations by providing professional skills: Support the Chinese Association of Engineering Consultants

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Evaluation Item



in accounting-related matters Fund collection/disbursement and capital movement for the Chinese Association of Engineering Consultants

Item Content Amount (TWD) Proportion (%)

Cash donation CTCI Education Foundation Subsidizing the underprivileged groups Building neighborhood relations Shilin Cultural Festival Awarding scholarships

16,089,953 57%

Goods donation Donation to Taiwan Fund for Children and Families Donation of second-hand computers Gifts for neighborhood activities 22,000 0%

Volunteering "Eat Well at Year's End" event volunteers Donation of old computer equipment Shilin Cultural Festival Beach Cleaning Activities Participation in non-profit organizations

10,827,600 39%

Management Cost Meet expenses for social charity events, including manpower/equipment/offices/post and electricity/water, etc. 1,126,298 4%

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Participation in Nonprofit Organizations CTCI mostly participates in engineering industry-related non-profit organizations. Through active participation of professional organizations, CTCI is committed to improving the exchanges across industries and by assuming positions as directors and or supervisors in those organizations, promote organizational well-being, sharing and enhancing practical experience with the industry, and raising the standards for the engineering industry chain. In 2017, CTCI participated in 40 non-profit organizations as either a group member or an individual member. Adding to the organizations joined by our affiliated companies, CTCI Group is involved in the affairs of 64 organizations. To encourage our employees to extend their exchanges with the industry, and learn practical experience, CTCI also formulates a subsidy system. In 2017, CTCI subsidized 836 individuals with NTD 592,506. The year-long expense for non-profit organizations is NTD 3,450,441 in total. Identity of participant Non-profit organizations in which CTCI participated in 2017

Director

Chinese Institute of Engineers (Main Chapter), Chinese Petroleum Institute, Taiwan Institute of Chemical Engineers, Chinese International Economic Cooperation Association, Chung-Hwa Railway Industry Development Association, Taiwan Carbon Capture Storage and Utilization Association, Board of Directors, Taiwan Institute for Sustainable Energy, Intelligent Transportation Society of Taiwan, Chinese Institute of Engineers (Kaohsiung Chapter), Sino-Arabian Cultural& Economic Association, Middle East Business Association, Taiwan India Business Association, Chinese Arbitration Association, Taiwan Safety Council, Cross-Strait CEO Summit, Taiwan Welding Society, The Chinese Association of Engineering Consultants, The Taipei Federation of Engineering Consultants, SinoIndonesia Cultural and Economic Association, Chinese Society of Mechanical Engineers, Chinese Society of Structural Engineering, Pressure Vessel Association, Nuclear Science & Technology Association, Taiwan Energy Service Association, Taiwan Road Association, Chinese Environmental, Safety and Health Association. Supervisor The Chinese Association of Engineering Consultants, Taiwan Association of Energy Companies, Taiwan Institute of Steel Construction, The Taipei Federation of Engineering Consultants, Taiwan Welding Society.

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Talent fostering an industry-academia cooperation CTCI not only provides its employees with a variety of educational training resources to enhance their professional competency, but also capitalizes the knowledge power of its senior engineers and senior managers, who deliver lectures in engineering departments of universities, sharing practical experience with the academia. Moreover, it offers students of engineering-associated departments and those interested in engineering opportunities with internship, so as to minimize the gap between the industry and the academia. Since 2011, CTCI has organized scholarship programs for outstanding university students. In 2016, it established the CTCI Education Foundation to lay the groundwork for education to nurture and reward the excellent youth. In addition to traditional methods of evaluation on academic performance and teachers' endorsement, we have also formulated the "project research related to CTCI engineering practices". In this program, with industry-academia interaction through academic engineering project research or school-based R&D project commissioned by CTCI, the students will learn the industry practices at an early stage. In 2017, we had nine scholarship recipients; each received NTD 100,000. Through the corporate power, we hope we can play a role in nurturing domestic engineering talents, supporting excellent students to fulfill their potential in their respective field, and make contributions to the society and the country. In 2017, we also ran nine industry-academia cooperation projects with five universities, spending NTD 15,465,300. Through these projects, with research and innovation, we offer our students opportunities to study and conduct research. (4) Education Foundation: CTCI Education Foundation was established in the end of 2016. The vision of the Foundation is "to cooperate with 2030 Sustainable Development Goals (SDGs) of United Nations by promoting construction of sustainable engineering and helping the country walk toward sustainable development" and to dedicate itself to three core values. Currently, five main committees subordinate to the Foundation (including University Cooperation Committee, Sustainable Engineering Committee, Cross-Strait Exchange Committee, International Exchange Committee and Social Care Committee) cooperate with Taiwan Sustainable Engineering Union in collaboration with the operational directions of the Foundation. In addition, the Secretariat Office was founded with the missions to implement relevant projects and integrate all resources; in this way, the level of Taiwanese engineering industry and engineering industry chains can be elevated, heading toward the new world of sustainable development. The objectives of CTCI Education Foundation are to improve the engineering education and technologies, cultivate outstanding engineering talents, reward and encourage academic research, build up a lifelong learning environment and improve national competitiveness. The Foundation also dedicates to incorporating the concept of combination of industry, educating students in university on sustainable engineering, corporate social

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Evaluation Item



responsibility and international perspective. The Foundation established "Taiwan Sustainable Engineering Union" to gather the influence and resources of engineering companies and experts, show sustainable engineering concepts and value chain ideas to the world, expand international market and promote the core values of sustainable, ecological and symbiotic engineering construction. CTCI would like to attract and invite vendors in industry chains to form a national engineering team on the basis of its rich experience of overseas market, develop overseas business opportunities, promote bilateral or multilateral exchange, improve engineering technologies and construct and expand large-scale construction cooperation models. In 2017, the Foundation established the Taiwan Sustainable Engineering Union and held activities, such as Taiwan in My Eyes-120h, Youth Sustainable Leadership Camp, CSR University Seminar (co-hosted), Review and Preview of Engineering Technology Seminar, Taiwan in My Eyes-SDGs Action, CSR Captain Program, Circular Economy Conference, CTCI CSR Academic Paper Award (sponsored), Suburban Pupils Book Donation (sponsored), Shi-Lin International Cultural Festival-CTCI Concert (co-hosted), International Forum on Sustainable Development and Sustainable Development Goals Education Books. There were 13 projects and 40 activities with in total 2,765 participants and 54 participating units. 7. If the corporate social responsibility reports have received assurance from external institutions, they should state so below: In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI Corporate Sustainability Report in 2008 to disclose the information concerning our materiality issues and according to the GRI Guidelines. We also regularly submit the report to the British Standards Institution (BSI) for verification. In fact, we are the first private business in Taiwan to have our CSR report pass the BSI verification. In the G4.0 Guidelines proclaimed in 2014, the GRI advised organizations that they should disclose information more comprehensively and more transparently. Upholding the attitude of being responsible and the spirit of information accessibility and transparency, we disclosed corporate information using the G4.0 Guidelines. Also, we passed the AA1000:2008 High Level accreditation from BSI and the GRI G4.0 Guidelines. All these point to one thing: We were a pioneer reporter using the GRI G4.0 Guidelines. In addition, to ensure that stakeholders at home and abroad can better understand the actual CSR activities at CTCI and to connect with the world, contents of this report also correspond to the Ten Principles of the UN Global Compact, the Seven Core Subjects in ISO2600:2010, and the Determination Items of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies. All these show that the CSR activities and information disclosed in this report are complete and transparent. With the concerted effort of Company’s managers and all employees, we won numerous awards and credits in 2017 to prove our achievements in promoting CSR.

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Evaluation Item



Honor Events: Corporate Social Responsibility Awards Description

Emerging Markets Index Membership for Dow Jones Sustainability Indices (DJSI) CTCI has been continuously selected for Emerging Markets Index Membership for DJSI with excellent performance and is a pioneer enterprise in the field of Engineering & Construction Industry in Taiwan. Recognized by the Taiwan Institute for Sustainable Energy (TAISE) with the Honor of Taiwan Corporate Sustainability Awards (TCSA)

CTCI is recognized by TAISE and honored with “The Most Prestigious Sustainability Awards - Top Ten Domestic Corporate”, ”Sustainable Corporate Award”, gold medal under the Taiwan Top 50 Corporate Sustainability Report Award, “Growth through Innovation Awards,” “Transparency and Integrity Awards” as well as “Social Inclusion Award”. Evaluated as Top 5% in the “2015 Corporate Governance Evaluation System” CTCI was evaluated as top 5% of the TWSE listed companies and the Taipei Exchange (TPEx) listed companies. Top 50 for Excellence in Corporate Social Responsibilities by CommonWealth Magazine

CTCI’s accomplishment of CSR activities was recognized by the CommonWealth Magazine, listed 28th among Top 50 of the Excellence in Corporate Social Responsibilities Award this year for the group of large enterprises (with annual turnover exceeding NT$10 billion). With good performance in the aspects of corporate governance, corporate commitment, social participation, and environmental protection, CTCI was able to stand out from various large enterprises and well-recognized with its achievement in corporate sustainability. Listed among the Top 2000 Enterprises by CommonWealth Magazine and retains Top 1 in the contractor sector

The ranking of 2016 Taiwan's Top 2000 Enterprises was based on the consolidated revenues and profits of the companies for 2015, a result of the survey conducted by CommonWealth Magazine. In terms of the overall ranking in the Top 650 Service Enterprises, CTCI Corporation ranked as the 22nd this year, retained Top 1 in the contractor sector for years in a row. BSI Sustainability Excellence Award With the determination and actions in carrying out sustainable development and fulfilling corporate social responsibilities, CTCI has been awarded Sustainability Award by BSI.

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3.4.6 The Ethical Corporate Management

Evaluation Item

Implementation Status Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies” and reasons


1. Establishment of ethical corporate management policies and programs (1) Does the company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Does the company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies? (3) Does the company establish appropriate precautions against high-potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies?

V The Company established “Corporate Governance Principles”, “Ethical Corporate Management Principles “, “Codes of Ethical Conduct”, and “Procurement Personnel Code of Conduct”. Directors, and managers should obey the “Codes of Ethical Conduct”, when they execute their function. Meanwhile, all employees are requested to follow the laws and ethics standard and behavior principles clearly defined in “Codes of Ethical Conduct”.

None.

2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity?

V a. The Company concluded the commerce contracts based on mutual trust and good faith management principles. b. The Company assigned Human Resources Department to be in charge of corporate integrity related matter and report to the board meeting at least once a year. c. It is forbidden to have preferential affairs between employee and party. All employees can’t pay or ask for present, entertainment, commission or

None.

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Evaluation Item

Implementation Status Deviations from “Ethical

Corporate Management Best Practice Principles for TWSE/GTSM-

Listed Companies” and reasons


(3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?

(4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited by either internal auditors or CPAs on a regular basis?

(5) Does the company regularly hold internal and external educational trainings on operational integrity?

bribe for the advantage of themselves or third party, when they conduct their work.

d. The Company set up effective and faultless accounting system and internal control program to manage out of ordinary affairs. The Company also set up a specialized independent audit unit to execute yearly auditing plans and report the audit results to supervisors every month. The audit unit also has to attend the Audit Committee and Board of Directors to report the faults and extraordinary affairs in their internal control inspection, and push related units to take modified measures and trace the results quarterly until they are fully- modified.

e. The principles of the Company are professionalism, integrity, teamwork and innovation. We delivered the related training coursed to train our employees and posted the poster at office and site to remind our employees as well.

3. Operation of the integrity channel (1) Does the company establish both a

reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up?

(2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases?

(3) Does the company provide proper whistleblower protection?

V a. The Company has the Accusation management regulation with a special telephone line and an investigation team to deal with the graft and bribe events.

b. The Company has the regulation of Reward and Punishment to deal with the above cases.

None.

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Evaluation Item

Implementation Status Deviations from “Ethical

Corporate Management Best Practice Principles for TWSE/GTSM-

Listed Companies” and reasons


4. Strengthening information disclosure (1) Does the company disclose its ethical corporate

management policies and the results of its implementation on the Company’s website and MOPS?

V The Company has disclosed the “Ethical Corporate Management Best Practice Principles” on its website and MOPS.

None.

5. If the company has established its own ethical corporate principles based on “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, please describe the difference between operation practice and the ethical corporate principles: According to the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, the Company has obtained the approval of the “Ethical Corporate Management Best Practice Principles” (the “Principle”) in the 5th meeting of the 13th Term Board of Directors in December 17th, 2014. The all employees, officers and board members should comply with the Principle. Furthermore, the Principle was amended and renamed to the “Ethical Corporate Management Principles” for the expansion of applicable scope to whole CTCI Group.

6. Other important information to facilitate understanding of the company’s good faith management implementation.(e.g. To announce the company’s determination to implement good faith management to business vendors, to invite vendors to participate in related education, and to review and revise the company’s ethical corporate management best practice principles) The Company strictly observed “Company Act”,” Securities and Exchange Act”, related rules for TWSE/GTSM-Listed Companies and other commerce ordinances to implement the good faith management. Review and revise the Company’s internal management principles including “Corporate Governance

Principles”, “Ethical Corporate Management Principles “, “Codes of Ethical Conduct”, and “Procurement Personnel Code of Conduct” based on the development of ethical corporate management principles.

3.4.7 Corporate Governance Guidelines and Regulations

Please refer to the Company’s website at www.ctci.com.

http://www.ctci.com/

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3.4.8 Other Important Information Regarding Corporate Governance A. Training program for directors Title Name Study period Sponsoring Organization Course Training hours From To

Chairman John T. Yu 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/05/12 2017/05/12 Taiwan Corporate Governance Association Big data analysis, and prevention/detection of fraud. 3.0

Vice Chairman Michael Yang 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/05/12 2017/05/12 Taiwan Corporate Governance Association Big data analysis, and prevention/detection of fraud. 3.0

Independent Director and Managing Director Jack Huang

2017/09/05 2017/09/05 Taiwan Corporate Governance Association The AI Revolution & Opportunities for Banking Industry. 3.0 2017/05/16 2017/05/16 Taiwan Academy of Banking and Finance Legal risk in Directors and Management Team. 3.0 2017/05/11 2017/05/11 Taiwan Corporate Governance Association Legal risk in Directors. 1.0 2017/05/05 2017/05/05 Taiwan Institute of Directors The opportunity and challenge in AI. 1.0 2017/05/04 2017/05/04 Taiwan Corporate Governance Association The opportunity and challenge in Fintech. 3.0

Independent Director Yen-Shiang Shih 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/08/01 2017/08/01 Taiwan Institute of Directors Tax Governance in the generation of anti-tax avoidance. 3.0

Independent Director Frank Fan 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/08/04 2017/08/04 Taiwan Corporate Governance Association

How to audit the financial statements by Directors and Supervisors without financial background. 3.0 2017/05/12 2017/05/12 Taiwan Corporate Governance Association Big data analysis, and prevention/detection of fraud. 3.0

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Title Name Study period Sponsoring Organization Course Training hours From To

Director Teng-Yaw Yu 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/05/12 2017/05/12 Taiwan Corporate Governance Association Big data analysis, and prevention/detection of fraud. 3.0

Director Quintin Wu 2017/10/30 2017/10/30 Securities & Futures Institute Freedom of information and Prevention of the insider trading 3.0 2017/07/04 2017/07/04 Securities & Futures Institute How to deal with modern white - collar crime 3.0

Director Bing Shen 2017/08/11 2017/08/11 Taiwan Corporate Governance Association The point risk managements of Board of Directors are used of innovative technologies. 3.0 2017/05/12 2017/05/12 Taiwan Corporate Governance Association Big data analysis, and prevention/detection of fraud. 3.0

Director Johnny Shih 2017/12/26 2017/12/26 Taiwan Academy of Banking and Finance

The practical operation of the BOD and the corporate governance 3.0 2017/07/13 2017/07/13 Taiwan Academy of Banking and Finance

The practical operation of the BOD and the corporate governance 3.0

Director Yancey Hai 2017/10/30 2017/10/30 Taiwan Corporate Governance Association The development and reflection of Taiwan’s anti-tax avoidance policy recently. 3.0 2017/03/09 2017/03/09 Taiwan Corporate Governance Association How to reflect the Antitrust Law by the company? In brief, Concerted Actions. 3.0

Director Wenent Pan

2017/08/09 2017/08/09 Taiwan Corporate Governance Association The managements of Corporate Governance and Criminal Risk. 3.0 2017/07/18 2017/07/18 Chinese National Association of Industry and Commerce

The common challenges and future trends of mergers and acquisitions. 3.0

2017/05/23 2017/05/23 Taiwan Corporate Governance Association The obligation of Directors and Supervisors in Information Disclosure and Fake Financial Statements. 2.0

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B. Internal Material Information Disclosure Procedure According to the letter of Financial Supervisory Commission dated March 16th, 2009 and consulting with “Internal Material Information Disclosure Procedure” which is announced by Taiwan Stock Exchange Corporation (TWSE), the Company has obtained the approval of the “Regulations Governing Prevention of Insider Trading” (the “Regulation”) in the 9th meeting of the 11th Term Board of Directors on August 28th, 2009. The Regulation is the code of conduct for Directors, Supervisors, Managerial personnel, and the persons regulated under the Regulation and it includes the scope of Internal Material Information, and the laws, regulations, orders that people forenamed should comply with. The Company has provided the Regulation to all Directors and Supervisors, and also disseminates all employees.

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C. Code of Business Conduct and Ethics for Board of Directors and Managers CTCI CORPORATION Code of Business Conduct and Ethics for Board of Directors and Managers Amended on December 19th, 2007 Amended on August 8th, 2014 Amended on June 22nd, 2016 Article 1 (Purpose of and basis for adoption) Pursuant to Article 6 of CTCI’s Corporate Governance Principles, CTCI’s Codes of Ethical Conduct are established to pursue the greatest interest of CTCI and devote in continuous business development. And for stakeholders to understand the content of ethical standards and code of conduct that have been complied by directors, managers and all employees in the execution of their duties. CTCI’s Codes of Ethical Conduct shall be approved by a resolution of Board of Directors.

Article 2 (Scope) The Codes of Ethical Conduct are applicable to CTCI’s subsidiaries, and other institutions or juridical persons which are substantially controlled by CTCI ("business group"). The term “CTCI employees” in this Codes of Ethical Conduct refers to directors, supervisors, and managerial officers (including deputy assistant general managers or their equivalents, chief financial and chief accounting officers), and employees. Article 3 (Compliance of ethical conduct) CTCI directors and managers shall comply with all regulations and the Codes of Ethical Conduct. They shall set as examples to CTCI employees, promoting the practice of this Codes of Ethical Conduct, pursuing high-level compliance of this Codes. CTCI directors and managers shall fulfill the duty of care of a good custodian, and as their objective the pursuit of CTCI’s overall benefit. Moreover, CTCI employees may not damage CTCI’s rights and interests for the benefit of a specific individual or specific group, and shall treat all shareholders fairly. In the execution of their duties, CTCI employees shall focus on teamwork, abandon sectionalism, diligently comply with the principle of honesty and credibility, be proactive, responsible and prudent. Article 4 (Fair hiring and anti-discrimination policy) No form of preferential treatment or discrimination should take place in any form based on race, sex, religious beliefs, political party affiliation, sexual orientation, position, nationality, or age. Article 5 (Safe and healthy working environment) CTCI employees should work to maintain a safe and healthy environment, and there should be no instances of harassment, or violent and threatening behavior. Article 6 (Prevention of conflicts of interest) When a proposal at a given board of directors meeting concerns the interest of CTCI, the concerned person shall not participate in discussion of or voting on the proposal and shall recuse himself or herself from the discussion or the voting, and may not exercise voting rights as proxy for another director. Where a director or manager, for himself/herself or on behalf of others, enters into a sale/purchase or loan transaction, or conducts any legal act with CTCI, he/she shall disclose detail information of the above situation to the audit committee.

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Article 7 (Prevention of conflicts of interest) If a director engages in conduct involving competition with CTCI, pursuant to the Company Law, he or she shall report the matter in advance to a general meeting of shareholders and obtain approval. If a manager engages in conduct involving competition with CTCI, in accordance with the Company Law, he or she shall report the matter in advance to board of directors and obtain approval. Article 8 (Minimizing incentives to pursue personal gain) CTCI employees shall faithfully execute their duties in the interests of all shareholders. As regards procurement and supply arrangements related to CTCI’s operations, cooperation arrangements, strategic alliances or other commercial opportunities or opportunities from which profit may be gained with which CTCI employees become familiar as the result of executing their functional duties, CTCI employees shall give priority to providing such opportunities to CTCI or to preserving the interests of the Company, and must not take advantage of such opportunities to seek personal gains for themselves or third parties. CTCI employees shall prevent the following activities: 1.Seeking an opportunity to pursue personal gain by using company property or information or taking advantage of their positions. 2.Competing with CTCI or damage CTCI’s interest through any methods. Article 9 (Fair trade) CTCI employees shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices. Article 10 (Insider trading) Work-related knowledge and any information that could affect the share price of CTCI stock, before it has been disclosed as public information, all information shall be kept confidential pursuant to The Securities and Exchange Act regulations, and shall not to be used to engage in insider trading. Article 11 (Confidentiality) Company employees’ work-related knowledge, confidential information or customer data is to be carefully managed, and except for that required for company disclosure or publicized as required by law, data should not be leaked to other persons, or used for any non-work related matter. This Article also to employees who have left the Company. CTCI employees are obliged to keep the Company and its clients’ information confidential. Information shall not be disclosed prior to Company’s authorization or as required by law, and leaked to other persons or used for any non-work related matter. The confidential information includes, but is not limited to, any undisclosed information that may be utilized or divulged by competitors and consequently cause damage or loss to the Company or its clients, as well as information regarding the investments, inventions, business secrets, technical data, product design, professional manufacturing knowledge, finance, accounting and intellectual property rights of CTCI. Article 12 (Safeguarding and proper use of company assets) CTCI employees have the responsibility to safeguard company assets and to ensure that they can be effectively and lawfully used for official business purposes; any theft, negligence in care, or waste of the assets will all directly impact CTCI's profitability. Article 13(Legal compliance) CTCI employees shall comply all regulations and company’s policies and procedures.

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Article 14 (Encouraging reporting on illegal or unethical activities) CTCI shall raise awareness of ethics internally and encourage employees to report with defined identity or anonymously upon suspicion or discovery of any activity in violation of a law or regulation or the Codes of Ethical Conduct. The company shall use its best efforts to ensure the safety of informants and protect them from reprisals. Article 15 (Procedures for penalizing) CTCI employees in violation of the Codes of Ethical Conduct shall be penalized according to the Company’s Rewards and Punishment related policy. Employees who are in significant violation of this Conduct shall be reported to Board of Directors. Article 16 (Procedures for exemption) In the event that a director or supervisor wishes to be exempted from the applicability of the Codes of Ethical Conduct, he or she should explain said opportunity, information or the specific details of the competition with CTCI to Board of Directors, and the reasons why there is no conflict with CTCI’s interests; this shall then be approved by a resolution of Board of Directors. Upon approval by a resolution of Board of Directors of an exemption of applicability as provided in the preceding paragraph, CTCI shall immediately disclose information including the titles and names of the personnel exempted, the date of board approval of the exemption, the period of the exemption, the reasons for exemption, and the standard(s) has been exempted on the Market Observation Post System (MOPS). Article 17 (Enforcement and method of disclosure) CTCI's Codes of Ethical Conduct, and any amendments to it, shall enter into force after it has been adopted by board of directors, and shall disclose in CTCI annual reports on its website.

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D. Accusation Management Regulations CTCI CORPORATION Accusation Management Regulations 1.0 Purpose This regulation is specially formulated in order to effectively control the accusation case of the company and establish smooth accusation channel and fair investigation procedure, so as to prevent blackmail and correct possible undue behavior. 2.0 Scope 2.1 Accuser Including official, contracted and dispatched in-service employee of the company, however, if external personnel of the company finds any significant malpractice, such personnel can be included as accuser. 2.2 Scope of accusation Accusation may be proposed if the accused object violates laws and decrees, rules and regulations of the company, or has other undue behaviors affecting the rights and interests of the company. 3.0 Definition 3.1 Individual accusation A employee proposes real-name accusation independently in his/her own name. 3.2 Joint accusation Two (inclusive) or more employees propose real-name accusation jointly. 3.3 Blackmail The accusation letter proposed anonymously. 4.0 Responsibility 4.1 Human Resources Department Responsible for accepting accusation case and proposing suggestion on preliminary examination, sending the case for Rewards and Punishment Committee for hearing, and handing subsequent matters thereof according to hearing result. 4.2 Investigation group The trans-department group formed by the members as approved by Rewards and Punishment Committee, which will be responsible for investigating whether the accusation contents are true and proposing investigation report. 4.3 Rewards and Punishment Committee Responsible for hearing the accusation case preliminary examination proposal and accusation case investigation report, and proposing suggestions on punishment. 4.4 Each Department Relevant personnel of each department shall coordinate to assist investigation group to execute relevant investigation works. 5.0 Activity 5.1 Operation procedure Subject to Attachment 1 - Flow Chart of this Regulation. 5.2 Accusation The accuser shall fill in "Accusation Letter" (Attachment 2), the accusation matter must conform to the scope as prescribed in Article 2.2 hereof, besides, accuser shall provide specific descriptions and relevant evidences on the concerned person, matter, time, place and object etc., and submit the such letter to the special accusation e-mail box of Human Resources Department or send it in confidential paper copy. Employee may use accusation special line to

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report the accusation case, provided such employee shall still provide relevant accusation documents and evidences as mentioned above. When accepting joint accusation, it will be handled as single case, and representative shall be elected upon accusation for the convenience of contact. When the accusation case comes from outside the company, the unit or employee that receiving the accusation materials shall submit the complete accusation materials to Human Resources Department at first time for subsequent handling, if the affiliated department of accused object has any concealment or delay that causing impact on the handling time and affecting the rights and interests of the company, it shall be punished according to relevant regulations of the company. 5.3 Case acceptance After Human Resources Department has accepted the accusation case, if necessary, it may ask the accuser to supplement relevant descriptions or evidences, conduct preliminary examination according to relevant contents of accusation materials, propose suggestions on whether or not to establish trans-department investigation group for investigation, fill in "Accusation Preliminary Examination Proposal" (Attachment 3) ans submit it to CTCI Rewards and Punishment Committee together with other case materials for review and approve whether or not to open a case for investigation. If it is not belong to the scope of accusation or the evidences proposed by accuser are not detailed and true, Human Resources Department shall ask the accuser for supplement. If the accusation case is blackmail, Human Resources Department may not handle it. 5.4 Investigation If the CTCI Rewards and Punishment Committee decides to open a case for investigation, it shall designate relevant unit representatives to form investigation group and assign group convenor to start investigation according to the situation of accusation case. In the course of investigation, Human Resources Department shall inform relevant units that shall cooperate to assist in investigation according to the investigation plan of the investigation group. When necessary, investigation group may interview relevant personnel or ask relevant personnel to provide relevant materials to assist in investigation. After the completion of investigation, investigation group shall submit investigation report to Human Resources Department. 5.5 Punishment After Human Resources Department has received the investigation report, it shall convene the meeting of Rewards and Punishment Committee pursuant to "CTCI Employees Reward and Punishment Regulations" to hear the accusation case, and propose punishment suggestions according to the preceding Regulation. Then Human Resources Department will submit the complete report contents to the Chairman for review and decision. 5.6 Response For any accusation case, Human Resources Department shall respond to the accuser in writing on the handling result thereof. For false accusation or fling abuses, the responding content shall include the reminder on relevant legal responsibility. 5.7 Confidentiality obligation Responsible employee of Human Resources Department and all members of Rewards and Punishment Committee and investigation group shall bear confidentiality obligation for the materials of accuser. 6.0 Reference document CP-319-B CTCI Employees Reward and Punishment Regulations 7.0 Attachment Attachment 1 Work Flow Chart Attachment 2 Accusation Letter Attachment 3 Accusation Preliminary Examination Proposal

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3.4.9 Internal Control System A. Statement of Internal Control System

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B. Where a CPA has been hired to carry out a special audit of the internal control system, furnish the CPA audit report: None. 3.4.10 In Recent Years until the Annual Report being Published, Violation of Internal Control Policies by Employees：None. 3.4.11 Major Resolutions of Shareholders’ Meeting and Board Meetings A. Major resolutions of Shareholders’ Meeting of Year 2017(2017.06.28):

Date Resolutions of Shareholders’ Meeting Action Arisen

2017.06.28

1. Adoption of the Company’s 2016 Business Report, Financial Statements and Consolidated Financial Statements. The resolution has been made and implemented.

2. Adoption of the Company’s distribution plan of 2016 earnings.(Each common share holder will be entitled to receive a cash dividend of TWD 2.60 per share, unappropriated retained earnings is TWD 315,072,874.)

The ex-dividend date was on August 1st, 2017, and cash dividend was paid on August 25th, 2017.

3. Approval of the amendment to the Company’s “Rule Governing Procedure for Marking of Endorsements or Guarantees”. Announced on MOPS and CTCI’s website on 7th July, 2017, and operated in compliance with amended regulation.

4. Approval of the amendment to the Company’s “The Procedure for Acquisition and Disposition of Assets”. Announced on MOPS and CTCI’s website on 7th July, 2017, and operated in compliance with amended regulation.

5. The election of the Company's 14th Term Directors The list of newly elected Directors: John T. Yu and Michael Yang, Representative of CTCI Development Corporation, Teng-Yaw Yu, Representative of CTCI Foundation, Quintin Wu, An-Ping Chang, Wenent Pan, Johnny Shih, Yancey Hai and Bing Shen. The list of newly elected Independent Directors: Jack Huang, Yen-Shiang Shih and Frank Fan.

Announced on MOPS and CTCI’s website, and the registration was approved by Ministry of Economic Affairs on 2nd August, 2017.

6. Approval of removing the non-competition restrictions on board directors newly-elected. The resolution of removing 12 directors (including 3 independent directors) of the 14th Term Board of Directors has been made and implemented.

B. Major resolutions of the Board Meeting in recent years until the annual report being published: 2017.03.17 2016 Review Report of Functional Committees. Evaluation Report for the Independence and Capability of Independent Auditor. Approval of the Fiscal 2016 business report, financial reports and consolidated reports. Approval of the distribution plan of Fiscal 2016 earnings. Approval of “Statement of Internal Control System for the Year 2016”. Approval of the amendment to the Company’s “Internal Control Systems” and the internal rules.

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Approval of election the Company’s 14th Term Directors by shareholders’ meeting. Approval of nomination the Company’s 14th Term Director Candidates. Approval of the removing the non-competition restrictions on Board Directors newly-elected by shareholders’ meeting. Approval of the convening of the 2017 Annual General Meeting. Approval of the place and the period of time for shareholders to submit proposals and the roster of director candidates of the 2017 Annual General Meeting. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the incorporation of a joint venture in Malaysia. Approval of the incorporation of a joint venture in Netherlands and establishing the branch in Oman. Approval in the cash injection of subsidiaries. Approval of the adjustment of managerial officers of the Company. Approval of changing the accounting officer. Approval of the removing the non-competition restrictions on a new managerial officer. Approval of the subscribers and the exercisable units of the 2017 Employee Stock Options. 2017.05.12 Report on Consolidated financial reports as of March 31st, 2017. Approval of auditing the qualification of candidates of the 14th Term Board of Directors. Approval of the amendment to the Company’s “Internal Control Systems” and the internal rules. Approval of the adjustment of managerial officers of the Company. Approval of the removing the non-competition restrictions on a new managerial officer. Approval in the cash injection of subsidiaries. 2017.06.28 John T. Yu, Michael Yang and Jack Huang were elected as Managing Directors of the 14th Term Board of Directors. John T. Yu and Michael Yang were elected as Chairman and Vice Chairman of the 14th Term Board of Directors by all present Managing Directors. Approval of the re-appointment of Michael Yang as the President. Approval of appointment of the Chairperson and Vice Chairpersons of Management Strategy Committee. Approval of the members of “Corporate Governance Committee”, “Remuneration Committee”, “Nominating Committee” and their assistants. Approval of the ex-dividend record date of 2017. Approval of the adjustment of managerial officers of the Company. 2017.06.28 Approval of the amendment to the Directors’ remuneration and the internal rule. Approval of adoption to the Chairman’s Remuneration. 2017.08.11 Report on Consolidated financial reports as of June 30th, 2017. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the amendment to the Company’s “Internal Control Systems” and the internal rules. Approval of the removing the non-competition restrictions on a new managerial officer. Approval of the amendment to the Director’s remuneration and the internal rule. 2017.11.02 Report on Consolidated financial reports as of September 30th, 2017. Report on Status Report of Directors’ and Officers’ Liability Insurance. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval in the cash injection of subsidiaries. Approval of the incorporation of a joint venture in Malaysia.

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Approval of the amendment to the Company’s “Internal Control Systems” and the internal rules. Approval of the amendment to the Company’s “Audit Committee Charter”, “Rules Governing Procedure for Board of Directors’ Meetings” and “Rules Governing the Scope of Powers of Independent Directors”. Approval of the real estate acquisition to build the 2nd headquarters building by subsidiaries. Approval of the employment of Mr. Casey Yeh as the head of Group Research & Innovation Center. Approval of removing the non-competition restrictions on a new managerial officer. 2017.12.15 Report on the implementation of ethical corporate management. Approval of the budget of 2018. Approval of the Year 2018 Audit Plan. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the amendment to the Company’s “Internal Control Systems” and the internal rules. Approval of donating to CTCI Education Foundation. Approval of the adjustment of managerial officers of the Company. Approval of the removing the non-competition restrictions on a new managerial officer. Approval of the issuance of 2018 Employee Stock Options. Approval of the average salary increase rate of 2018. Approval of the remuneration of the management officers of the Company. Approval of the amendment to the Chairman’s remuneration of the Company. 2018.03.09 2017 Review Report of Functional Committees. Evaluation Report for the Independence and Capability of Independent Auditor. Assessment Report for Adoption of International Financial Reporting Standards IFRS 16 Leases. Report for Board of Directors Performance Assessments. Approval of the distribution plan of the 2017 directors’ and employees’ remuneration. Approval of the Fiscal 2017 business report, financial reports and consolidated reports. Approval of the distribution plan of Fiscal 2017 earnings. Approval of “Statement of Internal Control System for the Year 2017”. Approval of the convening of the 2018 Annual General Meeting. Approval of the place and the period of time for shareholders to submit proposals of the 2018 Annual General Meeting. Approval of change of independent auditors of the Company. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of CTCI Corporation to close its Italian branch. Approval of appointment of additional assistant of the “Corporate Governance Committee”. Approval of list of subscribers and the number of shares they are allowed to subscribe for of 2018 Employee Stock Options Program. 3.4.12 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by Board of Directors None. 3.4.13 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, President, and Heads of Accounting, Finance, Internal Audit and R&D None.

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3.5 Information on CPA’s Fees 3.5.1 Information of CPA Accounting Firm Name of CPA Audit Period Note

PriceWaterHouseCoopers Shu-Chiung Chang Shih-Jung Weng 2017.01.01-2017.12.31 - 3.5.2 Scale of information on CPA’s Fees Unit: NT$ thousands Item Amount (NTD) Audit Fee Non-audit Fee Total

1 Less than 2,000 2 2,000 ~ 4,000 (inclusive of 2,000) 3 4,000 ~ 6,000 (inclusive of 4,000) 5,871 4,950 10,821 4 6,000 ~ 8,000 (inclusive of 6,000) 5 8,000 ~ 10,000 (inclusive of 8,000) 6 More than 10,000 (inclusive of 10,000)

Unit: NT$ thousands Accounting Firm Name of CPA Audit Fee

Non-audit Fee Audit Period Note System Design Registration Human Resource Other (Note1) Total

PriceWaterHouseCoopers Shu-Chiung Chang 5,871 3,720 300 0 930 4,950 2017.01.01~2017.12.31 Note 1 Shih-Jung Weng 2017.01.01~2017.12.31 Note 1: The (other) professional fees except audit fee include: transfer-pricing report NT$780 thousand, opinion of review employee stock options NT$150 thousand. Note 2: In the event that the CPA firm is changed and the audit fees paid by the company in the concurrent year are lower than the preceding year: None. Note 3: In the event that the audit fees paid by the company are reduced by 15% compared to the preceding year: None. 3.6 Alternation of CPA: None. 3.7 The Company's Chairman, President and Managerial Officer in charge of Finance or Accounting matters has held a position within CTCI’s CPA firm or its affiliated enterprise in the most recent year: None.

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3.8 Changes in Shareholding of Directors, Managers and Major Shareholders Unit: Share

Title Name 2017 As of March 31st, 2018

Holding Increase (Decrease) Pledged Holding Increase (Decrease)


Chairman CTCI Development Corporation 0 0 0 0

Representative: John T. Yu 0 0 0 0

Vice Chairman CTCI Development Corporation 0 0 0 0

Representative: Michael Yang 0 0 0 0 Independent Director and Managing Director Jack Huang 0 0 0 0 Independent Director Yen-Shiang Shih (Note1) 0 0 0 0 Independent Director Frank Fan 0 0 0 0

Director CTCI Foundation 0 0 0 0 Representative: Teng-Yaw Yu 0 0 0 0

Director Quintin Wu 0 0 0 0 Director Bing Shen 0 0 0 0 Director Johnny Shih 0 0 0 0 Director Yancey Hai 0 0 0 0 Director An-Ping Chang (Note1) 0 0 0 0 Director Wenent Pan 0 0 0 0

Vice Chairman CTCI Investment Corporation(Note2) 0 0 0 0 Representative: John H. Lin(Note2) (45,000) 0 0 0

Managing Director ECOVE Environment Services Corporation (Note2) 0 0 0 0

Representative: Andy Sheu(Note2) 0 0 0 0 Director Leslie Koo (Note3) 0 0 0 0

Managerial Officers John T. Yu 0 0 0 0 Managerial Officers John H. Lin (Note2) (45,000) 0 0 0 Managerial Officers Andy Sheu 0 0 0 0 Managerial Officers Michael Yang 0 0 0 0 Managerial Officers Mark W. H. Yang (Note4) 0 0 0 0

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Title Name 2017 As of March 31st, 2018



Managerial Officers M. H. Wang 0 0 0 0 Managerial Officers Pao-Yao Pan 0 0 0 0 Managerial Officers Ming-Cheng Hsiao 0 0 0 0 Managerial Officers Todd Chen (69,099) 0 0 0 Managerial Officers T. C. Huang (Note5) 257,388 0 4,000 0 Managerial Officers Andrew Tsai (Note6) 0 0 0 0 Managerial Officers Jung-Yu Han 2,000 0 9,000 0 Managerial Officers Chen-San Hu

(Note7) 0 0 0 0 Managerial Officers & CFO Patrick Lin 0 0 10,000 0 Managerial Officers Casey Yeh (Note8) 0 0 6,000 0 Managerial Officers Teh-Ming Tao 0 0 0 0 Managerial Officers Steve Jean 0 0 0 0 Managerial Officers M. G. Lee 0 0 0 0 Managerial Officers Po-Chien Wang 17,000 0 6,000 0 Managerial Officers Ching-Hsiang Tseng (Note9) 0 0 0 0 Managerial Officers Shen-Peng Liao (Note10) 0 0 0 0 Managerial Officers Tsai-Ming Wang 0 0 0 0 Managerial Officers Min-Li Lee 0 0 0 0 Managerial Officers Jing-Shing Wu 0 0 2,000 0 Managerial Officers J.H. Chen (Note11) 6,000 0 0 0 Managerial Officers Y. S. Liao 0 0 0 0 Managerial Officers S. H. Lin 0 0 0 0 Managerial Officers Ting-Kuo Li 101,142 0 0 0 Managerial Officers Connie Lin (Note12) 0 0 18,000 0 Managerial Officers Vincent Liu (Note13) 7,000 0 4,000 0 Managerial Officers Ho-Chuang Lee (Note14) 0 0 199,076 0 Managerial Officers Shih-Wei Chung (Note14) 0 0 29,033 0 Accounting Officer Ai-Cheng Ho (Note15) 58,219 0 0 0

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Note1: On Board on June 28, 2017. Note2: Be Dismissed on June 28, 2017. Note3: Be Dismissed on January 23, 2017. Note4: Be Dismissed on July 20, 2017. Note5: On Board on March 17, 2017. Note6: Be Dismissed on June 14, 2017. Note7: Be Dismissed on March 13, 2017. Note8: On Board on November 2, 2017. Note9: Be Dismissed on August 19, 2017. Note10: Be Dismissed on November 1, 2017. Note11: Be Dismissed on May 13, 2017. Note12: On Board on May 12, 2017. Note13: On Board on June 28, 2017. Note14: On Board on January 1, 2018. Note15: On Board on March 18, 2017. 3.8.1 Shares Trading with Related Parties Unit: Share

3.8.2 Shares Pledge with Related Parties None.

Name Reason for Transfer Date of Transaction Transferee

Relationship between Transferee and Directors, Supervisors, Managers and Major Shareholders Shares Transaction Price (NT$)

Todd Chen Donation 2017.02.08 Ren-Min Jiang Spouse 69,099 NA

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3.9 Relationship among the Top Ten Shareholders As of March 31

st, 2018

Name Shareholding

Spouse & Minor

Shareholding by Nominee

Arrangement

The relationship between any of the Company’s Top Ten Shareholders

Remarks

Shares % Shares % Shares % Name Relation

CTCI Foundation 60,862,051 7.97 0 0 0 0 None None

Fubon Life Insurance Co., Ltd.

51,125,000 6.70 0 0 0 0 None None

Representative: Richard M. Tsai

0 0 0 0 0 0 None None

CTBC BANK CO., LTD.(CTCI Corporation Employee Stock Ownership Trust)

48,928,275 6.41 0 0 0 0 None None

Blackrock Global Funds-Asian Growth Leaders

31,531,000 4.13 0 0 0 0 None None

CTBC BANK CO., LTD. (Sustainability Employee Stock Ownership Trust)

26,243,910 3.44 0 0 0 0 None None

Chunghwa Post Co., Ltd.

21,584,000 2.83 0 0 0 0 None None

Representative: Kwo-Tsai Wang

0 0 0 0 0 0 None None

Cathay Life Insurance Co., Ltd.

18,252,000 2.39 0 0 0 0 None None

Representative: Tiao-Kuei Huang

0 0 0 0 0 0 None None

KGI Bank 16,813,000 2.20 0 0 0 0 None None

Representative: Mark Wei

0 0 0 0 0 0 None None

American Funds Developing World Growth and Income Fund

16,667,000 2.18 0 0 0 0 None None

USI Corporation 15,180,656 1.99 0 0 0 0 None None

Representative: Quintin Wu

0 0 0 0 0 0 None None

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3.10 Ownership of Shares in Affiliated Enterprises As of March 31st, 2018

Affiliated Company Investment of the Company

Directors, Supervisors, Managements Direct and Indirect Investment of the Company Total Investment

Share % Share % Share % CTCI Smart Engineering Corporation 59,098,624 97.09 28,288 0.04 59,126,912 97.13 CTCI Resources Engineering Inc. 24,762,252 99.05 1,388 0.01 24,763,640 99.05 CTCI Advanced Systems Inc. 11,444,842 48.72 358,788 1.53 11,803,630 50.25 CTCI Development Corporation 169,000,000 100.00 0 0.00 169,000,000 100.00 CTCI Investment Corporation 207,200,000 100.00 0 0.00 207,200,000 100.00 ECOVE Environment Corporation 38,457,105 57.46 288,034 0.43 38,745,139 57.89 CTCI (Thailand) Co., Ltd. 1,249,500 49.00 1,300,500 51.00 2,550,000 100.00 CTCI Overseas (BVI) Corporation 6,740,000 100.00 0 0.00 6,740,000 100.00 CTCI Engineering & Construction Sdn. Bhd. 450,000 60.00 300,000 40.00 750,000 100.00 CTCI Arabia Ltd. 500 50.00 500 50.00 1,000 100.00 CTCI Machinery Corporation 20,000,000 100.00 0 0.00 20,000,000 100.00 SINOGAL - Waste Services Co., Ltd. *0 30.00 *0 30.00 0 60.00 CTCI Americas, Inc. 100,000 100.00 0 0.00 100,000 100.00 CTCI Singapore Pte. Ltd. 5,100,000 100.00 0 0.00 5,100,000 100.00 CTCI & Partners Co., Ltd. ** 2,000,000 40.00 3,000,000 60.00 5,000,000 100.00 CCJV P1 Engineering & Construction Sdn. Bhd. 247,500 99.00 0 0 247,500 99.00 CTCI CMCE JV SDN. BHD. 382,500 51.00 0 0 382,500 51.00 CTCI&HEC Water Business Corporation 25,500,000 51.00 0 0 25,500,000 51.00

*SINOGAL - Waste Services Co., Ltd. doesn’t issue any stock related certificates. ** CTCI and Partners Company Limited is in liquidation process and the capital has returned.

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IV. Capital Overview 4.1 Capital and Shares 4.1.1 Source of Capital A. Issued Shares As of March 31st, 2018

Year /Month Par Value (NT$)

Authorized Capital Paid-in Capital Remark

Shares Amount (NT$) Shares Amount (NT$) Sources of Capital

Capital Increased by Assets Other than Cash Other

1997.07 10 300,000,000 3,000,000,000 288,417,000 2,884,170,000 Retained Earnings None 1998.07~ 2000.06 10 520,000,000 5,200,000,000 476,000,000 4,760,000,000 Retained Earnings None 2001.06 10 720,000,000 7,200,000,000 547,600,000 5,476,000,000 Retained Earnings None 2003.12~ 2004.03 23.38 720,000,000 7,200,000,000 571,620,484 5,716,204,840 ECB None 2004.08~ 2006.08 10 720,000,000 7,200,000,000 598,000,000 5,980,000,000 Retained Earnings None 2007.09~ 2008.08 10 900,000,000 9,000,000,000 631,438,000 6,314,380,000 Retained Earnings None 2010.01~ 2011.04 10 900,000,000 9,000,000,000 698,666,648 6,986,666,480 CB & ESOP None 2011.07~ 2015.12 10 900,000,000 9,000,000,000 760,508,848 7,605,088,480 ESOP None 2016.04 10 900,000,000 9,000,000,000 761,107,598 7,611,075,980 ESOP None Note 1 2016.05 10 900,000,000 9,000,000,000 762,514,598 7,611,075,980 ESOP None Note 2 2016.07 10 900,000,000 9,000,000,000 763,273,848 7,632,738,480 ESOP None Note 3

Note 1: 2016.04.13 MOEA Ruling Ref.No. 10501068390. Note 2: 2016.05.24 MOEA Ruling Ref.No. 10501109180. Note 3: 2016.07.19 MOEA Ruling Ref.No. 10501164430. B. Type of Stock Share Type Authorized Capital Remarks Issued Shares Un-issued Shares Total Shares

Common Share 763,273,848 136,726,152 900,000,000 Listed stock

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4.1.2 Status of Shareholders As of March 31st, 2018

Item Government Agencies Financial Institutions Other Juridical Person

Domestic Natural Persons Foreign Institutions & Natural Persons

Total Number of Shareholders 0 42 83 22,242 288 22,655 Shareholding (shares) 0 195,197,211 170,723,029 123,630,551 273,723,057 763,273,848 Percentage (%) 0.00 25.57 22.37 16.20 35.86 100 4.1.3 Shareholding Distribution Status Common Shares (The par value for each share is NT$10)

As of March 31st, 2018 Class of Shareholding (Unit : Share) Number of Shareholders Shareholding (Shares) Percentage (%)

1 ~ 999 8,395 1,897,087 0.25 1,000 ~ 5,000 9,989 21,867,892 2.87 5,001 ~ 10,000 1,894 14,367,632 1.88 10,001 ~ 15,000 670 8,339,869 1.09 15,001 ~ 20,000 422 7,650,672 1.00 20,001 ~ 30,000 371 9,299,670 1.22 30,001 ~ 40,000 192 6,829,784 0.89 40,001 ~ 50,000 118 5,310,817 0.70 50,001 ~ 100,000 249 17,765,158 2.33 100,001 ~ 200,000 139 19,768,839 2.59 200,001 ~ 400,000 73 20,647,914 2.71 400,001 ~ 600,000 38 19,066,733 2.50 600,001 ~ 800,000 16 11,270,560 1.48 800,001 ~ 1,000,000 9 7,989,358 1.05

1,000,001 or over 80 591,201,863 77.44 Total 22,655 763,273,848 100.00 4.1.4 List of Major Shareholders

As of March 31st, 2018 Shareholder's Name Shareholding

Shares Percentage (%) CTCI Foundation 60,862,051 7.97 Fubon Life Insurance Co., Ltd. 51,125,000 6.70 CTBC BANK CO., LTD.(CTCI Corporation Employee Stock Ownership Trust) 48,928,275 6.41 Blackrock Global Funds-Asian Growth Leaders 31,531,000 4.13 CTBC BANK CO., LTD. (Sustainability Employee Stock Ownership Trust) 26,243,910 3.44 Chunghwa Post Co., Ltd. 21,584,000 2.83 Cathay Life Insurance Co., Ltd. 18,252,000 2.39 KGI Bank 16,813,000 2.20 American Funds Developing World Growth and Income Fund 16,667,000 2.18 USI Corporation 15,180,656 1.99

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

Item 2016 2017 As of March 31st, 2018 Market Price per Share

Highest Market Price 51.80 54.50 50.70 Lowest Market Price 34.60 43.00 43.55 Average Market Price 44.56 49.07 47.10

Net Worth per Share Before Distribution 22.40 23.52 NA After Distribution 19.80 20.29 NA

Earnings per Share Weighted Average Shares 761,539 763,274 NA Diluted Earnings Per Share 2.92 3.68 NA

Dividends per Share Cash Dividends 2.60 3.23 NA Stock Dividends Dividends from Retained Earnings 0 0 NA Dividends from Capital Surplus 0 0 NA Accumulated Undistributed Dividends 0 0 NA

Return on Investment Price / Earnings Ratio 15.26 13.33 NA Price / Dividend Ratio 17.14 15.19 NA Cash Dividend Yield Rate 0.06 0.07 NA

Note 1: Board of Directors has approved the 2017 earnings distribution and has not been resolved by the Annual General Meeting of Shareholders in 2018. 4.1.6 Dividend Policy and Implementation Status A. Dividend Policies under Articles of Incorporation When net profit occurs in the annual accounts, the Company shall first pay the profit-seeking enterprise income taxes and offset its losses in previous years and set aside a legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Company; then set aside a special capital reserve in the amount equivalent to the balance of shareholders’ equity deficit of the current fiscal year. After having paid the corporate taxes and off-set past losses, 10% of the profit earned by the Company of each fiscal year shall be set aside as statutory reserve, except where such reserve has reached the total authorized capital of the Company. Furthermore, a special reserve shall be set aside. If there is recovery of the balance of shareholders’ equity deficit, 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, together with the cumulative undistributed profit of the previous year shall be referred to as cumulative allocable profit, which shall be distributed according to shareholders’ resolutions. In order 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 cumulative allocable profit according to the shareholders’ resolutions Besides, the amount of shareholders’ bonus shall not be less than 50% of cumulative allocable profit of the Company, in particular cash dividend shall not be less than 20%.

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B. Proposed Distribution of Dividend: Cash dividend: NT$3.23 per share. C. The Company adopts a dividend policy of high earnings appropriation rate, and stipulates that at least 80% of total attributable earnings should be appropriated as dividends. In recent years, the Company distributes all of its dividends in the form of cash. Historical information about dividends distribution is available on the Company’s website. 4.1.7 Impact of Stock Dividend Distribution on Business Performance, EPS and Return on Investment: Not Applicable. 4.1.8 Employee and Directors' Remuneration A. Information Relating to Employee and Directors’ Remuneration in the Articles of Incorporation 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 board of directors, distribute 1.5%~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 board of directors as remuneration. The remuneration could be 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 board of directors’ remuneration shall be submitted to the shareholders’ meeting. B. The estimation basis on remuneration to Employees and Directors, the calculating basis on the number of shares for share bonus and accounting treatment for the differences between the actual distributing amounts and estimations: Estimation of employee and Directors’ remuneration is based on prior experience and is recognized as current expenses. In case of a significant change (per Article 6 of Securities and Exchange Act Enforcement Rules, the amount is over NT$10,000 thousand while reaching 1% of audited net operating revenue or 5% of paid-in capital), the expense shall be adjusted accordingly in the year where the employee bonus was recorded. When the change is not significant, it shall be recorded in the following year as change in accounting estimation. If the amount remains variable at the date of Shareholders’ meeting in the following year, it shall be recorded in the following year as change in accounting estimation. C. Profit Distribution of Year 2017 Approved in Board of Directors Meeting for Employee and Directors’ Remuneration a. Recommended Distribution of Directors’ Remuneration is NT$ 16.537 million, and Employees’ Remuneration in cash is NT$84.160 million. b. Ratio of Recommended Employee Stock Bonus to Capitalization of Earnings: None. c. Recounted EPS after Recommended Distribution of Employees’, Directors’ and Supervisors’ Remuneration: NT$3.23 per share.

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D. Information of 2016 Earnings Set Aside to Employee Bonus and Directors’ and Supervisors’ Remuneration: Unit: NT$ Actual Distribution A Recognized Estimated Amount B Variance C=A-B Bonuses for Employees (Cash) 66,484,328 66,484,328 0 Remuneration for Directors (Cash) 15,000,000 15,000,000 0 The Estimation for 2016 Employee Bonus and Directors’ Remuneration is based on the percentage of earnings after tax and legal reserve consideration in the Articles of Incorporation. There is no difference between the actual 2016 Employee Bonus and Directors’ Remuneration distributed according to the resolution of the stockholders’ meeting and the Estimated Amount. E. The Information of Top Ten Recipients of Employee Bonuses in 2016:

Name Title Amount(NT$) Andy Sheu Vice Chairperson of Management Strategy Committee

923,996

Michael Yang President M. H. Wang Executive Vice President Pao-Yao Pan Executive Vice President

Ming-Cheng Hsiao Executive Vice President Patrick Lin Senior Vice President and CFO

Chen-San Hu Senior Vice President Jung-Yu Han Senior Vice President

Teh-Ming Tao Vice President Tsai-Ming Wang Vice President

4.1.9 Buyback of Treasury Stock None. 4.2 Corporate Bonds None. 4.3 Preferred Shares None. 4.4 Global Depository Receipts None.

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4.5 Employee Stock Options 4.5.1 Issuance of Employee Stock Options As of March 31st, 2018

Type of Stock Option 2017 ESOP 2018 ESOP Effective Date by Regulatory Agency 2017/04/05 2018/01/09

Issue date 2017/04/11 2018/03/09 Units issued 20,000 units 20,000 units

Option shares to be issued as a percentage of outstanding shares (%) 2.62 2.62

Duration The duration for options is 6 years, during which employees may not transfer, pledge, or gift their options except to heirs. Upon the expiration of the grant period, unexercised options are deemed forfeited and the subscribers may no longer claim right to exercise the option and purchase those shares.

Conversion measures Issue new common share.

Conditional conversion periods and percentages

Subscribers may exercise their options by the following schedule and proportion: The availability period The ceiling of option exercisable (accumulate) Regular Reward Less than 2 years 0% 0% In 2 years after the grant 50% 25% In 3 years after the grant 75% 50% In 4 years after the grant 100% 100%

Converted shares 0 Shares 0 Shares Exercised amount NT$0 NT$0

Number of shares yet to be converted 20,000,000 Shares 20,000,000 Shares Adjusted exercise price for those who have yet to exercise their rights NT$49.6 NT$45.9

Unexercised shares as a percentage of total issued shares (%) 2.62 2.62 Impact on possible dilution of shareholdings Dilution to Shareholders’ Equity is limited.

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4.5.2 List of Executives Receiving Employee Stock Options and the Top 10 Employees As of March 31st, 2018

Title Name

No. of Option Shares (thousand shares)

Option Shares as a Percentage of Shares issued (%)

Exercised Unexercised Note1 No. of Shares Converted (thousand shares)

Strike Price (NT$) Amount (NT$ thousands)

Converted Shares as a Percentage of Shares issued (%)

No. of Shares Converted (thousand shares)



Managements


6,697 0.88 0 N/A 0 0 6,697

2017 ESOP: NT$49.6; 2018 ESOP: NT$45.9.

318,919 0.88

President Michael Yang Executive Vice President M. H. Wang Executive Vice President Ming-Cheng Hsiao Executive Vice President Pao-Yao Pan Executive Vice President Todd Chen

Senior Vice President Jung-Yu Han Senior Vice President Patrick Lin Senior Vice President T. C. Huang Senior Vice President Casey Yeh

Vice President Teh-Ming Tao Vice President Steve Jean Vice President M. G. Lee Vice President Po-Chien Wang Vice President Tsai-Ming Wang Vice President Min-Li Lee Vice President Jing-Shing Wu Vice President Y. S. Liao Vice President S. H. Lin Vice President Ting-Kuo Li Vice President Connie Lin Vice President Vincent Liu Vice President Ho-Chuang Lee Vice President Shih-Wei Chung

Accounting Officer Ai-Cheng Ho

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Title Name No. of Option Shares (thousand shares)

Option Shares as a Percentage of Shares issued (%)

Exercised Unexercised Note1 No. of Shares Converted (thousand shares)



No. of Shares Converted (thousand shares)



Employees

Chief Engineer Wen-Pin Lo

1,028 0.13 0 N/A 0 0 1,028

2017 ESOP: NT$49.6; 2018 ESOP: NT$45.9.

48,814 0.13

Chief Engineer Hope Sun Chief Engineer Cheng-Shen Wang

Chief Information Officer Gino Tsai Senior General Manager Chun-Jung Hung Senior General Manager Jin-Wen Chang Senior General Manager Michael Shih Senior General Manager Jenq-Shyong Chung Senior General Manager Michael C. Chang Senior General Manager C.L. Yen

Note1: The Effective Date and Issue date of the 2017 ESOP is April 5th and April 11th 2017, and the subscribers may not request for exercising the stock option within 2 years after the date of issued; the Effective Date and Issue date of the 2018 ESOP is January 9th and March 9th 2018, and the subscribers may not request for exercising the stock option within 2 years after the date of issued. 4.6 Employee Restricted Stock None. 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions None. 4.8 Financing Plans and Implementation None.

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V. Operational Highlights 5.1 Business Activities 5.1.1 Business Scope A. Main areas of business operations a. Markets: Hydrocarbon, Power, Environmental, Transportation and Industrial. b. Services: Project Management, FS/FEED, Engineering, Procurement, Fabrication, Construction, Commissioning, Intelligent Solutions, Automation & Control, Clean Room & MEP, Structure Jacking & Movement, Ground Freezing and Operation & Maintenance. c. Products: Stationary Equipment, Chemical Additives and Energy Management Software. B. Revenue distribution Unit；NT$ thousands Major Divisions Total Sales in Year 2017 (%) of total sales

Engineering 66,610,992 93.02 Environment 4,479,587 6.26 General Trade 184,704 0.26 Others 331,321 0.46 Total 71,606,604 100.00

C. Main Services The main services of the Company include feasibility study & planning, project management, engineering, procurement, fabrication, construction, plant commissioning, QA & HSE, operation & maintenance, and information technology. D. New products development: Not Applicable. 5.1.2 Industry Overview A. Outlook of Macro Economy: Based on the latest International Monetary Fund (IMF) report, global economy recovered firmly in 2017, in terms of GDP growth rate projected 3.7% whilst 2.3% for developed countries, 4.7% for emerging markets. Looking forward, such momentum experienced in 2017 remains consistent in 2018, evidenced by a revised GDP growth 3.9%, including 2.3% and 4.9% for advanced countries and emerging markets respectively. In addition, the U.S. tax reform associated with fiscal stimulus are expected to enhance U.S. economy growth, which is favor to its trading partners e.g. Canada and Mexico, and further stimulate the global economic as well. Economy growth rates for many of Euro area have been marked up, e.g. Germany, Italy, and the Netherlands, reflecting the stronger momentum in domestic and external demand. Emerging and Developing Asia markets will grow at around 6.5% in 2018~19, broadly the same pace as in 2017. Growth rate will be moderate in China, India, and remains stable in the ASEAN-5 region. The Company is engaged in the engineering, procurement and construction (“EPC”) industry, which is closely tied to the overall outlook of economy of our target markets. Many projects are initiated by government. Therefore, the economic growth rate of the Company’s target markets is one of major indicators of business opportunities. Please refer to the table, as below, conducted by IMF of the GDP growth rates of our major markets. Overall, the Company will retain a progressive bidding strategy in those countries of which GDP show either a recovery (e.g. Middle East) or prosperity of economy (e.g. China, India and most of ASEAN countries).

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Forecast of Economic Growth Rate Country 2017 2018

Global 3.7% 3.9% Taiwan 2.0% 1.9% China 6.8% 6.6% Singapore 2.5% 2.6% Indonesia 5.2% 5.3% Philippines 6.6% 6.7% Malaysia 5.4% 4.8% Thailand 3.7% 3.5% Vietnam 6.3% 6.3% India 6.7% 7.4% United States 2.3% 2.7% Mexico 2.0% 2.3% Saudi Arabia -0.7% 1.6% United Arab Emirates 1.3% 3.4% Qatar 2.5% 3.1% Kuwait -2.1% 4.1% Oman -0.02% 3.7%

Sources: International Monetary Fund (IMF) - Data and Statistics.

B. Market Overview: The Company is mainly engaged in the field of engineering design, procurement and construction (“EPC”). As a professional EPC lump sum turn-key provider, enjoying a leading position out of more than 510 companies registered with the Chinese Association of Engineering Consultants. Basically, most of local EPC companies target domestic market which is limited and competitive. In addition, those large-projects with large amount are under the tendency of lump sun turn-key for international bidding. Therefore, there is few local EPC companies are capable to team up with international bidders. Having a solid track record in the international EPC market for years, the Company has become a designated partner of many well-known international companies for various large projects globally. Currently, the Company is capable to bid project with single contract amount over US$ 1 billion. C. The EPC Industry: Major clients of the Company cover in areas of refinery, petrochemical, general chemical, LNG, power, transportation, steel manufacturing, environmental protection, and etc. The main service of the Company is to provide the EPC works in accordance to clients’ requirements. The EPC project is a professional-based integration, which requires an intensive engineers’ capability in completion timely and efficiently as required by the clients. For this reason, the entry barrier to enter this industry is high. More specifically, the Company’s services include feasibility study, engineering, procurement services, equipment supply, construction management, and commissioning services. The upstream of this industry is the clients with plant construction demands. The midstream is the EPC turnkey companies. (The Company is at this section) The downstream is the third-party vendors, such as materials, equipment suppliers and construction firms.

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D. Market Trend and Competition: a. The Trend (1) Large EPC Projects Given a trend of incessant businesses expansion overtime, requirements from client are getting more complicated. In order to minimize the risks associated with large projects and reduce cost, clients turn to be reluctant to award specific sub-projects to different contractors and prefer single EPC contractors instead. (2) Turnkey Solution Clients’ requirements today request not only engineering design, procurement and construction, but advance planning, project financing, operation management, etc. To complete the project with low cost, high quality and timely are preferred by the clients. It’s undoubtedly a challenge to EPC contractors. (3) Potential BOT projects in public sector In the public sector, the governments tend to boost economic growth by investing infrastructure projects. In order to reduce the government fiscal burden and encourage private sector to get involve with government’s projects, it’s becoming popular to announce BOT (Build-Operate-Transfer) projects for public sector projects. In the future, we will also introduce BOT model to emerging markets’ clients. After Taiwan joined the World Trade Organization and signed government purchase agreements with other countries, the domestic market in Taiwan is now available to foreign construction companies on an equal basis. Taiwanese engineering companies aim business potentials in global markets via collaboration with other engineering firms worldwide, and strengthening the capability in finance and legal resources to cope with the ever-changing environment. (4) Technical Innovation Technical innovation becomes increasingly important to viability of EPC contractors. Generating value-added solutions to satisfy clients’ demands is a key challenge to engineering firms worldwide for maintaining competiveness on the market. b. Competition There are about around 16 EPC competitors globally, who are mainly from South Korea, Japan and Europe. In domestic market, there are few local competitors in terms of operation scale. When the projects opened for international bidding, competitors come mainly from Korea and Japan. However, the Company still has the geographically advantages in Taiwan. In oversea markets, the Company without self-owned technologies, the keys to award the contracts is the well-experienced international project execution and the integrated ability of cost management. The Company has invested a local company in Malaysia for business development together with self-owned subsidies located in other major cities in Southeast Asia countries as well. For the major petrochemical market in Middle East, rigid competition from South Korea companies remains unchanged; besides several European companies turn to be aggressive in recent years.

Suppliers(Materials、

Equipments and Construction)

Downstream

CTCI

Midstream

Client(Owner)

Upstream

Engineering diagrams, Construction procedures and standards, Construction management

Requirement and Specification

Completion of construction or

installationCompletion Certificate

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5.1.3 Research and Development Overview A. Research and Development Expenses in Past Three Years Unit；NT$ thousands Item/Year 2015 2016 2017 Operating Revenue 42,049,227 42,764,443 48,591,380 R&D Expense 81,217 101,816 113,993 R&D Expense as percentage of Operating Revenue (%) 0.19 0.24 0.23

Note: Independent Financial Statements were under IFRS. B. Research and Development Projects Completed in Recent Years and Successful Technology or Products Developed in Past Two Years a. RD Projects Completed in Recent Years: Item 2016 Projects 2017 Projects

1 The application and development of project information dashboard The front operation, system setting and report online of implementing existing Innovation RD product to new project

2 The maintenance and implementation of existing innovation product The research and development of intelligent application platform (Tag Platform) 3 The application and research of the mobilization at site The research of virtual and physical plant hand over 4 The research and development of intelligentized turn over system The research of intelligent sensing technology applied to site management 5 The research and application of intelligent labeling for lump sum engineering The integrated research of Intergraph SPE and Tag Platform 6 The application of the maintenance, promotion and extension application of material management system

Material management system’s maintenance, mobilization application and group affiliates implementation 7 The research of process risk and mechanical integrity assessment AP Service 8 The development and optimization of intelligentized process design data

The development and application of Engineering information integration by using SmartPlant Suite. 9 The simulation study of Blowdown dynamic calculation and program

The development of Auto-Identification and Inspection Planning System for Corrosion and Deterioration Mechanisms 10 The programing for the discharge capacity calculation of safety release valve The development of HAZOP Review Comment Control System 11 The development of civil and building common information operation system The development and research of process design information automation 12 The research and development of the improvement of civil and building design workflow

The P&ID template establishment of raw water, pure water treatment system 13 The application and research of fireproof, insulation of vitreous particle of fluorite The basic design creation of systemic reclaimed water treatment technology 14 The common operation platform of Equipment Department The dynamic simulation research of flare / steam network

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Item 2016 Projects 2017 Projects 15 The integrated system of project equipment information

The development of iEPC common information operation systems in Civil & Building Engineering 16 European code storage tank design system Research & development on innovation of science and technology for Civil and Building Engineering 17 The research and development of instrumentation and control system common operation platform

The research and development of technology for railway track engineering 18 The research of integrated intelligentized database of instrumentation and control design information

The improvement of equipment operation workflow 19 The improvement of piping operation workflow Project equipment database system 20 Agile piping design The development and maintenance of equipment application system 21 The advanced application of power information integrated platform

CFD analysis for evaluating hot-air recirculation affection in air-cooled heat exchanger 22 The application and development of the digitalization of electrical layouts The automatic integrated research of instrumentation inter-discipline data 23 The risk assessment and analysis of lighting protection The research and development of instrumentation 3D/2D design operation 24 The analysis of No-load Tap Changer(NLTC) from step-up transformer in power plan The development of intelligent program for plot plan design 25 The planning of enhancing procurement supplier chain The technology development of VR applied to 3D model review 26 Integrating P6, CMS and SPC to apply to 4D Construction Planning and Simulation The integrated development of piping digital information 27 Construction HSE mobile system The extending application of power information integrated data 28 The development of integrated Intelligent construction Information Platform Applying electrical information to 3D/2D with automatic generation 29 The establishment of start-up expert system Analysis of Fast-Bus Transfer (FBT) scheme for its impact on power system and protective relay co-ordination 30 The research and promotion of SPPID application Vendor information exchange 31 The establishment of Implementing SPC system to optimize construction management platform 32 The research of scaffolding operation optimization and establishing modular skill 33 The application and development of robot installation at construction site 34 Mobile system optimization at construction site 35 Developing system mark-up 3D model in S3D

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b. Successful Technology or Products Developed in Past Two Years Only the most important technology or products are listed below due to approximate 30 projects in a year. Year RD Achievements 2016 1. The application and development of project information dashboard 2. The application and research of the mobilization at site 3. The research of reliability, availability and maintainability 4. The research of Bow-Tie/ALARP analysis 5. The dynamic calculation of Blowdown 6. The programming of safety release valve emission calculation 7. The application and research of fireproof, insulation of vitreous particle of fluorite 8. European code tank design system 9. The research and development of generating Instr. Location Plan from SP3D 10. The development of EQAS (Engineering Quality Assurance System) 11. The automatic adjusting development of S3D “intelligent” pipe supporting 12. The automation of power wiring operation 13. The risk analysis of lighting protection 14. The analysis of No-load Tap Changer(NLTC) from step-up transformer in power plant 15. The research and promotion SPPID application 2017 1. The research and development of intelligent application platform (Tag Platform) 2. The research of virtual and physical plant hand over 3. The research of intelligent sensing technology applied to site management 4. The development of Auto-Identification and Inspection Planning System for Corrosion and Deterioration Mechanisms 5. The development of HAZOP Review Comment Control System 6. The research and development of technology for railway track engineering 7. CFD analysis for evaluating hot-air recirculation affection in air-cooled heat exchanger 8. The research and development of instrumentation 3D/2D design operation 9. The development of intelligent program for plot plan design 10. The technology development of VR applied to 3D model review 11. Analysis of Fast-Bus Transfer (FBT) scheme for its impact on power system and protective relay co-ordination 12. Vendor information exchange 13. The research of scaffolding operation optimization and establishing modular skill 14. The application and development of robot installation at construction site 15. Developing system mark-up 3D model in S3D

C. 2018 RD Direction and Major Technology Development a. 2018 RD Direction is to (1) Develop iEPC technology to increase intelligentized lump sum engineering operation (2) Develop the expertise technology to strengthen lump sum engineering operation capability (3) Study AI technology to accelerate digitalized and intelligentized design information (4) Use IoT technology to strengthen construction management capability (5) Establish a common development platform to provide IoT, Big Data service b. Major Technology developments are as follows: (1) Develop iEPC technology - Research on Engineering Object-oriented Information Integration Platform to provide EPC integated information for project management

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- Establish intelligentized warehouse and construction management iEPC Intelligent Design System Development of all Engineering departments - Promote Vendor Information Exchange Platfrom and establish SOP - Implement pipe auto-welding robot on site (2) Develop expertise technology - Rule Base Water Treatment System Research and Development - Dynamic Simulation of LNG Terminal - Analysis of Track-Bridge Interaction and Study of Rail Expansion Joints Layout Assessment - Packaged Equipment - Pneumatic Conveying System Research - Research for Laboratory Equipment - A case study for Value Engineering to improve the performance - Simulation and Study of Insulation Coordination - SPF related modules development, maintenance and promotion system - Integration and application and handover of engineering data for SmartPlant Enterprise (3) Research of AI technology - Application and Research of Intelligent Technology in EPC Project - Develop program for intelligence plot plan of tank area - Research and Development for Application of Image Recognition Technology in Engineering Design (4) Apply IoT technolgoy - Research and Development for Smart Device Application in Construction Site Management - Construction Site Mobile App (5) Establish a common intelligent platform - Development of Intelligent Solution Platform(iSP) D. Current Project or New Product Being in process Refer to Section 7.6.3 for current RD project list. 5.1.4 Short & Long Term Development Plans A. Short Term Goals: a. Cultivating Global Landscape with Enhancement of Cross-Border Management Capability The Company has been well-positioned in the international EPC markets such as Middle East, Southeast Asia and the US, and will explore further to those new territories including East Europe, North Africa and South America. Having such active global development in the future, the Company will endeavor to facilitate comprehensive cross-border management synergy by means of a barrier-free platform in language, culture, talents and internal operations. Importantly, a global mindset has to be implanted in-depth to all of employees around the world. b. Participating in Global Power Plant Projects Aggressively In recent years, the Company has been awarded three mega power plant expansion projects by Taiwan state owned Power Company (“Taipower”) and overseas small power producer(“SPP”) projects in Thailand and Malaysia. According to a planned schedule of Taipower, several power plant renovation projects will be released in next couple years. Contributed by a promising economy in Southeast Asian region, strong power demand has been predicted which draws attention of new power plant projects in the coming few years. The Company will be involved actively in Taiwan and overseas market consistently. B. Long Term Goals a. Targeting New Business In addition to existing business lines, the Company has developed new fields recently such as liquid natural gas, green energy, recycling resources, etc. These new businesses are expected to contribute a good and stable profit and growth rate in the long run, particularly in emerging markets.

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b. Innovating Service Patterns to differentiate competitiveness against rivals By integrating of EPC service vertically and horizontally for an incessant expansion, the Company consistently devotes to an improvement in various aspects such as engineering technology, procurement, research and development, quality/HSE …etc. Through an active introduction of intelligent technology, the Company aims to create an intelligent technology platform - “iEPC” for its turnkey service and build big data bank for an intelligent turnkey service to a variety of customers. Through iEPC, the Company will be able to optimize the efficiency of project execution and originate a synergy for future business development aggressively. In all, the Company aims to become one of the top 30 engineering companies in the world, and to create an esteemed brand name for the Taiwanese engineering consulting service industry. 5.2 Market and Sales Overview 5.2.1 Market Analysis The Company signed contracts amounted NT$ 17.2 billion, while CTCI Group signed of NT$ 44.4 billion totally in 2017. The sales revenues of the Company amounted NT$ 48.6 billion, while the CTCI Group consolidated sales revenues amounted NT$ 71.6 billion totally in 2017. A. Sales Analysis by Major Services: a. By Area Area Group New Contracts Consolidated Sales Revenues

South East Asia 58.36% 20.54% Taiwan 29.42% 43.48% China 9.00% 3.68% Middle East 1.97% 29.88% Others 1.25% 2.42% Total 100% 100% b. By Industry

Industry Group New Contracts Consolidated Sales Revenues Refinery/Petrochemical 28.71% 55.61% Power 30.78% 22.62% Transportation 9.19% 4.57% Environmental 6.95% 8.55% Industrial 15.28% 5.92% Others 9.09% 2.73% Total 100.00% 100%

B. Market Share The Company has ranked No.1 in the domestic EPC market in Taiwan for years. The Common Wealth Magazine has placed the Company as No.1 in the top 650 service company survey within the engineering service provider category since 2005. On the global scene, the Company is well recognized by the U.S. Magazine Engineering News-Record in its annual rankings. For the year 2017, the Company is ranked, No.126 in Top 150 Global Design Firms Rankings, No.71 in Top 225 International Design Firms Rankings, No.125 in Top 250 Global Contractors Rankings, and No.99 in Top 250 International Contractors Rankings. C. Industry Trend Overview a. Short Term Market Trend Based on the latest International Monetary Fund (IMF) report, the global economic will be growing in 2017. The advanced countries and emerging countries have the same path of recovery. The countries in South East Asia still release National projects, while the Middle East region also

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releases petrochemical projects. The Company predicts such project investments in advanced and emerging countries will continue to 2018. Our views on the global market are briefed as following: (1) Taiwan The Company expects the government to maintain its policy on expanding domestic consumption, from which the Company targets local projects as one of priorities in the coming years. Domestic power demand is increasing with economic growth. Moreover, all of the domestic nuclear power plants will be decommissioned by 2025 based on the government policy and some of the mega thermal power plants will be expired in recent years, so the Taiwan Power Company begins to execute renewal and expansion plans for many power plants, which are the Company’s potential opportunities. For hydrocarbon projects, there are capacity upgrade project for refinery plant, petrochemical plant funded jointly with foreign investor, and LNG receiving terminal projects to strive for. For infrastructure projects, the Company is seeking to bid track work and system E&M projects of mass rapid transportation (MRT) system, General Industry, flue gas denitration(De-NOx), sewerage projects and etc. (2) South East Asia and India New investments appear to be trending upwards in Southeast Asia and India with the continuous growth of global economy. The maintained economic growth in India under the current government leadership led to increased demand on refineries, petrochemical plants and LNG receiving terminals. In Malaysia, the investments on refineries and upstream petrochemical plants have approached saturation. PETRONAS is now turning their focus to downstream petrochemical plants and fertilizer plants, which will be the Company’s upcoming opportunities. In Indonesia, the government is promoting new refinery investments to meet the increasing domestic demand. The tender for the first new refinery is going to take place in 2018. The investment in Thailand will be focused on LNG receiving terminals, existing refinery plants upgrades, specialty chemicals, mega power plants, small private-owned gas power plants, bio-fuel power plants, municipal waste incineration power plants, and etc. In Philippines and Vietnam, the Company will continue to pay close attention to new investment on refineries, petrochemical plants and LNG receiving terminals. Besides, the major opportunities in Vietnam will also be the municipal waste incineration power plants, coal-fired/gas-fired power plants and MRT projects. Except for the above projects, the Company will also seek for the coal-fired power plants subcontracting opportunities from renowned international EPC companies. Many projects will be available in Singapore along with several large infrastructure projects, including power supply and track work projects of MRT System projects. (3) China The Company not only monitors the refinery and petrochemical complex activated by Taiwanese investors and Sinopec, but also PTA plants invested by other Chinese firms. Besides, benefited by the thirteenth five-year economy plan of China, new opportunities are derived from the environmental protection and flue gas denitration(De-NOx). The Company plans to collaborate with local partners for such booming sectors. Moreover, there are also waste incineration power plant revamping opportunities in Macau. (4) Middle East and North Africa The oil price will remain volatile due to the competition of OPEC and Shales, which will lead to shorter price cycles. The crude oil market in first half of 2018 will be in tight balance; therefore the crude oil price is likely to remain weak. In order to improve the profits and stabilize the revenue, the Gulf Cooperation Council owners started to expand its business to high-value products in downstream. Even though the oil price didn’t have a large rebound, clients keep investing to meet production targets. The Company will keep eyes on the national tactical plan. Saudi Aramco plans to invest US$334 billion across the oil and gas value chain by 2025, and to triple its chemical production to 34 million metric tons per year by 2030. Parts of the private enterprises also initiate their investments while the construction cost is low. The Qatar government is re-evaluating the return of potential mega projects, and the

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petrochemical development outline will be confirmed in the near future. Bahrain is planning a new aromatic complex. Kuwait is expected to invest US$115billion on energy projects over the next five years to boost the crude production capacity to 4 million barrels a day by 2020. In Iraq, the situation in the north is relatively stable, however, it is learned that the financial strength of Iraqi governmental institutes are often weak, which becomes an important factor to decide whether to attend the tender or not for the Company. In the North African region, the Algerian government is planning to build refineries in the coming five years and to invest US$70 billion to shale oil/gas projects. Except for the projects mentioned, the bidding opportunities are also available in the fields of power, air pollution control, De-NOx, MRT Systems, steel/none-ferrous industrial, etc. (5) USA Due to large scale of shale gas production, the cost of petrochemical products has been considerably reduced. In addition, the Tax Cuts and Jobs Act (TCJA) put into effect in 2018 will attract more investors to invest in U.S. market, providing great opportunities for building petrochemical plants and lowering the investment cost. Taking this opportunity, the Company will actively participate in bidding several mega size FEED and EPC projects in 2018 and be focusing on U.S. market in the next five years. (6) Commonwealth of Independent States With abundant oil and gas resources as well as the geography advantage, Russia surpassed Saudi Arabia in 2017 for exporting crude oil to China and then provides many project opportunities foreseeable pertaining to petrochemical field. The Company is recognized positively because of its reliable and abundant EPC experiences overseas. With strong partnership and experience all over the world, the Company will be able to march toward the next milestone soon. b. Long Term Market Trend Looking into the future, although the economy uncertainty still exists because of the fluctuated oil price and new policy leaded by U.S. government, the emerging market such as China, Indonesia, Vietnam, India will still remain the economy growth which is stronger than global average. Therefore, the Company will be continuously focusing on the potential opportunities in these countries. As the notion of conserving energy is gaining momentum around the world, industries related to alternative energy and environmental protection are set to become mainstream in the years to come. Accordingly, the Company is trying to be more involved into new techniques and new areas such as LNG, alternative energy and other energy conservation items. D. Competitive Advantage The Company has been engaged in the industry for over 30 years and recognized as tier one international EPC company with solid track records worldwide. To overcome competition around the world, the company tries to leverage resources on a global basis. By setting up 40 subsidiaries in 15 countries, the Company develops engineering talents at competitive costs. Besides, the Company seeks strategic partners, on project basis, not only with other EPC companies but also critical vendors (e.g. producer of generator) to jointly bid project for enhancement of competitiveness. The Company is constantly trying to reinforce capability of project execution by soliciting a global logistics for cost down, and strengthening project risk management as well. E. Advantages and Disadvantages for Long-Term Development & Corresponding Strategies a. Advantages (1) Domestic market is recovering Taiwan government continues to push ahead for a new national development plan. CPC Corporation and Taiwan Power Company continue to execute their plans for renewal and

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expansion plans, which provide stable source of domestic opportunities. Taiwanese petrochemical companies still invest in new capacity expansion in China, India, South East Asia; it is another potential business of the Company as well. (2) Bidding for mega projects with professional capabilities The Company is now the only engineering Company in Taiwan to be able to carry out projects with amount over US$ 1 billion without any partner. The Company has valuable experience in teamed up with foreign partners for project both for local and overseas EPC projects. Also by collaborating with these international firms, the Company has established itself in the global market place for future opportunities overseas. (3) Entering into Overseas Markets with Strategic Partners With the successful strategic alliances, the Company now has world-class patented processes and techniques at its disposal. These advantages will not only serve existing projects, but can also be utilized globally such as China, Thailand, Vietnam, Malaysia, India, Singapore and the Middle East. The Company will integrate all the available resources to expand globally. (4) Strengthening Competiveness through Global Resources Management The Company’s subsidiaries in China (Beijing & Shanghai), Thailand, and Vietnam, India, Malaysia and Singapore have contributed significantly to the projects carried out in domestic and overseas markets. The engineers in these subsidiaries have also gained invaluable experiences throughout the process. These subsidiaries will continue to serve the Company favorably in the years to come with low cost and work efficiency advantages. b. Disadvantages & Corresponding Strategies Item Corresponding Strategies

Severe competition from other EPC companies The Company plans to do the following to increase its chances of winning projects: Strengthen cost control and project management capabilities. Technical Improvement: Continuous process re-engineering and innovation through the R&D center. Human Resources Development: Global expansion by integrating local talents.

Fluctuations in commodity prices The Company has adopted the following internal control mechanisms to deal with risk of commodity price: Shortening design timeframe, better control of procurement supply quantities and shipment schedule. Multiple hedging mechanisms to reduce the associated risks to the minimum. Purchasing commodity swaps to lock-in the prices of basic materials required such as copper and nickel. Arranging long-term supply contracts with suppliers. Enhancing relationships with major equipment manufacturers. To reduce the procurement costs of the projects, actively seeking for low cost regional suppliers with stable quality.

Difficulties in executing overseas projects The Company has established a risk management committee to monitor and control all the relevant risks at both the project and the corporate levels. Better integration of local resources and cost control for higher efficiency.

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5.2.2 The Company’s Main Services Purposes and Service Sequences The Company’s main services are EPC and consulting-oriented, including all sorts of professional services such as feasibility study, design, equipment supply, equipment fabrication, construction services, construction management, commissioning, and maintenance. A. Main Services and Purposes a. Refinery/Petrochemical: For the manufacturing of oil-related and petrochemical products. b. Utilities: Nuclear power plant, natural-gas power plant, coal-fired power plant, and combined-cycle power plant. c. Infrastructure: MRT system, high speed railway, etc. d. Environmental: Incinerators operation and maintenance, waste management, water treatment, air pollution processing, etc. e. General Industry: Steel manufacturing plant, storage and docking facilities. f. High tech and bio-related: electronic plant, pharmaceutical plant, etc. B. Service Sequences: Feasibility study and initial design → Engineering → Procurement → Construction → Construction Management → Commissioning → Service and Maintenance 5.2.3 Major Materials Used and Supply Status: A. Commodities: specially-formed steel, steel plates, steel rods, cement, various pipes and accessories, electricity cables, and special paints. These materials are sourced by qualified suppliers in the region close to the project job sites. B. Equipments: reactor, storage tank, heat exchanger, heat boiler…etc. These major equipments are supplied by specialized companies throughout the world. 5.2.4 Major Suppliers and Clients A. Major Clients (each commanding 10%-plus share of annual order volume) Information for the Last Two Calendar Years

Unit：NT$ thousands

Item 2016 2017

Company Name Amount % Relation with Issuer Company Name Amount % Relation with Issuer

1 TPC 16,811,608 24 None TPC 11,893,499 17 None 2 Orpic 4,299,976 6 None Orpic 15,413,235 22 None 3 Others 49,398,091 70 None Others 44,299,870 61 None Total 70,509,675 100 Total 71,606,604 100

B. Major Suppliers Information for the Last Two Calendar Years N/A. 5.2.5 Production over the Last Two Years Unit: NT$ thousands

2016 2017 Engineering 60,881,194 62,906,736 Environment 3,155,153 3,220,331

General Trade 85,154 136,152 Others 202,344 231,885 Total 64,323,845 66,495,104

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5.2.6 Shipments and Sales over the Last Two Years Unit: NT$ thousands

2016 2017 Local Export Local Export

Engineering 51,041,836 14,482,752 54,965,443 11,645,549 Environment 3,221,230 1,332,413 3,538,665 940,922 General Trade 114,051 0 184,704 0 Others 317,393 0 331,321 0 Total 54,694,510 15,815,165 59,020,133 12,586,471

5.3 Human Resources 5.3.1 The information about employees employed for the most recent two fiscal years and up to the date of printing of the annual report Year 2016 2017 As of March 31st, 2018

Number of Employees Permanent employee 2,598 2,571 2,547 Contract employee 176 127 103 Total 2,774 2,698 2,650

Average Age 41.9 42.2 42.4 Average service seniority 12.9 13.4 13.7

Number of employees at each level of educational degree

Doctor 19 15 15 Master 1,269 1,255 1,236 Bachelor 1,362 1,322 1,298 Senior High School 87 72 68 Senior High School below 37 34 33

Certification details of employees whose Jobs are related to the Release of the Company’s Financial Information: Certification Number of Employees

Certified Internal Auditor(CIA) 4 Test of the Enterprise Internal Control Basic Ability 4 Test of the Bank Internal Control Basic Ability 1 Certified Securities Investment Analyst(CSIA) 2 Certified Public Accountant (ROC) 5 Certified Public Accountant (USA) 1

5.3.2 Work Environment and Occupational Safety and Health A. HSE Policy CTCI’s HSE Policy Statements are set seventh below:

‧ Insist on Safety as the First Priority; ‧ Promote Personal Health and Wellbeing; ‧ Protect the Environment and Pursue Sustainability; ‧ Implement Effective Risk Management; ‧ Comply with Legal and Contractual Requirements; ‧ Encourage Training and Engagement; ‧ Continuously Improve Our HSE Management System.

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CTCI Corporation is always dedicated to creating and maintaining a sound working condition of health, safety, and environment protection (HSE). CTCI regards HSE as the priority among all of our activities. Also, we are enthusiastic to promote health management in workplace, to create a health working environment that free of harms to body and mind. We provide professional services with obligation to environment protection, aim for energy saving, carbon reduction, and prevent possible pollutions. We implement risk management mechanism, while prevention of occupational injuries and diseases as well as the environmental protection remains our highest concern among others. All of the projects related to planning, engineering design, procurement, construction and commissioning must be carried out in conformance with governments HSE legislations and the requirement specified in the contracts with customers is our commitment. To improve all personnel and collaborators’ knowledge on safety, health and environment protection, CTCI regularly held HSE training programs and often support HSE related activities and conferences, which personnel and collaborators are encouraged to participate actively. Moreover, CTCI spare no efforts on continuous improvement of each HSE activity to make sure the applicability and effectiveness of HSE management system. B. HSE Organization To ensure a safe and healthy environment provided by CTCI Corporation to our employees, also to ensure the project execution do not harm the environment, the company established HSE Management Department. CTCI also set up QHSE division. Under the direction of the group president, and the QHSE division, the HSE Management Department is in charge of formulating, planning, promoting and monitoring the corporate-level HSE activities, and instructing every department, project, subsidiaries in implementation. HSE Management Department also conducts internal auditing, monitors HSE performance of the corporation, and ensures the performance of HSE management work of every project activities, in order to prevent occupational accidents, protect employees’ safety and health, and conserve the environment. C. HSE Management System CTCI acquired ISO 14001 Environment Management System Certificate and OHSAS 18001 Occupational Health & Safety Management System Certificate in 2006, and has been continuously updating the latest version of international guidelines. In order to cooperate with the ISO 14001:2015 release, CTCI acquired the certification of ISO 14001:2015 in May 2017. CTCI also acquired a TOSHMS (Taiwan Occupational Safety and Health Management System) Certificate in year 2009, and in 2012 it was approved with CNS 15506:2011. To achieve continuous improvement of HSE management system, CTCI regularly review HSE performances, propose practical corrective actions and put into action, and annually revise the HSE objectives, to lower potential risk on safety, health and environment. Moreover, CTCI emphasizes concerns on safety management, incident prevention, energy conservation, and occupational health promotion. D. Operation of HSE Management System The operation of HSE management system followed the P-D-C-A process, scopes includes engineering design, procurement, construction, commissioning, emergency response, and headquarters etc. In addition, the company has established a “Occupational Safety and Health Committee” according to legal regulations, and the Committee has 18 members, with the President serving as the chief of the committee. Of all the 18 members, 6 of them (1/3 of total members) are representatives from the labor side in the labor-management conference. Routine meetings are held every three months to evaluate matters related to the management of health and safety, and results are recorded and publicly announced to all employees. Prior to these meetings, we always contribute office BBS surveys to the employees in our HQ to understand the levels of employee awareness in information pertaining to health, safety, the environment, and health promotions. Additionally, employees could also provide suggestions in these surveys.

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E. HSE Training To decrease the occurrence of occupational hazards, all relevant personnel must receive educational training for work-related hazard prevention. This is according to regulations from the local government, and must be completed prior to being stationed at a project site. In addition, employees in the CTCI HQ Building must also receive routine safety, health, and environment protection training according to the law. The training includes employee fire drills, new employee training, general on-the-job safety and health training, first-aid training, and high risk emergency training for special topics. F. HSE Risk Assessment CTCI’s safety, health, and environment risk assessment procedure was established according to OHSAS 18001/ISO 14001 management systems and in reference to the principles of the ISO 31000. The Administration & PR Division coordinates and handles safety, health, and environmental risks affairs in the Company HQ Office, and the risks are evaluated annually. Improvements or regulatory measures are proposed for risks that cannot be tolerated. Risk evaluation during project execution is carried out at the start of the project and also re-evaluated on an annual basis. When there are changes in construction methods, equipment, or procedures, and / or abnormal improvements to safety, health, or the environment or major worker-safety related incidents, corrective measures would be proposed and hazard and risk evaluations would be conducted once again. G. Statistic of Occupational Incidents CTCI as an international engineering corporation, in response to international clients’ requirements, the occupational injury statistics(Note1) is conducted by the formula of TRCR(Note2), Disabling Injury or DARTR(Note3) proclaimed by United State of Labor Department Occupational Safety and Health Administration (OSHA). Furthermore, the Root Cause Analysis (RCA) is conducted by the company in order to develop corrective and preventive and effective actions. Meanwhile, issues that are inter-departmental or systematic are documented, monitored and controlled.

Note1: Traffic incident are not included in the statistic number Note2: Total recordable case rate ,TRCR＝

200,000 Note3: Days away from work, days of restricted work activity or job transfer incidence rate,

DARTR= , 200,000

H. Awards To recognize its achievements in HSE, CTCI Corporation in 2017 received several awards from government authorities and clients. These are listed as follows: a. CTCI headquarters acquired Certificate of Zero Accident Proof from Ministry of Labor (totally 41.28 million accident free man-hours from January of 2007 to December of 2017) b. SKF10 Project awarded Best EHSS Performer for the 2nd Quarter 2017 by SABIC E&PM. c. SKF10 Project received a Certificate of 2.17 M safe work hour without Lost Workday Injury by SABIC E&PM.

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d. SAMAC Project awarded 20 M safe work hour without Lost Workday Injury by Saudi Arabian Methacrylates Company. e. P1 Project awarded Best Contractor for January 2017 by PETRONAS Refinery & Cracker Division. f. Talin No. 11 DHDS Project Contracted by CTCI Honored with CPC Outstanding Safety and Environmental Protection Performance in 2016. (Date of award: 2017/8/7) g. CTCI awarded by Kaohsiung environmental protection bureau with 2016 Excellent Construction Contractor Award. (Date of award: 2017/1/31) h. Dah-Tarn Emergency GTG Project receives a Certificate of Appreciation from Taiwan Power Company. 5.4 Environmental Protection Expenditure CTCI Corporation is in the industry of engineering service, which that the workplace including the Headquarters building and job sites. Described respectively as following: 1. Headquarters building: Mostly office works, no polluting events happened ever. The Green Building project is started in 2017. The light tubes in HQ had been fully replaced light tubes until now. Energy management system will be set up in 2018. The electricity usage of the building will be reduced in the feature, Furthermore, basing on statistics of analyzing the electricity usage of each floor with the energy management system, the energy-saving strategy will be more efficient. 2. Job sites: Located in industrial zone in most cases, no influence to nearby residents is always the top demand. During construction process, all sub-contractors are requested to execute the environmental protection measures like waste management or any other to eliminate impacts on air, water, and soil to comply with regulations. No improper records happened before. 5.5 Labor Relations 5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests A. Employees’ benefits a. Labor insurance (1) The Company’s employees are enrolled in the labor insurance program pursuant to laws. (2) The labor insurance premium includes the premium of the insurance against ordinary incident and occupational disaster. 70% of the insurance premium for ordinary incident will be borne by the Company, 20% thereof borne by the insured, 10% thereof borne by the government. The insurance premium for occupational disaster will be borne by the Company in full. b. National health insurance (1) The Company’s employees and their dependents are enrolled in the national health insurance program pursuant to laws. (2) The payable national health insurance premium shall be subject to the government’s relevant requirements. c. Group insurance (1) The Company’s employees are entitled to the additional group insurance purchased by the Company from the life insurance company externally. (2) The Company’s employees will be enrolled in the group insurance program immediately on the hiring date. The group insurance covers life insurance and accidental injury insurance, which will be borne by the Company in full. (3) The Company’s employees and their dependents may select the medical care insurance programs at their sole discretion, and 60% of the insurance premium will be borne by the Company.

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d. Annual bonus The Company will allocate the incentive bonus subject to the annual operation overview, and will grant the bonus with respect to individual performance, attendance record and seniority in accordance with the relevant operating procedure. e. Workers’ Welfare Commission The Company establishes the Workers’ Welfare Commission pursuant to laws, and allocates the welfare fund periodically. The colleagues may elect the commission members openly, and organize tours and club activities and give birthday coupons and festival gifts, subsidies and consolation money periodically. f. Incentive payment for shareholding trust To support the employees’ shareholding committee incorporated by employees and encourage employees to save funds and hold the Company’s shares permanently, the Company specially agrees that the colleagues who have served more than one year and been enrolled in the employees’ shareholding committee may be granted the incentive payment on a pro rata basis subject to the fund allocated on a monthly basis. g. Employee health care and promotion In order to create a healthy workplace environment, the company has a health center and deploys full-time medical staff, provided doctors' clinic services, health training course, and has an electronic platform to assist associates in linking health resources to implement employee health care and promotion. B. Top Management advanced studies: a. EMBA: Title Name Course Name Status

President Michael Yang EMBA, National Taiwan University of Science and Technology, Taiwan Graduated in 2008 Executive Vice President M. H. Wang EMBA, Chulalongkorn University, Thailand Graduated in 2009 Executive Vice President Pao-Yao Pan EMBA, National Sun Yat-sen University, Taiwan Graduated in 2010 Senior Vice President Jung-Yu Han EMBA, National Chengchi University, Taiwan Studied in 2009 Senior Vice President & CFO Patrick Lin EMBA, National Taiwan University, Taiwan Graduated in 2013 Vice President Steve Jean EMBA, National Chengchi University, Taiwan Graduated in 2013 Vice President M. G. Lee EMBA, National Taiwan University of Science and Technology, Taiwan Graduated in 2008 Vice President S. H. Lin EMBA, National Chengchi University, Taiwan Graduated in 2008 Accounting Officer Ai-Chen Ho EMBA Program in Finance, National Taiwan University, Taiwan Graduated in 2010

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b. Top Management program: Title Name Course Name Status

Executive Vice President Ming-Cheng Hsiao Executive Management Training Program, National Taiwan University, Taiwan

During the period of Apr. to Jul. 2013 Executive Vice President Pao-Yao Pan Top Management Training Course by National Taiwan University, Taiwan During the period of Mar. to Jun. 2013 Senior Vice President Jung-Yu Han

Participated in Advanced Executive Program for Senior Manager of National Taiwan University, Taiwan During the period of Nov. 2005 to Jun. 2006 Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013

Senior Vice President & CFO Patrick Lin Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan

During the period of Feb. to Jul. 2009 Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013

Vice President Steve Jean

Participated in Advanced Executive Program for Senior Manager of National Taiwan University, Taiwan During the period of Dec. 2008 to Aug. 2009 Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013 Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan During the period of Sep. 2009 to Mar. 2010

Vice President Teh-Ming Tao Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan

During the period of Feb. to Jul. 2009 Top Management Training Course by National Taiwan University, Taiwan During the period of Mar. to Jun. 2013

Vice President M. G. Lee Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013

Vice President S. H. Lin Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan

During the period of Feb. to Jul. 2009 Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013 Accounting Officer Ai-Chen Ho Top Management Training Course by National Taiwan University, Taiwan During the period of Apr. to Jul. 2013 c. Training program about Corporate Governance:

Name Date Sponsoring Organization Course Hours Michael Yang / Ming-Cheng Hsiao / Mark W. H. Yang / T. C. Huang / Po-Chien Wang / S. H. Lin / Ai-Cheng Ho / Ai-ling Hsu

2017/05/12 Taiwan Corporate Governance Association

Big data analysis, and prevention/detection of fraud. 3 Michael Yang / Ming-Cheng Hsiao / Pao-Yao Pan / Todd Chen / M. G. Lee / Po-Chien Wang / S. H. Lin / Connie Lin / Ai-Cheng Ho / Ai-ling Hsu

2017/08/11 Taiwan Corporate Governance Association

The point risk managements of Board of Directors are used of innovative technologies 3

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C. Employees’ training: The Company establishes the workers’ training system in accordance with the Company’s view, mission and long-term business objectives, and plans the training development blueprint for various professional areas and job ranks. In addition to enhancing the workers’ professional ability, the Company also works hard to train their multi-departmental integration professional ability. The training programs include traditional lecturing courses, and also OJT, Lesson & Learnt, e-Learning and knowledge database in order to upgrade the employees’ knowledge about the know-how and skill, language, computer, management and leadership. As of June 2010, the Company started to perform the Mentor & Mentee (M&M) plan with respect to new employees in order to assist new employees to adapt to the enterprise culture and rapidly acquire the professional attitude and ability required by independent operation through structured (professional guidance) and non-structured (environmental adaption) one-on-one instruction. The training management applies the omnibus training management system, GTS (Global Training System), to enhance the e-Learning function and enable colleagues around the world to learn the expertise synchronously, and hopes to fulfill the workers’ training systems and development blueprint effectively through the strong control mechanism. The Company’s personnel committee will recommend excellent colleagues to take on-the-job advanced studies in domestic and foreign colleges/universities on a yearly basis, and will offer them the chance to co-work with staff of foreign engineering companies on a non-scheduled basis, so as to upgrade their expertise and solidify their international competitive ability. The employees’ training costs will be NT$14.55 million approximately per year. The average training hours will be more than 84.2 hours per person/year (227,166hours/2,698 persons). The various training hours and costs are specified as following: Type Number of class Total number of attendees Total hours (hour) Total costs (NT$)

Orientation training 75 436 35,680 63,740 Competence training 1,354 28,745 6,923,068 119,046 Management training 52 786 5,921,783 35,725 General knowledge training 57 378 604,085 6,520 Self-development training 4 4 1,067,710 2,135 Total 1,542 30,349 14,552,326 227,166 a. Orientation training: Including the introduction to the overview, work rules and QHSE management regulations of the Company, Orientation, and Mentor & Mentee (M&M) plan; b. Competence training: The various departments conduct the specialty training programs by instructing the employees and offering the employees with the chance to practice subject to the nature of work, the Company’s business needs or requirements under contracts and laws, and have employees participate in the actual operation adequately to upgrade their competence; c. Management training: HR Dept. arranges the management programs subject to the Company’s status and development needs, and makes the programs available to the various departments’ management. d. General knowledge training: The employees’ specialty training committee plans general knowledge training programs together with relevant units in accordance with the employees’ training policy, objective and strategy, and make the programs available to the whole employees; e. Self-development training: Including English comprehension training arranged in order to upgrade the colleagues’ international language ability, and on-the-job advanced studies in domestic and foreign colleges/universities to advance employees’ competence; The operations related to the employees’ training programs shall be conducted in accordance with the “CTCI Employee Training Management Procedure” and “CTCI Employee's Professional Competency Assessment and Management Procedure”.

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D. Retirement system and implementation thereof: The Company enforces the workers' retirement rules pursuant to the Labor Standard Law and allocates the pension reserve on a monthly basis. The rules are outlined as following: a. All of the Company’s employees shall comply with the rights and obligations defined in the workers’ retirement rules. b. The Company allocated the pension reserve equivalent to 5% of the total salary on a monthly basis before the end of September 2002, and 6.5% thereof after October 2002. The pension reserve will be deposited to the exclusive account maintained at the Bank of Taiwan. As of July 2005, the Company has executed the new system according to the employees’ will and choice, and allocated the pension fund according to the Labor Pension Act. c. Payment of pension fund: The Company paid the pension fund pursuant to the Labor Standard Act or Labor Pension Act pursuant to laws subject to the employees’ choice as of July 1, 2005. d. The company has the supervisory committee of workers' retirement reserve fund that meets quarterly. E. Other important agreements: a. The Company is engaged in the engineering service and possesses qualified personnel, a definite management philosophy, and a well-founded management system. In addition to the ordinary organization and system, the communication channels also include employees’ forums and labor and employer meetings held on a scheduled or non-scheduled basis, and installation of a suggestions box, so as to establish common consensus and a harmonious relationship between the employees and employer through the various channels. b. The Company is engaged in the business where the Labor Standard Law may apply and, therefore, it shall operate in accordance with the Labor Standard Law. c. Written undertaking for non-disclosure, non-competition and intellectual property right to secure the going concern, protect the group members’ interest and complete the corporate governance, the Company amends the “written undertaking for non-disclosure and copyright & patent right” to the “written undertaking for non-disclosure, non-competition and intellectual property right” and hopes that all employees may comply with the undertaking. All employees of CTCI and its domestic affiliates and overseas companies have already signed the undertaking. 5.5.2 Loss suffered by the Company due to dispute between labor and employer in the most recent fiscal years The Company is used to valuing the employees’ benefits and calling a labor and employer meeting and welfare committee meeting on a quarterly basis, and also installs the suggestions box to make a two-way communication channel available to employees. Therefore, the relationship between labor and employer is harmonious and no dispute over labor has arisen in the past. No material loss or punishment has been suffered by the Company due to dispute between labor and employer in the past three years. In the future, the Company will continue to adhere to the same principle and solidify the relationship between labor and employer further. 5.5.3 Guidelines for ethical conduct 1.0 Purpose Guidelines for ethical conduct (“the Guidelines”) are adopted to assist CTCI to foster a corporate culture of ethical management, preventing employees taking advantage of their positions in exchange for improper benefits. 2.0 Scope These Guidelines are applicable to CTCI employees, subsidiaries, and other institutions or juridical persons which are substantially controlled by CTCI ("business group"). 3.0 Definition 3.1 Vendor: Including suppliers, third parties and subcontractors. 3.2 Family: Employee and their spouse and relatives within three degrees of consanguinity.

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3.3 Confidential information: Including all CTCI methods, techniques, processes, programs, or other information that can be used for production, sale or business operation. 3.4 Intellectual property: Including all CTCI patents, trademarks, copyrights and trade secrets. 4.0 Responsibility 4.1 Human Resource Department: Establish guidelines of ethical conduct and accept accusations. 5.0 Operation Procedure 5.1 Gift receiving norm 5.1.1 If CTCI is the Party A in contract: A. Shall not ask for, expect or receive any money and goods gifted by the downstream vendor (Party B in contract) having existing contractual relationship or might establish cooperation relationship with CTCI, including but not limited to: cash, coupon, present, entertainment ticket, fruit, food, liquor, tea, stationery, travel hospitality, commodity discount coupon, membership card, painting and other properties or preference in personal shopping. B. But under general social etiquette and custom circumstances below, the gift may be received when not affecting the specific rights and obligations: a. The gift is the souvenir distributed extensively and with the Logo of gifting company, such as calendar, notebook, pen drive, card case, tie, tie clip etc. or other management or inspirational books. b. When being invited to dinner party or other communicative activities, CTCI employee has reported to the supervisor (*Notes) and been approved in advance. * Notes: the supervisor of CTCI is the head of BU, the supervisor of subordinate unit is the President, so is the other companies under the Group. 5.1.2 If CTCI is the Party B in contract: For the present gifted to our company by Party A’s customer (landlord) and partner of our company, dinner party or other communicative activities, it may be accepted with prior report to the supervisor (*Notes). 5.2 Preventing conflicts of interest CTCI employees are allowed to conduct personal investments and other business activities under the limitation of following requirements, in order to avoid conflicts of interest between employee and CTCI, which may further affect the loyalty of such employee: 5.2.1 Avoid personal gain during business operations: A. CTCI employees shall not participate in business operations if business relationship appears between CTCI and their family. B. CTCI employees shall not directly or indirectly accept any improper benefits when conducting business operation. 5.2.2 Avoid part-time job and/or competing with CTCI: A. CTCI employees shall not accept other company’s employment during tenure. B. Direct or indirect relationship with competitors shall be avoid, including part-time/full-time employment and contractor of companies in the same business, CTCI’s clients or vendors, CTCI’s competitors and its supplier. C. Effects on CTCI clients and/or vendors lead to disadvantage of CTCI shall not occur. 5.2.3 The measures of relatives’ employment of related industries: A. To avoid disadvantaging CTCI and conflicting with interests of CTCI, CTCI employees shall not sharing confidential information with their relatives who is employed by a company in the related industries, and their companies as well. B. CTCI employees shall proactively submit to Human Resource Department in written form if his/her relatives hold a business relationship with CTCI. 5.2.4 CTCI employees shall submit to Executive Management Office in advance if he/she is a director of the board, supervisor or consultant of a company in the related industries, excluding those of CTCI affiliates. 5.3 Protection of business confidentiality and intellectual property rights 5.3.1 All types of documents and information shall not be altered or modified by CTCI employees. 5.3.2 CTCI employees shall not discuss their work with non-CTCI employees and leak confidential information which has not been revealed by CTCI to others. The article above is still valid after resigning or retiring.

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5.3.3 Before CTCI patent or confidential information is revealed, CTCI employees shall not disclose it in any ways, including disclosing it in CTCI. The disclosure in CTCI should be authorized or assigned, and the disclosure out of CTCI should be done after subscribing the contract of confidentiality. 5.4 Fair trade with vendors 5.4.1 Vendor selection A. Vendors shall be fairly selected based on the technical specification, quality, duration and business requirements with the most competitive price. CTCI employees shall not choose vendors with preference and ignore CTCI’s interests. B. Employees participating in vendor selection shall avoid doing any activity that might be seen as the cause for vendor selection result. C. Employees participating in vendor selection shall not provide any information relating to the contract or proposal to irrelevant third parties. D. CTCI’s goals in procurement are “Best price, suitable quality, and prompt delivery”. CTCI employees should assist our vendors to accomplish the quality and quantity of their products or services. 5.4.2 Dealing with vendors A. CTCI employees should treat all vendors in positivity, fairness, and politeness. B. CTCI employees shall not disclose confidential information to vendors. C. CTCI employees should avoid contacting vendors due to non-business-related affairs 5.5 Steps to determine the ethicalness of behavior 5.5.1 Ethical Decision Making When CTCI employees have concerns about their own acts, or find anyone has suspected unethical behavior within CTCI, employees should take the following steps： A. Assess that if there is any adverse effect to CTCI, other people, and yourself, due to the behaviors, according to the section 5.2 in Guideline. B. Taking action after assessing the above statement, and should be noted the following principles： a. The action plan shall comply with laws and regulations. b. The action plan shall meet CTCI’s policies. c. CTCI’s employees may consult ethic-responsible department before deciding to take the action. 5.5.2 Questions to consider When CTCI employees are faced with a situation not stated in this Guideline, the following questions may help them decide the right course of action: A. Am I personally uncomfortable about the course of action? B. Would I be unwilling or embarrassed to tell my family, friends, or coworkers? C. Could someone’s life, health, safety, or reputation be endangered by my action? D. Would such action damage CTCI’s reputation if it appears on the news? E. Would I be regret of such action? 5.6 Reporting and disciplinary procedures for violation 5.6.1 Disciplinary system A. CTCI employees shall acknowledge the rules and their obligations. Employee violates the Codes of Ethical Conduct shall be reviewed by the Rewards and Punishment Committee, and penalized according to “CTCI Employees Reward and Punishment Regulations”. Employees who are in significant violation of this Conduct may be subject to disciplinary action up to and including termination of the labor contract. B. Apart from being penalized according to the CTCI internal rewards and punishment related policies, CTCI may conduct civil or criminal lawsuit based on the severity of violation. 5.6.2 Reporting system A. CTCI employees who discover any violation of this Conduct or other unethical activities shall report under their real name or anonymously according to “Accusation Management Regulations”. B. Reporter shall provide specific descriptions and relevant evidences on the concerned person, matter, time, place and object for further investigation. Reporting channels including: Online rep6.1orting (https://www.reportnow.com.tw/ctci) and email ([email protected]).

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C. The reporting channel stated above is run by an independent third-party service provider to ensure the unethical activities being reported is conveyed truthfully. CTCI promise to keep the confidentiality of reporters’ identity, protecting reporters from inappropriate disciplinary actions due to their whistle-blowing. D. CTCI may not conduct investigation or further action if reporters could not provide descriptions and relevant evidences on the concerned person involved. Such reporters may be penalized for malicious complaints.

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5.6 Important Contracts Agreement Counterparty Period Major Contents Restrictions

EPC JG Summit Petrochemical Corporation 2017/12/11 2019/07/21 Philippines, JG Summit Aromatics and Butadiene Extraction Units, EPC

According to contract content stipulation EPC Global Power Synergy Company Limited 2017/10/27 2019/07/27 Thailand GPSC CUP 4 Co-generation Project, EPC

According to contract content stipulation EPC Chimei Corporation 2017/10/01 2018/12/31 Taiwan Chimei 240 CMH EDR WWRU EPC Project

According to contract content stipulation EPC MAXIHUB Company Limited 2017/10/01 2019/09/30

Vietnam Maxihub Lube Oil Blending and Tank Farm Terminal Project, EPCC

According to contract content stipulation EPC PRPC Refinery and Cracker SDN. BHD. 2017/09/01 2020/02/29 Malaysia RAPID P28B Euro 5 Project, EPCC

According to contract content stipulation Engineering Jupiter MLP 2017/08/28 2018/01/28 Jupiter-Light Condensate Project, FEED

According to contract content stipulation EPC Prasarana Malaysia Berhad 2017/06/16 2021/02/27

Malaysia Kuala Lumpur KLLRT Line 3 Power Supply System Project, EPC According to contract content stipulation

Engineering Saudi Basic Industry Corporation 2017/05/18 2017/12/17 Yansab-Butadiene Project, FEED According to contract content stipulation

EPC Southern Power Generation SDN. BHD. 2017/03/01 2020/01/01 SPG 1,440MW Track 4A IPP Project, EPC According to contract content stipulation

EPC Formosa Plastics Corporation, Texas 2017/01/09 2018/02/06 FPC-Tx Offsite Pipe Rack Modularization & Erection Project, EPC

According to contract content stipulation EPC Taiwan Power Company 2016/12/07 2018/02/11

Dah-Tarn 600MW Emergency GTG Project, EPCK According to contract content stipulation

BOT Taoyuan City Government 2016/08/19 2054/08/18 TYCG 156,000CMD Chungli Sewerage System BOT Project

According to contract content stipulation

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Agreement Counterparty Period Major Contents Restrictions BTO Kaohsiung City Government 2016/08/15 2019/08/14 KCG 45,000 CMD Fengshan WWRU BTO Project

According to contract content stipulation EPC Petronet LNG Limited 2016/07/01 2019/06/30 Petronet Dahej LNG IIIB-1 Expansion Project

According to contract content stipulation Engineering Cheng Loong Corp. HOU-LI MILL 2016/05/03 2017/06/30

Cheng Loong Houli District Cogeneration Boilers 65T/H & 230T/H SCR Project,EPC According to contract content stipulation

EPC CPC Corporation, Taiwan

Project & Construction Division

2016/03/10 2017/07/31 CPC 8,000CMD Talin Plant WWRU Project According to contract content stipulation

EPC Saudi Basic Industry Corporation 2016/02/08 2017/08/08 KSA Saudi Kayan No. 10 Furnace Project According to contract content stipulation

EPC Taiwan Power Co., Ltd. Taichung Power Plant

2015/12/31 2020/12/31

TPC Taichung Power Plant 550MWX4 Existing Unit 1~4 AQCS Retrofit Project, EPC

According to contract content stipulation EPC

Oman Oil Refineries and Petroleum Industries

Company SAOC (ORPIC) 2015/12/17 2019/12/17

Oman ORPIC PKG-1 Steam Cracker and U&O, EPC According to contract content stipulation

EPC Land Transport Authority 2015/04/08 2019/11/30

Singapore Gali Batu Depot Stabling Trackworks, EPC According to contract content stipulation

EPC Department of Rapid Transit Systems, New

Taipei City Government 2014/12/01 2017/07/30

Danhai LRT AC Power EP and Trackworks EPC According to contract content stipulation

Expansion Marubeni and Tokyo Electric Power Corp.

2014/09/16 2017/12/31

Philippines Pagbilao IPP Unit 3 Expansion Project Seawater FGD According to contract content stipulation

EPC TOHO/AMIC Joint Venture 2014/09/15 2017/05/31

KSA Toho/ AMIC JV Ti-sponge Feasibility Study , Early Work and EPC Work According to contract content stipulation

EP Land Transport Authority 2014/07/25 2020/12/30

Singapore Thomson Line Trackwork Project According to contract content stipulation

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Agreement Counterparty Period Major Contents Restrictions EPC PRPC Refinery and

Cracker SDN. BHD. 2014/08/01 2019/05/31

Malaysia Petronas RAPID Package 1 RFCC, EPC According to contract content stipulation

EPC Taiwan Power Company 2013/09/03 2020/12/31

Tunghsiao Combined Cycle Power Plant Project According to contract content stipulation

EPC Taiwan Power Company 2012/04/30 2018/04/30 TPC Talin Power Plant Renewal Project According to contract content stipulation

EPC Taiwan Power Company 2011/08/02 2021/04/17 800 MW x 3 Lin Kou Power Plant Renewal Project, EPC, Taiwan

According to contract content stipulation EPC Taichung City Government 2011/05/08 2019/04/23 DORTS, Taichung MCT Power Supply EPC, Taiwan

According to contract content stipulation

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VI. Financial Information 6.1 Five-Year Financial Summary 6.1.1 Condensed Consolidated Balance Sheet - International Financial Reporting Standards

Unit: NT$ thousands Year Item Five-Year Financial Summary

2013 2014 2015 2016 2017 Current Assets 35,132,199 42,090,608 45,298,807 51,394,621 54,762,209 Property, Plant and Equipment 7,150,831 7,026,878 7,001,676 6,876,224 6,660,116 Intangible Assets 114,766 118,638 121,469 127,686 97,201 Other Assets 6,551,449 7,647,224 7,808,634 7,826,358 8,548,463 Total Assets 48,949,245 56,883,348 60,230,586 66,224,889 70,067,989 Current Liabilities

Before distribution 23,657,670 31,033,931 34,389,605 40,297,705 43,960,316 After distribution 25,156,119 32,732,020 36,218,420 42,282,217 Note2

Non-current Liabilities 6,893,439 6,365,262 6,112,898 5,737,135 5,067,516 Total Liabilities


Equity Attributable to Shareholders of The Parent 15,950,640 16,918,949 17,019,448 17,098,343 17,952,032 Capital Stock 7,474,343 7,575,303 7,611,076 7,632,738 7,632,738 Capital Surplus 3,070,085 3,230,033 3,297,703 3,322,098 3,395,620 Retained Earnings


Other Equities 229,538 250,563 24,516 (188,505) (170,454) Treasury Stocks (11,835) (11,835) (11,835) (11,835) (11,835) Non-controlling Interests 2,447,496 2,565,206 2,708,635 3,091,706 3,088,125 Total Equity


Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year. Note2: The 2017 earnings distribution has not been resolved by the Shareholder’s Meeting, hence not applicable.

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Condensed Balance Sheet - International Financial Reporting Standards Unit: NT$ thousands

Year Item Five-Year Financial Summary 2013 2014 2015 2016 2017

Current Assets 21,723,839 27,948,158 27,683,068 30,226,145 31,969,258 Property, Plant and Equipment 376,216 354,847 344,367 320,512 301,716 Intangible Assets 99,555 108,317 112,131 121,127 90,863 Other Assets 11,461,708 12,721,418 12,983,703 13,650,508 13,851,788 Total Assets 33,661,318 41,132,740 41,123,269 44,318,292 46,213,625 Current Liabilities

Before distribution 14,278,377 20,713,133 20,493,816 23,623,778 24,616,947 After distribution 15,776,826 22,411,222 22,322,631 25,608,290 Note 2

Non-current Liabilities 3,432,301 3,500,658 3,610,005 3,596,171 3,644,646 Total Liabilities


Equity Attributable to Shareholders of The Parent 15,950,640 16,918,949 17,019,448 17,098,343 17,952,032 Capital Stock 7,474,343 7,575,303 7,611,076 7,632,738 7,632,738 Capital Surplus 3,070,085 3,230,033 3,297,703 3,322,098 3,395,620 Retained Earnings


Other Equities 229,538 250,563 24,516 (188,505) (170,454) Treasury Stocks (11,835) (11,835) (11,835) (11,835) (11,835) Non-controlling Interests 0 0 0 0 0

Total Equity Before distribution 15,950,640 16,918,949 17,019,448 17,098,343 17,952,032 After distribution 14,452,191 15,220,860 15,193,633 15,113,831 Note 2

Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year. Note2: The 2017 earnings distribution has not been resolved by the Shareholder’s Meeting, hence not applicable.

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Condensed Consolidated Income Statement - International Financial Reporting Standards Unit: NT$ thousands; EPS: NT$ Year Item Five-Year Financial Summary

2013 2014 2015 2016 2017 Operating Revenues 52,221,958 57,691,937 67,057,640 70,509,675 71,606,604 Gross Profit 4,217,053 4,374,365 5,436,078 6,185,829 5,111,500 Operating Income 2,365,775 2,702,331 3,001,912 4,162,523 3,015,026 Non-Operating Income & Expenses 144,135 462,501 318,740 (184,055) 976,327 Income Before Income Tax 2,509,910 3,164,832 3,320,652 3,978,468 3,991,353 Net Income from continuing operations 2,035,776 2,536,396 2,570,143 3,013,715 3,290,098 Net Income(Loss) 2,035,776 2,536,396 2,570,143 3,013,715 3,290,098 Other Comprehensive Income (Income after tax) 86,584 114,414 (393,515) (379,303) (47,446) Total Comprehensive Income 2,122,360 2,650,810 2,176,628 2,634,412 3,242,652 Net Income Attributable to Shareholders of The Parent

1,641,730 2,092,199 2,040,610 2,222,888 2,805,348

Net Income Attributable to Non-controlling Interests 394,046 444,197 529,533 790,827 484,750

Total Comprehensive Income (Loss) Attributable to Shareholders of the Parent 1,729,559 2,205,850 1,695,145 1,861,653 2,764,679

Total Comprehensive Income (Loss) Attributable to Non-controlling Interests 392,801 444,960 481,483 772,759 477,973

Earnings Per Share (NT$) 2.22 2.79 2.69 2.92 3.68

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Condensed Income Statement - International Financial Reporting Standards Unit: NT$ thousands; EPS: NT$ Year Item Five-Year Financial Summary

2013 2014 2015 2016 2017 Operating Revenues 31,446,326 38,060,203 42,049,227 42,764,443 48,591,380 Gross Profit 2,169,180 2,068,143 2,827,102 2,594,191 3,876,582 Operating Income 1,129,995 1,282,847 1,193,000 1,419,547 2,865,455 Non-Operating Income & Expenses 657,006 1,084,562 1,271,157 1,175,111 337,642 Income Before Income Tax 1,787,001 2,367,409 2,464,157 2,594,658 3,203,097 Net Income from continuing operations 1,641,730 2,092,199 2,040,610 2,222,888 2,805,348 Net Income(Loss) 1,641,730 2,092,199 2,040,610 2,222,888 2,805,348 Other Comprehensive Income (Income after tax) 87,829 113,651 (345,465) (361,235) (40,669) Total Comprehensive Income 1,729,559 2,205,850 1,695,145 1,861,653 2,764,679 Net Income Attributable to Shareholders of The Parent - - - - - Net Income Attributable to Non-controlling Interests - - - - - Total Comprehensive Income (Loss) Attributable to Shareholders of the Parent

- - - - -

Total Comprehensive Income (Loss) Attributable to Non-controlling Interests - - - - -

Earnings Per Share (NT$) 2.22 2.79 2.69 2.92 3.68 6.1.2 Auditors’ Opinions in Past Five Years:

CPA Firm/Year 2013 2014 2015 2016 2017

PriceWaterhouseCoopers Shih-Jung Weng Shih-Jung Weng Shih-Jung Weng Shih-Jung Weng Shu-Chiung Chang Huei-Shyang Wang Huei-Shyang Wang Huei-Shyang Wang Shu-Chiung Chang Shih-Jung Weng

Auditing Opinion modified unqualified opinion modified unqualified opinion

modified unqualified opinion unqualified opinion unqualified opinion

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6.2 Five-Year Financial Analysis 1. Consolidated Financial Ratio Analysis -International Financial Reporting Standards

Year Item Five-Year Financial Summary

2013 2014 2015 2016 2017 Financial Structure (%)

Debt to Asset Ratio 62.41 65.75 67.25 69.51 69.97 Long-term Funds to Properties, Plants and Equipment Ratio

353.69 367.86 369.07 377.06 392.00

Liquidity (%) Current ratio 148.50 135.63 131.72 127.54 124.57 Quick ratio 135.43 122.90 121.46 116.56 114.70 Interest Coverage Ratio 2,465.03 3,655.79 3,811.55 5,051.79 3,932.68

Operating Performance

Accounts Receivable Turnover (times) 8.83 8.24 9.85 11.75 14.07 Average Collection Period (days) 41.33 44.29 37.05 31.06 25.94 Inventory Turnover (times) N/A N/A N/A N/A N/A Accounts Payable Turnover (times) 3.93 3.67 3.88 3.97 4.56 Average Inventory Turnover Period (Days) N/A N/A N/A N/A N/A Properties, Plant and Equipment Turnover (times) 7.23 8.14 9.56 10.16 10.58 Total Assets Turnover (times) 1.02 1.09 1.15 1.12 1.05

Profitability

Return on Assets (%) 3.37 4.09 3.61 3.62 4.24 Return on Equity (%) 10.15 12.73 12.03 13.03 16.01 Income before tax to Capital Ratio (%) 33.58 41.78 43.63 52.12 52.29 Net Margin (%) 3.14 3.63 3.04 3.15 3.91 Earnings per share (NT$) 2.22 2.79 2.69 2.92 3.68

Cash flow Cash flow Ratio (%) (13.54) 16.27 (17.51) 37.57 10.96 Cash flow adequacy Ratio (%) 112.88 126.58 11.49 99.23 122.60 Cash reinvestment Ratio (%) (13.15) 12.15 (30.64) 47.21 8.48

Leverage Operating leverage 5.24 4.60 4.48 3.54 4.49 Financial leverage 1.05 1.03 1.03 1.02 1.04

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2. Financial Ratio Analysis -International Financial Reporting Standards Year Item

Five-Year Financial Summary 2013 2014 2015 2016 2017

Financial Structure (%) Debt to Asset Ratio 52.61 58.87 58.61 61.42 61.15 Long-term Funds to Properties, Plants and Equipment Ratio

5,152.08 5,754.48 5,990.54 6,456.70 7,157.95

Liquidity (%) Current ratio 152.15 134.93 135.08 127.95 129.87 Quick ratio 137.83 122.37 124.86 118.09 123.03 Interest Coverage Ratio N/A 1,797,032.20 49,225.94 57,707.86 27,801.26

Operating Performance

Accounts Receivable Turnover (times) 9.39 9.40 11.67 16.48 39.84 Average Collection Period (days) 38.88 38.82 31.27 22.15 9.16 Inventory Turnover (times) N/A N/A N/A N/A N/A Accounts Payable Turnover (times) 3.28 3.27 3.54 4.02 5.33 Average Inventory Turnover Period (Days) N/A N/A N/A N/A N/A Properties, Plant and Equipment Turnover (times) 80.52 104.12 120.28 128.64 156.19 Total Assets Turnover (times) 0.89 1.02 1.02 1.00 1.07

Profitability

Return on Assets (%) 4.66 5.59 4.97 5.21 6.22 Return on Equity (%) 10.15 12.73 12.03 13.03 16.01 Income before tax to Capital Ratio (%) 23.91 31.25 32.38 33.99 41.97 Net Margin (%) 5.22 5.50 4.85 5.20 5.77 Earnings per share (NT$) 2.22 2.79 2.69 2.92 3.68

Cash flow Cash flow Ratio (%) (20.37) 6.66 (18.21) 32.45 21.45 Cash flow adequacy Ratio (%) 98.99 75.28 (33.08) 14.15 79.86 Cash reinvestment Ratio (%) (26.80) (0.61) (27.28) 29.18 14.09

Leverage Operating leverage 5.27 4.50 5.15 4.78 2.88 Financial leverage 1.00 1.00 1.00 1.00 1.00

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The formulas for the above table: 1. Financial Structure

(1) Debts to Assets Ratio = Total Liabilities / Total Assets (2) Long-term Funds to Properties, Plants and Equipment Ratio = (Total Shareholders' Equity plus Noncurrent Liabilities) / Net of Properties, Plants and Equipment

2. Liquidity (1) Current Ratio = Current Assets / Current Liabilities (2) Quick Ratio = (Current Assets - inventory - Prepaid Expense) / Current Liabilities (3) Interest Coverage Ratio = (Net Income before Income Tax and Interest Expenses) / Interest Expense

3. Operating Performance (1) Account Receivable Turnover = Net Sales / Average Accounts Receivable (2) Average Collection Period = 365/ Accounts Receivable Turnover (3) Inventory Turnover = Costs of Goods Sold / Average Inventory (4) Accounts Payable Turnover = Costs of Goods Sold / Average Accounts Payable (5) Average Inventory Turnover Period = 365 / Inventory Turnover (6) Properties, Plant and Equipment Turnover = Net Sales / Average of Net Properties, Plants and Equipment (7) Total Assets Turnover Ratio = Net Sales / Average of Total Assets

4. Profitability Analysis (1) Return on Assets =[Net Income +Interest Expense×(1-Tax Rate)] / Average Total Assets (2) Return on Equity =Net Income / Average Shareholders' Equity (3) Net Margin = Net Income / Net Sales (4) Earnings per Share = (Net Income Attribute to Controlling Interest - Preferred Stock Dividend) / Weighed-average Number of Outstanding Shares

5. Cash Flow (1) Cash Flow Ratio = Cash Flows from Operating Activities / Current Liabilities (2) Cash Flow adequacy Ratio = Net Cash Flow from Operating Activities for the past 5 years / (Capital Expenditure + Increase in Inventory + Cash Dividends) for the past 5 years (3) Cash Reinvestment Ratio = (Net Cash Flow from Operating Activities - Cash Dividends) / (Gross Properties, Plants and Equipment + Long-term Investment + Other Noncurrent Assets + Working Capital)

6. Leverage Ratio (1) Operating Leverage = (Net Sales - Variable Operating Costs and Expenses) / Operating Income (2) Financial Leverage = Operating Income / (Operating Income-Interest Expenses)

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6.3 Audit Committee’s Review Report in the Most Recent Year

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6.4 Annual Consolidated Financial Report in the Most Recent Year Please refer to the Appendix 1. 6.5 Annual Parent Company only Financial Report in the Most Recent Year Please refer to the Appendix 2. 6.6 Impact of the Financial Distress Occurred to the Company and Affiliates in the Recent Years until the Annual Report being published None.

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VII. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status 7.1.1 Analysis of Financial Status Unit: NT$ thousands Year Item 2017 2016 Difference Remark Amount %

Current Assets 54,762,209 51,394,621 3,367,588 6.55 Properties, Plants and Equipment 6,660,116 6,876,224 (216,108) (3.14) Intangible Assets 97,201 127,686 (30,485) (23.87) Note Other Assets 8,548,463 7,826,358 722,105 9.23

Total Assets 70,067,989 66,224,889 3,843,100 5.80 Current Liabilities 43,960,316 40,297,705 3,662,611 9.09 Non-current Liabilities 5,067,516 5,737,135 (669,619) (11.67)

Total Liabilities 49,027,832 46,034,840 2,992,992 6.50 Equity attributable to owners of the parent 17,952,032 17,098,343 853,689 4.99 Capital stock 7,632,738 7,632,738 0 0.00 Capital surplus 3,395,620 3,322,098 73,522 2.21 Retained Earnings 7,105,963 6,343,847 762,116 12.01 Other equity interest (170,454) (188,505) 18,051 (9.58) Treasury stocks (11,835) (11,835) 0 0.00 Non-controlling interest 3,088,125 3,091,706 (3,581) (0.12)

Total Equity 21,040,157 20,190,049 850,108 4.21 Note: Intangible assets decreased, due to the expiration of the main asset's useful life. 7.1.2 The evaluation basis of the balance sheet valuation items

Item B/S valuation item Evaluation reference Evaluation basis 1 Monetary assets denominated in foreign currency Spot rate on balance sheet date Compute exchange gain or loss based on the spot rate.

2 Financial instruments carried at fair value, available for sales and derivatives

Fair market value on balance sheet date Evaluate based on the fair market value.

3 Allowances for doubtful accounts Historical records and credit references The recognition and valuation of allowance-for-bad-debts are based on the controlling credit risks of our clients which are categorized such as low risk, medium-high risk, foreign owners, etc. A certain percentage of allowances for bad debts are determined according to the valuation of aging of accounts receivable in each category. Note: The accounts receivables from related parties are not subject for allowances-for-bad-debts. However if special credit risk prevails, the allowance for bad debts will be evaluated according to the risk. 4 Allowances for inventory valuation and obsolescence losses

Not applicable to the Company Not applicable to the Company.

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7.2 Analysis of Financial Performance 1. Analysis of Financial Performance Unit: NT$ thousands Year Item 2017 2016 Difference Remark (Note) Amount %

Operating Revenue 71,606,604 70,509,675 1,096,929 1.56 Operating Costs (66,495,104) (64,323,846) (2,171,258) 3.38 Gross Profit 5,111,500 6,185,829 (1,074,329) (17.37) Operating Expenses (2,096,474) (2,023,306) (73,168) 3.62 Operating Income 3,015,026 4,162,523 (1,147,497) (27.57) Note 3 Non-operating Income and expenses 976,327 (184,055) 1,160,382 (630.45) Note 2 Profit before Income Tax 3,991,353 3,978,468 12,885 0.32 Income Tax Expense (701,255) (964,753) 263,498 (27.31) Note 2 Non-controlling Interest (484,750) (790,827) 306,077 (38.70) Note 2 Income attributable to owners of the parent 2,805,348 2,222,888 582,460 26.20 Note 3

2. The analysis of the differences： (1) The consolidated non-operating income and expense for 2017 increased compared to 2016 is mainly due to gains on bad debt recoveries. (2) Income tax expense decreases, due to one-time income from subsidiary occurred only in 2016. (3) Non-controlling equity net profit decreases, due to one-time income from subsidiary occurred only in 2016. 3. Analysis of gross profit: The consolidated revenue for 2017 increase compared to the previous year. This is mainly because major projects are in the high-peak of construction revenue recognition, and non-operating income and expenses increased compared to the same period of last year. Therefore, the pre-tax net profit and the current period's net profit are higher than last year. 4. The explanation of occurred or expected operational, policy, market status, economic environment and other internal and external: None. 5. The drivers of the following year that affect company expected operating revenue: The operating revenue of the following year is expected to be flat compared to 2017 accounting to the backlog. 7.3 Analysis of Cash Flow 7.3.1 Cash Flow Analysis for the Past 2 Year Unit: NT$ thousands

Year Item 2017/12/31 2016/12/31 Difference ratio (%) Cash Flow Ratio (%) 10.96 37.57 (70.83) Fund Flow Adequacy Ratio (%) 122.60 99.23 23.55 Cash Re-investment Ratio (%) 8.48 47.21 (82.04)

Explanation to changes: 1. Cash flow ratio decreased due to cash inflow from operating activities reduced. 2. Fund flow adequacy ratio increased due to cash outflow from operating activities. 3. Cash re-investment ratio decreased due to cash inflow from operating activities reduced. 7.3.2 Analysis of Cash Liquidity The cash inflow of Year 2017 is NT$5,522.589 million. The cash balance in the end of the year is NT$19,354.880 million. Cash liquidity is fine.

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7.3.3 Analysis of Cash Liquidity for the Coming Year Unit: NT$ thousands Cash Balance at Beginning for the Year

Expected Net Cash Flow from Operating Activities Expected Cash Inflow (Outflow)

Expected Cash Surplus (Deficit) Leverage of Expected Cash Deficit

Investment Plans Investment Plans 19,354,880 3,256,574 (3,936,697) 15,418,183 - -

1. Analysis of change in cash flow in Year 2018: (1) Operating activities: The sufficient backlog of CTCI Group and cost down policy will create net cash inflow. (2) Investing activities: The expected cash outflow is mainly due to new business investment and injection to JV Company. (3) Financing activities: The expected cash outflow is mainly due to cash dividends distribution. 2. Liquidity analysis and remedial measures against cash deficit: None. 7.4 Major Capital Expenditure Items: None. 7.5 Investment Policy in Most Recent Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year The Company has established subsidiaries in China, Thailand, Malaysia, Vietnam, India, the Middle East, the United States, Singapore and the Netherlands; branches in Italy and Qatar; CTCI Indonesia representative office. In accordance with strategy of development of U.S.A, the possibility of enlargement investment in US market is under evaluation recently. To strengthen global market position, CTCI would keep assessing overseas markets and future growth, and expand its global footprints timely to enhance the international competitiveness. 7.6 Analysis of Risk Management 7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Response Measures A. Interest rate

Unit：NT$ Thousands Item 2017 2016

Interest Income 131,658 43,460 Interest Expense 104,140 80,344

Investment gain on money market fund 1,684 1,592 Sales 71,606,604 70,509,675

Net Income before Tax 3,991,353 3,978,468 Besides equity products and deposits, the Company invests inactive money mainly in money market funds, which highly correlate with market interest rates. However, the investment gain on money market fund is not credited to interest income but to gain on disposal of investment. Therefore, to analyze the effects of changes in interest rates should consolidate interest income/expense and gain on disposal of money market fund. The inactive money was increased in this year, while interest income increased by NT$ 88,198 thousand over 2016. As FED raise the USD interest rates three times in 2017, resulted in financing costs was increased, while interest expense increased by NT$ 23,796 thousand over 2016. For inactive money, the Company will continue to look for higher-yield financial products with safety and proper liquidity to achieve the purpose of earning stable investment profits.

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B. Foreign exchange rates Unit：NT$ Thousands Item 2017 2016

Net Foreign Exchange Gain/Loss(A) -151,026 15,045 Sales (B) 71,606,604 70,509,675

Net Income before Tax (C) 3,991,353 3,978,468 A/B(%) -0.21 0.02 A/C(%) -3.78 0.38

The business line of CTCI includes engineering design, procurement, fabrication, construction, supervision, project management, test & commissioning and environmental protection. All business work can be separated into two parts as domestic projects and overseas projects according to its location. For cash-in side, domestic projects are usually signed in New Taiwan dollar, and sometimes in other foreign currencies; overseas projects are usually signed in US dollar and local currency. For cash-out side, the currencies of payment are usually decided by service location or procurement region. Therefore, the Company must keep appropriate foreign assets and liabilities to operate general activities. Thus the appreciation or depreciation of major currencies, like US dollar, Japanese Yen, and Euro, will influence foreign exchange profit/loss of the Company. To lower the influence on changes in foreign exchange rates, the Company adopts natural hedge strategy, including contracts in different currencies or asking multiple-currency contracts to cover major payment in different currencies. For other FX exposure, the Company also has concrete methods to hedge the risks. Thus, the changes in foreign exchange rates little affect the income of the Company. According to above table, the ratios of foreign exchange profit/loss to sales and net income before tax are slight. That means the changes in foreign exchange rates have limited influence on the sales and net income before tax. The concrete methods to hedge FX risks are as below, a. To know well update trends of major currencies, and adjust FX position timely. b. To create internal hedge effect by netting foreign receivables and payables. c. For payment in foreign currencies, to forecast the direction of payment currencies and analyze the potential profit and loss of foreign exchange, and then choose leads or lags strategy to hedge FX risks and achieve the goal of saving costs. d. In order to allocate optimal capital position, to open foreign currency deposit accounts to collect foreign income and convert it into New Taiwan dollar or other strong currencies based on actual cash flow demand or FX tendency. e. To use forward contracts or other tools to hedge FX risks. C. Inflation Item 2017 2016 CPI 100.62 100.00

Annual Change of CPI 0.62 1.4 Construction Cost Indices 102.40 100.00

Annual Change of Construction Cost Indices 2.4 -1.69 profit margin 7.14 8.77

Source：Directorate General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.(Taiwan)/ Base year 2016. Due to the industry nature, the analysis of inflation should be referred to not only CPI but also Construction Cost Indices. The Consumer Price Indices of 2017 was 100.62, and the annual change rate was 0.62%. The main causes were that the increased tobacco tax in 2017Q4 caused the miscellaneous category indices to rise by 2.18% and that rising prices of crude oil caused transportation and communication expenses to rise by 1.73%. DGBAS estimates the annual change of CPI of 2018 will be 1.21%.

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Taiwan Institute of Economic Research expects the CPI of 2018 will have roughly the same growth rate as that of 2017. It is mainly due to expanding private investment, government timely announced infrastructure plan and rising enterprise profit and labor wage driven consumption growth. It is expected that international raw material prices will remain stable and the domestic prices will hardly rise dramatically. The total Construction Cost Indices of 2017 rose by 2.4%, mainly due to continuing rising international steel price and copper price, which respectively caused the metal products category indices and mechanical and electrical equipment & apparatus category indices to rise by 13.34% and 4.13%; whereas the cement & related products category indices decrease offset some indices rise. Services category indices rose by 0.44% due to rising labor wages and rental prices of mechanical equipment. The Company would do the best to take potential inflation and raw material prices into account during whole project period in bidding stage. However, the profits will still be eroded once the price increase is more than expected. The Company will continue to watch price changes closely and reflect them to project contract quotation simultaneously; furthermore the Company also executes derivatives to hedge operational risks from potential inflation.

7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions The Company is devoted to develop EPC service business and does not engage in high-risk and high-leveraged investment. As for lending to others, guarantees and derivatives transactions all are executed according to the Company’s “Rules Governing Procedure for Loaning of Funds”, ”Rules Governing Procedure for Making of Endorsements or Guarantees” and “The Procedure for Acquisition and Disposition of Assets”.

7.6.3 Future Research & Development Projects and Corresponding Budget A. Current Project Progress (as of end of March, 2018), Budget and Estimated Time to Finish

Item Project Name Current Progress

(%) Budget

Estimated Time

to Finish

1 Research on Engineering Object-oriented Information Integration Platform

25 6,800,000 2017.12.31

2 Application and Research of Intelligent Technology in EPC Project

25 5,724,000 2017.12.31

3 Construction Site Mobile App 25 4,364,000 2017.12.31

4 Research and Development for Smart Device Application in Construction Site Management

25 8,944,500 2017.12.31

5 Develop program for intelligence plot plan of tank area 25 6,842,400 2017.12.31

6 Research and Development for Application of Image Recognition Technology in Engineering Design

25.8 4,723,000 2017.12.31

7 Development of Intelligent Solution Platform(iSP) 25 14,619,920 2017.12.31

8 Implement, Maintain and Update` 25 3,300,000 2017.12.31

9 iEPC Intelligent Design System Development of Process Department

25 2,640,000 2017.12.31

10 Water Treatment System Research and Development 25 1,320,000 2017.12.31

11 Dynamic Simulation of LNG Terminal 25 1,342,000 2017.12.31

12 iEPC Intelligent Design System Development of Civil & Building Department

25 7,458,000 2017.12.31

13 Research of Civil & Building New Technology 24 6,800,000 2017.12.31

14 Analysis of Track-Bridge Interaction and Study of Rail Expansion Joints Layout Assessment

25 3,400,000 2017.12.31

http://eng.stat.gov.tw/public/Data/1151634271.xls

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Item Project Name Current Progress

(%) Budget

Estimated Time

to Finish

15 iEPC Intelligent Design System Development of Equipment Department

25 3,960,000 2017.12.31

16 Project Equipment Design Apps Development/ Maintenance and Information Exchange

25 1,320,000 2017.12.31

17 Packaged Equipment- Pneumatic Conveying System Research

25 1,320,000 2017.12.31

18 iEPC intelligent design system development of Instrument Department

25 5,940,000 2017.12.31

19 Instrument operating system upgrade and maintenance, and customized develop for project

25 2,508,000 2017.12.31

20 Research for Laboratory Equipment 24 528,000 2017.12.31

21 A case study for Value Engineering to improve the performance

25 1,320,000 2017.12.31

22 iEPC Intelligent Design System Development of Piping Department

25 12,930,000 2017.12.31

23 Research and develop new technology and techniques of piping engineering

25 7,490,000 2017.12.31

24 iEPC Intelligent Design System Development of Electrical Engineering

25 5,818,000 2017.12.31

25 Update and Develop the Professional Software of Electrical Engineering

25 2,772,000 2017.12.31

26 Simulation and Study of Insulation Coordination 25 633,600 2017.12.31

27 Vendor Information Exchange 20 1,320,000 2017.12.31

28 The optimizations of mobile system applied to construction job site

25 2,015,000 2017.12.31

29 The study of application requirements of construction R&D works

22 3,528,000 2017.12.31

30 Piping field auto-welding robot 23 2,602,000 2017.12.31

31 Customization program development and system maintenance of Material Management System

25 6,040,000 2017.12.31

32 SPF related modules development, maintenance and promotion system

20 10,205,000 2017.12.31

33 Integration and application and handover of engineering data for SmartPlant Enterprise

25 1,320,000 2017.12.31

34 AP Service 15 660,000 2017.12.31

35 Advanced Development ,Maintenance and Application for Corrosion Mechanism Identification System

25 1,452,000 2017.12.31

B. Major Factor to Influence Future RD Success

a. Right RD strategy and definition of key performance Index. b. Good communication with users to make sure production meet market requirement. c. Stable RD resource to accomplish development task effectively. d. Accurate progress control to ensure the timeliness of RD results.

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7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales None. 7.6.5 Effects of and Response to Changes in Technology and in Industry Relating to Corporate Finance and Sales None. 7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures None. 7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans None. 7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans Not Applicable. 7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration None. 7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, or Shareholders with Shareholdings of over 10% The fluctuated security price and the possibility of changing directors are the effect and risk, and strengthening company’s information transparency is the countermeasure. The Company has established functional committees beneath Board of Directors, such as Corporate Governance Committee, Audit Committee and Remuneration Committee, to strengthen Board of Directors functions, furthermore, to promote the corporate governance. 7.6.11 Effects of, Risks Relating to and Response to Changes in Control over the Company None. 7.6.12 Litigation or Non-litigation Matters A. CTCI Corporation and Mitsubishi Heavy Industries, Ltd. were joint venture in the Kaohsiung Country Ren-Wu Resource Recovery Plant Project. The project completed on February 19, 2000 and accepted by Environmental Protection Administration on May 16, 2000. CTCI claimed for release of the guarantee bond in the amount of NTD 141,690 thousands, Environmental Protection Administration, however, declined the request due to one unsolved dispute between Kaohsiung City Government and O&M Contractor. After CTCI remitted in NTD 73,253 thousands to bank for exempting from the execution of the guarantee bond and filed a lawsuit to Taiwan Taipei District Court, Environmental Protection Administration returned the amount of NTD 9,299 thousands to CTCI. As a result, CTCI reduced the claim amount to NTD 63,954 thousands, with the interest in the amount of NTD 117 thousands and the liquated damages in the amount of NTD 2,421 thousands. CTCI was then awarded a winning adjudication except for the damages in the amount of NTD 1,708 thousands has been rejected. Afterwards, the Environmental Protection Administration appealed to the Taiwan High Court but failed. Further, the Environmental Protection Administration continued to appeal to the Taiwan Supreme Court. This lawsuit is remanded by Taiwan Supreme Court twice and now is under the trial of Taiwan High Court. The judgment of Taiwan High Court was not in favor of the assertion of Environmental Protection Administration and Environmental Protection Administration appealed to Taiwan Supreme Court for the third time. The judgment of Taiwan Supreme Court remanded this case

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to Taiwan High Court. This lawsuit now is under the trial of Taiwan High Court. There is no material impact to CTCI’s finance as well as business development so far. B. CTCI Corporation, Ishikawajima-Harima Heavy Industries Co., Ltd., Resource Engineering Services Inc. and East Construction Industry Co., Ltd were joint venture in the CPC Northern LNG Receiving Terminal Project and entered into a contract on July 23, 2004. CPC Corporation alleged it has limited budget and cannot pay the compensation of price escalation, so CTCI claimed for compensation of price escalation in the amount of USD 7,983 thousands and NTD 384,159 thousands and filed a lawsuit to Taipei District Court on March 5, 2010. The judgment of Taipei District Court is not awarded to CTCI. CTCI appealed to Taiwan High Court but was overruled. CTCI appealed to Taiwan Supreme Court and Taiwan Supreme Court remanded this case to Taiwan High Court to re-decide. This lawsuit now is under the re-trial of Taiwan High Court. There is no material impact to CTCI’s finance as well as business development so far. C. During 2015, the Company’s subsidiary CTCI Arabia Ltd. filed to a claim against a sub-contractor, Sinopec E&C Middle East Co., Ltd. for compensation against direct damages totaling to NTD 836.921 thousands (SAR 97,500 thousands) for not completing the contract work as per the sub-contract agreement. Sinopec E&C Middle Ease co., Ltd. also filed a counter claim against CTCI Arabia Ltd. for NTD 721.039 thousands (SAR 84,000 thousands) for costs suffered due to termination of the sub-contract agreement. The above claim by CTCI Arabia Ltd. and counter claim against CTCI Arabia Ltd. by Sinopec E&C Middle East Co., Ltd. have been appealed at the International Chamber of Commerce(“ICC”). CTCI Arabia Ltd.’s management is vigorously contesting this case and believes that no material liability will arise upon its ultimate resolution and accordingly, no provision has been made in the accompanying financial statements. 7.6.13 Risk management organization framework A. Organization chart

Note: The dashed line indicates the communication mechanism between Risk Management Executive Committee and Audit department rather than the reporting relationship. B. Responsibility a. Risk Management Executive Committee The Risk Management Executive Committee is the major monitoring mechanism for risk management of the company, its members mainly include President and Head of Executive Management Office, Business Operations and Supporting Operations, President is the Chairman of committee, and the convener is Head of Executive Management Office. Major responsibilities are as follows: -Approve risk management policy and rules of the company; -Examine risk management report and strategy of the company, and improvement plan;

風險管理執行委員會 Risk Management Executive Committee 稽核室 Audit Department

Risk management representative of Risk Management Unit

全體員工 All Employees

秘書業務 Secretary Service

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-Supervise execution of risk control measure and improvement plan, communicate and deliver risk management affairs with and to all employees; -Examine and assess the effectiveness of risk management measure and ask relevant unit to propose improvement plan. b. Risk Management Secretary Service The convener of Risk Management Executive Committee will designate dedicated personnel (or unit) to be responsible for overall risk management secretary service to ensure continuous effectiveness of risk management mechanism. Major responsibilities are as follows: -Contact window of risk management mechanism of the company; -Summarize and submit the risk management report, real time report and other works related to risk management; -Issue relevant procedures; -Convene risk management review meeting. c. Audit Department Audit Department can make and execute annual audit plan in accordance with the result of risk evaluation. d. Risk Management Representative Company sets several risk management units in accordance with the functions and each unit designates risk management representative to undertake relevant affairs and contact windows. Roles and responsibilities of risk management representative are as follows: -Promote the supervision, identification and management of significant risks on behalf of risk management units; -Summarize and prepare risk registers and improvement plan of the risk management unit; -Collect and monitor significant risk event and evaluate the impact; -Report significant risk and relevant improvement plan to Head of Business Operations and provide a copy to the unit of risk management secretary service; -Deliver the notice of risk management to members of the unit. e. All employees Comply with company policy, perform duty in accordance with the R&R, implement relevant operations of risk management, and report to the supervisor immediately in case of a risk. 7.6.14 Other Major Risks Competiveness is enhanced with CTCI tracking international business and economic conditions and assessing the impact on corporate finance, sales and business implementation which is responded to through various means including the control of cash flows to facilitate capital turnover; development of new markets for added business; and strengthened core technology which including project management and quality control. 7.7 Other Important Information: None.

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VIII. Special Disclosure 8.1 Summary of Affiliated Companies 8.1.1 Consolidated Business Report of Affiliates (1) Organizational chart of the affiliates

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(2) General information of the affiliates: March 31st, 2018 ; Unit : $Thousands

Company Date of Incorporation Address Common Stock Issued Major Business Activities CTCI Smart Engineering Corporation 1980.05.27 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 608,720 Planning and design of construction projects CTCI Resources Engineering Inc. 1984.05.29 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 250,000 Planning, design and supervision of mechanical and electrical engineering projects CTCI Advanced Systems Inc. 1987.08.03 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 234,915 Design and installation of software ECOVE Environmental Service Corporation 1994.05.24 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 151,000 Environmental engineering CTCI Development Corporation 1999.03.06 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 1,690,000 Real estate and leasing business CTCI Investment Corporation 1999.03.01 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 2,072,000 Investments ECOVE Environment Corporation 1999.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 669,329 Investments CTCI Chemicals Corporation 1999.08.04 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 71,000 Manufacturing of chemical products ECOVE Wujih Energy Corporation 2000.05.19 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 300,000 Environmental engineering ECOVE Waste Management Corporation 2001.06.01 No.69, Ln. 373, Changchun St., Wuri Dist., Taichung City, Taiwan NTD 20,000 Environmental engineering ECOVE Miaoli Energy Corporation 2002.11.07 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 750,000 Environmental engineering CTCI Machinery Corporation 2007.04.02 5, Xinggong Rd., Dashe Dist., Kaohsiung City, Taiwan NTD 200,000 Planning and design of construction projects CTCI (Thailand) Co., Ltd. 1987.08.15 19th Floor, Phairojkijja Tower 825, Bangna-Trad K.M.4, Bangna Bangkok 10260 Thailand THB 255,000 Planning and design of construction projects CTCI Overseas (BVI) Corporation 1997.04.30 P.O.Box 662, Road Town, Tortola British Virgin Islands HKD 67,400 Investment, planning and design of construction

151

March 31st, 2018 ; Unit : $Thousands Company Date of Incorporation Address Common Stock Issued Major Business Activities

CTCI Beijing Co., Ltd. 1993.02.17 10F Royal City International Centre B, No. 138, Andingmenwai Street, Dongcheng District, Beijing, China USD 10,600 Planning and design of construction projects CTCI Shanghai Co., Ltd. 2003.09.24 Room.12, Floor.8, No.441, He Nang Bai Road, Zhabei District, Shanghai, China CNY 123,413 Consulting services for construction projects CTCI Overseas Corporation Limited 1993.06.01 Suite 1801-5,18/F.,Tower 2,China Hong Kong City, 33 Canton Road,Tsim Sha Tsui, Kowloon Hong Kong HKD 67,400 Planning and design of construction projects CTCI Engineering & Construction Sdn. Bhd. 1983.09.21 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia MYR 750 Planning and design of construction projects CTCI Arabia Ltd. 2002.10.27 P.O.Box 1962 Al Khobar 31952 Kindom of Saudi Arabia SAR 5,000 Design and construction of chemical factories CIMAS Engineering Company Limited 2001.03.28 6th Floor, Charmvit Building 117Tran Duy HungCau Giay District Hanoi, Vietnam USD 3,800 Planning and design of construction projects Century Ahead Ltd. 2000.10.12 Offshore Chambers, P.O.Box 217, Apia, Samoa USD 750 Investments, planning and design of construction projects Superiority (Thailand) Co., Ltd. 2006.01.01 19th Floor, Phairojkijja Tower 825, Bangna-Trad Road, K.M.4, Bangna, Bangkok 10260 Thailand THB 350 Investments CTCI Advanced Systems Shanghai Inc. 2001.09.21 Room 704, 7Fl, 26, Lane 168, Daduhe Road, Putuo District, Shanghai, China USD 750 Computer skills services CTCI Malaysia Sdn. Bhd. 2002.06.04 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia MYR 750 Planning and design of construction projects

SUMBER MAMPU Sdn. Bhd. 2003.06.04 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia MYR 102 Investments CIPEC Construction Inc. 2003.07.03 Unit 402 SEDCCO 1 Building Roda St. Legaspi Village Makati City, Philippines. PHP 2,500 Planning and design of construction projects

152


SINOGAL - Waste Services Co., Ltd. 2009.06.25 Rua Dr. Pedro Jose Lobo, ns 1-3, Edificio Banco Luso Internacional,15 andar, salas 1501 e 1510, em Macau MOP 4,000 Environmental engineering CINDA Engineering & Construction Pvt. Ltd. 2008.08.08 B-92, 9th Floor, Himalaya House, 23 Kasturba Gandhi Marg, New Delhi – 110001, India INR 80,000 Planning and design of construction projects CTCI Trading Shanghai Co., Ltd. 2009.07.17 Room 701, 7Fl, 26, Lane 168, Daduhe Road, Putuo District, Shanghai, China CNY 5,000 General trade. CTCI Americas, Inc. 2009.10.02 9555 West Sam Houston Pkwy South, Suite 420 Houston, Texas 77099, USA USD 100 Business development and related engineering services and planning Universal Engineering(BVI) Corporation 2003.03.06 Akara Bldg.,24 De Castro Street, Wickhams Cay I, Road Town, Tortola, British Virgin Islands. USD 50 Planning and design of construction projects CTCI Singapore Pte. Ltd. 2011.01.10 80 Robinson Road #02-00 Singapore(068896) USD 5,100 Planning and design of construction projects Yuan Ding Resources Corporation 2013.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 45,000 Environmental engineering ECOVE Environment Consulting Corporation 2013.07.26 Room 2206-G,NO.89,East Yunling Rd., Putuo District, Shanghai, China USD 140 Environmental engineering CCJV P1 Engineering & Construction Sdn. Bhd. 2014.05.20 SUITE D23, 2nd Floor, Plaza Pekeliling, No.2, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia MYR 250 Planning of construction projects CTCI Netherlands B.V. 2016.01.04 Jan Pietersz. Coenstraat 7, 2595WP's-Gravenhage, Netherlands EUR 300 Engineers and other technical design and consultancy Crown Asia 2 Investment Limited 2011.04.21 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan NTD 250 Investments CTCI&HEC Water Business Corporation 2016.08.15 16Fl., No.65, Sec. 2, Daxing W. Rd., Taoyuan Dist., Taoyuan City, Taiwan NTD 500,000 Environmental engineering with BOT

153


CTCI CMCE JV Sdn. Bhd. 2017.07.10 7th Floor, Wisma MIE, No 2, Jalan Industri PBP 2, Taman Industri Pusat Bandar Puchong, 47100 Puchong, Selangor Darul Ehsan, Malaysia

MYR 750 Planning of construction projects

154

(3) Common Shareholders of the Company and Its Subsidiaries or Its Affiliates with Actual of Deemed Control: Not Applicable. (4) Industries covered by the business operated by all affiliates: The business of the Company and its subsidiaries and affiliates provide include engineering, environmental, chemical and investment. (5) Directors, supervisors, and general managers of the Company and affiliates March 31st, 2018

Company Title Name of Representative Shareholding Shares %

CTCI Smart Engineering Corporation

Chairman CTCI Corporation Representative: S. C. Chun 59,098,624 97.09

Vice Chairman CTCI Corporation Representative: Simon Liao Director

CTCI Corporation Representative: Hwei-Nan Yih Shuh-Gong Lou Yang-Ting Chen Supervisor CTCI Investment Corporation Representative: Connie Lin 1,000 0.00 President Simon Liao 0 0

CTCI Resources Engineering Inc.

Chairman CTCI Corporation Representative: Kuo-Ann Wu 24,762,252 99.05 Director

CTCI Corporation Representative: Ding-Go Ku Hwei-Nan Yih Michael Chung Benjamin C. N. Tsai Supervisor CTCI Development Corporation Representative: Gino Tsai 1,388 0.01 President Ding-Go Ku 0 0

CTCI Advanced Systems Inc.

Chairman CTCI Corporation Representative: Chen-Chin Chen 11,444,842 48.72

Director

CTCI Corporation Representative: (Vacancy) Shyue-Ching Lu 0 0 Bao-Lang Chen 0 0 Hou-Sheng Chan 0 0 Hung-I Chen 416,000 1.77

Independent Director Ray Chang 0 0 Victor Tsan 0 0 Amy Lee 0 0

President Chen-Chin Chen 0 0

155

March 31st, 2018 Company Title Name of Representative Shareholding

Shares %

ECOVE Environment Services Corporation

Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih 14,065,936 93.15 Director

ECOVE Environment Corporation Representative: J.J. Liao Eric Tiao Mike Chiou Daniel Hsin-I Ting Supervisor ECOVE Waste Management Corporation Representative: Chien-Lung Yen 1,000 0.01 President Eric Tiao 0 0


Chairman CTCI Corporation Representative: John T. Yu 169,000,000 100.00 Director CTCI Corporation Representative: Shih-Wei Chung Jim D. Chen

Supervisor CTCI Corporation Representative: Chun-Jung Hung President Patrick Lin 0 0

CTCI Investment Corporation

Chairman CTCI Corporation Representative: Todd Chen 207,200,000 100.00 Director CTCI Corporation Representative: Patrick Lin Teh-Ming Tao

Supervisor CTCI Corporation Representative: Hope Sun President Patrick Lin 0 0

ECOVE Environment Corporation

Chairman CTCI Corporation Representative: J.J. Liao 38,457,105 57.46

Director

CTCI Corporation Representative: Yun-Peng Shih Eugene Chien 0 0 Wen-Whe Pan 0 0 Yang-Min Liu 0 0 Parkwell Investment Limited Representative: Kuan-Shen Wang 1,060,000 1.58

Independent Director Shuh-Woei Yu 0 0 Shean-Bii Chiu 0 0 James Tsai 0 0

President Yun-Peng Shih 61,000 0.09

156


Shares %

CTCI Chemicals Corporation

Chairman CTCI Investment Corporation Representative: Kevin S.P. Jen 1,657,207 23.34 Director

CTCI Investment Corporation Representative: M.H. Wang M.L. Lee Yeu-Wen Chen Shirley Chou 576,910 8.13 Supervisor CTCI Development Corporation Representative: Henderson Ko 480,661 6.77 President Sam Kuo 10,143 0.14

ECOVE Wujih Energy Corporation

Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih 29,400,000 98.00 Director ECOVE Environment Corporation Representative: J.J. Liao Pei-Feng Chu Supervisor ECOVE Environment Services Corporation Representative: Nicole Ku 600,000 2.00 President Pei-Feng Chu 0 0

ECOVE Waste Management Corporation

Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih

2,000,000 100.00 Director ECOVE Environment Corporation Representative: J.J. Liao Hsiu-Yu Mike Kuo Chin-Jung Yeh Alex Chen

Supervisor ECOVE Environment Corporation Representative: Jig-Wen Chang President Hsiu-Yu Mike Kuo 0 0

ECOVE Miaoli Energy Corporation

Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih 56,249,000 75.00 Director

ECOVE Environment Corporation Representative: J.J. Liao Topco Scientific Co., Ltd. Representative: Fa-Siang Tan 18,700,000 24.93

Supervisor ECOVE Environment Services Corporation Representative: Jung-Yu Han 1,000 0.00 Topco International Investment Co., Ltd. Representative: Su-Qing Lu 50,000 0.07

President Pei-Feng Chu 0 0

157


Shares %

CTCI Machinery Corporation

Chairman CTCI Corporation Representative: Chen-San Hu

20,000,000 100.00 Director CTCI Corporation Representative: M.H. Wang Jung-Yu Han Ting-Kuo Li M.C. Wu

Supervisor CTCI Corporation Representative: Yuan-Shuang Kuan President M.C. Wu 0 0

CTCI (Thailand) Co., Ltd. Chairman Pao-Yao Pan 0 0 Director

Jeff Hsu 0 0 Alex I-Kang Ho 0 0 Rungthip Chin 0 0

CTCI Overseas (BVI) Corporation Director Andy Sheu 0 0 Po-Chien Wang 0 0 B.J.Liang 0 0

CTCI Beijing Co., Ltd.

Chairman CTCI Overseas Corporation Limited Representative: Tieh-Shih Chang USD 10,600,000 100.00 Director

CTCI Overseas Corporation Limited Representative: Todd Chen Ho-Chuang Lee Y. S. Liao Jeff C.F. Wu Supervisor CTCI Overseas Corporation Limited Representative: Ai-Cheng Ho President Ho-Chuang Lee 0 0

CTCI Shanghai Co., Ltd.

Chairman CTCI Smart Engineering Corporation Representative: Tieh-Shih Chang USD 3,210,000 19.24 Director

CTCI Smart Engineering Corporation Representative: Ho-Chuang Lee CTCI Overseas Corporation Limited Representative: S.C. Chun Chang-Ning Tzou USD 13,470,000 80.76

Supervisor CTCI Overseas Corporation Limited Representative: Sharon Chiang President Ho-Chuang Lee 0 0

CTCI Overseas Corporation Limited Director John T. Yu 0 0 John H. Lin 0 0 Andy Sheu 0 0 Michael Yang 0 0

CTCI Engineering & Construction Sdn. Bhd.

Chairman Ming-Cheng Hsiao 0 0 Director Jenq-Shyong Chung 0 0

T.C. Li 0 0 Managing Director Eric Chiu 0 0

158


Shares %

CTCI Arabia Ltd.

Chairman CTCI Corporation Representative: M. H. Wang 500 50.00 Director

CTCI Corporation Representative: Paul Yang CTCI Overseas Corporation Limited Representative: Edward Yuan 500 50.00 Managing Director CTCI Overseas Corporation Limited Representative: Scott Chen

CIMAS Engineering Company Limited

Chairman Vietnam Machinery Erection Corporation Representative: Hoang Minh Khoi USD 1,254,000 33.00 BOM Member Vietnam Machinery Erection Corporation Representative: Nguyen Viet Hung

Vice Chairman CTCI Overseas Corporation Limited Representative: Pao-Yao Pan USD 1,900,000 50.00 BOM Member

CTCI Overseas Corporation Limited Representative: James Y.H. Wang Perry Lin Sincerity Engineering Co., Ltd. Representative: Yi-Chung Yang USD 646,000 17.00

General Director Perry Lin 0 0 Century Ahead Ltd. Director

Chen-Chin Chen 0 0 Benjamin C. N. Tsai 0 0 Ai-Cheng Ho 0 0

Superiority (Thailand) Co., Ltd. Director Pao-Yao Pan 0 0 Jeff Hsu 0 0 Rungthip Chin 0 0

CTCI Advanced Systems Shanghai Inc.

Chairman Century Ahead Ltd. Representative: Chen-Chin Chen USD 750,000 100.00 Director Century Ahead Ltd. Representative: Benjamin C. N. Tsai Tsung-Kung Shu

Supervisor Century Ahead Ltd. Representative: Ai-Cheng Ho President Tsung-Kung Shu 0 0

CTCI Malaysia Sdn. Bhd.

Chairman Mohamed Nor Bin Abu Bakar 0 0

Director Kamaruddin Bin Anuar 0 0 Muhammad Anas Bin Marjunit 0 0 Jenq-Shyong Chung 0 0 Eric Chiu 0 0

159


Shares %

SINOGAL- Waste Services Co., Ltd.

Chairman Helder Jose Moura Dos Santos 0 0

Director Pereira Taveira Pinto, Carlos Manuel 0 0 Yun-Peng Shih 0 0 Eric Tiao 0 0 Patrick Lin 0 0

President Peter Wang 0 0

CIPEC Construction Inc.

Chairman Ming-Cheng Hsiao 1 0

Director Wen-Pin Lo 1 0 Romuel Consunji 1 0 Randolph Ang 1 0 Grace Fernandez 1 0

President Romuel Consunji 1 0 CINDA Engineering & Construction Pvt. Ltd.

Chairman Todd Chen 0 0 Director Ming-Shyan Lee 0 0

T.M. Wang 0 0 Managing Director Tim Lin 0 0

CTCI Trading Shanghai Co., Ltd.

Chairman CTCI Shanghai Co., Ltd. Representative: S. C. Chun CNY 5,000,000 100.00 Director CTCI Shanghai Co., Ltd. Representative: Chang-Ning Tzou Yu-Li Zhu

Supervisor CTCI Shanghai Co., Ltd. Representative: Ai-Cheng Ho President Chang-Ning Tzou 0 0

CTCI Americas, Inc.

Chairman Andy Sheu 0 0

Director

Michael Yang 0 0 M. H. Wang 0 0 Ming-Cheng Hsiao 0 0 Pao-Yao Pan 0 0 Todd Chen 0 0 Ebrahim Fatemizadeh 0 0

President Hal Ankrum 0 0 Universal Engineering (BVI) Corporation Chairman Ming-Cheng Hsiao 0 0

CTCI Singapore Pte. Ltd. Chairman Po-Chien Wang 0 0 Director Mike Chi-Min Chien 0 0

Lee Wei Hsiung 0 0 Managing Director Eric Chiu 0 0

Yuan Ding Resources Corporation

Chairman ECOVE Environment Corporation Representative: J.J. Liao 2,700,000 60.00 Director ECOVE Environment Corporation Representative: Yun-Peng Shih Eric Tiao Supervisor ECOVE Waste Management Corporation Representative: Patrick Lin 1,800,000 40.00 President Yun-Peng Shih 0 0

160


Shares %

ECVOE Environment Consulting Corporation

Executive Director ECOVE Environment Services Corporation Representative: Yun-Peng Shih USD 140,000 100.00

Supervisor ECOVE Environment Services Corporation Representative: Patrick Lin President Eric Wang 0 0

CCJV P1 Engineering & Construction Sdn. Bhd. Director

M. H. Wang 0 0 Steven C.H. Wu 0 0 Rick Wu 0 0 Takahashi Akemi 0 0

CTCI Netherlands B.V. Director David Wang 0 0 Crown Asia 2 Investment Limited

Chairman CTCI Development Corporation Representative: Michael Yang TWD 250,000 100.00 Director CTCI Development Corporation Representative: Ming-Cheng Hsiao

CTCI&HEC Water Business Corporation

Chairman CTCI Corporation Representative: Pao-Yao Pan 25,500,000 51.00

Director

CTCI Corporation Representative: Y. S. Liao Tyrone C Tsai HSIN DAR Environment Corporation Representative: Sheng-Le Chen Li-Ming Zhou 24,500,000 49.00

Supervisor Po-Chien Wang 0 0 Shu-Mei Sie 0 0

President William Chung 0 0

Sumber Mampu Sdn. Bhd. Director Frank Wu 0 0 Eric Chiu 0 0 Mohamed nor bin abu bakar 30,000 29.40 Kamaruddin Bin Anuer 30,000 29.40 Muhammad Anas Bin Marjunit 30,000 29.40

CTCI CMCE JV Sdn. Bhd. Director Mike Chi-Min Chien 0 0 Ming-Shyan Lee 0 0 Hazwan Alif Bin Abdul Rahman 0 0 Nazatul Najla Binti Abdul Rahman 0 0

161

8.1.2 Operation overview of the Company and affiliates December 31st, 2017; Unit: NT$ Thousands

Company Common Stock Issued Total Assets Total Liabilities Total Stockholders’ Equity

Total Operating Revenue Operating Income (Loss) Net Income (Loss) Earnings Per Share (NT$)

CTCI Smart Engineering Corporation $ 608,720 $ 3,029,719 $ 2,761,687 $ 268,032 $ 2,418,713 $ (406,872) $ (478,024) $ (7.85)5CTCI Resources Engineering Inc. 250,000 778,694 527,878 250,816 908,726 (175,489) (172,954) (6.92) CTCI Advanced Systems Inc. 234,915 1,450,349 910,354 539,995 1,306,025 93,896 75,889 3.23 ECOVE Environment Services Corporation 151,000 1,926,471 1,005,174 921,297 2,929,747 356,252 369,656 24.48 CTCI Development Corporation 1,690,000 4,822,167 2,269,859 2,552,308 328,819 172,927 134,541 0.80 CTCI Investment Corporation 2,072,000 1,955,952 27,865 1,928,087 (24,291) (25,219) (35,760) (0.17) ECOVE Environment Corporation 668,106 4,707,456 23,817 4,683,639 791,864 742,069 761,339 11.41 ECOVE Wujih Energy Corporation 300,000 1,486,901 232,973 1,253,928 727,576 353,100 295,010 9.83 ECOVE Miaoli Energy Corporation 750,000 1,637,139 293,228 1,343,911 348,186 185,022 150,527 2.01 CTCI Chemicals Corporation 71,000 339,200 108,972 230,228 458,455 73,005 57,982 8.17 ECOVE Waste Management Corporation 20,000 455,056 354,082 100,974 1,157,573 47,625 44,366 22.18 CTCI (Thailand) Co., Ltd. 233,402 752,324 745,770 6,554 272,280 (111,862) (147,447) (64.47) CTCI Overseas (BVI) Corporation 258,090 1,831,810 78 1,831,732 0 (653) (358,026) - CTCI Overseas Corporation Limited 258,090 5,007,903 3,199,109 1,808,794 1,705,405 (125,369) (357,690) (1.74) CTCI Beijing Co., Ltd. 335,458 1,544,550 361,262 1,183,288 971,650 15,414 5,102 0.01 CTCI Engineering & Construction Sdn. Bhd. 5,521 811,200 693,896 117,304 335,679 60,934 70,745 10.25 CIMAS Engineering Company Limited 88,353 120,618 28,783 91,835 120,200 (3,726) (4,064) - Century Ahead Ltd. 23,678 25,831 0 25,831 0 (81) (639) - CTCI Arabia Ltd. 39,797 1,057,731 2,314,238 (1,256,507) 3,107,468 (578,259) (586,647) - CTCI Shanghai Co., Ltd. 565,094 919,492 495,854 423,638 751,956 (89,553) (82,526) - CTCI Advanced Systems Shanghai Inc. 24,380 27,762 3,095 24,667 46,679 (619) (478) -

162

Company Common Stock Issued Total Assets Total Liabilities Total Stockholders’ Equity

Total Operating Revenue Operating Income (Loss) Net Income (Loss) Earnings Per Share (NT$)

CTCI Machinery Corporation 200,000 1,720,224 1,225,744 494,480 2,586,278 114,773 89,778 4.49 Superiority (Thailand) Co., Ltd. 320 (71,832) 62,924 (134,756) 0 (251) (76,487) 695.35 Universal Engineering(BVI) Corporation 1,492 110,924 134,983 (24,059) 0 (115) (75,085) - CIPEC Construction Inc. 1,495 22,033 21,125 908 0 (1,576) 4,692 - CINDA Engineering & Construction Pvt. Ltd. 37,360 974,978 808,640 166,338 900,616 28,722 11,775 3.14 Sumber Mampu Sdn. Bhd. 751 178,075 4,861 173,214 0 (246) 65,163 (0.34) CTCI Malaysia Sdn. Bhd. 5,521 283,574 61,008 222,566 48,975 (2,064) 81,748 15.77 SINOGAL - Waste Services Co., Ltd. 14,951 418,050 205,825 212,225 708,712 168,554 193,550 - CTCI Trading Shanghai Co., Ltd. 22,895 200,415 154,584 45,831 366,935 10,368 5,264 - CTCI Americas, Inc. 2,985 176,752 168,978 7,774 346,753 3,397 763 - CTCI Singapore Pte. Ltd. 144,437 844,951 1,415,241 (570,290) 721,118 (85,029) (81,074) - Yuan Ding Resources Corporation 45,000 39,223 62 39,161 0 (163) 45 0.01 ECOVE Environment Consulting Corporation 3,937 68,264 53,985 14,279 114,034 12,280 9,135 - CCJV P1 Engineering & Construction Sdn. Bhd. 1,840 5,153,804 4,538,738 615,066 4,744,887 73,641 28,353 16.02 CTCI Netherlands B.V. 10,702 98,234 55,942 42,292 70,123 15,718 13,686 - Crown Asia 2 investment Limited 250 1,875 148 1,727 1,430 1,342 1,120 44.79 CTCI&HEC Water Business Corporation 500,000 494,967 5,479 489,488 31,538 (9,571) (7,384) (0.15) CTCI CMCE JV Sdn. Bhd. 5,521 71,759 63,907 7,852 52,198 3,645 (4,572) (0.42)

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8.1.3 The related information on the endorsements or guarantees for others, lending to others and derivative financial instruments of affiliates: A. Endorsements or guarantees for others: (as of March 31st, 2018) Unit: NT$ thousands

No. (Note 1) Guarantor Guarantee

The Ceiling on guarantee for single enterprise

The highest balance during the period (Note 4)

Ending balance as of March 31st,2018

Assets pledged for guarantee

Ratio of the accumulated guarantee to the net asset value of the Company as of March 31st,2018

Ceiling on total guarantee amount (Note 3) Name Relationship with the company (Note 2)

1 CTCI Advanced Systems Inc. Century Ahead Ltd. 2 100% of the net worth from the latest audited financial statements of CTCI Advanced Systems Inc.

17,540 17,481 - 3.13% The ceiling for total guarantee is $1,115,884, 200% of the net worth from the latest audited financial statements of CTCI Advanced Systems Inc.

2 CTCI Machinery Corporation CTCI Smart Engineering Corporation 5

300% of the net worth from the latest audited financial statements of CTCI Machinery Corporation 560,000 560,000 - 113.25%

The ceiling for total guarantee is $2,966,882, 600% of the net worth from the latest audited financial statements of CTCI Machinery Corporation

3 CTCI Chemicals Corporation CTCI Corporation 4 300% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation

18,817 18,817 - 8.17% The ceiling for total guarantee is $1,381,367, 600% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation

3 CTCI Chemicals Corporation CTCI Machinery Corporation 5

300% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation 245,000 245,000 - 106.42%

The ceiling for total guarantee is $1,381,367, 600% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation

4 CTCI Shanghai Co., Ltd. CTCI Trading Shanghai Co., Ltd. 2 300% of the net worth from the latest audited financial statements of CTCI Shanghai Co., Ltd.

165,986 165,881 - 38.20% The ceiling for total guarantee is $2,605,569, 600% of the net worth from the latest audited financial statements of CTCI Shanghai Co., Ltd.

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No. (Note 1) Guarantor Guarantee

The Ceiling on guarantee for single enterprise

The highest balance during the period (Note 4)

Ending balance as of March 31st,2018

Assets pledged for guarantee

Ratio of the accumulated guarantee to the net asset value of the Company as of March 31st,2018

Ceiling on total guarantee amount (Note 3) Name Relationship with the company (Note 2)

5 CTCI Resources Engineering Inc.

CTCI Smart Engineering Corporation 5 300% of the net worth from the latest audited financial statements of CTCI Resources Engineering Inc.

234,675 234,675 - 93.56% The ceiling for total guarantee is $1,504,897, 600% of the net worth from the latest audited financial statements of CTCI Resources Engineering Inc.

6 ECOVE Environment Corporation G.D. Development Corporation 6

200% of the net worth from the latest audited financial statements of ECOVE Environment Corporation 631,253 554,412 - 11.40%

The ceiling for total guarantee is $14,587,656, 300% of the net worth from the latest audited financial statements of ECOVE Environment Corporation

7 CTCI Smart Engineering Corporation CTCI Shanghai Co., Ltd. 5

300% of the net worth from the latest audited financial statements of CTCI Smart Engineering Corporation 253,413 - - -

The ceiling for total guarantee is $1,036,805, 600% of the net worth from the latest audited financial statements of CTCI Smart Engineering Corporation

7 CTCI Smart Engineering Corporation CTCI Machinery Corporation 5

300% of the net worth from the latest audited financial statements of CTCI Smart Engineering Corporation 1,698,800 - - -

The ceiling for total guarantee is $1,036,805, 600% of the net worth from the latest audited financial statements of CTCI Smart Engineering Corporation

8 CTCI Overseas Corporation Limited CTCI Americas, Inc. 5

300% of the net worth from the latest audited financial statements of CTCI Overseas Corporation Limited 5,936 - - -

The ceiling for total guarantee is$11,327,519, 600% of the net worth from the latest audited financial statements of CTCI Overseas Corporation Limited Note 1: 1. Company：0.

2. Subsidiaries：Please fill in the number with a sequence from 1 to 10. Note 2: Eligibility of endorsements or Guarantees：

1. A company with which it does business. 2. A company in which the company directly or indirectly holds more than 50%of the voting shares.

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3. A company and subsidiaries totally holds more than 50% of the voting shares. 4. A company directly and indirectly holds more than 50% of the voting shares in the company. 5. Contract required. 6. The relationship of Joint venture. 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. Note 4: Fill in the maximum outstanding balance of endorsements/guarantees provided during the year ended March 31st, 2018. B. Lending to others: (as of March 31st, 2018) No. (Note1) Lender Borrower Account item (Note2)

The highest balance during period (Note3)

Ending balance as of March 31st,2018 (Note8) Interest rate

Nature of Lending (Note4) Amount for operation (Note5)

Reason of short-term financing (Note6) Allowance for bad debts

Collateral Limit on lending for single enterprise (Note7)

Ceiling for total amount (Note7) Name Value 1 CTCI Advanced Systems Inc. CTCI Corporation

Accounts receivable-related parties 45,000 45,000 - 2 0 For operational needs 0 NA 0 55,794 223,177

2 CTCI Overseas Corporation Limited Superiority (Thailand) Co., Ltd.

Accounts receivable-related parties 63,470 63,305 1.700% 2 0 For operational needs 0 NA 0 706,234 706,234

2 CTCI Overseas Corporation Limited CTCI Netherlands B.V.


2 CTCI Overseas Corporation Limited CTCI Trading Shanghai Co., Ltd.


2 CTCI Overseas Corporation Limited CTCI CMCE JV Sdn. Bhd.


3 CTCI Overseas (BVI) Corporation CIPEC Construction Inc.


4 ECOVE Environment Corporation CTCI Corporation

Accounts receivable-related parties 430,000 430,000 0.810% 2 0 For operational needs 0 NA 0 486,255 1,945,021

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No. (Note1) Lender Borrower Account item (Note2) The highest balance during period (Note3)

Ending balance as of March 31st,2018 (Note8) Interest rate

Nature of Lending (Note4) Amount for operation (Note5)

Reason of short-term financing (Note6) Allowance for bad debts

Collateral Limit on lending for single enterprise (Note7)

Ceiling for total amount (Note7) Name Value 5 ECOVE Waste Management Corporation

CTCI Corporation Accounts receivable-related parties 14,000 7,000 - 2 0 For operational needs 0 NA 0 11,283 45,131

5 ECOVE Waste Management Corporation CTCI Smart Engineering Corporation


5 ECOVE Waste Management Corporation CTCI Machinery Corporation


6 ECOVE Environment Services corporation

CTCI Corporation Accounts receivable-related parties 140,000 70,000 0.810% 2 0 For operational needs 0 NA 0 100,581 402,326


CTCI Smart Engineering Corporation Accounts receivable-related parties 140,000 70,000 - 2 0 For operational needs 0 NA 0 100,581 402,326


CTCI Machinery Corporation Accounts receivable-related parties 140,000 70,000 - 2 0 For operational needs 0 NA 0 100,581 402,326


CTCI Resources Engineering Inc. Accounts receivable-related parties 140,000 70,000 - 2 0 For operational needs 0 NA 0 100,581 402,326

7 CTCI Shanghai Co., Ltd. CTCI Trading Shanghai Co., Ltd.


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Note 1： Number for items explain as follows： ■ Company：0. ■ Subsidiaries：Please fill in the number with a sequence from 1 to 10.

Note 2： This item is for account receivable-related parties, owner’s equity, prepayments, temporary payments etc. If any item belongs to Lending to others needs to be filled in this column. Note 3： The highest balance during period.

Note 4： Description for Lending to others as follows： ■1：Having business relationship. ■2：Operational needs.

Note 5： Belongs to item 1, please fill in the amount for operation. Note 6： Belongs to item 2, please explain the reason and lending purpose of short-term financing. For example, repayment for loans, purchasing equipments, or

needs for operations and working capital, etc. Note 7： Please fill in the limit of amount on lending to single enterprise and total limit of amount on lending to others by the Company, according to the stipulation of the Procedures of Lending to Others, and express the calculation of the aforesaid figures in the column of remarks. Note 8： The amounts of funds to be loaned to others which have been approved by board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Governing 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 exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if board of directors of a public company has authorized the chairman to loan funds in installments 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 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.

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C. Derivative Transactions Information: a. Derivatives transactions by December 31st, 2017 (1) Up to December 31st, 2017, CTCI Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 5,829,491 thousand. As the counter-party has good credit, the financial risk is limited. The main exchange loss of aforesaid forward contracts is 36,741 thousand, listed in non-operating expense, and the other exchange loss of aforesaid forward contracts, which is executed for the CCJV P1 project, is 278 thousand, debited to operating cost. (2) Up to December 31st, 2017, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 119,113 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 6,232 thousand, listed in non-operating expense. (3) Up to December 31st, 2017, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 287,050 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 3,583 thousand, listed in non-operating expense. (4) Up to December 31st, 2017, CTCI Smart Engineering Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 9,295 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 266 thousand, listed in non-operating expense. (5) Up to December 31st, 2017, CTCI Machinery Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 87,998 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 1,469 thousand, listed in non-operating expense. (6) Up to December 31st, 2017, CCJV P1 Engineering & Construction Sdn. Bhd. engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 2,791,994 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 61,207 thousand, listed in non-operating income.

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b. Derivatives transactions by March 31st, 2018 (1) Up to March 31st, 2018, CTCI Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 1,251,867 thousand. As the counter-party has good credit, the financial risk is limited. The main exchange loss of aforesaid forward contracts is 8,144 thousand, listed in non-operating expense. (2) Up to March 31st, 2018, CTCI Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 729,410 thousand. As the counter-party has good credit, the financial risk is limited. The exchange loss of aforesaid SWAP contracts is 442 thousand, listed in non-operating expense. (3) Up to March 31st, 2018, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 122,982 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 2,666 thousand, listed in non-operating expense. (4) Up to March 31st, 2018, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 209,752 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 975 thousand, listed in non-operating expense. 8.1.4 Consolidated Financial Statements of Affiliated Enterprises of the Company: None. 8.1.5 Affiliation Report: None.

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8.2 Private Placement Securities in the Most Recent Years: None. 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years: Unit: NT$ thousands; Shares; % Name of subsidiary

Stock capital collected Fund source

Shareholding ratio of the company (%) Date of acquisition or disposition

Shares and amount acquired

Shares and amount disposed of Investment gain (loss)

Shareholdings & amount in the most recent year Mortgage

Endorsement amount made for the subsidiary

Amount loaned to the subsidiary ECOVE Environment Services Corporation

$ 151,000 own reserves 93.16 1997.08 50,000 $1,764 1,028 $61 None None None 1997.10

50,000 $2,021 $258 1997.10 50,000 $1,893

1997.12 50,000 $1,780

1997.12 100,000 $3,673 $185 1998.08 50,000 $3,092 1998.12

Stock dividend 11,500 1998.12 61,000 $3,112 $45 1999.12 971,160 $31,475 1999.12 831,560 $26,951 $721 2001.12 505,871 $13,256 2002.12 645,000 2004.08

Stock dividend 9 2005.10

Stock dividend 9

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Name of subsidiary Stock capital collected

Fund source Shareholding ratio of the company (%)

Date of acquisition or disposition Shares and amount acquired

Shares and amount disposed of Investment gain (loss)

Shareholdings & amount in the most recent year Mortgage

Endorsement amount made for the subsidiary

Amount loaned to the subsidiary 2006.10



Stock dividend 12 CTCI Development Corporation

$1,690,000 own reserves 100 1999.03 550,000 $21,878 912,170 $53,818 None None None 1999.03

200,000 $8,104 $303 1999.04 450,000 $19,056

1999.04 450,000 $18,791 $586 1999.05 350,000 $14,677

1999.05 620,000 $27,053 $831 1999.06 776,000 $28,919 1999.07

Stock dividend 168,200 1999.07 15,000 $584 $18 1999.08 100,000 $3,044 2000.02 427,000 $14,663 $1,274 2000.07

Stock dividend 68,220

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Name of subsidiary

Stock capital

collected

Fund source

Shareholding ratio of the

company (%)

Date of acquisition or

disposition

Shares and

amount acquired

Shares and amount disposed

of

Investment gain (loss)

Shareholdings & amount in the most recent

year

Mortgage

Endorsement amount made

for the subsidiary

Amount loaned to

the subsidiary

2001.07


2004.08


2005.10


2006.10


2007.10


2008.09



$1,402,000 own reserves

100 1999.04

328,000 $14,198

344,436 $20,322

None None None

1999.04 105,000

$4,582 $108

1999.05 350,000 $14,826

1999.05 400,000 $17,881

$769

1999.06 250,000

$9,659

1999.07


2000.02 308,840

$8,841 $420

2000.07


2001.07


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Name of subsidiary

Stock capital

collected

Fund source

Shareholding ratio of the

company (%)

Date of acquisition or

disposition

Shares and

amount acquired

Shares and amount disposed

of

Investment gain (loss)

Shareholdings & amount in the most recent

year

Mortgage

Endorsement amount made

for the subsidiary

Amount loaned to

the subsidiary

2004.08


2005.10


2006.10


2007.10


2008.09


Crown Asia 2 Investment Limited Note

$ 250 Donation 100 2011.04 500 $18

500 $18

None None None

Note: Acquired in March 2016, the funding source is by donation.

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8.4 Other Supplementary Information 8.4.1 KPI by industry: A. CTCI Group budget for conclusion of contract, operating revenue and gross profit Unit : NT$100 million Item Budget in 2017 Performance

New Order 817.52 444.46 Operating Revenue 725.93 716.07

Gross Profit 58.62 51.12 B. Social responsibility a. Concern about safety and health environment, carry out HSE management system. b. Aggressively build positive ties throughout the community and promote local activities of culture and education. c. Foster engineering expertise with close attention employee training and education and the exchange of knowledge which also enhances Industry-academic cooperation d. Provide employment opportunities, assist job related activities and build long term ties with marginally listed workers. e. Offer a friendly workplace, health promotion activities in order to improve the physical and mental health of the employee. f. KPI for energy saving and carbon reduction and health management:

Item KPI in 2017 Performance Water consumption in the workplace Less than 11.263M3/person (average water consumption over the past two years) 10.98 M3/person Power consumption in workplace Less than 3,250 degree/person (average amount consumed electricity over the past two years)

3,180 degree/person Health management - Promotion More than 12 seminars 14 seminars

g. To enhance the urgent response ability, there are a total of 35 qualified first-aid personnel. 8.4.2 Material Event Impact on Shareholders' Equity or Share Price in Recent Years until the Annual Report being published The 13th Term of the office of CTCI’s Directors had expired in 2017, and 14th Term of the Directors had been elected in the 2017 AGM on 28th June, 2017. The new Directors and Independent Directors are as below: Directors: John T. Yu, Representative of CTCI Development Corporation; Michael Yang, Representative of CTCI Development Corporation; Teng-Yaw Yu, Representative of CTCI Foundation; Quintin Wu; Bing Shen; Johnny Shih; Yancey Hai; An-Ping Chang; Wenent Pan. Independent Director: Yen-Shiang Shih; Frank L.S. Fan; Jack J.T. Huang.

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� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �� ! � " � � � � # � � $ % � � & $ % # � � " # � � ' $ � " � ( ) � ( � & � � * + , � � � $ ) % " � � � & - � � ( � � � $ % � � � $ � � � ' ( $ + " ./ 0 1 2 1 3 0 2 4 5 6 2 6 7 8 7 1 6 5 9 2 : 7 ; 7 7 1 6 < 2 1 5 4 2 6 7 = 0 1 6 > ? 1 @ 4 0 5 9 / < > 8 6 9 7 > < 0 @ 0 1 2 4 A 9 0 1 7 5 7 : 7 < 5 0 > 1 B < 7 B 2 < 7 = 2 1 = C 5 7 = 0 16 9 7 D 7 B C ; 4 0 3 > / A 9 0 1 2 E F 1 6 9 7 7 : 7 1 6 > / 2 1 G = 0 5 3 < 7 B 2 1 3 G ; 7 6 H 7 7 1 6 9 7 ? 1 @ 4 0 5 9 : 7 < 5 0 > 1 2 1 = 6 9 7 > < 0 @ 0 1 2 4 A 9 0 1 7 5 7: 7 < 5 0 > 1 > < 2 1 G = 0 / / 7 < 7 1 3 7 5 0 1 6 9 7 0 1 6 7 < B < 7 6 2 6 0 > 1 > / 6 9 7 6 H > : 7 < 5 0 > 1 5 I 6 9 7 A 9 0 1 7 5 7 � 4 2 1 . ) $ . � $ ) % " � � � & - � � ( � � � $ %/ 0 1 2 1 3 0 2 4 5 6 2 6 7 8 7 1 6 5 5 9 2 4 4 B < 7 : 2 0 4 E

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54600

文字方塊

Appendix 2

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CTCI CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31,2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

~7~

December 31, 2017 December 31, 2016 Assets Notes AMOUNT % AMOUNT %

Current assets

1100 Cash and cash equivalents 6(1) $ 9,824,161 21 $ 4,809,361 11 1110 Financial assets at fair value

through profit or loss - current

6(2)

47,678 - 42,390 - 1125 Available-for-sale financial assets

- current

6(3)

406,401 1 332,850 1 1170 Accounts receivable, net 6(5) 831,810 2 1,453,102 3 1180 Accounts receivable - related

parties

7

144,887 - 9,285 - 1190 Receivables from customers on

construction contracts

6(6) and 7

18,262,745 40 17,726,913 40 1200 Other receivables 48,947 - 25,450 - 1210 Other receivables - related parties 7 540,270 1 901,799 2 1220 Current income tax assets 55,747 - 18,178 - 1410 Prepayments 6(7) 1,684,235 4 2,328,068 5 1470 Other current assets 6(8) 122,377 - 2,578,749 6 11XX Current Assets 31,969,258 69 30,226,145 68 Non-current assets

1543 Financial assets measured at cost

- non-current

6(4)

672,753 1 539,980 1 1550 Investments accounted for under

equity method

6(9)

12,246,300 27 12,174,294 28 1600 Property, plant and equipment,net 6(10) 301,716 1 320,512 1 1760 Investment property,net 6(11) and 7 153,600 - 154,945 - 1780 Intangible assets 90,863 - 121,127 - 1840 Deferred income tax assets 6(26) 396,860 1 437,426 1 1900 Other non-current assets 6(12) and 8 382,275 1 343,863 1 15XX Non-current assets 14,244,367 31 14,092,147 32 1XXX Total assets $ 46,213,625 100 $ 44,318,292 100

(Continued)

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CTCI CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31,2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

The accompanying notes are an integral part of these parent company only financial statements.

~8~

December 31, 2017 December 31, 2016 Liabilities and Equity Notes AMOUNT % AMOUNT %

Current liabilities 2100 Short-term borrowings 6(13) $ 2,770,000 6 $ - - 2120 Financial liabilities at fair value

through profit or loss - current

6(2)

4,426 - 45,060 - 2150 Notes payable - - 759 - 2170 Accounts payable 6(14) 5,781,063 12 8,727,328 20 2180 Accounts payable - related parties 7 1,253,772 3 1,022,196 2 2190 Payables to customers on

construction contracts

6(6) and 7

6,220,855 13 12,278,478 28 2200 Other payables 6(15) 1,382,387 3 1,367,719 3 2220 Other payables - related parties 7 25,819 - 11,527 - 2230 Current income tax liabilities 271,919 1 34,889 - 2300 Other current liabilities 6(16) 6,906,706 15 135,822 - 21XX Current Liabilities 24,616,947 53 23,623,778 53 Non-current liabilities 2570 Deferred income tax liabilities 6(26) 231,917 1 320,701 1 2600 Other non-current liabilities 6(9)(17)(18) 3,412,729 7 3,275,470 7 25XX Non-current liabilities 3,644,646 8 3,596,171 8 2XXX Total Liabilities 28,261,593 61 27,219,949 61 Equity Share capital 6(19)(20) 3110 Common stock 7,632,738 17 7,632,738 17 Capital surplus 6(19)(21) 3200 Capital surplus 3,395,620 7 3,322,098 8 Retained earnings 6(22)(26) 3310 Legal reserve 3,278,360 7 3,056,071 7 3320 Special reserve 765,904 2 768,121 2 3350 Unappropriated retained earnings 3,061,699 7 2,519,655 6 Other equity interest 3400 Other equity interest ( 170,454) ( 1) ( 188,505) ( 1) 3500 Treasury stocks 6(20) ( 11,835) - ( 11,835) - 3XXX Total equity 17,952,032 39 17,098,343 39 Significant Contigent Liabilities

and Unrecognised Contract

Commitments

9

Significant Events After the

Balance Sheet Date

11

3X2X Total liabilities and equity $ 46,213,625 100 $ 44,318,292 100

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CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

DECEMBER 31,2017 AND 2016 (Expressed in thousands of New Taiwan dollars, except earnings per share amounts)


~9~

Year ended December 31 2017 2016

Items Notes AMOUNT % AMOUNT % 4000 Operating revenue 6(23) and 7 $ 48,591,380 100 $ 42,764,443 100 5000 Operating costs 6(24)(25) and 7 ( 44,716,778) ( 92) ( 40,172,232) ( 94) 5900 Net operating margin 3,874,602 8 2,592,211 6 5920 Realized profit on sales 1,980 - 1,980 - 5950 Gross profit 3,876,582 8 2,594,191 6 Operating expenses 6(24)(25) and 7 6200 General & administrative expenses ( 897,134) ( 2) ( 1,072,828) ( 3) 6300 Research and development expenses ( 113,993) - ( 101,816) - 6000 Total operating expenses ( 1,011,127) ( 2) ( 1,174,644) ( 3) 6900 Operating profit 2,865,455 6 1,419,547 3 Non-operating income and expenses 7010 Other income 7 1,051,614 2 92,066 - 7020 Other gains and losses ( 81,852) - ( 162,060) - 7050 Finance costs ( 11,563) - ( 4,504) - 7070 Share of (loss) profit of associates

and joint ventures accounted for under equity method

6(9) ( 620,557) ( 1) 1,249,609 3 7000 Total non-operating income and

expenses 337,642 1 1,175,111 3

7900 Profit before income tax 3,203,097 7 2,594,658 6 7950 Income tax expense 6(26) ( 397,749) ( 1) ( 371,770) ( 1) 8200 Profit for the year $ 2,805,348 6 $ 2,222,888 5 Other comprehensive income Components of other comprehensive

income that will not be reclassified to profit or loss

8311 Other comprehensive income, before

tax, actuarial loss on defined benefit plans

6(18) ($ 59,470) - ($ 138,885) - 8330 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

( 9,361) - ( 32,939) - 8349 Income tax related to components of

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

6(26) 10,111 - 23,610 - Components of other comprehensive

income that will be reclassified to profit or loss

8361 Cumulative translation differences of

foreign operations 9,184 - ( 202,450) ( 1)

8362 Unrealized profit or (loss) on valuation of available-for-sale financial assets

6(3) 14,767 - ( 2,297) - 8380 Total share of other comprehensive

income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss

( 5,900) - ( 8,274) - 8300 Other comprehensive loss for the

year ($ 40,669) - ($ 361,235) ( 1)

8500 Total comprehensive income for the year

$ 2,764,679 6 $ 1,861,653 4 Basic earnings per share 6(27) 9750 Basic earnings per share $ 3.68 $ 2.92 Diluted earnings per share 6(27) 9850 Diluted earnings per share $ 3.67 $ 2.91

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CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

Notes 2017 2016

~11~

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 3,203,097 $ 2,594,658 Adjustments Adjustments to reconcile profit (loss) Depreciation 6(10)(11) 42,266 47,042 Amortization 6(24) 133,411 124,685 Provision for allowance for doubtful account ( 956,578 ) 159,660 Loss on valuation of financial assets 6(2) 40,379 75,787 Loss on disposal of investments 5,997 - Investment loss from liquidation of subsidiaries 6(9) 525 - (Gain) loss on disposal of property, plant and equipment ( 326 ) 149 Compensation costs for employee stock options 6(25) 49,853 - Investment income accounted for under the equity method 6(9) 620,557 ( 1,249,609 ) Realized gain from intercompany transactions ( 1,980 ) ( 1,980 ) Dividends income ( 17,362 ) ( 17,662 ) Interest income ( 24,858 ) ( 18,845 ) Interest expense 11,563 4,504 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss ( 154,885 ) 59,264 Notes receivable, net 959,245 427,000 Accounts receivable, net 483,023 1,678,721 Other receivables ( 20,682 ) 26,631 Other receivables - related parties ( 21,301 ) 20,696 Receivables from customers on construction contracts ( 535,832 ) 816,194 Prepayments 643,833 ( 234,043 ) Other current assets 2,456,372 ( 2,578,749 ) Other non-current assets 3,115 33,683 Changes in operating liabilities Notes payable ( 759 ) ( 7,431 ) Accounts payable ( 2,946,265 ) 349,077 Accounts payable - related parties 231,576 ( 836,368 ) Payables to customers on construction contracts ( 6,057,623 ) 6,971,240 Other payables 13,066 ( 57,241 ) Other payables-related parties 14,282 ( 46,006 ) Net defined benefit liabilities ( 282,342 ) ( 244,883 ) Other current liabilities 6,770,884 ( 1,009,073 ) Cash inflow generated from operations 4,662,251 7,087,101 Interest received 15,118 7,268 Interest paid ( 8,581 ) ( 5,026 ) Dividends received 849,139 1,025,747 Income tax paid ( 236,397 ) ( 449,522 ) Net cash flows from operating activities 5,281,530 7,665,568

(Continued)

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CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31,2017 AND 2016 (Expressed in thousands of New Taiwan dollars)

Notes 2017 2016


~12~

CASH FLOWS FROM INVESTING ACTIVITIES

Decrease in other receivables - related parties $ 382,500 $ 629,100

Interest received-related parties 7,255 12,203

(Increase) decrease in available-for-sale financial assets ( 72,118 ) 35,193

Proceeds from disposal of available-for-sale financial

assets

6,611 -

Increase in financial assets measured at cost-non-current 6(4) ( 132,773 ) -

Increase in long-term investment - subsidiaries 6(9) ( 1,105,649 ) ( 678,700 ) Proceeds from liquidation of capital of investee company 6(9) 10,245 -

Acquisition of property, plant and equipment 6(10) ( 22,155 ) ( 22,440 ) Acquisition of investment property 6(11) - ( 700 ) Proceeds from disposal of property, plant and equipment 356 441

Increase in intangible assets ( 40,624 ) ( 80,463 ) Increase in other non-current assets ( 103,652 ) -

Increase in refundable deposits (shown in other non-current

assets)

( 399 ) ( 4,412 ) Net cash flows used in investing activities ( 1,070,403 ) ( 109,778 )CASH FLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in short-term borrowings 2,770,000 ( 2,126,000 ) Interest paid-related parties ( 1,381 ) -

Other payables-related parties 10 -

Increase (decrease) in deposits received 19,556 ( 25,944 ) Cash dividends paid ( 1,984,512 ) ( 1,828,815 ) Proceeds from employee stock options exercised - 51,773

Net cash flows from (used in) financing activities 803,673 ( 3,928,986 )Net increase in cash and cash equivalents 5,014,800 3,626,804

Cash and cash equivalents at beginning of year 4,809,361 1,182,557

Cash and cash equivalents at end of year $ 9,824,161 $ 4,809,361

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~13~

CTCI CORPORATION

NOTES TO THE FINANCIAL STATEMENTS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANISATION

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

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

on May 1, 1979. The main business activities of the Company 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 PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised by the Board of Directors on March 9,

2018.

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 FSC effective from 2017 are as follows:

New Standards, Interpretations and Amendments

Effective date by

International Accounting

Standards Board

Amendments to IFRS 10, IFRS 12 and IAS 28, ‘Investment entities:

applying the consolidation exception’

January 1, 2016

Amendments to IFRS 11, ‘Accounting for acquisition of interests in

joint operations’

January 1, 2016

IFRS 14,‘Regulatory deferral accounts’ January 1, 2016

Amendments to IAS 1, ‘Disclosure initiative’ January 1, 2016

Amendments to IAS 16 and IAS 38, ‘Clarification of acceptable

methods of depreciation and amortisation’

January 1, 2016

Amendments to IAS 16 and IAS 41, ‘Agriculture: bearer plants’ January 1, 2016

Amendments to IAS 19, ‘Defined benefit plans: employee

contributions’

July 1, 2014

Amendments to IAS 27, ‘Equity method in separate financial

statements’

January 1, 2016

Amendments to IAS 36, ‘Recoverable amount disclosures for non-

financial assets’

January 1, 2014

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~14~

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

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

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

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as

follows:

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

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


Effective date by


Standards Board

Amendments to IAS 39, ‘Novation of derivatives and continuation of

hedge accounting’

January 1, 2014

IFRIC 21, ‘Levies’ January 1, 2014

Annual improvements to IFRSs 2010-2012 cycle July 1, 2014

Annual improvements to IFRSs 2011-2013 cycle July 1, 2014

Annual improvements to IFRSs 2012-2014 cycle January 1, 2016


Effective date by


Standards Board

Amendments to IFRS 2, ‘Classification and measurement of share-

based payment transactions’

January 1, 2018

Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with

IFRS 4 Insurance contracts’

January 1, 2018

IFRS 9, ‘Financial instruments’ January 1, 2018

IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018

Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from

contracts with customers’

January 1, 2018

Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017

Amendments to IAS 12, ‘Recognition of deferred tax assets for

unrealised losses’

January 1, 2017

Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018

IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018

Annual improvements to IFRSs 2014-2016 cycle- Amendments to

IFRS 1, ‘First-time adoption of International Financial Reporting

Standards’

January 1, 2018

Annual improvements to IFRSs 2014-2016 cycle- Amendments to

IFRS 12, ‘Disclosure of interests in other entities’

January 1, 2017

Annual improvements to IFRSs 2014-2016 cycle- Amendments to IAS

28, ‘Investments in associates and joint ventures’

January 1, 2018

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~15~

A. IFRS 9, ‘Financial instruments’

(a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.

(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses or lifetime expected credit losses (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

When adopting the new standards endorsed by the FSC effective from 2018, the Company will apply the new rules under IFRS 9 retrospectively from January 1, 2018, with the practical expedients permitted under the statement. The significant effects of applying the new standards as of January 1, 2018 are summarized below:

In accordance with IFRS 9, the Company expects to reclassify available-for-sale financial assets and financial assets at cost in the amounts of $406,401 and $1,157,973, respectively, and make an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income and in the amounts of $350,409, $792,174, and

increasing/(decreasing) retained earnings 、 other equity interest and accumulated impairment-

financial assets measured at cost in the amounts of $66,429,($3,000) and ($485,220), respectively.

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(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:

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

Company’s financial condition and financial performance based on the Company’s assessment. The

quantitative impact will be disclosed when the assessment is complete.

IFRS 16, ‘Leases’

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.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of the Company only financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless

otherwise stated.

(1) Compliance statement

These parent company only financial statements of the Company have been prepared in accordance

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

International

Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC

Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).


Effective date by


Standards Board

Amendments to IFRS 9, ‘Prepayment features with negative

compensation’

January 1, 2019

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


Standards Board

IFRS 16, ‘Leases’ January 1, 2019

IFRS 17, ‘Insurance contracts’ January 1, 2021

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

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(2) Basis of preparation

A. Except for the following items, the parent company only 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) Available-for-sale financial assets measured at fair value.

(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 International Financial Reporting

Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as

endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain

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

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

or complexity, or areas where assumptions and estimates are significant to the parent company

only financial statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of each of the Company’s entities are measured using the

currency of the primary economic environment in which the entity operates (the “functional

currency”). The parent company only financial statements are presented in New Taiwan Dollars,

which is the Company’s functional currency.

A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange

rates prevailing at the dates of the transactions or valuation where items are remeasured.

Foreign exchange gains and losses resulting from the settlement of such transactions are

recognised in profit or loss in the period in which they arise.

(b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange

differences that were recorded in other comprehensive income are proportionately transferred

to the non-controlling interest in this foreign operation. In addition, even when the Company

retains partial interest in the former foreign subsidiary after losing control of the former foreign

subsidiary, such transactions should be accounted for as disposal of all interest in the foreign

operation.

(c) Monetary assets and liabilities denominated in foreign currencies at the period end are re-

translated at the exchange rates prevailing at the balance sheet date. Exchange differences

arising upon re-translation at the balance sheet date are recognized in profit or loss.

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(d) Non-monetary assets and liabilities denominated in foreign currencies held at fair value

through profit or loss are re-translated at the exchange rates prevailing at the balance sheet

date; their translation differences are recognised in profit or loss. Non-monetary assets and

liabilities denominated in foreign currencies held at fair value through other comprehensive

income are re-translated at the exchange rates prevailing at the balance sheet date; their

translation differences are recognised in other comprehensive income. However, non-

monetary assets and liabilities denominated in foreign currencies that are not measured at fair

value are translated using the historical exchange rates at the dates of the initial transactions.

B. Translation of foreign operations

(a) The operating results and financial position of all the group entities, associates and joint

arrangements that have a functional currency different from the presentation currency are

translated into the presentation currency as follows:

i. Assets and liabilities for each balance sheet presented are translated at the closing exchange

rate at the date of that balance sheet;

ii. Income and expenses for each statement of comprehensive income are translated at average

exchange rates of that period; and

iii. All resulting exchange differences are recognised in other comprehensive income.

(b) When a foreign operation partially disposed of or sold is an associate or joint arrangement,

exchange differences that were recorded in other comprehensive income are proportionately

reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the

Company still retains partial interest in the former foreign associate or joint arrangement after

losing significant influence over the former foreign associate, or losing joint control of the

former joint arrangement, such transactions should be accounted for as disposal of all interest

in these foreign operations.

(4) Classification of current and non-current items

A. As the operating cycle for construction contracts usually exceeds one year, the Company uses the

operating cycle (typically 3～4 years) as its criteria for classifying current and non-current assets

and liabilities related to construction contracts. For other assets and liabilities, the criterion is one

year.

B. Assets that meet one of the following criteria are classified as current assets; otherwise they are

classified as non-current assets:

(a) Assets arising from operating activities that are expected to be realized, or are intended to be

sold or consumed within the normal operating cycle;

(b) Assets held mainly for trading purposes;

(c) Assets that are expected to be realized within twelve months from the balance sheet date;

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(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are

to be exchanged or used to settle liabilities more than twelve months after the balance sheet

date.

C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they

are classified as non-current liabilities:

(a) Liabilities that are expected to be settled off within the normal operating cycle;

(b) Liabilities arising mainly from trading activities;

(c) Liabilities that are to be settled off within twelve months from the balance sheet date;

(d) Liabilities for which the repayment date cannot be extended unconditionally to more than

twelve months after the balance sheet date. Terms of a liability that could, at the option of the

counterparty, result in its settlement by the issue of equity instruments do not affect its

classification.

(5) Cash and cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known

amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that

meet the definition above and are held for the purpose of meeting short-term cash commitments in

operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

A. Financial assets at fair value through profit or loss are financial assets held for trading or financial

assets designated as at fair value through profit or loss on initial recognition. Financial assets are

classified in this category of held for trading if acquired principally for the purpose of selling in

the short-term. Derivatives are also categorized as financial assets held for trading unless they are

designated as hedges.

B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are

recognized and derecognized using trade date accounting.

C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related

transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured

and stated at fair value, and any changes in the fair value of these financial assets are recognized

in profit or loss.

(7) Available-for-sale financial assets

A. Available-for-sale financial assets are non-derivatives that are either designated in this category

or not classified in any of the other categories.

B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and

derecognized using trade date accounting.

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C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs.

These financial assets are subsequently remeasured and stated at fair value, and any changes in

the fair value of these financial assets are recognized in other comprehensive income.

Investments in equity instruments that do not have a quoted market price in an active market and

whose fair value cannot be reliably measured or derivatives that are linked to and must be settled

by delivery of such unquoted equity instruments are presented in ‘financial assets measured at

cost’.

(8) Accounts receivable

Accounts receivable are loans and receivables originated by the entity. They are created by the entity

by selling goods or providing services to customers in the ordinary course of business. Accounts

receivable are initially recognized at fair value and subsequently measured at amortized cost using

the effective interest method, less provision for impairment. However, short-term accounts receivable

without bearing interest are subsequently measured at initial invoice amount as effect of discounting

is immaterial.

(9) Impairment of financial assets

A. The Company assesses at each balance sheet date whether there is objective evidence that a

financial asset or a group of financial assets is impaired as a result of one or more events that

occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has

an impact on the estimated future cash flows of the financial asset or group of financial assets that

can be reliably estimated.

B. The criteria that the Company uses to determine whether there is objective evidence of impairment

loss is as follows:

(a) Significant financial difficulty of the issuer or debtor;

(b) A breach of contract, such as a default or delinquency in interest or principal payments;

(c) The Company, for economic or legal reasons relating to the borrower’s financial difficulty,

granted the borrower a concession that a lender would not otherwise consider;

(d) It becomes probable that the borrower will enter bankruptcy or other financial reorganization;

(e) The disappearance of an active market for that financial asset because of financial difficulties;

(f) Observable data indicating that there is a measurable decrease in the estimated future cash

flows from a group of financial assets since the initial recognition of those assets, although the

decrease cannot yet be identified with the individual financial asset in the group, including

adverse changes in the payment status of borrowers in the group or national or local economic

conditions that correlate with defaults on the assets in the group;

(g) Information about significant changes with an adverse effect that have taken place in the

technology, market, economic or legal environment in which the issuer operates, and indicates

that the cost of the investment in the equity instrument may not be recovered; or

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(h) significant or prolonged decline in the fair value of an investment in an equity instrument

below its cost.

C. When the Company assesses that there has been objective evidence of impairment and an

impairment loss has occurred, accounting for impairment is made as follows according to the

category of financial assets:

(a) Financial assets measured at amortized cost

The amount of the impairment loss is measured as the difference between the asset’s carrying

amount and the present value of estimated future cash flows discounted at the financial asset’s

original effective interest rate, and is recognized in profit or loss. If, in a subsequent period,

the amount of the impairment loss decreases and the decrease can be related objectively to an

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

impairment loss is reversed through profit or loss to the extent that the carrying amount of the

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

impairment loss not been recognized previously. Impairment loss is recognized and reversed

by adjusting the carrying amount of the asset directly.

(b) Financial assets measured at cost

The amount of the impairment loss is measured as the difference between the asset’s carrying

amount and the present value of estimated future cash flows discounted at current market

return rate of similar financial asset, and is recognized in profit or loss. Impairment loss

recognized for this category shall not be reversed subsequently. Impairment loss is recognized

by adjusting the carrying amount of the asset through the use of an impairment allowance

account.

(c) Available-for-sale financial assets

The amount of the impairment loss is measured as the difference between the asset’s

acquisition cost (less any principal repayment and amortization) and current fair value, less

any impairment loss on that financial asset previously recognized in profit or loss, and is

reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period,

the fair value of an investment in a debt instrument increases, and the increase can be related

objectively to an event occurring after the impairment loss was recognized, then such

impairment loss is reversed through profit or loss. Impairment loss of an investment in an

equity instrument recognized in profit or loss shall not be reversed through profit or loss.

Impairment loss is recognized and reversed by adjusting the carrying amount of the asset

through the use of an impairment allowance account.

(10) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to receive the cash flows

from the financial asset expire.

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(11) Construction contracts

A. IAS 11, ‘Construction Contracts’, defines a construction contract as a contract specifically

negotiated for the construction of an asset. If the outcome of a construction contract can be

estimated reliably and it is probable that this contract would make a profit, contract revenue

should be recognized by reference to the stage of completion of the contract activity, using the

percentage-of-completion method of accounting, over the contract term. Contract costs are

expensed as incurred. The stage of completion of a contract is measured by the proportion of

contract costs incurred for work performed to date to the estimated total costs for the contract.

An expected loss where total contract costs will exceed total contract revenue on a construction

contract should be recognized as an expense as soon as such loss is probable. If the outcome of

a construction contract cannot be estimated reliably, contract revenue is recognized only to the

extent of contract costs incurred that it is probable will be recoverable.

B. Contract revenue should include the revenue arising from variations from the original contract

work, claims and incentive payments that are agreed by the customer and can be measured

reliably.

C. The excess of the cumulative costs incurred plus recognized profits (less recognized losses) over

the progress billings on each construction contract is presented as an asset within ‘Receivables

from customers on construction contracts’. While, the excess of the progress billings over the

cumulative costs incurred plus recognized profits (less recognized losses) on each construction

contract is presented as a liability within ‘Payables to customers on construction contracts’.

(12) Investments accounted for under the equity method / subsidiary and associates

A. Subsidiaries are all entities (including special purpose entities) over which the Company has the

power to govern the financial and operating policies. In general, control is presumed to exist

when the parent owns, directly or indirectly through subsidiaries, more than half of the voting

power of an entity. The Company accounts for investments in subsidiaries under the equity

method in the parent company only financial statements.

B. Inter-company transactions, balances and unrealised gains or losses on transactions between

companies and subsidiaries are eliminated. Accounting policies of subsidiaries have been

adjusted where necessary to ensure consistency with the policies adopted by the Company.

C. The Company’s share of its subsidiary’ post-acquisition profits or losses is recognized in profit

or loss, and its share of post-acquisition movements in other comprehensive income is recognized

in other comprehensive income. When the Company’s share of losses in an associate equals or

exceeds its interest in the associate, including any other unsecured receivables, the Company

recognizes losses in ownership interests.

D. If changes in the Company’s share in subsidiaries’ do not result in loss in control (transactions

with non-controlling interest), transctions shall be considered as equity transactions, which are

transactions between owners. Dfference of adjustment of non-controlling interest and fair value

of consideration paid or received is recognised in equity.

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E. Associates are all entities over which the Company has significant influence but not control. In

general, it is presumed that the investor has significant influence, if an investor holds, directly or

indirectly 20 percent or more of the voting power of the investee. Investments in associates are

accounted for using the equity method and are initially recognized at cost.

F. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit

or loss, and its share of post-acquisition movements in other comprehensive income is recognized

in other comprehensive income. When the Company’s share of losses in an associate equals or

exceeds its interest in the associate, including any other unsecured receivables, the Company

does not recognize further losses, unless it has incurred legal or constructive obligations or made

payments on behalf of the associate.

G. When changes in an associate’s equity that are not recognized in profit or loss or other

comprehensive income of the associate and such changes not affecting the Company’s ownership

percentage of the associate, the Company recognizes change in ownership interests in the

associate in ‘capital surplus’ in proportion to its ownership.

H. Unrealized gains on transactions between the Company and its associates are eliminated to the

extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless

the transaction provides evidence of an impairment of the asset transferred. Accounting policies

of associates have been adjusted where necessary to ensure consistency with the policies adopted

by the Company.

I. In the case that an associate issues new shares and the Company does not subscribe or acquire

new shares proportionately, which results in a change in the Company’s ownership percentage

of the associate but maintains significant influence on the associate, then ‘capital surplus’ and

‘investments accounted for under the equity method’ shall be adjusted for the increase or

decrease of its share of equity interest. If the above condition causes a decrease in the

Company’s ownership percentage of the associate, in addition to the above adjustment, the

amounts previously recognized in other comprehensive income in relation to the associate are

reclassified to profit or loss proportionately on the same basis as would be required if the relevant

assets or liabilities were disposed of.

J. When the Company disposes its investment in an associate and loses significant influence over

this associate, the amounts previously recognised in other comprehensive income in relation to

the associate, are reclassified to profit or loss, on the same basis as would be required if the

relevant assets or liabilities were disposed of. If it retains significant influence over this associate,

the amounts previously recognised in other comprehensive income in relation to the associate

are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

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K. In accordance with the “Rules Governing the Preparation of Financial Statements by Securities

Issuers”, the period’s income and other comprehensive income in the parent company only

financial statements should be the same to the allocation amount of the period’s income and

comprehensive income attributable to the owners of the parent company’s in the consolidated

financial statements. The owners’ equity in the parent company only financial statements should

be the same as the owners’ equity attributable to the owners of the parent company in the

consolidated financial statements.

(13) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the

construction period are capitalized.

B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,

as appropriate, only when it is probable that future economic benefits associated with the item

will flow to the Company and the cost of the item can be measured reliably. The carrying amount

of the replaced part is derecognized. All other repairs and maintenance are charged to profit or

loss during the financial period in which they are incurred.

C. Land is not depreciated. Other property, plant and equipment apply cost model and are

depreciated using the straight-line method to allocate their cost over their estimated useful lives.

Each part of an item of property, plant, and equipment with a cost that is significant in relation

to the total cost of the item must be depreciated separately.

D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if

appropriate, at each financial year-end. If expectations for the assets’ residual values and useful

lives differ from previous estimates or the patterns of consumption of the assets’ future economic

benefits embodied in the assets have changed significantly, any change is accounted for as a

change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and

Errors”, from the date of the change. The estimated useful lives of property, plant and equipment

are as follows:

Buildings and structures 35 ~ 50 years

Machinery 3 ~ 10 years

Transportation equipment 3 ~ 10 years

Office equipment 3 ~ 5 years

Other equipment 3~ 20 years

(14) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model.

Except for land, investment property is depreciated on a straight-line basis over its estimated useful

life of 50 years.

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(15) Intangible assets

Computer software is stated at cost and amortized on a straight-line basis over its estimated useful

life of 3 to 5 years.

(16) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where

there is an indication that they are impaired. An impairment loss is recognized for the amount by

which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the

higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons

for recognizing impairment loss for an asset in prior years no longer exist or diminish, the

impairment loss is reversed. The increased carrying amount due to reversal should not be more than

what the depreciated or amortized historical cost would have been if the impairment had not been

recognized.

(17) Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are

subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs)

and the redemption value is recognized in profit or loss over the period of the borrowings using the

effective interest method.

(18) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in

the ordinary course of business from suppliers. They are recognized initially at fair value and

subsequently measured at amortized cost using the effective interest method. However, short-term

accounts payable without bearing interest are subsequently measured at initial invoice amount as

effect of discounting is immaterial.

(19) Financial liabilities at fair value through profit or loss

A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or

financial liabilities designated as at fair value through profit or loss on initial recognition.

Financial liabilities are classified in this category of held for trading if acquired principally for

the purpose of repurchasing in the short-term. Derivatives are also categorized as financial

liabilities held for trading unless they are designated as hedges.

B. Financial liabilities at fair value through profit or loss are initially recognized at fair value.

Related transaction costs are expensed in profit or loss. These financial liabilities are

subsequently remeasured and stated at fair value, and any changes in the fair value of these

financial liabilities are recognized in profit or loss.

(20) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract

is discharged or cancelled or expires.

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(21) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount 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.

(22) Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and

are subsequently remeasured at their fair value.

(23) 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 recognized as

expenses in that period when the employees render service.

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

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

ii. Remeasurement arising on defined benefit plans are recognized in other comprehensive

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

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

C. Employees’ compensation and 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.

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(24) Employee share-based payment

For the equity-settled share-based payment arrangements, the employee services received are

measured at the fair value of the equity instruments granted at the grant date, and are recognized as

compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value

of the equity instruments granted shall reflect the impact of market vesting conditions and non-

market vesting conditions. Compensation cost is subject to adjustment based on the service

conditions that are expected to be satisfied and the estimates of the number of equity instruments

that are expected to vest under the non-market vesting conditions at each balance sheet date. And

ultimately, the amount of compensation cost recognized is based on the number of equity

instruments that eventually vest.

(25) 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 parent

company only 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.

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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 utilised.

(26) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of

new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

B. Where the Company repurchases the Company’s equity share capital that has been issued, the

consideration paid, including any directly attributable incremental costs (net of income taxes) is

deducted from equity attributable to the Company’s equity holders. Where such shares are

subsequently reissued, the difference between their book value and any consideration received,

net of any directly attributable incremental transaction costs and the related income tax effects,

is included in equity attributable to the Company’s equity holders.

(27) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are

approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(28) Revenue recognition

The Company provides construction services. Revenue from delivering services is recognized under

the percentage-of-completion method when the outcome of services provided can be estimated

reliably. The stage of completion of a service contract is measured by the proportion of contract

costs incurred for services performed as of the financial reporting date to the estimated total costs

for the service contract. If the outcome of a service contract cannot be estimated reliably, contract

revenue should be recognized only to the extent that contract costs incurred are likely to be

recoverable.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical

judgements in applying the Company’s accounting policies and make critical assumptions and estimates

concerning future events. Judgements and estimates are continually evaluated and adjusted based on

historical experience and other factors. The above information is addressed below:

(1) Critical accounting estimates and assumptions

None.

(2) Critical accounting estimates and assumptions

A. Revenue recognition

The Company relies on the project condition and objective factors to estimate total cost. The

revenue is recognised based on the percentage of input cost, and the reasonableness of estimates

is reviewed regularly. The estimated total cost will be affected by industry environment transition

and construction status to adjust the revenue recognition amount.

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B. Impairment assessment of financial assets

If the objective evidences have indications of impairment, the Company will consider the estimate

of future cash flow. The impairment loss is measured at the difference on the assets’ book value

and the estimate of future cash flow present which discount by initially effected rate. If the actual

future cash flow less than estimate, it would be have significant impairment loss.

6. future cash flow less than estimate, it would be have significant impairment loss.DETAILS OF

SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

A. The Company 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 Company’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 - current

A. The Company recognized, net loss of $40,379 and $75,787 for the years ended December 31,

2017 and 2016, respectively.

December 31, 2017 December 31, 2016

Cash on hand and revolving funds 21,197$ 29,617$

Checking accounts and demand deposits 2,552,136 4,779,744

Time deposits 7,250,828 -

9,824,161$ 4,809,361$

Items December 31, 2017 December 31, 2016

Current items:

Financial assets held for trading

Beneficiary certificates 43,916$ 40,816$

Non-hedging derivatives 497 5,271

44,413 46,087

Valuation adjustment of financial assets

held for trading 3,265 3,697)(

Total 47,678$ 42,390$

Finacial liablities held for trading

Non-hedging derivatives $ 4,426 $ 45,060

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B. As of December 31, 2017 and 2016, the trading items and contract information of derivatives are

as follows:

The Company entered into forward foreign exchange contracts to sell or buy forward foreign

exchange to hedge exchange rate risk of import or export proceeds. However, these forward

foreign exchange contracts are not adopting the hedging accounting because these do not conform

to all the conditions.

C. Due to the global financial crisis in year 2008, listed (TSE and OTC) stocks amounting to $56,044

which were initially classified as “financial assets at fair value through profit or loss” were

reclassified to “available-for-sale financial assets” on July 1, 2008, in accordance with paragraph

50 (c) of IAS 39. The relevant information is set forth below:

(a) The above reclassified assets which have not yet been disposed of were as follows:

(b) The changes in fair value of the above listed stocks that were recognized in profit or loss and

other comprehensive income were $0 and $6,105 respectively, for the year ended December

31, 2017 and were $0 and $8,978, respectively, for the year ended December 31, 2016. And

the accumulated total changes in fair value of the above listed stocks that were recognized in

profit or loss and other comprehensive income before January 1, 2016 were $0 and ($5,303),

respectively.

Contract Period

Non-delivery of forward exchange contract-

buy (10 items)

USD 26,000,000 2017.12.19~2018.01.31

Forward exchange contract-buy (2 items) EUR 1,200,000 2017.12.20~2018.01.22

Contract Period

Non-delivery of forward exchange contract-

buy (5 items)

USD 19,000,000 2016.11.28~2017.02.24

Forward exchange contract-buy (6 item) EUR 21,000,000 2016.08.10~2017.07.07

Forward exchange contract-buy (1 items) CHF 1,000,000 2016.07.21~2017.03.13

Forward exchange contract-buy (2 items) USD 5,000,000 2016.11.24~2017.02.24

December 31, 2017

Contract Amount

December 31, 2016

(notional principal)

(notional principal)

Contract Amount


Book value/Fair value Book value/Fair value

Listed (TSE or OTC)

stocks 91,574$ 85,469$

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(c) If the above listed stocks had not been reclassified to “available-for-sale financial assets” on

July 1, 2008, the gain (loss) from change in fair value of those assets should have been

recognized for the following periods:

(3) Available-for-sale financial assets

The amounts that the Company recognised profit or loss in other comprehensive income due to the

changes in fair value were $14,767 and ($2,297) for the years ended December 31, 2017 and 2016,

respectively.

(4) Financial assets measured at cost

A. Based on the Company’s intention, its investment in stocks should be classified as available-for-

sale financial assets. However, as these investments are not traded in active markets, the fair value

of the investment cannot be measured reliably. The Company classified those stocks as ‘financial

assets measured at cost’.

B. In August, 2016, the Board of Directors approved the Company’s investment of US $13,181 in

Ever Victory Global Limited for an ownership stake of 2.32%. The investment will be made in

several installments over several years. In 2017, the Company invested $74,347 (US $2,309) and

$58,426 (USD $1,921) in March and September, respectively.

C. As of December 31, 2017 and 2016, no financial assets measured at cost held by the Company

were pledged to others.

For the year ended For the year ended


Listed (TSE or OTC) stocks 6,105$ 8,978$


Current items:

Listed (TSE or OTC) stocks 254,939$ 195,428$

Foreign bonds 85,672 85,672

Valuation adjustment 65,790 51,750

406,401$ 332,850$


Non-current items:

Unlisted stocks 1,157,973$ 1,025,200$

Accumulated impairment- financial assets

measured at cost 485,220)( 485,220)(

672,753$ 539,980$

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(5) Accounts receivable

(6) Construction in progress

As of December 31,2017 and 2016, there were no retainage relating to construction contracts; the

advances received before the related construction work is performed amounted to $591,298 and $0,

respectively.

(7) Prepayments

(8) Other current assets

Note 1: Other financial assets are time deposits with maturity over three months.

Note 2: As of December 31, 2016, due to the accumulated capital injection exceeding the

accumulated cost, the joint venture was recognised in “other current assets”.


Accounts receivable 835,227$ 1,453,852$

Less: Allowance for bad debts 3,417)( 750)(

831,810$ 1,453,102$


Aggregate costs incurred plus recognised

profits

305,319,806$ 281,307,187$

Less: Progress billings 293,277,916)( 275,858,752)(

Net balance sheet position for construction in

progress

12,041,890$ 5,448,435$

Presented as:

Receivables from customers on construction

contracts

18,262,745$ 17,726,913$

Payables to customers on construction

contracts 6,220,855)( 12,278,478)(

12,041,890$ 5,448,435$


Prepayment for materials 1,294,706$ 1,668,649$

Prepayment for construction in progress 28,705 134,389

Overpaid sales tax 157,482 311,039

Others 203,342 213,991

1,684,235$ 2,328,068$


Other financial assets (Note 1) 122,377$ -$

Joint venture (Note 2) - 2,578,749

122,377$ 2,578,749$

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(9) Investments accounted for under the equity method

2017 2016

At January 1 11,318,823$ 10,657,379$

Addition of investments accounted for under

equity method 1,105,649 678,700

Remittance of liquidated share capital from

investee 10,600)( -

Share of profit or loss of investments

accounted for under equity method 620,557)( 1,249,609

Earnings distribution of investments accounted

for under equity method 831,777)( 1,008,085)(

Changes in capital surplus 23,669 5,716)(

Changes in other equity items 63,068 253,064)(

At December 31 11,048,275$ 11,318,823$


Investments under equity method

Subsidiaries

CTCI Smart Engineering Corporation 261,339$ 802,404$

CTCI Resources Engineering Inc. 248,464 164,231

CTCI Advanced Systems Inc. 263,086 255,177

CTCI Development Corporation 2,530,655 2,502,100

CTCI Investment Corporation 1,922,352 1,289,864

ECOVE Environment Corp. 2,696,371 2,710,442

CTCI(Thailand) Co. Ltd. 3,212 75,589

CTCI Machinery Corp. 494,480 440,796

Sinogal-waste Services Co., Ltd. 63,667 76,927

CTCI and Partners Company Limited - 11,244

CTCI CMCE JV SDN. BHD 392 -

CTCI Overseas (BVI) Co., Ltd. 1,923,648 2,244,890

CTCI Engineering & Construction

Sdn. Bhd. 70,382 90,890

CTCI Americas, Inc. 7,774 7,579

CCJV P1 Engineering & Construction

Sdn. Bhd. 608,915 565,424

CTCI & HEC Water Business Co., Ltd 249,639 253,405

Associates

Blue Whale Water Technology Co., Ltd. 364,397 158,195 Pan Asia Corp. 537,527 525,137

12,246,300$ 12,174,294$

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A. Subsidiary

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

(b) The summarized financial information of the subsidiaries that are material to the Company is

as follows:

Other non-current liabilities December 31, 2017 December 31, 2016

Subsidiaries

CTCI Arabia Ltd. 627,735)($ 366,488)($

CTCI Singapore Pte. Ltd. 570,290)( 488,983)(

($ 1,198,025) ($ 855,471)

2017 2016

CTCI Development

Corporation

Taiwan 100.00% 100.00%Subsidiaries Equity method

CTCI Investment Corporation " 100.00% 100.00% " "

ECOVE Environment Corp. " 57.57% 57.89% " "

CTCI Machinery Corp. " 100.00% 100.00% " "

CTCI Overseas (BVI) Co.,

Ltd.

BVI 100.00% 100.00%" "

CCJV P1 Engineering &

Construction Sdn. Bhd.

Malaysia 99.00% 99.00%" "

CTCI Arabia Ltd. Saudi Arabia 50.00% 50.00% " "

CTCI Singapore Pte. Ltd. Singapore 100.00% 100.00% " "

Company name

Principal place

of business

Shareholding ratio Nature of

relationship

Methods of

measurement


Current assets 70,668$ 107,808$

Non-current assets 4,751,499 4,838,019

Current liabilities 206,362)( 189,752)(

Non-current liabilities 2,063,498)( 2,232,323)(

Total net assets 2,552,307$ 2,523,752$

Share in associate's net assets 2,552,307$ 2,523,752$

Carrying amount of the associate 2,530,655$ 2,502,100$


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Current liabilities 12,542)( 128)(

Non-current liabilities 15,325)( 16,278)(

Total net assets 1,928,087$ 1,295,599$







Current liabilities 21,610)( 20,858)(


Total net assets 4,683,639$ 4,682,057$




Current assets 1,525,154$ 1,815,392$

Non-current assets 195,069 215,729

Current liabilities 1,209,053)( 1,574,498)(


Total net assets 494,480$ 440,796$

Share in associate's net assets 494,480$ 440,796$

Carrying amount of the associate 494,480$ 440,796$

ECOVE Environment Corp.

CTCI Machinery Corp.




Current liabilities 80)( 35)(

Total net assets 1,836,511$ 2,157,753$



CTCI Overseas (BVI) Co., Ltd.

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Statement of comprehensive income


Current assets 5,113,578$ 6,321,637$



Total net assets 615,066$ 571,135$




Current assets 792,122$ 2,188,740$




Total net assets 1,255,470)($ 733,528)($

Share in associate’s net assets 627,735)($ 366,764)($

Carrying amount of the associate 627,735)($ 366,488)($


CTCI Arabia Ltd.





Current liabilities 1,415,241)( 997,668)(

Total net assets 570,290)($ 488,983)($

Share in associate's net assets 570,290)($ 488,983)($

Carrying amount of the associate 570,290)($ 488,983)($

CTCI Singapore Pte. Ltd.

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Year ended Year ended


Revenue 328,819$ 326,689$

Profit for the period from continuing

operations 134,541 114,476

Other comprehensive (loss) income, net of

tax

2,953)( 1,447

Total comprehensive income 131,588$ 115,923$

Dividends received from associates 102,977$ 99,883$




Revenue 24,290)($ 6,981)($

Loss for the period from

continuing operations

35,760)( 17,745)(

Other comprehensive income (loss), net of

tax

1,711 13,017)(

Total comprehensive loss 34,049)($ 30,762)($




Revenue 791,864$ 880,677$


operations 761,339 848,097

Other comprehensive loss, net of tax 40,255)( 29,213)(





Revenue 2,586,278$ 2,518,683$


operations 89,778 51,920

Other comprehensive income (loss), net of

tax

3,317 9,260)(



EVOCE Environment Corp.

CTCI Machinery Corp.

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B. Associate

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



Revenue -$ -$

Total comprehensive (loss) income 358,026)($ 49,407$

Dividend received from associates -$ 153,640$

CTCI Overseas (BVI) Co., Ltd.



Revenue 4,744,887$ 6,058,374$




Revenue 3,107,468$ 5,213,282$

Total comprehensive (loss) income 586,647)($ 598,719$


CTCI Arabia Ltd.




Revenue 721,118$ 721,345$

Total comprehensive (loss) income 81,074)($ 424,349)($

CTCI Singapore Pte. Ltd.

December

31, 2017

December

31, 2016

Pan Asia Corp. Taiwan 34.27% 34.27% Associates Equity method

Company name

Principal place of

business

Shareholding ratio

Nature of

relationship

Methods of

measurement

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

follows:

Balance sheet

Statement of comprehensive income

C. For information on the Company’s subsidiaries, please refer to Note 4 (3) in the Company’s

consolidated financial statements for the year ended December 31, 2017.

D. The Board of Directors had resolved to invest in CTCI & HEC Water Business Co., Ltd. in August,

2016. The Company invested and owned 51% equity of CTCI & HEC Water Business Co., Ltd.

amounting to $255,000.

E. The Board of Directors had resolved to invest and owned 49% equity in Blue Whale Water

Technology Co., Ltd., in August, 2016. The Company invested in Blue Whale Water Technology

Co., Ltd., amounting to $161,700. Subsequently the Board of Directors resolved to make an

additioned investment in Blue Whale Water Technology Co., Ltd. in December, 2017. Hence, the

Company made an additioned investment in Blue Whale Water Technology Co., Ltd. amounting

to $186,200.

F. The Board of Directors had resolved to invest in CTCI Investment Corporation, in September,

2016 and May, 2017. The Company invested in CTCI Investment Corporation, amounting to

$262,000 and $670,000, respectively.


Current assets 3,341,120$ 3,194,871$




Total net assets 1,568,508$ 1,532,352$



Pan Asia Corp.



Revenue 5,380,591$ 5,156,131$


operations 57,009 24,835

Other comprehensive income (loss),

net of tax 2,035 14,333)(



Pan Asia Corp.

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G. The Board of Directors had resolved to invest and own 51% equity in CTCI CMCE JV SDN.

BHD, in March, 2017. The Company invested in CTCI CMCE JV SDN. BHD, amounting to

$2,759.

H. The Board of Directors had resolved to invest in CTCI Resources Engineering Inc., in December,

2017. The Company invested in CTCI Resources Engineering Inc., amounting to $246,690.

I. In December of 2017, the Board of Directors approved the liquidation of CTCI and Partners

Company. The Company received $10,245 (SAR 1,287) from the proceeds of liquidation and

recognised a loss on disposal of $525 and a currency exchange gain of $170; both amounts were

included in other gains and losses.

J. Sinogal-Waste Services Corp. (Sinogal Company) an investee of the Company and ECOVE

Environment Corp., entered into a contract, “Provision of Services for Operation and Maintenance

of the Macao Refuse Incineration Plant”. Due to the change in the electricity sales calculation

which was specified in the contract, after clarification and approval by the owner, since the result

of the calculation formula of adjustment of electricity sales is a loss, the adjustment of electricity

sales amounting to $262,893 thousands was transferred from other current liabilities to operating

revenue.

K. Under the equity method, the Company recognised investment income and other comprehensive

income of $103,927 for the year ended December 31, 2017, from Pan Asia Corp., Blue Whale

Water Technology Co., Ltd., CTCI Engineering & Construction San Bhd. CCJV P1 Engineering

& Construction Sdn. Bhd., CTCI CMCE JV SDN. BHD, Powertec Energy Corp. that were

invested by CTCI Investment Corporation. and CTCI Overseas (BVI) Corp., and its subsidiaries.

The above investments accounted for using the equity method have been audited by other

independent accountants.

L. Under the equity method, the Company recognized investment income and other comprehensive

income of $413,981 for the year ended December 31, 2016, from Pan Asia Corp., Blue Whale

Water Technology Co., Ltd. CTCI Engineering & Construction Sdn., Bhd., CCJV P1 Engineering

& Construction Sdn. Bhd., CTCI and Partners Company Limited, Powertec Energy Corp that were

invested by CTCI Investment Corporation. MIEI Industrial Sdn. Bhd. that invest by CTCI

Investment Corporation. and CTCI Malaysia Sdn. Bhd. and CTCI Overseas (BVI) Corp., and its

subsidiaries. The above investments accounted for using the equity method have been audited by

other independent accountants.

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45

)(

52

,45

8)

(

7

0,7

62

)(

56

2,3

13

)(

12

7,2

28

$

5

9,1

27

$

48

,94

1$

9

,75

3$

1,9

55

$

7

3,5

08

$

32

0,5

12

$

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(11) Investment property

Land Buildings Total

At January 1, 2017

Cost 115,692$ 76,683$ 192,375$

Accumulated depreciation - 37,430)( 37,430)(

115,692$ 39,253$ 154,945$

2017

Opening net book amount 115,692$ 39,253$ 154,945$

Depreciation charge - 1,345)( 1,345)(

Closing net book amount 115,692$ 37,908$ 153,600$

At December 31, 2017

Cost 115,692$ 76,683$ 192,375$


115,692$ 37,908$ 153,600$

Land Buildings Total

At January 1, 2016

Cost 115,692$ 75,983$ 191,675$


115,692$ 39,890$ 155,582$

2016

Opening net book amount 115,692$ 39,890$ 155,582$

Additions - 700 700

Depreciation charge - 1,337)( 1,337)(

Closing net book amount 115,692$ 39,253$ 154,945$

At December 31, 2016

Cost 115,692$ 76,683$ 192,375$


115,692$ 39,253$ 154,945$

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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 Company as of December 31, 2017, and

2016 were $679,997 and $795,167, respectively, The above fair values are based on the valuation

of market trading prices of similar property belonging to close proximities.

(12) Other non-current assets

(13) Short-term borrowings

(14) Accounts payable



Rental revenue from the lease of the

investment property 6,392$ 6,392$

Direct operating expenses arising from the

investment property that generated

rental income in the period 3,684$ 3,622$

Direct operating expenses arising from the

investment property that did not

generate rental income in the period -$ -$


Long-term receivables 1,078$ 442$

Restricted bank deposits 46,203 49,955

Refundable deposits 208,094 207,695

Others 126,900 85,771

382,275$ 343,863$

Type of borrowings December 31, 2016 Interest rate range Collateral

Unsecured borrowings

Mizuho Bank, Ltd. 1,250,000$ 0.70% -

HSBC 920,000 0.68% -

The Bank of Tokyo-Mitsubishi UFJ 580,000 0.72% -

SMBC 20,000 0.75% -

2,770,000$


Materials payable 1,970,824$ 4,307,923$

Sub-contract costs payable 3,810,239 4,419,405

5,781,063$ 8,727,328$

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(15) Other payables

(16) Other current liabilities

As of December 31, 2017, due to the accumulated cost exceeding the accumulated capital injection,

the joint venture was recognised in “other current liabilities”.

(17) Other non-current liabilities


Accrued payroll 1,000,715$ 1,011,405$

Accrued employee bonuses, directors' and

supervisors' remuneration 100,697 81,484

Accrued insurance 48,971 47,911

Accrued pension 20,584 20,455

Others 211,420 206,464

1,382,387$ 1,367,719$


Joint venture 6,847,852$ -$

Receipt in advance 57,612 118,888

Others 1,242 16,934

6,906,706$ 135,822$


Net defined benefit liabilities 2,033,252$ 2,256,125$

Guarantee deposits 101,703 82,147

Investments accounted for under the

equity method (credit balance) 1,198,025 855,471

Others 79,749 81,727

3,412,729$ 3,275,470$

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(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 2% 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) The amounts recognised in the balance sheet are determined as follows:


Present value of defined benefit 3,502,540$ 3,589,967$

Fair value of plan assets 1,469,288)( 1,333,842)(

Net defined benefit liability 2,033,252$ 2,256,125$

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(c) Movements in net defined benefit liabilities are as follows:

Present value of

defined benefit Fair value of Net defined

obligations plan assets benefit liability

Year ended December 31, 2017

Balance at January 1 3,589,967$ 1,333,842)($ 2,256,125$

Current service cost 20,858 - 20,858

Interest expense (income) 43,079 16,006)( 27,073

3,653,904 1,349,848)( 2,304,056

Remeasurements:

Change in demographic

assumptions 51,189 - 51,189

Change in financial

assumptions 89,917 2,066 91,983

Experience adjustments 83,702)( - 83,702)(

57,404 2,066 59,470

Pension fund contribution - 326,403)( 326,403)(

Paid pension 208,768)( 204,897 3,871)(

Balance at December 31 3,502,540$ 1,469,288)($ 2,033,252$

Present value of

defined benefit Fair value of Net defined

obligations plan assets benefit liability

Year ended December 31, 2016

Balance at January 1 3,583,229$ 1,221,107)($ 2,362,122$

Current service cost 24,581 - 24,581

Interest expense (income) 60,915 20,759)( 40,156

3,668,725 1,241,866)( 2,426,859

Remeasurements:

Change in financial assumptions 131,246 11,367 142,613

Experience adjustments 3,728)( - 3,728)(

127,518 11,367 138,885

Pension fund contribution - 305,667)( 305,667)(

Paid pension 206,276)( 202,324 3,952)(

Balance at December 31 3,589,967$ 1,333,842)($ 2,256,125$

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(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic

subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment

and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and

Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund

includes deposit in domestic or foreign financial institutions, investment in domestic or

foreign listed, over-the-counter, or private placement equity securities, investment in

domestic or foreign real estate securitization products, etc.). With regard to the utilisation of

the Fund, its minimum earnings in the annual distributions on the final financial statements

shall be no less than the earnings attainable from the amounts accrued from two-year time

deposits with the interest rates offered by local banks. If the earnings is less than

aforementioned rates, government shall make payment for the deficit after being authorized

by the Regulator. The Company has no right to participate in managing and operating that

fund and hence the Company is unable to disclose the classification of plan asset fair value

in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of

December 31, 2017 and 2016 is given in the Annual Labor Retirement Fund Utilisation

Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Assumptions regarding future mortality experience are set based on actuarial advice in

accordance with published statistics and experience in each territory.

Because the main actuarial assumption changed, the present value of defined benefit

obligation is affected. The analysis was as follows:

The sensitivity analysis above is based on other conditions that are unchanged but only one

assumption is changed. In practice, more than one assumption may change all at once. The

method of analysing sensitivity and the method of calculating net pension liability in the

balance sheet are the same.



Discount rate 0.90% 1.20%

Future salary increases 3.00% 3.00%

Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25%

December 31, 2017

Effect on present

value of defined benefit

obligation 75,168)($ 77,602$ 67,154$ 65,503)($

December 31, 2016

Effect on present

value of defined benefit

obligation 66,567)($ 68,525$ 51,781$ 57,002$

Discount rate Future salary increases

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(f) Expected contributions to the defined benefit pension plans of the Company for the year

ending December 31, 2018 amounts to $65,316.

(g) As of December 31, 2017, the weighted average duration of the retirement plan is nine years.

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 defined contribution pension plans of the Company for the years

ended December 31, 2017 and 2016 were $119,910 and $119,611, respectively.

(19) Share-based payment-employee compensation

A. As of December 31, 2017 and 2016, the Company’s share-based payment arrangements were as

follows:

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting

conditions

Fourth plan of employee

stock options

2010.06.18 22,000

units

6 years Service of 2 years

to 4 years

Fifth plan of employee

stock options

2017.04.11 20,000

units

6 years Service of 2 years

to 4 years

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B. The above employee stock options are set forth below:

(a) Details of the fourth plan of employee stock options outstanding as of December 31, 2017

and 2016 are set forth below:

As a result of employee stock options exercised based on the exercise price of NT$23.90, the

outstanding capital stock increase amounted to 2,166,250 shares and capital surplus-common

stock amounted to $30,111 for the year ended December 31, 2016. Each warrant could

subscribe to 1,000 shares of common stock.

(b) Details of the fifth plan of employee stock options outstanding as of December 31, 2017 and

2016 are set forth below:

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

December 31, 2017 and 2016 was NT$52.20 and NT$44.31, respectively.

Weighted-

average

Weighted-

average

No. of units exercise price No. of units exercise price

Stock options (in thousand) (in dollars) (in thousand) (in dollars)

Options outstanding at

beginning of period - - 2,814.50 NT$23.90

Options waived - - 648.25)( -

Options exercised - - 2,166.25)( NT$23.90

Options outstanding

at end of period - - - -

Options exercisable

at end of period - - - -

For the years ended December 31,

2017 2016

Weighted-

average

Weighted-

average

No. of units exercise price No. of units exercise price

Stock options (in thousand) (in dollars) (in thousand) (in dollars)


beginning of period - - - -

Options granted 20,000.00 NT $ 52.20 - -

Options waived 875.00)( - - -

Options exercised - - - -


end of period 19,125.00 NT $ 49.60 - -

Options exercisable at

end of period - - - -


2017 2016

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D. As of December 31, 2017 and 2016, the range of exercise prices of stock options outstanding

was NT$49.60 and NT$23.90, respectively; the weighted-average remaining contractual period

was as follows:

E. For the stock options granted before January 1, 2008 with compensation cost accounted for using

the fair value method, their fair value on the grant date is estimated using the Black-Scholes

option-pricing model. The information is as follows:

F. Expenses incurred on share-based payment transactions is $49,853 and $0 in 2017 and 2016,

respectively.

(20) Share capital

A. As of December 31, 2017 and 2016, the Company’s authorized capital was $9,000,000,

(including 800,000 thousand 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.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

Note: The number of the Company’s ordinary shares outstanding which was held by its

subsidiaries had not been reduced.

Type of arrangement December 31, 2017 December 31, 2016

Fourth plan of employee stock options - -

Fifth plan of employee stock options 4~5 years -

Type of

arrangement Grant date Stock price

Exercise

price

Expected

price

volatility

rate

Expected

vesting

period

Expected

dividend

yield

rate

Risk free

interest

rate

Fair value

per unit

Fourth plan of

employee stock

options

2010.6.18 NT$ 32.8 NT$ 32.8 36.22% 4.5 years 0% 0.93% NT$ 10.3

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

For the year ended

December 31, 2017

For the year ended

December 31, 2016

At January 1 763,273,848 761,107,598

Employee stock options exercised - 2,166,250

At December 31 763,273,848 763,273,848

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B. Treasury shares

(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 capitalised 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. Change in Capital surplus is as follows:

Number of shares

Name of investors Reason for reacquisition in thousand Book value

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

December 31, 2017

Number of shares

Name of investors Reason for reacquisition in thousand Book value

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

December 31, 2016

Difference between proceeds on

Treasury share acquisition of disposal of equity interest

Share premium transactions in a subsidiary and its carrying amount Others Total

At January 1, 2017 2,865,969$ 5,043$ 197,436$ 244,408$ -$ 9,242$ 3,322,098$

Employee stock options exercised - - 6,590 - - - 6,590

by subsidiary

Employee stock options granted - - - 65,027 - - 65,027

Changes in long-term investment that did

not maintain shareholding ratio

- - 1,905 - - - 1,905

At December 31, 2017 2,865,969$ 5,043$ 205,931$ 309,435$ -$ 9,242$ 3,395,620$

Employee stock options

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

(22) Retained earnings

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.

Difference between proceeds on

Treasury share acquisition of disposal of equity interest

Share premium transactions in a subsidiary and its carrying amount Others Total

At January 1, 2016 2,815,485$ 5,043$ 204,171$ 265,664$ -$ 7,340$ 3,297,703$

Employee stock options exercised - - 6,735)( - - - 6,735)(

by subsidiary

Employee stock options granted - - - 1,019 - - 1,019

Employee stock options exercised 50,484 - - 20,373)( - - 30,111

Employee stock options revoked - - - 1,902)( - 1,902 -

At December 31, 2016 2,865,969$ 5,043$ 197,436$ 244,408$ -$ 9,242$ 3,322,098$

Employee stock options

2017 2016

At January 1 2,519,655$ 2,477,692$

Profit for the period 2,805,348 2,222,888

Set aside as legal reserve 222,289)( 204,061)(

Cash dividends 1,984,512)( 1,828,815)(

Reversal of special reserve 2,217 165

Remeasurement on post employment benefit

obligations, net of tax 58,720)( 148,214)(

At December 31 3,061,699$ 2,519,655$

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In order 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. And, the amount of shareholders’ bonus shall not be less than 50% of

accumulated distributable earnings of the Company, and in particular cash dividend shall not be

less than 20%.

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. The imputation tax system requires that any undistributed current earnings of the Company are

subject to an additional 10% corporate income tax if the earnings are not distributed in the

following year.

E. 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.

F. The appropriation of 2016 and 2015 had been resolved at the stockholders’ meeting on June 28

and June 22, 2017 and 2016, respectively. Details are summarized below:

Amount

Dividends

per share

(in NT dollars) Amount

Dividends

per share

(in NT dollars)

Legal reserve 222,289$ -$ 204,061$ -$

Reversal of

special reserve 2,217)( - 165)( -

Cash dividends 1,984,512 2.60 1,828,815 2.40

Total 2,204,584$ 2.60$ 2,032,711$ 2.40$

2016 2015

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G. The appropriation of 2017 earnings had been proposed at the Board of Directors meeting on

March 9, 2018. Details are summarized below: T

As of March 9, 2018, the abovementioned appropriation of 2017 earnings has not been approved

by the stockholders.

H. For information relating to employees’ remuneration (bonuses) and directors’ and supervisors’

remuneration, please refer to Note 6(25).

(23) Operating revenue

(24) Expense by nature

Amounts

Dividends

per share

(in NT dollars)

Legal reserve 280,535$ -$

Reversal of special reserve 2,110)( -

Cash dividends 2,468,202 3.23

Total 2,746,627$ 3.23$

2017



Refining and petrochemical project 29,698,394$ 22,713,511$

Basic construction 2,681,644 2,594,558

Resources environmental 16,153,946 17,406,074

Other operating revenue 57,396 50,300

Total 48,591,380$ 42,764,443$



Materials 24,453,497$ 18,699,514$

Subcontract costs 12,144,113 12,478,828

Employee benefit expense 5,220,741 5,158,097

Temporary equipment 547,619 816,435

Rental expenses 559,593 603,332

Insurance expenses 81,079 71,396

Travel expenses 354,002 270,716

Depreciation charges on property,

plant and equipment 40,921 45,705

Amortisation on intangible assets 133,411 124,685

Others 2,192,929 3,078,168

Total 45,727,905$ 41,346,876$

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(25) Employee benefit expense

As of December 31, 2017 and 2016, Company had 2,730 and 2,791 employees, respectively.

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 years ended December 31, 2017 and 2016, employees’ remuneration was accrued at

$84,160 and $66,484, respectively; directors’ remuneration was accrued at $16,537 and $15,000,

respectively. The aforementioned amounts were recognized in salary expenses and other

expenses, respectively.

For the year ended December 31, 2017, the employees’ remuneration 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 year as of the end of reporting period.

Employees’ compensation and directors’ remuneration of 2016 as resolved at the Board of

Directors’ meeting were in agreement with those amounts recognized in the 2016 financial

statements.

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

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

System” at the website of the Taiwan Stock Exchange.

For operating For operating

costs expenses Total

Salaries and wages 3,912,039$ 635,706$ 4,547,745$

Employee stock options 39,952 9,901 49,853

Labor and health insurance 247,514 41,478 288,992

Pension costs 142,203 25,638 167,841

Other personnel expenses 128,015 38,295 166,310

4,469,723$ 751,018$ 5,220,741$

For the year ended December 31, 2017

For operating For operating

costs expenses Total

Salaries and wages 3,892,787$ 637,961$ 4,530,748$

Labor and health insurance 248,135 37,476 285,611

Pension costs 152,035 32,313 184,348

Other personnel expenses 128,602 28,788 157,390

4,421,559$ 736,538$ 5,158,097$


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(26) Income tax

A. Components of income tax expense:

B. Reconciliation of differences between financial income and taxable income:

Note: The basis of applicable tax rate calculated by the rate applicable to the Company.



Current tax :

Current tax on profits for the period 429,013$ 288,156$

Adjustments in understatement of prior years 6,843 28,404

Total current tax 435,856 316,560

Origination and reversal of temporary

differences 38,107)( 55,210

Income tax expense 397,749$ 371,770$



Net income before tax calculated by the legal 544,526$ 441,093$

tax rate (Note)

Effects from items disallowed by tax

regulation 36,572)( 114,152)(

Adjustments in understatement of prior years 6,843 28,404

Tax credit of investment 10,657)( 9,486)(

Others 106,391)( 25,911

Income tax expense 397,749$ 371,770$

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C. Amounts of deferred tax assets or liabilities as a result of temporary difference are as follows:

Recognised

January 1

Recognised in

profit or loss

in other

comprehensive

income December 31

Temporary differences:

Deferred tax assets:

Unrealized construction

loss 25,005$ 385)($ -$ 24,620$

Unrealized bad debts 17,170 - - 17,170

Short-term paid

absences (holiday leave) 22,983 150)( - 22,833

Unrealized exchange loss 2,766 803 - 3,569

Unrealized loss on

financial instruments 510 - - 510

Unrealized membership

fees of the golf club 918 - - 918

Unrealized labor pension 349,092 47,310)( 10,111 311,893

Others 18,982 3,635)( - 15,347

Subtotal 437,426$ 50,677)($ 10,111$ 396,860$

Deferred tax liabilities:

Unrealized investment

income from foreign

equity investments 314,130)( 88,784 - 225,346)(

Others 6,571)( - - 6,571)(

Subtotal 320,701)($ 88,784$ -$ 231,917)($

Total 116,725$ 38,107$ 10,111$ 164,943$


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D. As of December 31, 2016, the Company’s income tax returns through 2014 have been assessed

and approved by the Tax Authority.

E. Unappropriated retained earnings:

F. The balance of the Company’s imputation tax credit account was $401,376 as of December 31,

2016. The actual creditable tax rate was 19.55% for the year ended December 31, 2016. Under

the amendments to the Income Tax Act promulgated by the President of the Republic of China

on February 7, 2018, the imputation tax system will be abolished and the imputation credit

account will be eliminated, along with the recordkeeping, calculations, and penalties associated

with such accounts. The amendments are effective January 1, 2018, therefore the creditable tax

rate no longer applies to earnings for the year ended December 31, 2017.

Recognised

January 1

Recognised in

profit or loss

in other

comprehensive

income December 31

Temporary differences:

Deferred tax assets:

Unrealized construction

loss 18,296$ 6,709$ -$ 25,005$

Unrealized bad debts 17,170 - - 17,170

Short-term paid absences

(holiday leave) 21,722 1,261 - 22,983

Unrealized exchange loss 403 2,363 - 2,766

Unrealized loss on

financial instruments 510 - - 510

Unrealized membership

fees of the golf club 918 - - 918

Unrealized labor pension 367,064 41,582)( 23,610 349,092

Others 11,564 7,418 - 18,982

Subtotal 437,647$ 23,831)($ 23,610$ 437,426$

Deferred tax liabilities:

Unrealized exchange gain 7,467)($ 7,467$ -$ -$

Unrealized investment

income from foreign

equity investments 275,284)( 38,846)( - 314,130)(

Others 6,571)( - - 6,571)(

Subtotal 289,322)($ 31,379)($ -$ 320,701)($

Total 148,325$ 55,210)($ 23,610$ 116,725$



Earnings generated in and before 1997 47,819$ 47,819$

Earnings generated in and after 1998 3,013,880 2,471,836

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(27) Earnings per share

Weighted-average

number of

ordinary shares

Amount outstanding Earnings per share

after tax (share in thousands) (in dollars)

Basic earnings per share

Profit attributable to the

ordinary shareholders

of the parent 2,805,348$ 763,274 3.68$

Diluted earnings per share

Effects of dilutive

potential ordinary shares

Employee bonus - 1,978

Profit attributable to


of the parent plus

assumed conversion

of all dilutive potential

ordinary shares 2,805,348$ 765,252 3.67$


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(28) Operating leases

The Company leases land and buildings under operating lease agreements. These leases have terms

expiring between 2007 and 2029.The lease expense recognised for the years ended December 31,

2017 and 2016 were $559,593 and $603,332, respectively.

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

are as follows:

Weighted-average

number of

ordinary shares

Amount outstanding Earnings per share

after tax (share in thousands) (in dollars)

Basic earnings per share

Profit attributable to the


of the parent 2,222,888$ 761,539 2.92$

Diluted earnings per share

Effects of dilutive potential

ordinary shares

Employee bonus

Employee stock options - 1,365

Profit attributable to ordinary

shareholders of the parent

plus assumed conversion

of all dilutive potential

ordinary shares 2,222,888$ 762,904 2.91$



Not later than one year 293,629$ 523,136$

Later than one year but not

later than five years 289,979 566,897

Later than five years 45,925 59,177

629,533$ 1,149,210$

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Company

ECOVE Environment Corp. Subsidiary

CTCI Development Corporation Subsidiary

CTCI Smart Engineering Corporation Subsidiary

CTCI Resources Engineering Inc. Subsidiary

CTCI Advanced Systems Inc. Subsidiary

ECOVE Environmental Services Corporation. Subsidiary

CTCI Chemical Corp. Subsidiary

ECOVE Waste Managment Corporation. Subsidiary

CTCI Overseas Co.,Ltd. Subsidiary

ECOVE Miaoli Energy Corporation. Subsidiary

CTCI Shanghai Co., Ltd. Subsidiary

CTCI Beijing Co., Ltd. Subsidiary

CTCI Machinery Corp. Subsidiary

CTCI & HEC Water Business Co., Ltd Subsidiary

CTCI Engineering & Construction Sdn. Bhd. Subsidiary

CTCI CMCE JV SDN. BHD. Subsidiary

CINDA Engineering & Construction Private Limited Subsidiary

CTCI Arabia Ltd. Subsidiary

CTCI Netherlands B.V. Subsidiary

CTCI Malaysia Sdn Bhd Subsidiary

Universal Engineering (BVI) Corporation Subsidiary

CIPEC Construction Inc. Subsidiary

CCJV P1 Engineering & Construction Sdn. Bhd. Subsidiary

CIMAS Engineering Company Limited Subsidiary

CTCI Americas, Inc. Subsidiary

CTCI (Thailand ) Co., Ltd. Subsidiary

CTCI Singapore Pte. Ltd. Subsidiary

Blue Whale Water Technology Co., Ltd. Associate

Powertec Energy Corp. Associate

Pan Asia Corp. Associate

Boretech Resource Recovery Associate

MIE INDUSTRIAL SDN. BHD. Associate

CTCI Foundation Other related party

CTCI Education foundation Other related party

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(2) Significant transactions and balances with related parties

A. Sales of services:

i. 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.

ii. The subsidiary, CTCI Investment Corporation., invested in Powertec Energy Corporation which

became an associated enterprise on August, 2014. As of December 31, 2017 and 2016, the

Company recognised total operating revenue amounting to $10,096,241 and $9,858,827,

respectively. Notes receivable amounted to $0 and $959,245, which had been reduced by

allowance for doubtful accounts of $0 and $959,245, respectively, and accounts receivable

amounted to $13,859 and $2,149.

As of May 2017, the Company has collected the abovementioned allowance for uncollectible

accounts of notes receivable by $959,245, thus, the Company reversed accumulated provisions

for impairment losses by $959,245, and accounted as other gains and losses.

B. Other operating revenue

The rate on the human resource support contracts entered into with related parties are set through

negotiation by both parties. The collection terms of 30 days were approximately the same as those

with third parties.



Associates 695,387$ 91,605$

Subsidiaries 357,773 34,742

Other related party 2,913 1,332

1,056,073$ 127,679$



Subsidiaries 50,796$ 45,946$

Associates 7,366 4,056

58,162$ 50,002$

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C. Purchases of services:

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

by both parties. The payment terms of 30 days were approximately the same as those with third

parties.

D. Other operating costs

The rate on the sub-contracting projects contracts entered into with related parties are set through

negotiation by both parties. The payment terms of 30 days were approximately the same as those

with third parties.

E. Accounts receivable

F. Other receivables-related parties:

Includes advances to related parties for engineering and business travel.

G. Loans to related parties: (Shown in other receivables-related parties)

(a) Receivables from related parties



Subsidiaries 2,294,389$ 2,694,816$


Other related party - 4,137

2,588,011$ 2,789,330$








Other related party 788 -

144,887$ 9,285$




Associates 252 1,032

59,270$ 38,299$



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(b) Interest income

The loans to subsidiaries are receivable within one year and carry interest at 1.01%~1.09% per

annum for the years ended December 31, 2017 and 2016, respectively.

H. Accounts payable

I. Other payables-related party

Other payables-related party is to pay the tariff and system grade up expense.

J. Progress billings (Recognize in receivables from customers on construction contracts and payables

from customers on construction contracts ):

K. Rental income

(a) Assets leased to related parties are as follows:

(b) Rental income





Subsidiaries 1,042,606$ 905,016$

Associates 211,166 117,180

1,253,772$ 1,022,196$




Subsidiaries 3,162,899$ 2,128,822$

Associates 10,955,178 10,332,566

Other related party 5,476 657

14,123,553$ 12,462,045$

Leased assets Lessee December 31, 2017 December 31, 2016

Land and buidings Subsidiaries 153,600$ 154,945$


Lessee Rental amount December 31, 2017 December 31, 2016

Subsidiaries-A $268/month/quarterly collection 3,217$ 3,217$

Subsidiaries-B $265/month/quarterly collection 3,175 3,175

Subsidiaries-C $1,075/month/quarterly collection 12,895 13,616

19,287$ 20,008$

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L. Rental expense

M. Contribution expense

N. Guarantees for related parties

As of December 31, 2017 and 2016, the Company had used guarantees in the amount of

$18,832,806 and $14,083,008, respectively, for related parties, and guarantees under various

construction contracts amounting to $15,580,563 and $11,516,492, respectively.

O. Key management compensation

8. PLEDGED ASSETS

Lessor Leased assets Rental amount 2017 2016

Other related party Land / Buildings $698/month/

semiannual

8,372$ 8,372$

Subsidiaries-D Land / Buildings $22,547/month/

month Refundable

deposits $128,300 270,570 275,481

278,942$ 283,853$


2017 2016

Other related party 15,000$ 45,000$



Associates 769,300$ 769,300$

Subsidiaries 28,931,809 27,455,008

29,701,109$ 28,224,308$

2017 2016

Salaries and other short-term

employee benefits97,638$ 86,616$

Share based payments 6,314 -

Post-employment benefits 691 706

Other long-term benefits 950 935

105,593$ 88,257$


Pledged assets December 31, 2017 December 31, 2016 Purpose

Other non-current assets

Pledged bank deposits 8,135$ 8,084$ Guarantee for oil expense and bank guarantee

Refundable deposits 208,094 207,695 Guarantee for oil expense, rent, construction contracts

216,229$ 215,779$

Book value

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

In addition to those items which have been disclosed in Notes 6(28) and 7, the significant contingent

liabilities and unrecognised contract commitments of the Company as of December 31, 2017 were as

follows:

(1) Guarantee

A. The Company had outstanding notes payable for security deposits of various construction projects

amounting to $1,339,679.

B. The Company had outstanding notes payable for bank financing amounting to $69,293,096.

(2) The Company had unused and outstanding letters of credit of approximately $889,514.

(3)The Company had outstanding commitments for construction subcontracts amounting to $13,274,933.

(4) The Company had a joint procurement project with Mitsubishi Heavy Industries, Ltd. in 1996. The

construction was completed on February 19, 2000 and accepted by the Environmental Protection

Administration (the “EPA”) on May 16, 2000. 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, 2009. 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 amount. The EPA indicated that it had repaid $9,299 to the

Company in 2009. Therefore, the Company reduced the lawsuit claim to $63,954 plus interest of

$117 and damage loss of $2,421.

Aside from the damages of $1,708 awarded, the Company won the judgement of first instance of this

case. Nonetheless, the Environmental Protection Administration (the “EPA”) appealed the decision

with the High Court, and the appeal was dismissed. The EPA then filed an appeal with the Supreme

Court, which reviewed and remanded the case to the High Court, which dismissed the appeal again.

The EPA filed a second appeal with the Supreme Court, and the case was once again remanded to the

High Court, where it is still pending as of December 31, 2017. The Company’s legal counsed stated

that the outcome of the case is still uncertain, and the EPA bases its argument on the finality of the

arbitration judgement, so it is difficult to estimate the maximum possible loss or potential gain from

damages awarded resulting from this case.

10. SIGNIFICANT DISASTER LOSS

None.

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11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

A. Please see Note 6 (22) H. for detailed information on the apporopriation of 2017 earnings that had

been resolved at the Board of Directors’meeting on March 9, 2018.

B. The amendments to the Income Tax Act were promulgated by the President of the Republic of China

on February 7, 2018, and went into effect on January 1, 2018. The material effects to the Company

are described as follows:

(a) the Company’s applicable income tax rate will be raised from 17% to 20% effective from

January 1, 2018. This will increase both the Company’s deferred tax assets and deferred tax

liabilities by 3%, and (decrease) increase current income tax expense accordingly.

(b) The imputation tax system will be abolished, thus, the balance of the imputation credit account

on December 31, 2017 will become $0 as of January 1, 2018.

12. OTHERS

(1) Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’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 Company may adjust the amount of dividends paid to shareholders, return capital to shareholders,

issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the

gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as

total borrowings (including ‘current and non-current borrowings’ as shown in the parent company

only balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown

in the parent company only balance sheet.

The gearing ratios as of December 31, 2017 and 2016, were as follows:

(2) Financial instruments

A. Fair value information of financial instruments

Except for those listed in the table below, the carrying amounts of the Company’s financial

instruments not measured at fair value (including cash and cash equivalents, notes receivable,

accounts receivable, other receivables, short-term loans, notes payable, accounts payable and

other payables) are approximate to their fair values. The fair value information of financial

instruments measured at fair value is provided in Note 12(3).


Total borrowings 2,770,000$ -$

Total equity 17,952,032$ 17,098,343$

Gearing ratio 15.43% 0%

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B. Financial risk management policies

(a) The Company’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. The

Company’s overall risk management programme focuses on the unpredictability of financial

markets and seeks to minimise potential adverse effects on the Company’s financial position

and financial performance.

(b) Risk management is carried out by a treasury department (Company treasury) under policies

approved by the Board of Directors. Company treasury identifies, evaluates and hedges

financial risks in close co-operation with the Company’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 Company operates internationally and is exposed to foreign exchange risk arising

from various currency exposures, primarily with respect to the USD, EUR and CNY.

Foreign exchange risk arises from future commercial transactions, recognised assets and

liabilities and net investments in foreign operations.

ii. Management has set up a policy to require the Company to manage its foreign exchange

risk against its functional currency. The Company is required to hedge its entire foreign

exchange risk exposure with the Company treasury. To manage its foreign exchange risk

arising from future commercial transactions and recognised assets and liabilities, the

Company uses forward foreign exchange contracts, transacted with Company treasury.

Foreign exchange risk arises when future commercial transactions or recognised assets or

liabilities are denominated in a currency that is not the Company’s functional currency.

iii. The Company has certain investments in foreign operations, whose net assets are exposed

to foreign currency translation risk.

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iv. The Company’s businesses involve some non-functional currency operations (the

Company’s and subsidiaries’ functional currency: NTD; other certain subsidiaries’

functional currency: USD, RMB, etc. 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 299,914$ 29.84 8,949,434$

EUR：NTD 15,123 35.67 539,366

SGD：NTD 7,277 22.32 162,423

JPY：NTD 442,250 0.26 117,152

VDN：NTD 80,377,528 0.0013 104,491

SAR：NTD 5,230 7.96 41,627

RMB：NTD 3,614 4.58 16,548

THB：NTD 2,005 0.92 1,835

GBP：NTD 39 40.21 1,568

Financial liabilities

Monetary items

USD：NTD 5,568 29.84 166,149

EUR：NTD 2,141 35.67 76,379

SEK：NTD 18,368 3.62 66,468

SGD：NTD 663 22.32 14,801

CHF：NTD 276 30.55 8,432

THB：NTD 3,659 0.92 3,349

RMB：NTD 1,036 4.58 4,744

December 31, 2017

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v. The unrealized exchange gain (loss) arising from significant foreign exchange variation

on the monetary items held by the Company for the years ended December 31, 2017 and

2016 amounted to ($34,354) and ($95,130), respectively.

Foreign Currency

Amount

(In Thousands) Exchange Rate Book Value

(Foreign currency:


Financial assets

Monetary items

USD：NTD 143,137$ 32.20 4,609,011$

EUR：NTD 11,436 33.92 387,909

JPY：NTD 49,134 0.28 13,758

THB：NTD 2,138 0.90 1,924

RMB：NTD 1,015 4.62 4,689

SEK：NTD 103 3.54 365

AUD：NTD 14 23.31 326

SGD：NTD 1,687 22.28 37,586

GBP：NTD 52 39.53 2,056


Monetary items

USD：NTD 860 32.20 27,692

EUR：NTD 640 33.92 21,709

THB：NTD 6,843 0.90 6,159

RMB：NTD 5,272 4.62 24,357

December 31, 2016

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vi. Analysis of foreign currency market risk arising from significant foreign exchange

variation:

Degree of

Variation

Effect on Profit

or Loss

Effect on Other

Comprehensive

Income

(Foreign currency:


Financial assets

Monetary items

USD：NTD 1% 89,494$ -$

EUR：NTD 1% 5,394 -

SGD：NTD 1% 1,624 -

JPY：NTD 1% 1,172 -

VDN：NTD 1% 1,045 -

SAR：NTD 1% 416 -

RMB：NTD 1% 165 -

THB：NTD 1% 18 -

GBP：NTD 1% 16


Monetary items

USD：NTD 1% 1,662 -

EUR：NTD 1% 764 -

SEK：NTD 1% 665 -

SGD：NTD 1% 148 -

CHF：NTD 1% 84 -

THB：NTD 1% 33 -

RMB：NTD 1% 47 -

December 31, 2017

Sensitivity Analysis

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Price risk

The Company is exposed to equity securities price risk because of investments held by the

Company and classified on the parent company only balance sheet either as available-for-sale

or at fair value through profit or loss. The Company is not exposed to commodity price risk.

To manage its price risk arising from investments in equity securities, the Company

diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits

set by the Company.

Interest rate risk

The Company’s interest rate risk arises from borrowings. Borrowings issued at variable rates

expose the Company to cash flow interest rate risk which is partially offset by cash and cash

equivalents held at variable rates. During the years ended December 31, 2017 and 2016, the

Company’s borrowings at variable rate were denominated in NTD.

Degree of

Variation

Effect on Profit

or Loss

Effect on Other

Comprehensive

Income

(Foreign currency:


Financial assets

Monetary items

USD：NTD 1% 46,090$ -$

EUR：NTD 1% 3,879 -

JPY：NTD 1% 138 -

THB：NTD 1% 19 -

RMB：NTD 1% 47 -

SEK：NTD 1% 4 -

AUD：NTD 1% 3 -

SGD：NTD 1% 376 -

GBP：NTD 1% 21 -


Monetary items

USD：NTD 1% 277 -

EUR：NTD 1% 217 -

THB：NTD 1% 62 -

RMB：NTD 1% 244 -

December 31, 2016

Sensitivity Analysis

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(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the

clients or counterparties of financial instruments on the contract obligations. According to

the Company’s credit policy, each local entity in the Company is responsible for managing

and analysing the credit risk for each of their new clients before standard payment and

delivery terms and conditions are offered. Internal risk control assesses the credit quality

of the customers, taking into account their financial position, past experience and other

factors.

ii. The credit quality information of financial assets that are neither past due nor impaired is

as follows:

Group 1：Government or state- owned enterprise.

Group 2：Listed companies.

Group 3：The company does not belong to group 1 or group 2.

iii.The ageing analysis of financial assets that were past due but not impaired is as follows:

iv.Movements on the provision for impairment of accounts receivable are as follows:

(i) As of December 31, 2017 and 2016, the Company’s accounts receivable that were

impaired amounted to $0 and $959,995, respectively.

Group 1 Group 2 Group 3

Notes and accounts receivable 26,925$ 424,951$ 222,814$

December 31, 2017

Group 1 Group 2 Group 3

Notes and accounts receivable 683,879$ 307,541$ 430,936$

December 31, 2016


Accounts receivable

Up to 30 days 66,371$ 16,629$

31 to 90 days 66,157 705

91-180 days 167,354 6,628

Over 181 days 2,125 16,069

302,007$ 40,031$

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(ii) Movements on the Company’s provision for impairment of accounts receivable are as

follows:

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and

aggregated by Company treasury. Company treasury monitors rolling forecasts of the

Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs

so that the Company does not breach borrowing limits or covenants on any of its borrowing

facilities. Such forecasting takes into consideration the Company’s debt financing plans,

covenant compliance, compliance with internal balance sheet ratio targets.

ii. The table below analyses the Company’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.

2017 2016

At January 1 959,995$ 800,335$

Provision for impairment 3,417 159,660

Reversal of impariment 959,995)( -

At December 31 3,417$ 959,995$

Non-derivative financial liabilities:

December 31, 2017 Less than 1 year More than 1 year

Short-term borrowings 2,770,000$ -$

Notes payable - -

Accounts payable 7,034,835 -

Other payables 1,408,206 -

Guarantee deposits - 101,703

Non-derivative financial liabilities:

December 31, 2016 Less than 1 year More than 1 year

Notes payable 759$ -$

Accounts payable 9,749,524 -

Other payables 1,379,246 -

Guarantee deposits - 82,147

Derivative financial liabilities:

December 31, 2017

Forward exchange contracts $ 4,426 $ -

Less than

3 months

Between

3 months

and 1 year

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(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. Details of the fair value of the Company’s financial assets and financial liabilities not measured

at fair value are provided in Note 12(2)A

B. 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 Company’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 Company’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.

December 31, 2016

Less than

3 months

Between

3 months

and 1 year

Forward exchange contracts $ 34,697 $ 10,363

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C. The following table presents the Company’s financial assets and liabilities that are measured at

fair value as of December 31, 2017 and, 2016.

December 31, 2017 Level 1 Level 2 Level 3 Total

Financial assets:

Financial assets at

fair value through

profit or loss

　Beneficiary

certificates

47,181$ -$ -$ 47,181$

　Derivative financial

assets

- 497 - 497

Available-for-sale

financial assets

　Equity securities 406,401 - - 406,401

Total 453,582$ 497$ -$ 454,079$

Financial liabilities:

Financial liabilities at

fair value through

profit or loss


liabilities -$ 4,426$ -$ 4,426$

December 31, 2016 Level 1 Level 2 Level 3 Total

Financial assets:

Financial assets at

fair value through

profit or loss

　Beneficiary

certificates

37,119$ -$ -$ 37,119$


assets

- 5,271 - 5,271

Available-for-sale

financial assets

　Equity securities 332,850 - - 332,850

Total 369,969$ 5,271$ -$ 375,240$

Financial liabilities:

Financial liabilities at

fair value through

profit or loss


liabilities -$ 45,060$ -$ 45,060$

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D. The methods and assumptions the Company used to measure fair value are as follows:

(a) The instruments the Company used market quoted prices as their fair values (that is, Level 1)

are listed below by characteristics:

(b) 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.

The fair value of financial instruments measured by using valuation techniques can refer to

current fair value of instruments with similar terms and characteristics in substance,

discounted cash flow method or other valuation methods, including calculated by applying

model using market information available at the parent company only balance sheet date (i.e.

yield curves on the Taipei Exchange, average commercial paper interest rates quoted from

Reuters).

E. If one or more of the significant inputs is not based on observable market data, the instrument is

included in level 3.

F. Specific valuation techniques used to value financial instruments include:

(a) Quoted market prices or dealer quotes for similar instruments.

(b) The fair value of forward foreign exchange contracts is determined using forward exchange

rates at the balance sheet date, with the resulting value discounted back to present value.

(c) Other techniques, such as discounted cash flow analysis, are used to determine fair value for

the remaining financial instruments.

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 $300 million or

20% of the Company’s paid-in capital: Please refer to table 4.

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 5.

Listed shares Open-end fund

Marked quated price Closing price Net asset value

55971

矩形

55971

打字機

376

~79~

H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:

Please refer to table 6.

I. Trading in derivative 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 7.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in

Mainland China)：Please refer to table 8.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 9.

B. Significant transactions, either directly or indirectly through a third area, with investee companies

in the Mainland Area: None.

55971

矩形

55971

打字機

377

Item

Val

ue0

CTC

I Cor

p.C

TCI

(Th

aila

nd)

CO

., Lt

d.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

209,

294

$

-$

-$

-2

-$

Fo

rop

erat

iona

lne

ed

-$

-

-$

3,59

0,40

6$

7,18

0,81

3$

-

0C

TCI C

orp.

CTC

I M

achi

nery

Cor

p.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

700,

000

650,

000

388,

000

1.01

%2

-

Fo

rop

erat

iona

lne

ed

-

-

-

3,59

0,40

6

7,18

0,81

3

-

0C

TCI C

orp.

CTC

I Sm

art

Eng

inee

ring

Cor

pora

tion

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

200,

000

200,

000

93,0

00

1.

01%

2-

For

oper

atio

nal

need

-

-

-

3,59

0,40

6

7,18

0,81

3

-

0C

TCI C

orp.

CTC

I Res

ourc

es

Engi

neer

ing

In

c.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

300,

000

-

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

3,59

0,40

6

7,18

0,81

3

-

0C

TCI C

orp.

CTC

I Sha

ngha

i C

o., L

td.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

96,5

97

89

,544

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

3,59

0,40

6

7,18

0,81

3

-

1C

TCI A

dvan

ced

Sys

tem

s Inc

.C

TCI C

orp.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

49,0

00

45

,000

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

54,0

00

215,

998

-

2C

TCI O

vers

eas

Co.

, Ltd

.C

IPEC

Con

stru

ctio

n

Inc.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

20,2

47

19

,870

19,8

70

1.

656%

2-

For

oper

atio

nal

need

-

-

-

725,

430

725,

430

-

Allo

wan

cefo

rdo

ubtfu

l a

ccou

nts

Col

late

ral

Lim

it on

loan

s g

rant

ed to

a si

ngle

par

ty（

Not

e 7）

Cei

ling

on to

tal l

oans

gran

ted

（N

ote

7）Fo

otno

te

Rea

son

for s

hort-

term

fin

anci

ng（

Not

e 6）

No.

（N

ote

1）C

redi

tor

Borro

wer

Gen

eral

ledg

erac

coun

t（

Not

e 2）

Is a

rela

ted

party

Max

imum

outs

tand

ing

bala

nce

durin

gye

ar e

nded

Dec

embe

r 31,

2017

(Not

e 3)

Bala

nce

atD

ecem

ber 3

1,20

17（

Not

e 8）

Act

ual a

mou

ntdr

awn

dow

nIn

tere

st r

ate

Nat

ure

oflo

an（

Not

e 4）

Am

ount

of

trans

actio

nsw

ith th

ebo

rrow

er（

Not

e 5）

CTC

I Cor

pora

tion

Loan

s to

othe

rs

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Tabl

e 1

Expr

esse

d in

thou

sand

s of N

TD(E

xcep

t as o

ther

wise

indi

cate

d)

Tabl

e 1

Page

1

55971

矩形

55971

打字機

378

Item

Val

ue

Allo

wan

cefo

rdo

ubtfu

l a

ccou

nts

Col

late

ral

Lim

it on

loan

s g

rant

ed to

a si

ngle

par

ty（

Not

e 7）

Cei

ling

on to

tal l

oans

gran

ted

（N

ote

7）Fo

otno

te

Rea

son

for s

hort-

term

fin

anci

ng（

Not

e 6）

No.

（N

ote

1）C

redi

tor

Borro

wer

Gen

eral

ledg

erac

coun

t（

Not

e 2）

Is a

rela

ted

party

Max

imum

outs

tand

ing

bala

nce

durin

gye

ar e

nded

Dec

embe

r 31,

2017

(Not

e 3)

Bala

nce

atD

ecem

ber 3

1,20

17（

Not

e 8）

Act

ual a

mou

ntdr

awn

dow

nIn

tere

st r

ate

Nat

ure

oflo

an（

Not

e 4）

Am

ount

of

trans

actio

nsw

ith th

ebo

rrow

er（

Not

e 5）

2C

TCI O

vers

eas

Co.

, Ltd

.C

TCI S

hang

hai

Co.

, Ltd

.O

ther

rece

ivab

les-

rela

ted

parti

es

Yes

193,

194

$

-$

-$

-2

-$

Fo

rop

erat

iona

lne

ed

-$

-

-

$

72

5,43

0$

72

5,43

0$

2C

TCI O

vers

eas

Co.

, Ltd

.Su

perio

rity

(Tha

iland

)C

o., L

td.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

118,

829

62,2

19

62

,219

1.7%

2-

For

oper

atio

nal

need

-

-

-

725,

430

725,

430

-

2C

TCI O

vers

eas

Co.

, Ltd

.C

TCI A

mer

icas

,In

c.O

ther

rece

ivab

les-

rela

ted

parti

es

Yes

38,6

39

-

-

-

2-

For

oper

atio

nal

need

-

-

-

725,

430

725,

430

-

2C

TCI O

vers

eas

Co.

, Ltd

.C

TCI

N

ethe

rland

s

B.V

.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

36,4

97

35

,818

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

725,

430

725,

430

-

2C

TCI O

vers

eas

Co.

, Ltd

.C

TCI A

rabi

a

Ltd.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

321,

990

-

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

725,

430

725,

430

-

2C

TCI O

vers

eas

Co.

, Ltd

.C

TCI T

radi

ng S

hang

hai C

o.,

Ltd

.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

52,6

57

52

,657

-

-2

- Fo

rop

erat

iona

lne

ed

-

-

- 72

5,43

0

72

5,43

0

-

3U

nive

rsal

Engi

neer

ing

(BV

I)C

orpo

ratio

n

CIP

EC

Con

stru

ctio

n

Inc.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

19,3

07

-

-

-

2

-

For

oper

atio

nal

need

-

-

-

-

-

-

3EC

OV

EEn

viro

nmen

t C

orp.

G.D

. D

evel

opm

ent

Cor

pora

tion

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

30,0

00

-

-

-

2

-

Fo

rop

erat

iona

lne

ed

-

-

-

468,

364

1,87

3,45

6

-

Tabl

e 1

Page

2

55971

矩形

55971

打字機

379

Item

Val

ue

Allo

wan

cefo

rdo

ubtfu

l a

ccou

nts

Col

late

ral

Lim

it on

loan

s g

rant

ed to

a si

ngle

par

ty（

Not

e 7）

Cei

ling

on to

tal l

oans

gran

ted

（N

ote

7）Fo

otno

te

Rea

son

for s

hort-

term

fin

anci

ng（

Not

e 6）

No.

（N

ote

1）C

redi

tor

Borro

wer

Gen

eral

ledg

erac

coun

t（

Not

e 2）

Is a

rela

ted

party

Max

imum

outs

tand

ing

bala

nce

durin

gye

ar e

nded

Dec

embe

r 31,

2017

(Not

e 3)

Bala

nce

atD

ecem

ber 3

1,20

17（

Not

e 8）

Act

ual a

mou

ntdr

awn

dow

nIn

tere

st r

ate

Nat

ure

oflo

an（

Not

e 4）

Am

ount

of

trans

actio

nsw

ith th

ebo

rrow

er（

Not

e 5）

3EC

OV

EEn

viro

nmen

t C

orp.

CTC

I Cor

p.O

ther

rece

ivab

les-

rela

ted

parti

es

Yes

430,

000

$

430,

000

$

-$

-2

-$

Fo

rop

erat

iona

lne

ed

-$

-

-$

468,

364

$

1,87

3,45

6$

-

4EC

OV

E W

aste

Man

agem

ent

Cor

pora

tion.

CTC

I Cor

p.O

ther

rece

ivab

les-

rela

ted

parti

es

Yes

14,0

00

14

,000

-

-2

-

Fo

rop

erat

iona

lne

ed

-

-

-

10,0

97

40,3

90

-

4EC

OV

E W

aste

Man

agem

ent

Cor

pora

tion.

CTC

I M

achi

nery

Cor

p.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

14,0

00

14

,000

7,00

0

1.01

%2

-

Fo

rop

erat

iona

lne

ed

-

-

-

10,0

97

40,3

90

-

4EC

OV

E W

aste

Man

agem

ent

Cor

pora

tion.

CTC

I Sm

art

Eng

inee

ring

Cor

pora

tion

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

14,0

00

14

,000

7,00

0

1.01

%2

-

Fo

rop

erat

iona

lne

ed

-

-

-

10,0

97

40,3

90

-

5EC

OV

EEn

viro

nmen

tal

Serv

ices

Cor

pora

tion.

CTC

I Cor

p.O

ther

rece

ivab

les-

rela

ted

parti

es

Yes

156,

000

140,

000

-

-

2-

For

oper

atio

nal

need

-

-

-

92,1

30

368,

519

-

5EC

OV

EEn

viro

nmen

tal

Serv

ices

Cor

pora

tion.

CTC

I Res

ourc

es

Engi

neer

ing

In

c.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

156,

000

140,

000

-

-

2-

For

oper

atio

nal

need

-

-

-

92,1

30

368,

519

-

5EC

OV

EEn

viro

nmen

tal

Serv

ices

Cor

pora

tion.

CTC

I Sm

art

Eng

inee

ring

Cor

pora

tion

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

156,

000

140,

000

-

-

2-

For

oper

atio

nal

need

-

-

-

92,1

30

368,

519

-

5EC

OV

EEn

viro

nmen

tal

Serv

ices

Cor

pora

tion.

CTC

I M

achi

nery

Cor

p.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

156,

000

140,

000

-

-

2-

For

oper

atio

nal

need

-

-

-

92,1

30

368,

519

-

Tabl

e 1

Page

3

55971

矩形

55971

打字機

380

Item

Val

ue

Allo

wan

cefo

rdo

ubtfu

l a

ccou

nts

Col

late

ral

Lim

it on

loan

s g

rant

ed to

a si

ngle

par

ty（

Not

e 7）

Cei

ling

on to

tal l

oans

gran

ted

（N

ote

7）Fo

otno

te

Rea

son

for s

hort-

term

fin

anci

ng（

Not

e 6）

No.

（N

ote

1）C

redi

tor

Borro

wer

Gen

eral

ledg

erac

coun

t（

Not

e 2）

Is a

rela

ted

party

Max

imum

outs

tand

ing

bala

nce

durin

gye

ar e

nded

Dec

embe

r 31,

2017

(Not

e 3)

Bala

nce

atD

ecem

ber 3

1,20

17（

Not

e 8）

Act

ual a

mou

ntdr

awn

dow

nIn

tere

st r

ate

Nat

ure

oflo

an（

Not

e 4）

Am

ount

of

trans

actio

nsw

ith th

ebo

rrow

er（

Not

e 5）

6C

TCI S

hang

hai

Co.

, Ltd

.C

TCI T

radi

ng S

hang

hai C

o.,

Ltd

.

Oth

erre

ceiv

able

s-re

late

dpa

rties

Yes

91,5

78$

91,5

78$

52

,199

$

5.1%

2-

$

For

oper

atio

nal

need

-$

-

-$

169,

455

$

169,

455

$

-

Not

e 1:

The

num

bers

fille

d in

for t

he lo

ans p

rovi

ded

by th

e C

ompa

ny o

r sub

sidia

ries a

re a

s fol

low

s:

(1

)The

Com

pany

is ‘0

’.

(2

)The

subs

idia

ries a

re n

umbe

red

in o

rder

star

ting

from

‘1’.

Not

e 2:

Fill

in th

e na

me

of a

ccou

nt in

whi

ch th

e lo

ans a

re re

cogn

ised,

such

as r

ecei

vabl

es-re

late

d pa

rties

, cur

rent

acc

ount

with

stoc

khol

ders

, pre

paym

ents

, tem

pora

ry p

aym

ents

, etc

.N

ote

3: F

ill in

the

max

imum

out

stan

ding

bal

ance

of l

oans

to o

ther

s dur

ing

the

year

end

ed D

ecem

ber 3

1, 2

017

Not

e 4:

.The

num

bers

fille

d in

for t

he n

atur

e of

loan

s are

as f

ollo

ws:

　　　

(1) B

usin

ess a

ssoc

iatio

n is

labe

led

as “

1”　　　

(2) S

hort-

term

fina

ncin

g is

labe

led

as “

2”.

Not

e 5:

Fill

in th

e am

ount

of b

usin

ess t

rans

actio

ns w

hen

natu

re o

f the

loan

is re

late

d to

bus

ines

s tra

nsac

tions

, whi

ch is

the

amou

nt o

f bus

ines

s tra

nsac

tions

occ

urre

d be

twee

n th

e cr

edito

r and

bor

row

er in

the

curre

nt y

ear.

Not

e 6:

Fill

in p

urpo

se o

f loa

n w

hen

natu

re o

f loa

n be

long

s to

shor

t-ter

m fi

nanc

ing,

for e

xam

ple,

repa

ymen

t of l

oan,

acq

uisit

ion

of e

quip

men

t, w

orki

ng c

apita

l, et

c.N

ote

7: T

he c

alcu

latio

n an

d am

ount

on

ceili

ng o

f loa

ns a

re a

s fol

low

s:　　　

[The

com

pany

]　　　

(1) T

he li

mit

on lo

ans g

rant

ed to

a si

ngle

par

ty sh

all n

ot e

xcee

d 20

% o

f the

Com

pany

's ne

t ass

ets v

alue

.　　　

(2) T

he c

eilin

g on

tota

l loa

ns sh

all n

ot e

xcee

d 40

% o

f the

Com

pany

's ne

t ass

ets v

alue

.　　　

[Dom

estic

subs

idia

ries a

nd o

vers

eas s

ubsid

iarie

s]　　　

(1) T

he li

mit

on lo

ans g

rant

ed to

a si

ngle

par

ty b

y do

mes

tic su

bsid

iarie

s and

ove

rsea

s sub

sidia

ries s

hall

not e

xcee

d 10

% a

nd 4

0% o

f the

Com

pany

's ne

t val

ue, r

espe

ctiv

ely.

　　　

(2) T

he c

eilin

g on

tota

l loa

ns sh

all n

ot e

xcee

d 40

% o

f the

Com

pany

's ne

t ass

ets v

alue

.N

ote

8: T

he a

mou

nts o

f fun

ds to

be

loan

ed to

oth

ers w

hich

hav

e be

en a

ppro

ved

by th

e bo

ard

of d

irect

ors o

f a p

ublic

com

pany

in a

ccor

danc

e w

ith A

rticl

e 14

, Ite

m 1

of t

he “

Reg

ulat

ions

Gov

erin

g Lo

anin

g of

Fun

ds a

nd M

akin

g

of

End

orse

men

ts/G

uara

ntee

s by

publ

ic C

ompa

nies

” sh

ould

be

incl

uded

in it

s pub

lishe

d ba

lanc

e of

loan

s to

othe

rs a

t the

end

of t

he re

porti

ng p

erio

d to

reve

al th

e ris

k of

loan

ing

the

publ

ic c

ompa

ny b

ears

, eve

n th

ough

they

have

not

yet

bee

n ap

prop

riate

d. H

owev

er, t

his b

alan

ce sh

ould

exc

lude

d th

e lo

ans r

epai

d w

hen

repa

ymen

ts a

re d

one

subs

eque

ntly

to re

flect

the

risk

adju

stm

ent.

In a

dditi

on, i

f the

boa

rd o

f dire

ctor

s of a

pub

lic c

ompa

ny h

as

auth

orise

d th

e ch

airm

an to

loan

fund

s in

inst

alm

ents

or i

n re

volv

ing

with

in c

erta

in li

nes a

nd w

ithin

one

yea

r in

acco

rdan

ce w

ith A

rticl

e 14

, Ite

m 2

,of t

he “

Reg

ulat

ions

Gov

erni

ng L

oani

ng o

f Fun

ds a

nd M

akin

g of

End

orse

men

ts/

Gua

rant

ees b

y Pu

blic

Com

pani

es”,

the

publ

ished

bal

ance

of l

oans

to o

ther

s at t

he e

nd o

f the

repo

rting

per

iod

shou

ld a

lso in

clud

e th

ese

lines

of l

oani

ng a

ppro

ved

by th

e bo

ard

of d

irect

ors,

and

thes

e lin

es o

f loa

ning

shou

ld n

ot b

e

ex

clud

ed fr

om th

is ba

lanc

e ev

en th

ough

the

loan

s are

repa

id su

bseq

uent

ly, f

or ta

king

into

con

sider

atio

n th

ey c

ould

be

loan

ed a

gain

ther

eafte

r.

Tabl

e 1

Page

4

55971

矩形

55971

打字機

381

Com

pany

nam

e

Rel

atio

nshi

pw

ith th

een

dors

er/

guar

anto

r（

Not

e 2）

0C

TCI C

orp.

Uni

vers

al E

ngin

eerin

g

(BV

I) C

orpo

ratio

n3

53,8

56,0

96$

31,5

06$

29

,848

$

-

$

-

$

0.

17%

107,

712,

192

$

Y

NN

-

0C

TCI C

orp.

CTC

I Eng

inee

ring

&

Con

stru

ctio

n Sd

n.

Bhd

.

353

,856

,096

1,

868,

643

1,86

8,64

3

1,38

3,61

3

-

10

.41%

107,

712,

192

Y

NN

-

0C

TCI C

orp.

CTC

I Mac

hine

ry C

orp.

253

,856

,096

36

9,97

4

366,

829

292,

752

-

2.

04%

107,

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Y

NN

-

0C

TCI C

orp.

CIN

DA

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inee

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& C

onst

ruct

ion

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ate

Lim

ited

353

,856

,096

2,

247,

063

2,12

0,76

8

923,

118

-

11

.81%

107,

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Y

NN

-

0C

TCI C

orp.

CTC

I Am

eric

as, I

nc.

353

,856

,096

30

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0

298,

480

-

-

1.66

%10

7,71

2,19

2

YN

N-

0C

TCI C

orp.

CTC

I Sin

gapo

re P

te.

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d.2

53,8

56,0

96

2,24

4,37

9

2,

113,

499

1,

471,

376

-

11.7

7%10

7,71

2,19

2

YN

N-

0C

TCI C

orp.

CTC

I Ove

rsea

s C

o., L

td.

353

,856

,096

6,

978,

145

6,90

7,27

7

3,41

7,38

8

-

38

.48%

107,

712,

192

Y

NN

-

0C

TCI C

orp.

CTC

I Ara

bia

Ltd.

353

,856

,096

5,

114,

659

3,60

0,41

4

2,96

5,60

5

-

20

.06%

107,

712,

192

Y

NN

-

0C

TCI C

orp.

CTC

I Bei

jing

Co.

, L

td.

353

,856

,096

64

6,51

0

289,

658

52,6

54

-

1.

61%

107,

712,

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Y

NY

-

0C

TCI C

orp.

CTC

I Sha

ngha

i C

o., L

td.

353

,856

,096

51

4,87

0

319,

506

82,0

89

-

1.

78%

107,

712,

192

Y

NY

-

0C

TCI C

orp.

CC

JV P

1 E&

C S

dn.

B

hd.

253

,856

,096

1,

271,

861

1,17

8,99

6

-

-

6.57

%10

7,71

2,19

2

YN

N-

Am

ount

of

endo

rsem

ents

/gu

aran

tees

secu

red

with

colla

tera

l

Rat

io o

fac

cum

ulat

eden

dors

emen

t/gu

aran

tee

amou

nt to

net

asse

t va

lue

ofth

e en

dors

er/

guar

anto

rco

mpa

ny

Cei

ling

onto

tal a

mou

nt o

fen

dors

emen

ts/

guar

ante

espr

ovid

ed（

Not

e 3）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

pare

ntco

mpa

ny to

subs

idia

ry（

Not

e 7）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

subs

idia

ry to

pare

ntco

mpa

ny（

Not

e 7）

Out

stan

ding

endo

rsem

ent/

guar

ante

esam

ount

at

Dec

embe

r 31,

2017

（N

ote

5）CTC

I Cor

pora

tion

Prov

isio

n of

end

orse

men

ts a

nd g

uara

ntee

s to

othe

rs

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Tabl

e 2

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

Num

ber

（N

ote

1）En

dors

er/

guar

anto

r

Party

bei

ngen

dors

ed/g

uara

ntee

dLi

mit

onen

dors

emen

ts/

guar

ante

espr

ovid

ed fo

r asi

ngle

par

ty（

Not

e 3）

Max

imum

outs

tand

ing

endo

rsem

ent/

guar

ante

eam

ount

as o

fD

ecem

ber 3

1,20

17（

Not

e 4）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

toth

e pa

rty in

Mai

nlan

dC

hina

（N

ote

7）Fo

otno

te

Act

ual a

mou

ntdr

awn

dow

n（

Not

e 6）

Table 2 Page 1

55971

矩形

55971

打字機

382

Com

pany

nam

e

Rel

atio

nshi

pw

ith th

een

dors

er/

guar

anto

r（

Not

e 2）

Am

ount

of

endo

rsem

ents

/gu

aran

tees

secu

red

with

colla

tera

l

Rat

io o

fac

cum

ulat

eden

dors

emen

t/gu

aran

tee

amou

nt to

net

asse

t va

lue

ofth

e en

dors

er/

guar

anto

rco

mpa

ny

Cei

ling

onto

tal a

mou

nt o

fen

dors

emen

ts/

guar

ante

espr

ovid

ed（

Not

e 3）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

pare

ntco

mpa

ny to

subs

idia

ry（

Not

e 7）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

subs

idia

ry to

pare

ntco

mpa

ny（

Not

e 7）

Out

stan

ding

endo

rsem

ent/

guar

ante

esam

ount

at

Dec

embe

r 31,

2017

（N

ote

5）N

umbe

r（

Not

e 1）

Endo

rser

/gu

aran

tor

Party

bei

ngen

dors

ed/g

uara

ntee

dLi

mit

onen

dors

emen

ts/

guar

ante

espr

ovid

ed fo

r asi

ngle

par

ty（

Not

e 3）

Max

imum

outs

tand

ing

endo

rsem

ent/

guar

ante

eam

ount

as o

fD

ecem

ber 3

1,20

17（

Not

e 4）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

toth

e pa

rty in

Mai

nlan

dC

hina

（N

ote

7）Fo

otno

te

Act

ual a

mou

ntdr

awn

dow

n（

Not

e 6）

0C

TCI C

orp.

CTC

I Sm

art

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inee

ring

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pora

tion

253

,856

,096

$

30

,187

$

27,9

83$

-$

-$

0.16

%10

7,71

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2$

YN

N-

0C

TCI C

orp.

CTC

I (Th

aila

nd)

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, Ltd

.3

53,8

56,0

96

2,54

5,53

8

2,

404,

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1,

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9%10

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YN

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0C

TCI C

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CB

&I-C

TCI B

.V.

653

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6,

822,

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6,32

4,75

5

6,32

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-

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.23%

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NN

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TCI C

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I Che

mic

al C

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353

,856

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20

,527

19,0

28

12,0

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NN

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0C

TCI C

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CTC

I & H

EC W

ater

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ines

s Co.

, Ltd

.6

53,8

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10

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%10

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653

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76

9,30

0

769,

300

390,

040

-

4.

29%

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NN

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TCI C

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I Mal

aysi

a Sd

n.B

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353

,856

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1,

261,

313

873,

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55,9

49

-

4.

86%

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Y

NN

-

0C

TCI C

orp.

CIP

EC C

onst

ruct

ion

Inc.

353

,856

,096

86

,999

86,9

99

86,9

99

-

0.

48%

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NN

-

1C

TCI A

dvan

ced

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stem

s Inc

.C

entu

ry A

head

Ltd

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539,

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19

,319

17,9

09

-

-

3.32

%1,

079,

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NN

N-

2C

TCI S

mar

t E

ngin

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g C

orpo

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n

CTC

I Tra

ding

Sha

ngha

i Co.

, L

td.

580

4,09

6

157,

134

-

-

-

-1,

608,

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NN

Y-

2C

TCI S

mar

t E

ngin

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g C

orpo

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n

CTC

I Sha

ngha

i C

o., L

td.

580

4,09

6

502,

493

25

0,11

4

25

0,11

4

-

93.3

1%1,

608,

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NN

Y-

2C

TCI S

mar

t E

ngin

eerin

g C

orpo

ratio

n

CTC

I Mac

hine

ry C

orp.

580

4,09

6

1,69

8,80

0

1,

698,

800

1,

698,

800

-

633.

80%

1,60

8,19

2

N

NN

-

Table 2 Page 2

55971

矩形

55971

打字機

383

Com

pany

nam

e

Rel

atio

nshi

pw

ith th

een

dors

er/

guar

anto

r（

Not

e 2）

Am

ount

of

endo

rsem

ents

/gu

aran

tees

secu

red

with

colla

tera

l

Rat

io o

fac

cum

ulat

eden

dors

emen

t/gu

aran

tee

amou

nt to

net

asse

t va

lue

ofth

e en

dors

er/

guar

anto

rco

mpa

ny

Cei

ling

onto

tal a

mou

nt o

fen

dors

emen

ts/

guar

ante

espr

ovid

ed（

Not

e 3）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

pare

ntco

mpa

ny to

subs

idia

ry（

Not

e 7）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

by

subs

idia

ry to

pare

ntco

mpa

ny（

Not

e 7）

Out

stan

ding

endo

rsem

ent/

guar

ante

esam

ount

at

Dec

embe

r 31,

2017

（N

ote

5）N

umbe

r（

Not

e 1）

Endo

rser

/gu

aran

tor

Party

bei

ngen

dors

ed/g

uara

ntee

dLi

mit

onen

dors

emen

ts/

guar

ante

espr

ovid

ed fo

r asi

ngle

par

ty（

Not

e 3）

Max

imum

outs

tand

ing

endo

rsem

ent/

guar

ante

eam

ount

as o

fD

ecem

ber 3

1,20

17（

Not

e 4）

Prov

isio

n of

endo

rsem

ents

/gu

aran

tees

toth

e pa

rty in

Mai

nlan

dC

hina

（N

ote

7）Fo

otno

te

Act

ual a

mou

ntdr

awn

dow

n（

Not

e 6）

3C

TCI M

achi

nery

Cor

p.C

TCI S

mar

t E

ngin

eerin

g C

orpo

ratio

n

51,

483,

440

$

560,

000

$

56

0,00

0$

56

0,00

0$

-$

113.

25%

2,96

6,88

0$

N

NN

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4C

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hem

ical

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p.C

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690,

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24

5,00

0

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000

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10

6.42

%1,

381,

367

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4C

TCI C

hem

ical

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p.C

TCI C

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18

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5C

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hang

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radi

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.

21,

270,

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98

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23

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7

N

NY

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vers

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CTC

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eric

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35,

440,

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5,93

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81,4

44

NN

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7C

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inee

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I Sm

art

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nviro

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69,

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-

Table 2 Page 3

55971

矩形

55971

打字機

384

Not

e 1:

The

num

bers

fille

d in

for t

he e

ndor

sem

ents/

guar

ante

es p

rovi

ded

by th

e C

ompa

ny o

r sub

sidi

arie

s are

as f

ollo

ws:

(1)T

he C

ompa

ny is

‘0’.

(2)T

he su

bsid

iarie

s are

num

bere

d in

ord

er st

artin

g fro

m ‘1

’.

Not

e 2:

Rel

atio

nshi

p be

twee

n th

e en

dors

er/g

uara

ntor

and

the

party

bei

ng e

ndor

sed/

guar

ante

ed is

cla

ssifi

ed in

to th

e fo

llow

ing

six

cate

gorie

s; fi

ll in

the

num

ber o

f cat

egor

y ea

ch c

ase

belo

ngs t

o:

(1)H

avin

g bu

sines

s rel

atio

nshi

p.

(2)T

he e

ndor

ser/g

uara

ntor

par

ent c

ompa

ny o

wns

dire

ctly

mor

e th

an 5

0% v

otin

g sh

ares

of t

he e

ndor

sed/

guar

ante

ed su

bsid

iary

.

(3)T

he e

ndor

ser/g

uara

ntor

par

ent c

ompa

ny a

nd it

s sub

sidia

ries j

oint

ly o

wn

mor

e th

an 5

0% v

otin

g sh

ares

of t

he e

ndor

sed/

guar

ante

ed c

ompa

ny.

(4)T

he e

ndor

sed/

guar

ante

ed p

aren

t com

pany

dire

ctly

or i

ndire

ctly

ow

ns m

ore

than

50%

vot

ing

shar

es o

f the

end

orse

r/gua

rant

or su

bsid

iary

.

(5)M

utua

l gua

rant

ee o

f the

trad

e as

requ

ired

by th

e co

nstru

ctio

n co

ntra

ct.

(6)D

ue to

join

t ven

ture

, eac

h sh

areh

olde

r pro

vide

s end

orse

men

ts/gu

aran

tees

to th

e en

dors

ed/g

uara

ntee

d co

mpa

ny in

pro

porti

on to

its o

wne

rshi

p.

Not

e 3:

Fill

in li

mit

on e

ndor

sem

ents/

guar

ante

es p

rovi

ded

for a

sing

le p

arty

and

cei

ling

on to

tal a

mou

nt o

f end

orse

men

ts/g

uara

ntee

s pro

vide

d as

pre

scrib

ed in

the

endo

rser

/gua

rant

or c

ompa

ny’s

“Pr

oced

ures

for P

rovi

sion

of E

ndor

sem

ents

and

Gua

rant

ees”

,

and

state

eac

h in

divi

dual

par

ty to

whi

ch th

e en

dors

emen

ts/gu

aran

tees

hav

e be

en p

rovi

ded

and

the

calc

ulat

ion

for c

eilin

g on

tota

l am

ount

of e

ndor

sem

ents/

guar

ante

es p

rovi

ded

in th

e fo

otno

te.

　

　[T

he c

ompa

ny]

　　　

(1)T

he li

mit

on e

ndor

sem

ents

and

guar

ante

es g

rant

ed to

a si

ngle

par

ty sh

all n

ot e

xcee

d 30

0% o

f the

Com

pany

’s n

et a

sset

s val

ue in

last

fina

ncia

l sta

tem

ents

whi

ch w

as re

view

ed o

r aud

ited

by a

ccou

ntan

t.

　　　

(2)T

he c

eilin

g on

tota

l end

orse

men

ts a

nd g

uara

ntee

s sha

ll no

t exc

eed

600%

of t

he C

ompa

ny’s

net

ass

ets v

alue

in la

st fi

nanc

ial s

tate

men

ts w

hich

was

revi

ewed

or a

udite

d by

acc

ount

ant.

　

　[D

omes

tic su

bsid

iarie

s and

ove

rsea

s sub

sidi

arie

s]

　　　

(1)T

he li

mit

on e

ndor

sem

ents

and

guar

ante

es g

rant

ed to

a si

ngle

par

ty sh

all n

ot e

xcee

d 10

0% to

300

% o

f the

Com

pany

's ne

t ass

ets v

alue

in la

st fi

nanc

ial s

tate

men

ts w

hich

was

revi

ewed

or a

udite

d by

acc

ount

ant.

　　　

(2)T

he c

eilin

g on

tota

l end

orse

men

ts a

nd g

uara

ntee

s sha

ll no

t exc

eed

200%

to 6

00%

of t

he C

ompa

ny's

net a

sset

s val

ue in

last

fina

ncia

l sta

tem

ents

whi

ch w

as re

view

ed o

r aud

ited

by a

ccou

ntan

t.

Not

e 4:

Fill

in th

e ye

ar-to

-dat

e m

axim

um o

utst

andi

ng b

alan

ce o

f end

orse

men

ts/g

uara

ntee

s pro

vide

d as

of t

he re

porti

ng p

erio

d.

Not

e 5:

Onc

e en

dors

emen

t/gua

rant

ee c

ontra

cts o

r pro

miss

ory

note

s are

sign

ed/is

sued

by

the

endo

rser

/gua

rant

or c

ompa

ny to

the

bank

s, th

e en

dors

er/g

uara

ntor

com

pany

bea

rs e

ndor

sem

ent/g

uara

ntee

liab

ilitie

s. A

nd a

ll ot

her e

vent

s inv

olve

end

orse

men

ts an

d gu

aran

tees

shou

ld b

e in

clud

ed in

the

bala

nce

of o

utsta

ndin

g en

dors

emen

ts an

d gu

aran

tees

.

Not

e 6:

Fill

in th

e ac

tual

am

ount

of e

ndor

sem

ents

/gua

rant

ees u

sed

by th

e en

dors

ed/g

uara

ntee

d co

mpa

ny.

Not

e 7:

Fill

in ‘Y

’ for

thos

e ca

ses o

f pro

visi

on o

f end

orse

men

ts/gu

aran

tees

by

liste

d pa

rent

com

pany

to su

bsid

iary

and

pro

visi

on b

y su

bsid

iary

to li

sted

par

ent c

ompa

ny, a

nd p

rovi

sion

to th

e pa

rty in

Mai

nlan

d C

hina

.

Tab

le 2

Pag

e 4

55971

矩形

55971

打字機

385

Typ

e of

mar

keta

ble

secu

ritie

sN

ame

of In

vest

ee c

ompa

ny

Num

ber o

f sha

res/

deno

min

atio

nsB

ook

valu

e(N

ote

3) O

wne

rshi

p (%

)M

arke

t val

ueC

TCI C

orp.

Fund

Fuh

Hw

a C

hina

New

Eco

nom

yB

alan

ceN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

500,

000

5,00

0$

-

5,51

0$

-

CTC

I Cor

p.Fu

ndM

IRA

E A

SSET

ASI

A G

REA

TC

ON

SUM

ER E

QU

ITY

FU

ND

N/A

Fina

ncia

l ass

ets a

t fai

rva

lue

thro

ugh

prof

it or

loss

-cur

rent

22,5

69

10

,449

-

11,9

10

-

CTC

I Cor

p.Fu

ndA

berd

een

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bal-J

apan

ese

Smal

ler

Com

pani

es F

und

A2

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e C

urre

ncy

Expo

sure

USD

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Fina

ncia

l ass

ets a

t fai

rva

lue

thro

ugh

prof

it or

loss

-cur

rent

20,1

18

10

,766

-

12,1

18

-

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I Cor

p.Fu

ndB

lack

Roc

k G

loba

l Fun

d - E

urop

ean

Val

ue F

und

A2

USD

Hed

ged

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Fina

ncia

l ass

ets a

t fai

rva

lue

thro

ugh

prof

it or

loss

-cur

rent

12,4

38

4,

601

-

4,

533

-

CTC

I Cor

p.Fu

ndFu

bon

TWSE

Cor

pora

teG

over

nanc

e 10

0 ET

FN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

155,

000

3,10

0

-

3,23

0

-

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I Cor

p.Fu

ndFu

bon

US

Pref

erre

d St

ock

ETF

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ncia

l ass

ets a

t fai

rva

lue

thro

ugh

prof

it or

loss

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500,

000

10,0

00

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9,

880

-

43,9

16

47,1

81$

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djus

tmen

t3,

265

47

,181

$

C

TCI C

orp.

Bon

dsB

P C

apita

l PLC

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/AA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

curr

ent

2,00

0,00

0

10,1

32

-

9,

139

N

ote

5

CTC

I Cor

p.B

onds

Cay

man

Ton

Yi I

ndus

trial

N

/AA

vaila

ble-

for-s

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finan

cial

ass

ets-

curr

ent

15,0

00,0

00

75

,540

-

68,7

65

N

ote

5

85,6

72

77,9

04$

A

djus

tmen

t7,

768)

(

77

,904

$

C

TCI C

orp.

Com

mon

Sto

ckC

hina

Ste

el C

hem

ical

Cor

p.Th

e C

ompa

ny's

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iden

t is t

hesu

perv

isor

Ava

ilabl

e-fo

r-sal

efin

anci

al a

sset

s-cu

rren

t1,

776,

916

10

0,61

5$

-

22

6,55

7$

-

CTC

I Cor

p.C

omm

on S

tock

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tech

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rgy

Cor

pora

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The

Com

pany

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esid

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s the

dire

ctor

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ilabl

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anci

al a

sset

s-cu

rren

t2,

041,

018

85

,876

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30

-

CTC

I Cor

p.C

omm

on S

tock

Taiw

an C

emen

t Cor

p.N

/AA

vaila

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for-s

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ass

ets-

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1,80

0,00

0

68,4

48

-

65

,610

-

254,

939

32

8,49

7$

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djus

tmen

t73

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328,

497

$

CTC

I Cor

pora

tion

Hol

ding

of m

arke

tabl

e se

curit

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t the

end

of t

he p

erio

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ot in

clud

ing

subs

idia

ries,

asso

ciat

es a

nd jo

int v

entu

res)

Dec

embe

r 31,

201

7

Foot

note

（N

ote

4）Se

curit

ies h

eld

by

Rel

atio

nshi

p w

ith th

ese

curit

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ssue

r (N

ote

2)G

ener

alle

dger

acc

ount

Tabl

e 3

(Not

e 1)

As o

f Dec

embe

r 31,

201

7

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

Table 3 Page 1

55971

矩形

55971

打字機

386

Typ

e of

mar

keta

ble

secu

ritie

sN

ame

of In

vest

ee c

ompa

ny

Num

ber o

f sha

res/

deno

min

atio

nsB

ook

valu

e(N

ote

3) O

wne

rshi

p (%

)M

arke

t val

ueFo

otno

te（

Not

e 4）

Secu

ritie

s hel

d by

Rel

atio

nshi

p w

ith th

ese

curit

ies i

ssue

r (N

ote

2)G

ener

alle

dger

acc

ount

(Not

e 1)

As o

f Dec

embe

r 31,

201

7

CTC

I Cor

p.C

omm

on S

tock

Cor

e Pa

cific

City

Co.

, Ltd

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/AFi

nanc

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sset

sm

easu

red

at c

ost

- non

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rent

36,0

00,0

00

36

0,00

0$

2.26

190,

000

$

-

CTC

I Cor

p.C

omm

on S

tock

Ute

ch S

olar

Cor

p.Th

e C

ompa

ny is

the

Boa

rd o

f dire

ctor

Fina

ncia

l ass

ets

mea

sure

d at

cos

t- n

on-c

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nt

17,5

56,0

00

40

9,20

0

14.5

196

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CTC

I Cor

p.C

omm

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CD

IB &

Par

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vest

men

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p.

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Com

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irect

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nanc

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sset

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27,0

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0

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250,

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I Cor

p.C

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tock

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ltant

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300,

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p.C

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4,23

0,00

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132,

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3213

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3

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p.C

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tock

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g K

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p.N

/AFi

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00

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0)(

672,

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nves

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ndFS

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wan

Mon

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tN

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nanc

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s at f

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roug

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ofit

orlo

ss-c

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nt

516,

300

7,85

1$

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7,85

1$

-

CTC

I Inv

estm

ent

Cor

pora

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Fund

Fran

klin

Tem

plet

on su

noam

Mon

eyM

arke

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dN

/AFi

nanc

ial a

sset

s at f

air

valu

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roug

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ofit

orlo

ss-c

urre

nt

253,

377

2,60

3

-

2,60

3

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CTC

I Inv

estm

ent

Cor

pora

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Com

mon

Sto

ckG

inte

ch E

nerg

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orpo

ratio

nTh

e C

ompa

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Pres

iden

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he d

irect

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vaila

ble-

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curr

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277,

000

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1

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I Inv

estm

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ckC

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The

Com

pany

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ilabl

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efin

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sset

s-no

n cu

rren

t34

4,43

6

15

,551

0.

0515

,551

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I Inv

estm

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mon

Sto

ckG

loba

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283,

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men

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ass

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non

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elop

men

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I Adv

ance

d Sy

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men

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nC

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Com

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t75

9,00

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Table 3 Page 2

55971

矩形

55971

打字機

387

Typ

e of

mar

keta

ble

secu

ritie

sN

ame

of In

vest

ee c

ompa

ny

Num

ber o

f sha

res/

deno

min

atio

nsB

ook

valu

e(N

ote

3) O

wne

rshi

p (%

)M

arke

t val

ueFo

otno

te（

Not

e 4）

Secu

ritie

s hel

d by

Rel

atio

nshi

p w

ith th

ese

curit

ies i

ssue

r (N

ote

2)G

ener

alle

dger

acc

ount

(Not

e 1)

As o

f Dec

embe

r 31,

201

7

CTC

I Dev

elop

men

t C

orpo

ratio

nFu

ndFS

ITC

Tai

wan

Mon

ey M

arke

tN

/AFi

nanc

ial a

sset

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air

valu

e th

roug

h pr

ofit

orlo

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394,

553

6,00

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6,00

0$

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CTC

I Res

ourc

es E

ngin

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c.C

omm

on S

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tech

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The

Com

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I Res

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c.C

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2,64

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2,66

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Cor

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Fund

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C T

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3,74

9,54

5

57,0

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269,

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Envi

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p.Fu

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p.C

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1,97

5,02

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Envi

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tech

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-cur

rent

5

15,9

41

9,1

84-

9,1

84-

ECO

VE

Envi

ronm

ent

Cor

p.C

omm

on S

tock

Team

WIN

Opt

o-El

ectro

nics

Co.

, Ltd

.N

/AFi

nanc

ial a

sset

sm

easu

red

at c

ost

- non

-cur

rent

150,

000

475

2.

4647

5

-

ECO

VE

Envi

ronm

ent

Cor

p.C

omm

on S

tock

East

ern

Paci

fic E

nerg

y Sd

n. B

hd.

ECO

VE

Envi

ronm

ent

Cor

p.'s

Pres

iden

t is t

he d

irect

or

Fina

ncia

l ass

ets

mea

sure

d at

cos

t- n

on-c

urre

nt

10,0

00

68

10.0

068

-

Table 3 Page 3

55971

矩形

55971

打字機

388

Typ

e of

mar

keta

ble

secu

ritie

sN

ame

of In

vest

ee c

ompa

ny

Num

ber o

f sha

res/

deno

min

atio

nsB

ook

valu

e(N

ote

3) O

wne

rshi

p (%

)M

arke

t val

ueFo

otno

te（

Not

e 4）

Secu

ritie

s hel

d by

Rel

atio

nshi

p w

ith th

ese

curit

ies i

ssue

r (N

ote

2)G

ener

alle

dger

acc

ount

(Not

e 1)

As o

f Dec

embe

r 31,

201

7

ECO

VE

Envi

ronm

enta

l S

ervi

ces C

orpo

ratio

nC

omm

on S

tock

CTC

I Cor

p.Th

e C

ompa

nyA

vaila

ble-

for-s

ale

finan

cial

ass

ets -

cur

rent

1,02

8

46$

-

46$

-

ECO

VE

Envi

ronm

enta

l S

ervi

ces C

orpo

ratio

nC

omm

on S

tock

Taiw

an C

emen

t Cor

p.N

/AA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

curr

ent

1,13

8,15

6

41,4

86

-

41

,486

-

ECO

VE

Envi

ronm

enta

l S

ervi

ces C

orpo

ratio

nC

omm

on S

tock

Gin

tech

Ene

rgy

Cor

pora

tion

ECO

VE

Envi

ronm

ent

Cor

p.'s

Pres

iden

t is t

he d

irect

or

Ava

ilabl

e-fo

r-sal

efin

anci

al a

sset

s-cu

rren

t64

2,13

5

11

,430

-

11,4

30

-

ECO

VE

Envi

ronm

enta

l S

ervi

ces C

orpo

ratio

nB

onds

BP

Cap

ital P

LCN

/AA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

curr

ent

6,00

0,00

0

27,4

17

-

27

,417

Not

e 5

ECO

VE

Envi

ronm

enta

l S

ervi

ces C

orpo

ratio

nFu

ndFr

ankl

in T

empl

eton

Sin

oam

Mon

eyM

arke

t Fun

dN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

18,0

13,0

95

18

5,05

4

-

18

5,05

4

-

ECO

VE

Mio

ali E

nerg

y C

orpo

ratio

nFu

ndPr

uden

tial F

inan

cial

Mon

ey M

arke

tN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

445,

647

7,00

7

-

7,00

7

-

ECO

VE

Mio

ali E

nerg

y C

orpo

ratio

nFu

ndFS

ITC

Tai

wan

Mon

ey M

arke

tN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

230,

205

3,50

1

-

3,50

1

-

CTC

I (Th

aila

nd) C

o.,

Ltd

.C

omm

on S

tock

CH

IYO

DA

(Tha

iland

) Co.

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.N

/AFi

nanc

ial a

sset

sm

easu

red

at c

ost

- non

-cur

rent

3,60

0

329

9.

00

32

9

-

Cro

wn

Asi

a-2

Inv

estm

ent L

imite

dC

omm

on S

tock

CTC

I Cor

p.Th

e C

ompa

nyA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

non

curr

ent

500

24

-

24

-

CTC

I Adv

ance

d S

yste

ms I

nc.

Fund

FSIT

C T

aiw

an M

oney

Mar

ket

N/A

Fina

ncia

l ass

ets a

t fai

rva

lue

thro

ugh

prof

it or

loss

-cur

rent

3,94

5,57

7

60,0

01

-

60

,001

-

CTC

I Adv

ance

d S

yste

ms I

nc.

Fund

Jih

Sun

Mon

ey M

arke

t Fun

dN

/AFi

nanc

ial a

sset

s at f

air

valu

e th

roug

h pr

ofit

orlo

ss-c

urre

nt

1,36

1,45

8

20,0

51

-

20

,051

-

CTC

I Adv

ance

d S

yste

ms I

nc.

Com

mon

Sto

ckTa

iwan

Cem

ent C

orp.

N/A

Ava

ilabl

e-fo

r-sal

efin

anci

al a

sset

s-cu

rren

t82

5,98

0

30

,107

-

30,1

07

-

CTC

I Adv

ance

d S

yste

ms I

nc.

Com

mon

Sto

ckG

inte

ch E

nerg

y C

orpo

ratio

nTh

e C

ompa

ny's

Pres

iden

t is t

he d

irect

orA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

curr

ent

737,

000

13,1

19

-

13

,119

-

CTC

I Adv

ance

d S

yste

ms I

nc.

Bon

dsB

AN

K O

F C

HIN

A L

TD P

AR

ISN

/AA

vaila

ble-

for-s

ale

finan

cial

ass

ets-

curr

ent

6,00

0,00

0

27,2

34

-

27

,234

Not

e 5

Not

e 1:

Mar

keta

ble

secu

ritie

s in

the

tabl

e re

fer t

o st

ocks

, bon

ds, b

enef

icia

ry c

ertif

icat

es a

nd o

ther

rela

ted

deriv

ativ

e se

curit

ies.

Not

e 2:

Lea

ve th

e co

lum

n bl

ank

if th

e is

suer

of m

arke

tabl

e se

curit

ies i

s non

-rela

ted

party

.N

ote

3: F

ill in

the

book

val

ue w

ithou

t ded

uctio

n of

allo

wan

ce fo

r val

uatio

n lo

ss o

f the

mar

keta

ble

secu

ritie

s.N

ote

4: T

he n

umbe

r of s

hare

s of s

ecur

ities

and

thei

r am

ount

s ple

dged

as s

ecur

ity o

r ple

dged

for l

oans

and

thei

r res

trict

ions

on

use

unde

r som

e ag

reem

ents

shou

ld b

e st

ated

in th

e fo

otno

te if

the

secu

ritie

s pre

sent

ed h

erei

n ha

ve su

ch c

ondi

tions

.N

ote

5: T

he b

ook

valu

e of

bon

ds d

enom

inat

ed in

CN

Y.

Table 3 Page 4

55971

矩形

55971

打字機

389

Tabl

e 4

Num

ber o

f sh

ares

( tho

usan

dsh

are)

Am

ount

Num

ber o

f sh

ares

( tho

usan

dsh

are)

Am

ount

Num

ber o

f sh

ares

( tho

usan

dsh

are)

Selli

ng p

rice

Boo

k va

lue

Gai

n on

disp

osal

Loss

on

disp

osal

Num

ber o

f sh

ares

( tho

usan

dsh

are)

Am

ount

CTC

I Cor

p.Ea

stsp

ring

Inc

wel

l poo

lM

oney

Mar

ket

Fina

ncia

l ass

ets a

tfa

irva

lue

thro

ugh

prof

itor

loss

-cur

rent

-

-

-

-$

22,2

28

30

0,00

0$

22

,228

300,

042

$

300,

000

$

42$

-$

-

-$

ECO

VE

Env

ironm

enta

l S

ervi

ces

Cor

pora

tion

Fran

klin

Tem

plet

onSi

noam

Mon

ey M

arke

tFu

nd

"-

-

25

,361

259,

500

35,0

71

36

0,00

0

42

,419

434,

643

434,

470

173

-

18

,013

185,

030

CTC

I Inv

estm

ent

Cor

pora

tion

Pow

erte

c En

ergy

Cor

p.In

vest

men

ts a

coun

ted

unde

r equ

ity m

etho

dPo

wer

tec

Ener

gyC

orp.

Oth

er re

late

dpa

rties

388,

232

92

8,31

5

22

2,47

1

667,

412

-

-

-

-

(111

,350

)

610,

703

1,48

4,37

7

Not

e 1:

Mar

keta

ble

secu

ritie

s in

the

tabl

e re

fer t

o st

ocks

, bon

ds, b

enef

icia

ry c

ertif

icat

es a

nd o

ther

rela

ted

deriv

ativ

e se

curit

ies.

Not

e 2:

Fill

in th

e co

lum

ns th

e co

unte

rpar

ty a

nd re

latio

nshi

p if

secu

ritie

s are

acc

ount

ed fo

r usi

ng th

e eq

uity

met

hod;

oth

erw

ise

leav

e th

e co

lum

ns b

lank

.N

ote

3: A

ggre

gate

pur

chas

es a

nd sa

les a

mou

nts s

houl

d be

cal

cula

ted

sepa

rate

ly a

t the

ir m

arke

t val

ues t

o ve

rify

whe

ther

they

indi

vidu

ally

reac

h N

T$30

0 m

illio

n or

20%

of p

aid-

in c

apita

l or m

ore.

Bal

ance

as a

t Jan

uary

1, 2

017

Add

ition

（N

ote

3）D

ispo

sal

（N

ote

3）B

alan

ce a

s at D

ecem

ber 3

1,20

17

Inve

stor

Mar

keta

ble

secu

ritie

s（

Not

e 1）

Gen

eral

ledg

er a

ccou

ntC

ount

erpa

rty（

Not

e 2）

Rel

atio

nshi

pw

ith t

he in

vest

or（

Not

e 2）

CTC

I Cor

pora

tion

Acq

uisi

tion

or sa

le o

f the

sam

e se

curit

y w

ith th

e ac

cum

ulat

ed c

ost e

xcee

ding

$30

0 m

illio

n or

20%

of t

he C

ompa

ny's

paid

-in c

apita

l

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

Table 4, Page 1

55971

矩形

55971

打字機

390

Purc

hase

s(s

ales

)A

mou

ntPe

rcen

tage

of t

otal

purc

hase

s (sa

les)

Cre

dit t

erm

Uni

t pric

e C

redi

t ter

m B

alan

ce

Perc

enta

ge o

fto

tal n

otes

/acc

ount

sre

ceiv

able

(pay

able

)C

TCI C

orp.

CTC

I Ove

rsea

s C

o., L

td.

Subs

idia

ryPu

rcha

ses

259,

197

$

0.

39%

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e25

1,70

4)($

(

1.

99%

)-

CTC

I Cor

p.C

TCI A

dvan

ced

Syst

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Inc

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s36

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rds s

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gpr

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and

colle

ctio

n te

rms

Neg

otia

ted

bybo

th p

artie

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o si

gnifi

cant

diffe

renc

e23

9,55

4)(

(

1.

89%

)-

CTC

I Am

eric

as, I

nc.

CTC

I Cor

pTh

e C

ompa

nyPu

rcha

ses

108,

762

0.

16%

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

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diffe

renc

e10

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9)(

(

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83%

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Was

te

Man

agem

ent C

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nEC

OV

E En

viro

nmen

tal

Se

rvic

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orpo

ratio

nSe

cond

-tier

subs

idia

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541,

683

0.

81%

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

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)(

(

0.77

%)

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CTC

I Cor

p.C

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and

colle

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Neg

otia

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th p

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o si

gnifi

cant

diffe

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e92

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(

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%)

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EVC

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E W

ujih

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pora

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pora

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hase

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9

0.38

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day

s afte

rse

ason

ally

billi

ngs

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otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e82

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)(

(

0.65

%)

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ECO

VE

Was

te

Man

agem

ent C

orpo

ratio

nEV

CO

VE

Wuj

ih

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gy C

orpo

ratio

nSe

cond

-tier

subs

idia

ryPu

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ses

406,

621

0.

61%

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e74

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)(

(

0.59

%)

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CTC

I Cor

p.EC

OV

E En

viro

nmen

tal

Se

rvic

es C

orpo

ratio

nSe

cond

-tier

subs

idia

ryPu

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ses

159,

287

0.

24%

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e48

,548

)(

(

0.38

%)

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ECO

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ali

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Cor

pora

tion

ECO

VE

Envi

ronm

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l

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ices

Cor

pora

tion

Seco

nd-ti

ersu

bsid

iary

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hase

s14

0,87

8

0.21

%30

day

s afte

rse

ason

ally

billi

ngs

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otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e23

,149

)(

(

0.18

%)

-

Foot

note

Purc

hase

r/sel

ler

Cou

nter

party

Rel

atio

nshi

pw

ith th

eco

unte

rpar

ty

Tran

sact

ion

Diff

eren

ces i

n tra

nsac

tion

term

s c

ompa

red

to th

ird p

arty

tran

sact

ion

Not

es/a

ccou

nts r

ecei

vabl

e (p

ayab

le)

(Exc

ept a

s oth

erw

ise

indi

cate

d)

CTC

I Cor

pora

tion

Purc

hase

s or s

ales

of g

oods

from

or t

o re

late

d pa

rties

reac

hing

NT$

100

mill

ion

or 2

0% o

f pai

d-in

cap

ital o

r mor

e

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Tabl

e 5

Expr

esse

d in

thou

sand

s of N

TD

Table 5 Page 1

55971

矩形

55971

打字機

391

Purc

hase

s(s

ales

)A

mou

ntPe

rcen

tage

of t

otal

purc

hase

s (sa

les)

Cre

dit t

erm

Uni

t pric

e C

redi

t ter

m B

alan

ce

Perc

enta

ge o

fto

tal n

otes

/acc

ount

sre

ceiv

able

(pay

able

)Fo

otno

tePu

rcha

ser/s

elle

rC

ount

erpa

rty

Rel

atio

nshi

pw

ith th

eco

unte

rpar

ty

Tran

sact

ion

Diff

eren

ces i

n tra

nsac

tion

term

s c

ompa

red

to th

ird p

arty

tran

sact

ion

Not

es/a

ccou

nts r

ecei

vabl

e (p

ayab

le)

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

CTC

I Che

mic

al C

orp.

Seco

nd-ti

ersu

bsid

iary

Purc

hase

s11

2,22

2$

0.17

%30

day

s afte

rse

ason

ally

billi

ngs

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e21

,876

)($

(

0.17

%)

-

CTC

I Cor

p.C

TCI (

Thai

land

) C

o., L

td.

Subs

idia

ryPu

rcha

ses

189,

461

0.

28%

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e18

,612

)(

(

0.15

%)

-

CTC

I Cor

p.C

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achi

nery

Cor

p.Su

bsid

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hase

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5,84

2

0.81

%St

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rds s

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gpr

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and

colle

ctio

n te

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Neg

otia

ted

bybo

th p

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sN

o si

gnifi

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e15

,986

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-

CTC

I Adv

ance

d Sy

stem

s

Inc.

CTC

I Cor

p.Th

e C

ompa

ny(S

ales

)36

4,40

3)(

(

0.

55%

)St

anda

rds s

ellin

gpr

ice

and

colle

ctio

n te

rms

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e23

9,55

4

1.89

%-

CTC

I Ove

rsea

s Co.

, Ltd

CTC

I Cor

p.Th

e C

ompa

ny(S

ales

)25

9,19

7)(

(

0.

39%

)St

anda

rds s

ellin

gpr

ice

and

colle

ctio

n te

rms

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e25

1,70

4

1.99

%-

CTC

I Cor

p.C

TCI A

mer

icas

, Inc

.Su

bsid

iary

(Sal

es)

108,

762)

(

(

0.16

%)

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e10

4,39

9

0.83

%-

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

ECO

VE

Was

te

Man

agem

ent C

orpo

ratio

nSe

cond

-tier

subs

idia

ry(S

ales

)54

1,68

3)(

(

0.

81%

)30

day

s afte

rse

ason

ally

billi

ngs

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e98

,012

0.77

%-

CTC

I Bei

jing

Co.

, Ltd

.C

TCI C

orp.

The

Com

pany

(Sal

es)

391,

983)

(

(

0.59

%)

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e92

,541

0.73

%-

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

EVC

OV

E W

ujih

En

ergy

Cor

pora

tion

Seco

nd-ti

ersu

bsid

iary

(Sal

es)

255,

219)

(

(

0.38

%)

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e82

,066

0.65

%-

EVC

OV

E W

ujih

En

ergy

Cor

pora

tion

ECO

VE

Was

te

Man

agem

ent C

orpo

ratio

nSe

cond

-tier

subs

idia

ry(S

ales

)(4

06,6

21)

(

0.

61%

)30

day

s afte

rse

ason

ally

billi

ngs

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e74

,952

0.59

%-

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

CTC

I Cor

p.Th

e C

ompa

ny(S

ales

)15

9,28

7)(

(

0.

24%

)30

day

s afte

rse

ason

ally

billi

ngs

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e48

,548

0.38

%-

Table 5 Page 2

55971

矩形

55971

打字機

392

Purc

hase

s(s

ales

)A

mou

ntPe

rcen

tage

of t

otal

purc

hase

s (sa

les)

Cre

dit t

erm

Uni

t pric

e C

redi

t ter

m B

alan

ce

Perc

enta

ge o

fto

tal n

otes

/acc

ount

sre

ceiv

able

(pay

able

)Fo

otno

tePu

rcha

ser/s

elle

rC

ount

erpa

rty

Rel

atio

nshi

pw

ith th

eco

unte

rpar

ty

Tran

sact

ion

Diff

eren

ces i

n tra

nsac

tion

term

s c

ompa

red

to th

ird p

arty

tran

sact

ion

Not

es/a

ccou

nts r

ecei

vabl

e (p

ayab

le)

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

ECO

VE

Mio

ali

En

ergy

Cor

pora

tion

Seco

nd-ti

ersu

bsid

iary

(Sal

es)

(140

,878

)$

(

0.21

%)

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e23

,149

$

0.18

%-

CTC

I Che

mic

al C

orp.

ECO

VE

Envi

ronm

enta

l

Serv

ices

Cor

pora

tion

Seco

nd-ti

ersu

bsid

iary

(Sal

es)

112,

222)

(

(

0.17

%)

30 d

ays a

fter

seas

onal

lybi

lling

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e21

,876

0.17

%-

CTC

I Mac

hine

ry C

orp.

CTC

I Cor

p.Th

e C

ompa

ny(S

ales

)53

5,84

2)(

(

0.

81%

)St

anda

rds s

ellin

gpr

ice

and

colle

ctio

n te

rms

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e15

,986

0.13

%-

CTC

I (Th

aila

nd )

Co.

, Ltd

.C

TCI C

orp.

The

Com

pany

(Sal

es)

189,

461)

(

(

0.28

%)

Stan

dard

s sel

ling

pric

e an

dco

llect

ion

term

s

Neg

otia

ted

bybo

th p

artie

sN

o si

gnifi

cant

diffe

renc

e18

,612

0.15

%-

Table 5 Page 3

55971

矩形

55971

打字機

393

Tabl

e 6

Am

ount

Act

ion

take

nC

TCI C

orp.

CTC

I Mac

hine

ry C

orp.

Subs

idia

ry38

8,00

0$

Not

e 1

-$

-

-

$

-

CTC

I Cor

p.C

TCI A

mer

icas

, Inc

.Su

bsid

iary

104,

399

2.

08-

-

-

-

CTC

I Adv

ance

d Sy

stem

s Inc

.C

TCI C

orp.

The

Com

pany

23

9,55

4

1.19

-

-

-

-

CTC

I Ove

rsea

s Co.

, Ltd

.C

TCI C

orp.

The

Com

pany

25

1,70

4

2.06

-

-

-

-

Not

e 1：

Oth

er a

ccou

nts r

ecei

vabl

e ar

ise

from

lend

ing

capi

tal.

Am

ount

col

lect

edsu

bseq

uent

to th

e b

alan

ce sh

eet d

ate

Allo

wan

ce fo

r d

oubt

ful a

ccou

nts

Cre

dito

rC

ount

erpa

rtyR

elat

ions

hip

with

the

coun

terp

arty

Bal

ance

as a

t Dec

embe

r 31,

2017

Turn

over

rate

Ove

rdue

rece

ivab

les

CTC

I Cor

pora

tion

Rec

eiva

bles

from

rela

ted

parti

es re

achi

ng N

T$10

0 m

illio

n or

20%

of p

aid-

in c

apita

l or m

ore

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

Table 6 Page 1

55971

矩形

55971

打字機

394

Gen

eral

ledg

er a

ccou

ntA

mou

ntTr

ansa

ctio

n te

rms

Perc

enta

ge o

f con

solid

ated

tota

l ope

ratin

gre

venu

es o

r tot

al a

sset

s (N

ote

3)0

CTC

I Cor

p.C

TCI A

mer

icas

, Inc

.1

Sale

s rev

enue

108,

762

$

Neg

otia

ted

by b

oth

parti

es0.

15%

1EV

CO

VE

Wuj

ih E

nerg

y C

orpo

ratio

nEC

OV

E W

aste

Man

agem

ent

Cor

pora

tion

3〃

406,

621

30 d

ays a

fter s

easo

nally

billi

ngs

0.57

%

2EC

OV

E En

viro

nmen

tal S

ervi

ces

Cor

pora

tion

ECO

VE

Was

te M

anag

emen

tC

orpo

ratio

n3

〃54

1,68

3

〃

0.76

%

2〃

ECO

VE

Mio

ali E

nerg

yC

orpo

ratio

n3

〃14

0,87

8

〃

0.20

%

2〃

EVC

OV

E W

ujih

Ene

rgy

Cor

pora

tion

3〃

255,

219

〃0.

36%

2〃

CTC

I Cor

p.2

〃15

9,28

7

〃

0.22

%4

CTC

I Che

mic

al C

orp.

ECO

VE

Envi

ronm

enta

lSe

rvic

es C

orpo

ratio

n3

〃11

2,22

2

〃

0.16

%

3C

TCI O

vers

eas C

o., L

td.

CTC

I Cor

p.2

〃25

9,19

7

N

egot

iate

d by

bot

h pa

rties

0.36

%

5C

TCI B

eijin

g C

o., L

td.

〃2

〃39

1,98

3

〃

0.55

%6

CTC

I Mac

hine

ry C

orp.

〃2

〃53

5,84

2

〃

0.75

%7

CTC

I Adv

ance

d Sy

stem

s Inc

.〃

2〃

364,

403

〃0.

51%

8C

TCI (

Thai

land

) C

o., L

td.

〃2

〃18

9,46

1

〃

0.26

%12

CTC

I Dev

elop

men

t Cor

pora

tion

〃2

〃27

0,57

0

〃

0.38

%0

CTC

I Cor

p.C

TCI A

mer

icas

, Inc

.1

Acc

ount

s rec

eiva

ble

104,

399

〃0.

15%

3C

TCI O

vers

eas C

o., L

tdC

TCI C

orp.

2〃

251,

704

〃0.

36%

7C

TCI A

dvan

ced

Syst

ems I

nc.

CTC

I Cor

p.2

〃23

9,55

4

〃

0.34

%0

CTC

I Cor

p.C

TCI M

achi

nery

Cor

p.1

Oth

er re

ceiv

able

s38

8,00

0

〃

0.55

%0

〃C

TCI O

vers

eas (

BV

I) C

o.an

d its

subs

idia

ries.

1A

dvan

ce c

onst

ruct

ion

rece

ipt

2,50

6,01

5

〃3.

57%

5C

TCI M

achi

nery

Cor

p.C

TCI C

orp.

2〃

2,93

8,27

0

〃4.

19%

7C

TCI R

esou

rces

Eng

inee

ring

Inc.

〃2

〃36

7,22

7

〃

0.52

%8

CTC

I (Th

aila

nd) C

o., L

d.〃

2〃

516,

716

〃0.

74%

0C

TCI C

orp.

CTC

I Dev

elop

men

t

Cor

pora

tion

1R

efun

dabl

e de

posi

ts12

8,30

0

N

ot a

pplic

able

0.18

%

0C

TCI C

orp.

CTC

I (Th

aila

nd )

Co.

, Ltd

.1

Gua

rant

ee2,

404,

072

〃

Not

app

licab

le0

〃C

CJV

P1

E&C

SD

N. B

HD

.1

〃1,

178,

996

〃

〃

0〃

CTC

I Ove

rsea

s Co.

, Ltd

1〃

6,90

7,27

7

〃〃

0〃

CIN

DA

Eng

inee

ring

&C

onst

ruct

ion

Priv

ate

Lim

ited

1〃

2,12

0,76

8

〃〃

Num

ber

(Not

e 1)

Com

pany

nam

eC

ount

erpa

rtyR

elat

ions

hip

(Not

e 2)

Tran

sact

ion

CTC

I Cor

pora

tion

Sign

ifica

nt in

ter-c

ompa

ny tr

ansa

ctio

ns d

urin

g th

e re

porti

ng y

ears

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Tabl

e 7

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

Table 7 Page 1

55971

矩形

55971

打字機

395

Gen

eral

ledg

er a

ccou

ntA

mou

ntTr

ansa

ctio

n te

rms

Perc

enta

ge o

f con

solid

ated

tota

l ope

ratin

gre

venu

es o

r tot

al a

sset

s (N

ote

3)N

umbe

r(N

ote

1)C

ompa

ny n

ame

Cou

nter

party

Rel

atio

nshi

p(N

ote

2)

Tran

sact

ion

0C

TCI C

orp.

CTC

I Ara

bia

Ltd.

1〃

3,60

0,41

4

〃〃

0〃

CTC

I Am

eric

as, I

nc.

1G

uara

ntee

298,

480

$

Not

app

licab

leN

ot a

pplic

able

0〃

CTC

I Bei

jing

Co.

, Ltd

.1

〃28

9,65

8

〃

〃

0〃

CTC

I Sha

ngha

i Co.

, Ltd

.1

〃31

9,50

6

〃

〃

0〃

CTC

I Sin

gapo

re P

te. L

td.

1〃

2,11

3,49

9

〃〃

0〃

CTC

I Mac

hine

ry C

orp.

1〃

366,

829

〃〃

0〃

CTC

I & H

EC W

ater

Bus

ines

sC

o., L

td.

1〃

102,

000

〃〃

0〃

CTC

I Eng

inee

ring

&C

onst

ruct

ion

Sdn.

Bhd

.1

〃1,

868,

643

〃

〃

0〃

CTC

I Mal

aysi

a Sd

n. B

hd.

1〃

873,

054

〃〃

0〃

CB

&I-C

TCI B

.V.

1〃

6,32

4,75

5

〃〃

4C

TCI C

hem

ical

Cor

p.C

TCI M

achi

nery

Cor

p.3

〃24

5,00

0

〃

〃

6C

TCI M

achi

nery

Cor

p.C

TCI S

mar

t Eng

inee

ring

Cor

pora

tion

3〃

560,

000

〃〃

9C

TCI S

mar

t Eng

inee

ring

Cor

pora

tion

CTC

I Sha

ngha

i Co.

, Ltd

.3

〃25

0,11

4

〃

〃

9〃

CTC

I Mac

hine

ry C

orp.

3〃

1,69

8,80

0

〃〃

7C

TCI R

esou

rces

Eng

inee

ring

Inc.

CTC

I Sm

art E

ngin

eerin

g C

orpo

ratio

n3

〃23

4,67

5

〃

〃

11EC

OV

E En

viro

nmen

t Cor

p.G

.D. D

evel

opm

ent C

ompa

ny3

〃63

1,25

3

〃

〃

Not

e 1:

The

num

bers

fille

d in

for t

he tr

ansa

ctio

n co

mpa

ny in

resp

ect o

f int

er-c

ompa

ny tr

ansa

ctio

ns a

re a

s fol

low

s:

(1

)Par

ent c

ompa

ny is

‘0’.

(2)T

he su

bsid

iarie

s are

num

bere

d in

ord

er st

artin

g fr

om ‘1

’.N

ote

2: R

elat

ions

hip

betw

een

trans

actio

n co

mpa

ny a

nd c

ount

erpa

rty is

cla

ssifi

ed in

to th

e fo

llow

ing

thre

e ca

tego

ries;

fill

in th

e nu

mbe

r of c

ateg

ory

each

cas

e be

long

s to

(If tr

ansa

ctio

ns b

etw

een

pare

nt c

ompa

ny a

nd su

bsid

iarie

s or b

etw

een

subs

idia

ries r

efer

to th

e sa

me

trans

actio

n, it

is n

ot re

quire

d to

dis

clos

e tw

ice.

For

exa

mpl

e, if

the

pare

nt c

ompa

ny h

as a

lread

y di

sclo

sed

its tr

ansa

ctio

n w

ith a

subs

idia

ry, t

hen

the

subs

idia

ry is

not

requ

ired

to d

iscl

ose

the

trans

actio

n;

for t

rans

actio

ns b

etw

een

two

subs

idia

ries,

if on

e of

the

subs

idia

ries h

as d

iscl

osed

the

trans

actio

n, th

en th

e ot

her i

s not

requ

ired

to d

iscl

ose

the

trans

actio

n.):

(1)P

aren

t com

pany

to su

bsid

iary

.

(2

)Sub

sidi

ary

to p

aren

t com

pany

.

(3

)Sub

sidi

ary

to su

bsid

iary

.N

ote

3: R

egar

ding

per

cent

age

of tr

ansa

ctio

n am

ount

to c

onso

lidat

ed to

tal o

pera

ting

reve

nues

or t

otal

ass

ets,

it is

com

pute

d ba

sed

on p

erio

d-en

d ba

lanc

e of

tran

sact

ion

to c

onso

lidat

ed to

tal a

sset

s for

bal

ance

shee

t acc

ount

s and

bas

ed o

n

a

ccum

ulat

ed tr

ansa

ctio

n am

ount

for t

he p

erio

d to

con

solid

ated

tota

l ope

ratin

g re

venu

es fo

r inc

ome

stat

emen

t acc

ount

s.N

ote

4: T

he C

ompa

ny m

ay d

ecid

e to

dis

clos

e or

not

to d

iscl

ose

trans

actio

n de

tails

in th

is ta

ble

base

d on

the

Mat

eria

lity

Prin

cipl

e.

Table 7 Page 2

55971

矩形

55971

打字機

396

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

CTC

I Cor

p.C

TCI S

mar

t E

ngin

eerin

g C

orpo

ratio

n

Taiw

anD

esig

n, m

anag

emen

t,an

d bu

ildin

g of

nuc

lear

pow

er, t

herm

al p

ower

,fir

e pu

mpe

d st

orag

epo

wer

gen

erat

ion

and

othe

rs re

late

d to

engi

neer

ing.

$

456

,251

$

456

,251

59,0

98,6

2497

.09

$

2

61,3

39($

47

8,02

4)($

464

,114

)A

subs

idia

ry

CTC

I Cor

p.C

TCI R

esou

rces

En

gine

erin

g In

c.Ta

iwan

Min

ing

of g

eolo

gy, s

ea o

ilan

d ga

s, m

arba

l and

rare；

plan

ning

, des

ign,

mon

itor o

f civ

il, tr

affic

envi

ronm

ent a

nd v

ario

usm

echa

nica

l and

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trica

l equ

ipm

ent.

263

,455

16

,765

24,7

62,2

5299

.05

2

48,4

64(

17

2,95

4)(

162

,793

)A

subs

idia

ry

CTC

I Cor

p.C

TCI A

dvan

ced

Sy

stem

s Inc

.Ta

iwan

Syst

ems p

lann

ing,

des

ign,

inte

grat

ion,

and

engi

neer

ing

for v

ario

usIT

syst

ems e

tc.

44

,409

44

,409

11,4

44,8

4248

.72

2

63,0

86

7

5,88

9

3

6,97

3A

subs

idia

ry

CTC

I Cor

p.C

TCI D

evel

opm

ent

Cor

pora

tion

Taiw

anR

eal e

stat

e an

d le

asin

gbu

sine

ss

1,6

90,0

00

1,6

90,0

00

169

,000

,000

100.

00

2

,530

,655

135,

541

134,

541

A su

bsid

iary

CTC

I Cor

p.C

TCI I

nves

tmen

t C

orpo

ratio

nTa

iwan

Gen

eral

inve

stm

ent.

2

,072

,000

1

,402

,000

2

07,2

00,0

00

100.

00

1

,922

,352

(

35,

760)

(

39,

568)

A su

bsid

iary

CTC

I Cor

p.EC

OV

E En

viro

nmen

t C

orp.

Taiw

anG

ener

al in

vest

men

t.

9

38,8

89

9

38,8

89

38

,457

,105

57.5

7

2

,696

,371

761,

339

438,

303

A su

bsid

iary

CTC

I Cor

p.C

TCI (

Thai

land

) C

o., L

td.

Thai

land

Des

ign

and

build

ing

ofpe

troch

emic

al p

lant

.

1

16,8

94

1

16,8

94

1

,249

,500

49.0

0

3

,212

(

147,

447)

(

72,

249)

A su

bsid

iary

CTC

I Cor

p.C

TCI M

achi

nery

Cor

p.Ta

iwan

Seco

ndar

y pr

oces

sing

of st

eel,

pipi

ng, h

eat

treat

men

t, m

anuf

actu

reof

pol

lutio

n co

ntro

leq

uipm

ent a

nd n

on-

dest

ruct

ive

test

ing

etc.

293

,800

293

,800

20,0

00,0

0010

0.00

4

94,4

80

8

9,77

8

8

9,77

8A

subs

idia

ry

CTC

I Cor

p.C

TCI A

rabi

a Lt

d.A

rabi

aC

onst

ruct

ion

and

mai

nten

ance

of r

efin

ery,

stor

age

tank

s and

chem

ical

pla

nt.

23

,312

23

,312

500

5

0.00

(

6

27,7

35)

(

586,

647)

(

2

93,5

87)

A su

bsid

iary

Info

rmat

ion

on in

vest

ees (

not i

nclu

ding

inve

stee

s in

Mai

nlan

d C

hina

)

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Tabl

e 8

Expr

esse

d in

thou

sand

s of N

TD

(Exc

ept a

s oth

erw

ise

indi

cate

d)

CTC

I Cor

pora

tion

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

Dec

embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

ent i

ncom

e(lo

ss)

reco

gnis

ed b

y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

iviti

es

Initi

al in

vest

men

t am

ount

Shar

es h

eld

as a

t Dec

embe

r 31,

201

7

Table 8 Page 1

55971

矩形

55971

打字機

397

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

Dec

embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

ent i

ncom

e(lo

ss)

reco

gnis

ed b

y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

iviti

es

Initi

al in

vest

men

t am

ount

Shar

es h

eld

as a

t Dec

embe

r 31,

201

7

CTC

I Cor

p.Si

noga

l-Was

te S

ervi

ces C

orp.

Mac

aoM

anag

emen

t of w

aste

recy

clin

g si

te a

ndm

aint

enan

ce o

f rel

ated

mec

hani

cal a

ndeq

uipm

ent e

tc.

$

4

,958

$

4

,958

-

30.0

0 $

63

,667

$

193,

550

$

58,

065

A su

bsid

iary

CTC

I Cor

p.C

TCI S

inga

pore

Pte

. L

td.

Sing

apor

eIn

vest

men

t and

pla

nnin

gof

rela

ted

engi

neer

ing.

152

,254

152

,254

5,1

00,0

00

100.

00(

570

,290

)(

8

1,07

4)(

8

1,07

4)A

subs

idia

ry

CTC

I Cor

p.C

TCI a

nd P

artn

ers

Com

pany

Lim

ited

Ara

bia

Con

stru

ctio

n an

dm

aint

enan

ce o

f re

finer

y,st

orag

e ta

nks a

nd c

hem

ical

plan

t.

-

15

,755

-

-

-

(

435

)(

17

4)A

subs

idia

ry

CTC

I Cor

p.C

TCI O

vers

eas

(B

VI)

Cor

p.B

VI

Inve

stm

ent a

nd p

lann

ing

of re

late

d en

gine

erin

g.

3

08,5

54

3

08,5

54

6

,740

,000

100.

00

1

,923

,648

(

358,

026)

(

3

68,7

11)

A su

bsid

iary

CTC

I Cor

p.C

TCI E

ngin

eerin

g &

Con

stru

ctio

n S

dn. B

hd.

Mal

aysi

aIn

vest

men

t and

pla

nnin

gof

rela

ted

engi

neer

ing.

4

,118

4

,118

4

50,0

0060

.00

70,3

82

7

0,74

5

4

1,78

0A

subs

idia

ry

CTC

I Cor

p.C

TCI C

MC

E JV

SDN

. BD

HM

alay

sia

Con

stru

ctio

n pl

anni

ng..

2

,759

-

51

51.0

0

392

(

4

,572

)(

2,33

2)A

subs

idia

ry

CTC

I Cor

p.C

TCI A

mer

icas

, Inc

.U

SATo

ext

end

fore

ign

busi

ness

,th

e G

roup

stre

ngth

en th

eco

llabo

rativ

e re

latio

nshi

pw

ith lo

cal b

usin

ess o

wne

ran

d su

pplie

r, de

velo

ping

adeq

uate

pot

entia

l sup

plie

r,an

d he

lp th

em to

ope

rate

proj

ects

, pur

chas

e an

d ot

her

rela

ted

busi

ness

es.

3

,217

3

,217

1

00,0

0010

0.00

7,7

7476

376

3A

subs

idia

ry

CTC

I Cor

p.C

CJV

P1

Eng

inee

ring

& C

onst

ruct

ion

Sdn.

Bhd

.

Mal

aysi

aC

onst

ruct

ion

plan

ning

.

2,2

59

2,2

59

247

,500

99.0

0

608

,915

28,

353

28,

069

A su

bsid

iary

CTC

I Cor

p.C

TCI &

HEC

Wat

er B

usin

ess C

o., L

td.

Taiw

anSe

wer

age

Syst

em B

OT

Proj

ect

255

,000

255

,000

25,5

00,0

0051

.00

2

49,6

39(

7,3

84)

(

3,

766)

A su

bsid

iary

CTC

I Cor

p.B

lue

Wha

le W

ater

Tec

hnol

ogy

Co.

, Ltd

.Taiw

anW

aste

wat

er R

ecla

mat

ion

Uni

t BTO

Pro

ject

347

,900

161

,700

34,7

90,0

00

49.

00

364

,397

40,

820

20,

002

An

inve

stee

und

ereq

uity

met

hod

Table 8 Page 2

55971

矩形

55971

打字機

398

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

Dec

embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

ent i

ncom

e(lo

ss)

reco

gnis

ed b

y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

iviti

es

Initi

al in

vest

men

t am

ount

Shar

es h

eld

as a

t Dec

embe

r 31,

201

7

CTC

I Cor

p.Pa

n A

sia

Cor

p.Ta

iwan

Inpu

t of f

orei

gn la

bor

and

tech

nolo

gies

,te

chni

cal

coop

erat

ion

with

fore

ign

cons

truct

ion

busi

ness

, and

con

stru

ctio

nof

eng

inee

ring

cons

truct

ion

etc.

$

71

,543

$

71

,543

39,2

19,5

0934

.27

537,

527

$

$

57,

009

19,5

37$

An

inve

stee

und

ereq

uity

met

hod

$

11,0

48,2

75($

620

,557

)

CTC

I D

evel

opm

ent

Cor

pora

tion

CTC

I Che

mic

al C

orp.

Taiw

anM

anuf

actu

re w

hole

sale

,an

d re

tail

of in

dust

rial

chem

ical

s.

13

,522

13

,522

4

80,6

616.

77 $

15

,586

57,

982

$

3

,925

A se

cond

-tier

subs

idia

ry

CTC

I D

evel

opm

ent

Cor

pora

tion

ECO

VE

Envi

ronm

ent

Cor

p.Ta

iwan

Gen

eral

inve

stm

ent.

11

,270

11

,270

2

43,9

18

0

.37

17,1

23

76

1,33

9

2,8

01A

subs

idia

ry

CTC

I D

evel

opm

ent

Cor

pora

tion

CTC

I Res

ourc

es

Engi

neer

ing

Inc.

Taiw

anM

inin

g of

geo

logy

, sea

oil

and

gas,

mar

bal a

nd ra

re,

plan

ning

, des

ign,

mon

itor

of c

ivil,

traf

fic e

nviro

nmen

tan

d va

rious

mec

hani

cal a

ndel

ectri

cal e

quip

men

t.

2

3

23

1,

000

0.0

1

1

4(

17

2,95

4)(

1

0)A

subs

idia

ry

CTC

I D

evel

opm

ent

Cor

pora

tion

Cro

wn

Asi

a-2

Inv

estm

ent L

imite

dTa

iwan

Gen

eral

inve

stm

ent.

2

,531

2

,531

25,

000

10

0.00

1,7

27

1,1

20

1,1

20A

seco

nd-ti

ersu

bsid

iary

CTC

I Inv

estm

ent

C

orpo

ratio

nC

TCI C

hem

ical

Cor

p.Ta

iwan

Man

ufac

ture

, who

lesa

le,

and

reta

il of

indu

stria

lch

emic

als.

32

,153

32

,153

1,6

57,2

07

23.

34

53

,737

57,

982

13,

533

A se

cond

-tier

subs

idia

ry

CTC

I Inv

estm

ent

C

orpo

ratio

nEC

OV

E En

viro

nmen

t C

orp.

Taiw

anG

ener

al in

vest

men

t.

1,3

74

1,3

74

3

2,13

2

0

.05

2,2

56

76

1,33

9

3

69A

subs

idia

ry

CTC

I Inv

estm

ent

C

orpo

ratio

nC

TCI S

mar

t

Engi

neer

ing

C

orpo

ratio

n

Taiw

anD

esig

n, m

anag

emen

t,an

d bu

ildin

g of

nuc

lear

pow

er,th

erm

al p

ower

, fire

pum

ped

stor

age

pow

erge

nera

tion

and

othe

rsre

late

d to

eng

inee

ring.

1

1

11

1,

000

0

.002

5

(

478,

024)

(

7

)A

subs

idia

ry

CTC

I Inv

estm

ent

C

orpo

ratio

nPo

wer

tec

Ener

gy C

orp.

Taiw

anB

asic

ally

che

mic

al in

dust

rypo

wer

gen

erat

ion,

rota

tion

elec

tric,

mac

hine

rym

anuf

actu

ring

of e

lect

ricpo

wer

and

serv

ices

of

ener

gy te

chno

logi

es.

1

,832

,107

1

,164

,695

6

10,7

03

18.

89

1

,484

,377

(

589,

464)

(

1

11,3

50)

An

inve

stee

und

ereq

uity

met

hod

CTC

I Inv

estm

ent

C

orpo

ratio

nM

IE IN

DU

STR

IAL

SD

N. B

HD

.M

alay

sia

Equi

pmen

t & In

stru

men

t,Pr

ocur

emen

t & C

ontru

ctio

n&

Pan

el

139

,885

139

,885

9,4

50,0

00

21.

00

213

,543

344,

135

72,

268

An

inve

stee

und

ereq

uity

met

hod

Table 8 Page 3

55971

矩形

55971

打字機

399

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

Dec

embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

ent i

ncom

e(lo

ss)

reco

gnis

ed b

y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

iviti

es

Initi

al in

vest

men

t am

ount

Shar

es h

eld

as a

t Dec

embe

r 31,

201

7

CTC

I Mac

hine

ry C

orp.

Bor

etec

h R

esou

rce

Rec

over

y E

ngin

eerin

g C

o., L

td.

(C

aym

an)

Cay

man

Isla

ndSh

are

hold

ing

and

inve

stm

ent.

$

154

,744

$

154

,744

6,6

66,6

6710

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1

46,7

21($

1

3,12

6)($

3,30

8)A

n in

vest

ee u

nder

equi

ty m

etho

d

ECO

VE

Envi

ronm

ent

Cor

p.

ECO

VE

Was

te

Man

agem

ent

C

orpo

ratio

n

Taiw

anIn

tern

atio

nal t

rade

and

envi

ronm

enta

l ser

vice

of

was

te d

ispo

sal,

equi

pmen

t ins

talla

tion

and

mec

hani

cal

inst

alla

tion

etc.

20

,000

20

,000

2,0

00,0

00

100.

00

100

,974

44,

366

44,

366

A su

bsid

iary

ECO

VE

Envi

ronm

ent

Cor

p.

EVC

OV

E W

ujih

Ener

gy C

orpo

ratio

nTa

iwan

Envi

ronm

enta

l ser

vice

of

was

te d

ispo

sal d

evic

ein

stal

latio

n, st

eam

pow

erco

gene

ratio

n et

c.

425

,085

601

,485

29,4

00,0

00

98.

00

1

,228

,849

295,

010

289,

110

A su

bsid

iary

ECO

VE

Envi

ronm

ent

Cor

p.

ECO

VE

Envi

ronm

enta

lSe

rvic

es C

orpo

ratio

n

Taiw

anM

anag

emen

t of w

aste

recy

clin

g si

te a

ndm

aint

enan

ce o

f rel

ated

mec

hani

cal a

ndeq

uipm

ent e

tc.

339

,921

339

,921

14,0

65,9

36

93.

15

853

,832

369,

656

339,

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A su

bsid

iary

ECO

VE

Envi

ronm

ent

Cor

p.

ECO

VE

Mio

ali

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rgy

Cor

pora

tion

Taiw

anEn

viro

nmen

tal s

ervi

ce o

fw

aste

dis

posa

l dev

ice

inst

alla

tion,

stea

m p

ower

coge

nera

tion

etc.

1

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,483

1

,012

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56,2

49,0

00

74.9

99

1

,007

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150,

527

112,

894

A su

bsid

iary

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VE

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ronm

ent

Cor

p.

G.D

. Dev

elop

men

t C

ompa

nyTa

iwan

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gy te

chno

logy

serv

ice

and

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ted

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pone

nts

man

ufac

turin

g.

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chha

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int v

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p.

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n D

ing

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ourc

es M

anag

emen

t Cor

p.

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anW

aste

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was

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r env

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e, a

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tal

pollu

tion

serv

ice

etc.

27

,000

27

,000

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00,0

00

60.

00

23

,496

45

26

A su

bsid

iary

ECO

VE

Envi

ronm

ent

Cor

p.

Bor

etec

h R

esou

rce

Rec

over

y E

ngin

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g C

o., L

td.

(C

aym

an)

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man

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ndSh

are

hold

ing

and

inve

stm

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309

,489

309

,489

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33

20.

00

293

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(

13,

126)

(

6,

615)

An

inve

stee

und

ereq

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met

hod

ECO

VE

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ronm

enta

lSe

rvic

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ratio

n

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OV

E W

ujih

En

ergy

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pora

tion

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viro

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tal s

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ce o

fw

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posa

l dev

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inst

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tion,

stea

m p

ower

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nera

tion

etc.

6

,000

9

,600

6

00,0

00

2

.00

25,0

79

29

5,01

0

5,9

00A

ssoc

iate

s

Table 8 Page 4

55971

矩形

55971

打字機

400

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

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k va

lue

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pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

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embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

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ncom

e(lo

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gnis

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y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

iviti

es

Initi

al in

vest

men

t am

ount

Shar

es h

eld

as a

t Dec

embe

r 31,

201

7

ECO

VE

Envi

ronm

enta

lSe

rvic

esC

orpo

ratio

n

CTC

I Che

mic

al C

orp.

Taiw

anM

anuf

actu

re, w

hole

sale

,an

d re

tail

of in

dust

rial

chem

ical

s.

$

24

,851

$

24

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1,9

10,2

4126

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8 $

61

,942

$

57,

982

$

15,

601

Ass

ocia

tes

ECO

VE

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ronm

enta

lSe

rvic

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ratio

n

Sino

gal-W

aste

Ser

vice

s Cor

p.M

acao

Man

agem

ent o

f was

tere

cycl

ing

site

and

mai

nten

ance

of r

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l and

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pmen

t etc

.

4

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30

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n

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Mio

ali

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l dev

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1

3

13

1,

000

0

.001

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150,

527

2

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ocia

tes

ECO

VE

Env

ironm

enta

l S

ervi

ces

Cor

pora

tion

G.D

. Dev

elop

men

t C

ompa

nyTa

iwan

Ener

gy te

chno

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ice

and

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pone

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man

ufac

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g.

8

8

1,

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0

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Ass

ocia

tes

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Was

te

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agem

ent

C

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n

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Taiw

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1,

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36

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6

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ffili

ated

com

pany

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VE

Was

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agem

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orpo

ratio

n

Yua

n D

ing

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ourc

es M

anag

emen

t C

orp.

Taiw

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was

te c

lear

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r env

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e, a

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tal

pollu

tion

serv

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etc.

18

,000

18

,000

1,8

00,0

00

40.

00

15

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45

18

A su

bsid

iary

CTC

I Ove

rsea

s (

BV

I) C

orp.

CTC

I Ove

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s C

o., L

td.

Hon

g K

ong

Inve

stm

ent a

nd p

lann

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of re

late

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g.

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0.00

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13,5

74(

35

7,69

0)(

357

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seco

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CTC

I Ove

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s C

o., L

td.

CTC

I Ara

bia

Ltd.

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bia

Con

stru

ctio

n an

dm

aint

enan

ce o

f re

finer

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nd c

hem

ical

plan

t.

22

,610

22

,610

500

5

0.00

(

6

27,7

35)

(

586,

647)

(

2

93,5

87)

A su

bsid

iary

CTC

I Ove

rsea

s C

o., L

td.

Uni

vers

al E

ngin

eerin

g (

BV

I) C

orp.

BV

IIn

vest

men

t and

pla

nnin

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rela

ted

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neer

ing.

1

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1

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50,

000

10

0.00

(

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(

75,

085)

(

75,

085)

A se

cond

-tier

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idia

ry

CTC

I Ove

rsea

s C

o., L

td.

CIP

EC C

onst

ruct

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Inc.

Phili

ppin

esC

onst

ruct

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and

mai

nten

ance

of

refin

ery,

stor

age

tank

s and

che

mic

alpl

ant.

663

663

10,

000

3

9.89

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55

4,6

92

1,8

72A

seco

nd-ti

ersu

bsid

iary

Table 8 Page 5

55971

矩形

55971

打字機

401

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

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embe

r 31,

201

7(N

ote

2(2)

)

Inve

stm

ent i

ncom

e(lo

ss)

reco

gnis

ed b

y th

e C

ompa

ny fo

rth

e ye

ar e

nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

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Initi

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vest

men

t am

ount

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es h

eld

as a

t Dec

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r 31,

201

7

CTC

I Ove

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s C

o., L

td.

CIM

AS

Engi

neer

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C

ompa

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hem

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roch

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al,

feas

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ty st

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cure

men

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bric

atio

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rect

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cons

truct

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mm

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onin

g.

$

26

,330

$

26

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-

5

0.00

$

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4,0

64)

($

1,

727)

A se

cond

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idia

ry

CTC

I Ove

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s C

o., L

td.

CTC

I Eng

inee

ring

& C

onst

ruct

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Sdn.

Bhd

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Mal

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vest

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t and

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ted

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2

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2

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3

00,0

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40.

00

46

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70,

745

28,

965

A su

bsid

iary

CTC

I Ove

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s C

o., L

td.

CTC

I and

Par

tner

s C

ompa

ny L

imite

dA

rabi

aC

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ion

and

mai

nten

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stor

age

tank

s and

chem

ical

pla

nt.

-

15,7

55

-

-

-(

4

35)

(

261)

A su

bsid

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CTC

I Ove

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CIN

DA

Eng

inee

ring

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Priv

ate

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31

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31

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8,0

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100.

00

165

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11,

775

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775

A se

cond

-tier

subs

idia

ry

CTC

I Ove

rsea

s C

o., L

td.

SUM

BER

MA

MPU

SDN

. BH

D.

Mal

aysi

aB

uild

ing

of re

late

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gine

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95

9

5

1

2,04

0

10.

00

107

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65,

163

65,

163

A se

cond

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idia

ry

Uni

vers

al E

ngin

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g (

BV

I) C

orp.

Supe

riorit

y (

Thai

land

) Co.

, Ltd

.Th

aila

ndIn

vest

men

t and

bui

ldin

g of

rela

ted

engi

neer

ing.

151

151

2,

156

4

9.00

(

1

34,9

08)

(

76,

487)

(

76,

487)

A se

cond

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Supe

riorit

y (

Thai

land

) Co.

, L

td.

CTC

I Tha

iland

Co.

, Ltd

.Th

aila

ndD

esig

n an

d pl

antin

g of

petro

chem

ical

pla

nt.

12

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12

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1,3

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0051

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43(

14

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subs

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CTC

I Adv

ance

d

Syst

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nc.

Cen

tury

Ahe

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td.

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oaPr

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vest

men

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mpa

ny.

25

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25

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7

50,0

00

100.

00

25

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(

639

)(

63

9)A

seco

nd-ti

ersu

bsid

iary

CTC

I Sm

art

En

gine

erin

g

Cor

pora

tion

CTC

I Che

mic

al C

orp.

Taiw

anM

anuf

actu

re, w

hole

sale

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d re

tail

of in

dust

rial

chem

ical

s.

7

,354

7

,354

6

56,3

60

9

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20,3

12

5

7,98

2

5,3

56A

seco

nd-ti

ersu

bsid

iary

CTC

I Sha

ngha

i C

o., L

td.

CTC

I Tra

ding

Sha

ngha

i Co.

, L

td.

Chi

naG

ener

al tr

ade.

23

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23

,748

-

10

0.00

45,8

31

5,2

64

5,2

64A

seco

nd-ti

ersu

bsid

iary

Table 8 Page 6

55971

矩形

55971

打字機

402

Bal

ance

as a

tD

ecem

ber 3

1, 2

017

Bal

ance

as a

tD

ecem

ber 3

1, 2

016

Num

ber o

f sha

res

Ow

ners

hip

(%)

Boo

k va

lue

Net

pro

fit (l

oss)

of t

he in

vest

ee fo

r the

yea

ren

ded

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embe

r 31,

201

7(N

ote

2(2)

)

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stm

ent i

ncom

e(lo

ss)

reco

gnis

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y th

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ompa

ny fo

rth

e ye

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nded

Dec

embe

r 31,

2017（

Not

e 2(

3)）

Foot

note

Inve

stor

Inve

stee

(Not

es 1

and

2)

Loc

atio

n M

ain

busi

ness

act

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Initi

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vest

men

t am

ount

Shar

es h

eld

as a

t Dec

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r 31,

201

7

CTC

I Res

ourc

es

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neer

ing

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CTC

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mic

al C

orp.

Taiw

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anuf

actu

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hole

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tail

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rial

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ical

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7

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$

7

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6

56,3

60

9

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$

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5

7,98

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60A

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I Sin

gapo

re

Pte.

Ltd

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TCI N

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Net

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11

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11

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0.00

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91

1

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1

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6A

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CTC

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inee

ring

& C

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SD

N. B

HD

.

CTC

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a SD

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vest

men

t and

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ldin

g of

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ted

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1

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1

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1

50,0

00

20.

00

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81,

748

16,

350

A se

cond

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idia

ry

CTC

I Mal

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a S

DN

. BH

D.

MIE

IND

UST

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L S

DN

. BH

D.

Mal

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anel

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12,6

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6,35

9A

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SUM

BER

MA

MPU

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CTC

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vest

men

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ted

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5

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6

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80.

00

178

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81,

748

65,

398

A se

ond-

tier

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idia

ry

Table 8 Page 7

55971

矩形

55971

矩形

55971

打字機

403

Rem

itted

toM

ainl

and

Chi

na R

emitt

ed b

ack

to T

aiw

anC

TCI B

eijin

g C

o.,

Lt

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n, su

rvey

, con

struc

tion

an

d in

spec

tion

of v

ario

us

engi

neer

ing

and

cons

truct

ion

pr

ojec

ts, p

lant

s, m

achi

nery

an

d e

quip

men

t, an

d

envi

ronm

enta

l pro

tect

ion

pr

ojec

ts.

$ 342,115

2 $ 313,998

$ -

$ -

$ 313,998

$ 5,102

100.00

$ 5,102

$ 1,183,288

$ 295,938

Not

e 3

CTC

I Sha

ngha

i C

o., L

td.

Des

ign,

surv

ey, c

onstr

uctio

n an

d

insp

ectio

n of

var

ious

eng

inee

ring

an

d co

nstru

ctio

n pr

ojec

ts.

592,787

2 534,974

-

-

534,974

( 82,526)

99.44

( 82,064)

421,266

23,530

"

CTC

I Adv

ance

d S

yste

ms S

hang

hai

In

c.

Com

pute

r tec

hnol

ogy

serv

ices

. 22,680

2 22,680

-

-

22,680

(478)

48.72

(478)

24,667

-

Not

e 4

Gra

nSin

o

Envi

ronm

enta

l

Tech

nolo

gy C

o.,

Lt

d.

Con

sulta

tion

and

deve

lopm

ent o

f

sani

tatio

n te

chno

logy

, mai

nten

ance

of

env

ironm

enta

l pol

lutio

n di

spos

al

equi

pmen

t, m

anag

emen

t of

co

nstru

ctio

n, a

nd re

tail

busin

ess,

et

c.

22,193

1 10,874

-

10,874

-

-

- -

-

3,377

Not

e 6

ECO

VE

Env

ironm

ent

Con

sulti

ng C

orpo

ratio

n

Tech

nica

l dev

elop

men

t, ad

viso

ry

and

serv

ice

in e

nviro

nmen

tal f

ield

;

envi

ronm

enta

l pol

lutio

n co

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1 4,147

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132,773

-

132,773

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-

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-

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e 5

CTC

I Cor

pora

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rmat

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on in

veste

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ot in

clud

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inve

stees

in M

ainl

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Chi

na)

For t

he y

ear e

nded

Dec

embe

r 31,

201

7

Expr

esse

d in

thou

sand

s of N

TD

Inve

stee

inM

ainl

and

Chi

na

(Exc

ept a

s oth

erw

ise in

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ted)

Boo

k va

lue

ofin

vestm

ents

inM

ainl

and

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naas

of D

ecem

ber

31, 2

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umul

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ntof

inve

stmen

tin

com

ere

mitt

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ack

toTa

iwan

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fD

ecem

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1,20

17

Tabl

e 9

Foot

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Mai

n bu

sines

s act

iviti

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Inve

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（N

ote

1）

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nt o

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f Jan

uary

1,

2017

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ittan

cefr

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aiw

an to

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nlan

d C

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as o

f Dec

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r31

, 201

7

Ow

ners

hip

held

by

the

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pany

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ct o

rin

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stmen

t inc

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by th

e C

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ny

for t

he y

ear e

nded

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embe

r 31,

201

7（

Not

e 2(

2)B）

Net

inco

me

ofin

veste

e as

of

Dec

embe

r 31,

2017

Am

ount

rem

itted

from

Tai

wan

toM

ainl

and

Chi

na/

Am

ount

rem

itted

bac

kto

Tai

wan

for f

or th

e ye

ar e

nded

Dec

embe

r 31,

201

7

Table 9 Page 1

55971

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404

Com

pany

nam

e

Acc

umul

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am

ount

of r

emitt

ance

from

Tai

wan

to M

ainl

and

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of D

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1, 2

017

Inve

stmen

t am

ount

app

rove

dby

the

Inve

stmen

tC

omm

issio

n of

the

Min

istry

of E

cono

mic

Aff

airs

(MO

EA)

Cei

ling

on in

vestm

ents

inM

ainl

and

Chi

na im

pose

dby

the

Inve

stmen

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n of

MO

EAC

TCI C

orp.

$

1

,008

,572

$

1

,367

,259

$

1

0,77

1,21

9

Not

e 1:

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stmen

t met

hods

are

cla

ssifi

ed in

to th

e fo

llow

ing

thre

e ca

tego

ries;

fill i

n th

e nu

mbe

r of c

ateg

ory

each

cas

e be

long

s to:

(1)D

irect

ly in

vest

in a

com

pany

in M

ainl

and

Chi

na..

(2)T

hrou

gh in

vesti

ng in

an

exist

ing

com

pany

in th

e th

ird a

rea,

whi

ch th

en in

veste

d in

the

inve

stee

in M

ainl

and

Chi

na.

(3)O

ther

sN

ote

2: In

the

‘Inve

stmen

t inc

ome

(loss

) rec

ogni

sed

by th

e C

ompa

ny fo

r the

yea

r end

ed D

ecem

ber 3

1, 2

017

colu

mn:

(1)It

shou

ld b

e in

dica

ted

if th

e in

veste

e w

as st

ill in

the

inco

rpor

atio

n ar

rang

emen

ts an

d ha

d no

t yet

any

pro

fit d

urin

g th

is pe

riod.

(2)In

dica

te th

e ba

sis fo

r inv

estm

ent i

ncom

e (lo

ss) r

ecog

nitio

n in

the

num

ber o

f one

of t

he fo

llow

ing

thre

e ca

tego

ries:

A.T

he fi

nanc

ial s

tate

men

ts th

at a

re a

udite

d an

d at

teste

d by

inte

rnat

iona

l acc

ount

ing

firm

whi

ch h

as c

oope

rativ

e re

latio

nshi

p w

ith a

ccou

ntin

g fir

m in

R.O

.C.

B.T

he fi

nanc

ial s

tate

men

ts th

at a

re a

udite

d an

d at

teste

d by

R.O

.C. p

aren

t com

pany

’s C

PA.

C.O

ther

s.

Not

e 3:

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sted

by C

TCI O

vers

eas C

o., L

td.

Not

e 4:

Inve

sted

by C

entu

ry A

head

Ltd

.N

ote

5: In

veste

d in

Dyn

amic

Eve

r Inv

estm

ents

Lim

ited

thro

ugh

Ever

Vic

tory

Glo

bal L

imite

d.N

ote

6: In

veste

d by

EC

OV

E En

viro

nmen

tal S

ervi

ce C

orpo

ratio

n.

Table 9 Page 2

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CTCI CORPORATION DETAILS OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Sheet 1

Sheet 1 Page 1

Items Summary AmountCash on hand and revolving funds 21,197$

Bank deposits : Checking accounts 2,190 Demand deposits －USD USD $ 44,885 rate 29.84 1,339,716 －EUR EUR $ 15,123 rate 35.67 539,366 －SGD SGD $ 7,277 rate 22.32 162,423 －JPY JPY $ 442,250 rate 0.2649 117,152 －VND VND $ 80,377,528 rate 0.0013 104,491 －NTD 130,800 －Others 155,998

2,549,946

Time depostis －USD USD $ 242,925 rate 29.84 7,250,828

9,824,161$

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55971

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407

CTCI CORPORATION DETAILS OF ACCOUNTS RECEIVALBE


Sheet 3

Sheet 3 Page 1

Client Name Amount Notes

Client :A Company 327,906$ B Company 136,754 C Company 106,599

Others 263,968 Each individual customer balance did notexceed 5% of the account balance

835,227 Less : Allowance for bad debts 3,417)(

831,810$

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408

CTCI CORPORATION DETAILS OF CONSTRUCTION IN PROGRESS FOR THE YEAR ENDED DECEMBER 31, 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) Sheet 4

Sheet 4 Page 1

Project No.

Balance at January 1,

2017 CostProject

(loss) gainCompletedand roll-out

Balance atDecember 31,

201711 0789A 32,320,268$ 5,333,247$ 571,335)($ -$ 37,082,180$ 08 1305 26,077,003 9,278 6,981)( - 26,079,300 12 1000A 22,912,236 1,607,213 541,613)( - 23,977,836 09 0001A 23,196,976 4,941)( 2,304)( - 23,189,731 15 2200C 4,299,976 12,621,057 1,464,946 - 18,385,979 13 1500A 11,980,530 5,524,501 359,412 - 17,864,443 14 1758E 6,808,040 5,700,660 1,152,735 - 13,661,435 14 1717A 8,917,231 1,332,941 17,611 - 10,267,783 11 0570A 9,858,827 121,764 40,248 - 10,020,839 04VKX0088A 5,553,908 - 479 - 5,554,387 10 0347A 5,175,576 107 - - 5,175,683 00 2902 4,868,447 5,774)( 167,226 - 5,029,899 10 0541A 4,212,959 6,335 467)( - 4,218,827 13 1336C 3,854,308 445,437 93,470)( - 4,206,275 09 0171A 4,176,582 - - - 4,176,582 13 1515A 4,135,361 24,495 14,496)( - 4,145,360 11 0845A 3,871,337 43,987 4,561 - 3,919,885 12 0888A 3,882,437 9,409 999 - 3,892,845 02 3288 3,192,879 133,798 8,069 - 3,334,746 10 0523B 3,328,486 4,575 351 - 3,333,412 97 2262 3,196,097 - - - 3,196,097 10 0542A 3,032,251 6,221)( 4,007)( - 3,022,023 06 1165 3,369,173 2,406 27,870 - 3,399,449 14 1788S 2,540,259 358,772 56,899 - 2,955,930 12 0977A 2,951,140 11,648)( 573)( - 2,938,919 15 1988A 1,730,571 536,963 269,416 - 2,536,950 14 1787A 501,807 1,208,999 323,088 - 2,033,894 11 0625A 946,681 719,926 307,329 - 1,973,936 16 2727A 5,431 1,300,560 607,815 - 1,913,806 03 3456 17,719,833 700)( 24,388 17,743,521)( - Others 52,690,577 7,699,632 278,386 6,837,220)( 53,831,375

281,307,187$ 44,716,778$ 3,876,582$ 24,580,741)($ 305,319,806$

Current change

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55971

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410

CTCI CORPORATION DETAILS OF ACCOUNTS PAYABLE


Sheet 6

Sheet 6 Page 1

Client name Amounts Notes

Client : China Steel Machinery Corporation 120,930$ FORTUNE ELECTRIC CO., LTD. 78,160 Chung Hsin Electric & Machinery Mfg. Corp. Ltd. 73,868

HUAH RUNG CO.,LTD 56,870 LVMAX INTERNATION CORP.,LTD 49,759

Others 5,401,476 Each individual customer balance didnot exceed 2% of the account balance

5,781,063$

55971

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411

CTCI CORPORATION DETAILS OF PARTIAL CONSTRUCTION BILLINGS

FOR THE YEAR ENDED DECEMBER 31, 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Sheet 7

Sheet 7 Page 1

Project No.

Balance at

January 1,

2017

Additions

(Reductions)

Completed and

roll-out

Balance at

December 31,

2017

11 0789A 26,738,681$ 6,675,579$ -$ 33,414,260$

08 1305 26,082,992 114 - 26,083,106

12 1000A 15,639,811 4,213,438 - 19,853,249

09 0001A 23,199,120 - - 23,199,120

15 2200C 6,097,916 9,592,533 - 15,690,449

13 1500A 10,707,914 2,804,795 - 13,512,709

14 1758E 12,373,472 2,914,672 - 15,288,144

14 1717A 9,544,526 376,444 - 9,920,970

11 0570A 10,239,144 51,707 - 10,290,851

04VKX0088A 5,238,645 1,208 - 5,239,853

10 0347A 5,183,951 - - 5,183,951

00 2902 4,696,214 360,824 - 5,057,038

10 0541A 4,302,149 - - 4,302,149

13 1336C 3,960,081 - - 3,960,081

09 0171A 4,183,675 - - 4,183,675

13 1515A 4,158,837 - - 4,158,837

11 0845A 3,803,731 119,451 - 3,923,182

12 0888A 3,905,310 - - 3,905,310

02 3288 3,203,905 152,520 - 3,356,425

10 0523B 3,319,326 - - 3,319,326

97 2262 3,208,286 - - 3,208,286

10 0542A 3,064,049 - - 3,064,049

06 1165C 2,615,852 396,222 - 3,012,074

14 1788S 2,515,090 343,313 - 2,858,403

12 0977A 2,953,338 - - 2,953,338

15 1988A 2,053,039 519,929 - 2,572,968

14 1787A 434,191 1,350,348 - 1,784,539

11 0625A 1,623,001 188,608 - 1,811,609

16 2727A - 2,054,506 - 2,054,506

03 3456 17,686,052 57,469 17,743,521)( -

Others 53,126,454 9,826,225 6,837,220)( 56,115,459

275,858,752$ 41,999,905$ 24,580,741)($ 293,277,916$

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CTCI CORPORATION DETAILS OF OPERATING REVENUE


Sheet 8

Sheet 8 Page 1

Items Summary Amounts NotesRefining and petrochemical project 29,698,394$

Basic construction 2,681,644

Resources environmental 16,153,946

Others 57,396

48,591,380$

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CTCI CORPORATION DETAILS OF OPERATING COSTS


Sheet 9

Sheet 9 Page 1

Items Summary Amounts

Balance at January 1, 2017 -$

Add : Purchasing 24,461,576

Less : Transferred to indirect materials 8,079)(

Balance at December 31, 2017 -

Consumption materials 24,453,497

Consumption indirect materials 8,079

Direct labor 3,152,522

Manufacturing expenses 4,961,892

Subcontract costs 12,144,133

Input costs 44,720,123

Estimated project loss at January 1, 2017 148,169)(

Estimated project loss at December 31, 2017 144,824

Operating costs 44,716,778$

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CTCI CORPORATION DETAILS OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2017

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Sheet 10

Sheet 10 page1

Items Summary AmountsIndirect labor 759,517$

Temporary equipment 547,619

Rental expenses 514,944

Travelling expenses 324,549

Delivery expenses 36,118

Finance costs 634,778

Pension 142,203

Amortizations charges 125,989

Taxes 310,963

Meals expenses 70,021

Employee benefits 53,108

Depreciation charges on property, plant and equipment 31,734

Utilities expenses 63,215

Repairs and maintenance expenses 55,579

Fuel consumption 19,748

Postage expenses 26,737

Apportion of office 23,029

Photocopier expenses 23,155

Entertainment expenses 9,960

Other expenses 1,188,926

4,961,892$

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CTCI CORPORATION DETAILS OF OPERATING EXPENSES


Sheet 11

Sheet 11 Page 1

Items

General andadministrative

expenses

Research anddevelopment

expenses Total

Payroll expenses 567,156$ 68,550$ 635,706$

Pension 21,789 3,849 25,638

Rental expenses 36,610 8,039 44,649

Office supplies expenses 2,026 11 2,037

Travelling expenses 29,221 232 29,453

Utilities expenses 2,200 573 2,773

Entertainment expenses 5,961 42 6,003

Donation expenses (Note) 16,094 - 16,094

Depreciation charges on property, plant and equipment 7,181 2,006 9,187

Various amortizations 3,360 4,062 7,422

Employee benefits 4,427 1,179 5,606

Professional service fees 20,540 - 20,540

Office miscellaneous expenses 3,094 817 3,911

Meals expenses 5,316 1,420 6,736

Miscellaneous expenses 172,159 23,213 195,372

897,134$ 113,993$ 1,011,127$

Note: As of May, 2017 the Company contributed cash amounting to $15,000 cash to CTCI EducationFoundation

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2017 annual report - ctci corporation report_2017.pdf2017 annual report printed on march 31, 2018...

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