ctci corporation and subsidiaries · 2020. 9. 4. · other current liabilities ( 1,758,589) (...

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CTCI CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT

JUNE 30, 2020 AND 2019

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

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

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

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

version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and

financial statements shall prevail.

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

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June 30, 2020 December 31, 2019 June 30, 2019 Assets Notes AMOUNT % AMOUNT % AMOUNT %

Current assets 1100 Cash and cash equivalents 6(1) $ 12,504,957 18 $ 20,767,581 30 $ 17,027,571 25 1110 Financial assets at fair value

through profit or loss - current 6(2)

3,697,500 5 275,845 1 382,122 1 1120 Financial assets at fair value

through other comprehensive

income - current

6(3)

431,760 1 464,943 1 529,350 1 1136 Financial assets at amortized

cost - current 6(4)

768,789 1 277,164 - 72,903 - 1140 Contract assets - current 6(24) 19,349,327 28 18,653,485 27 18,840,920 27 1150 Notes receivable, net 6(5) 15,938 - 63,360 - 109,921 - 1170 Accounts receivable, net 6(5) 5,223,107 8 4,513,304 7 4,714,762 7 1180 Accounts receivable - related

parties 7

915,336 1 760,878 1 496,773 1 1200 Other receivables 126,171 - 245,735 - 230,637 - 1210 Other receivables - related

parties 7

35,343 - - - - - 1220 Current income tax assets 222,045 - 204,024 - 150,938 - 130X Inventories 158,569 - 144,407 - 280,426 - 1410 Prepayments 6(6) 3,630,514 5 2,758,670 4 5,291,567 8 1460 Non-current assets or disposal

groups classified as held for

sale, net

- - 38,380 - - - 1470 Other current assets 6(15) 1,323,116 2 6,817 - - - 11XX Total current assets 48,402,472 69 49,174,593 71 48,127,890 70 Non-current assets 1517 Financial assets at fair value


income - non-current

6(3)

1,341,075 2 858,499 1 768,409 1 1535 Financial assets at amortized

cost - non-current 6(4) and 8

163,360 - 130,720 - 107,880 - 1550 Investments accounted for

using the equity method 6(7)

2,180,202 3 2,173,160 3 3,175,468 5 1600 Property, plant and equipment,

net 6(8) and 8

12,678,681 18 11,788,472 17 10,706,079 16 1755 Right-of-use assets 6(9) 409,800 1 443,854 1 405,955 1 1760 Investment property, net 6(10) and 8 801,774 1 803,823 1 805,976 1 1780 Intangible assets 190,666 1 191,971 - 191,347 - 1840 Deferred income tax assets 766,541 1 784,379 1 494,244 1 1900 Other non-current assets 6(11) and 8 2,881,959 4 3,145,040 5 3,700,098 5 15XX Total non-current assets 21,414,058 31 20,319,918 29 20,355,456 30 1XXX Total assets $ 69,816,530 100 $ 69,494,511 100 $ 68,483,346 100

(Continued)

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

JUNE 30, 2020, DECEMBER 31, 2019 AND JUNE 30, 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(The balance sheets as of June 30, 2020 and 2019 are reviewed, not audited)

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

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June 30, 2020 December 31, 2019 June 30, 2019 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %

Current liabilities 2100 Short-term borrowings 6(12) $ 5,367,324 8 $ 6,163,306 9 $ 10,396,242 15 2110 Short-term notes and bills

payable

17,993 - 199,921 - 250,913 - 2120 Financial liabilities at fair value

through profit or loss - current 6(2)

33,784 - 54,716 - 4,487 - 2130 Contract liabilities - current 6(24) 14,704,247 21 12,157,272 18 14,196,426 21 2150 Notes payable 7,048 - 48,369 - 22,229 - 2170 Accounts payable 6(13) 9,869,024 14 11,708,290 17 9,664,066 14 2180 Accounts payable - related

parties 7

485,471 1 648,957 1 792,220 1 2200 Other payables 6(14) 3,887,620 6 2,848,021 4 4,088,570 6 2220 Other payables - related parties 7 67,801 - - - - - 2230 Current income tax liabilities 210,130 - 217,180 - 343,299 1 2280 Current lease liabilities 7 127,382 - 146,499 - 126,174 - 2300 Other current liabilities 6(15)(17) 354,459 - 1,991,941 3 3,229,848 5 21XX Total current liabilities 35,132,283 50 36,184,472 52 43,114,474 63 Non-current liabilities 2530 Bonds payable 6(16) 8,984,460 13 5,989,529 9 - - 2540 Long-term borrowings 6(17) 5,381,947 8 5,390,673 8 3,423,573 5 2570 Deferred income tax liabilities 249,248 - 216,697 - 248,080 - 2580 Non-current lease liabilities 7 266,521 - 281,103 - 252,473 1 2600 Other non-current liabilities 6(18) 1,875,954 3 2,085,040 3 2,181,152 3 25XX Total non-current

liabilities

16,758,130 24 13,963,042 20 6,105,278 9 2XXX Total liabilities 51,890,413 74 50,147,514 72 49,219,752 72 Equity attributable to owners of

parent

Share capital 6(21) 3110 Common stock 7,633,326 11 7,633,182 11 7,633,100 11 Capital surplus 6(22) 3200 Capital surplus 3,993,602 6 3,730,448 5 3,648,444 5 Retained earnings 6(23) 3310 Legal reserve 3,278,010 5 3,741,648 5 3,741,648 6 3320 Special reserve 1,180,439 2 762,377 1 762,377 1 3350 Unappropriated retained

earnings

310,227 - 1,481,062 2 806,242 1 Other equity interest 3400 Other equity interest ( 1,163,517 ) ( 2 ) ( 1,180,439 ) ( 1 ) ( 222,449 ) - 3500 Treasury stocks 6(21) ( 11,835 ) - ( 11,835 ) - ( 11,835 ) - 31XX Equity attributable to

owners of the parent

15,220,252 22 16,156,443 23 16,357,527 24 36XX Non-controlling interest 4(3) 2,705,865 4 3,190,554 5 2,906,067 4 3XXX Total equity 17,926,117 26 19,346,997 28 19,263,594 28 Significant contingent liabilities

and unrecognized contract

commitments

9

3X2X Total liabilities and equity $ 69,816,530 100 $ 69,494,511 100 $ 68,483,346 100

CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

(UNAUDITED)


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Three months ended June 30 Six months ended June 30

2020 2019 2020 2019

Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %

4000 Operating revenue 6(24) and 7 $ 13,261,500 100 $ 13,381,465 100 $ 24,705,860 100 $ 27,093,923 100 5000 Operating costs 6(29)(30) and 7 ( 12,363,414 ) ( 93 ) ( 12,587,382 ) ( 94 ) ( 22,819,348 ) ( 92 ) ( 25,261,270 ) ( 93 ) 5900 Gross Profit 898,086 7 794,083 6 1,886,512 8 1,832,653 7 Operating expenses 6(29)(30) 6200 General and administrative expenses ( 421,217 ) ( 4 ) ( 395,353 ) ( 3 ) ( 802,859 ) ( 4 ) ( 804,520 ) ( 3 ) 6300 Research and development expenses ( 17,255 ) - ( 30,847 ) - ( 47,126 ) - ( 56,020 ) - 6000 Total operating expenses ( 438,472 ) ( 4 ) ( 426,200 ) ( 3 ) ( 849,985 ) ( 4 ) ( 860,540 ) ( 3 ) 6900 Operating income 459,614 3 367,883 3 1,036,527 4 972,113 4 Non-operating income and expenses 7100 Interest income 6(25) 37,700 - 73,665 - 71,893 - 131,825 - 7010 Other income 6(26) 32,698 - 24,994 - 57,143 - 42,232 - 7020 Other gains and losses 6(27) ( 52,075 ) - 142,557 1 ( 226,908 ) ( 1 ) 170,421 1 7050 Finance costs 6(28) ( 87,527 ) ( 1 ) ( 42,518 ) - ( 153,225 ) - ( 124,575 ) - 7060 Share of profit (loss) of associates and joint ventures accounted for

using the equity method

6(7)

54,284 1 ( 59,845 ) - 75,520 - ( 208,525 ) ( 1 ) 7000 Total non-operating income and expenses ( 14,920 ) - 138,853 1 ( 175,577 ) ( 1 ) 11,378 - 7900 Profit before income tax 444,694 3 506,736 4 860,950 3 983,491 4 7950 Income tax expense 6(31) ( 163,560 ) ( 1 ) ( 106,033 ) ( 1 ) ( 299,423 ) ( 1 ) ( 239,121 ) ( 1 ) 8200 Profit for the period $ 281,134 2 $ 400,703 3 $ 561,527 2 $ 744,370 3

Components of other comprehensive income that will not be

reclassified to profit or loss

8311 Actuarial losses on defined benefit plans $ - - $ - - ( $ 244 ) - $ - - 8316 Unrealized (losses) gains from investments in equity instruments

measured at fair value through other comprehensive income

6(3)

35,128 - 11,088 - ( 54,795 ) - 47,982 - Components of other comprehensive income that will be reclassified

to profit or loss

8361 Cumulative translation differences of foreign operations ( 69,511 ) - ( 35,316 ) - 43,574 - ( 11,345 ) - 8300 Total other comprehensive income (loss) for the period ( $ 34,383 ) - ( $ 24,228 ) - ( $ 11,465 ) - $ 36,637 -

8500 Total comprehensive income for the period $ 246,751 2 $ 376,475 3 $ 550,062 2 $ 781,007 3

Profit attributable to: 8610 Owners of the parent $ 153,356 1 $ 272,064 2 $ 310,472 1 $ 493,537 2 8620 Non-controlling interest 127,778 1 128,639 1 251,055 1 250,833 1 Total $ 281,134 2 $ 400,703 3 $ 561,527 2 $ 744,370 3

Comprehensive income attributable to: 8710 Owners of the parent $ 134,839 1 $ 272,752 2 $ 325,723 1 $ 516,255 2 8720 Non-controlling interest 111,912 1 103,723 1 224,339 1 264,752 1 Total $ 246,751 2 $ 376,475 3 $ 550,062 2 $ 781,007 3

9750 Basic earnings per share (in NT dollars) 6(32) $ 0.20 $ 0.36 $ 0.41 $ 0.65

9850 Diluted earnings per share (in NT dollars) 6(32) $ 0.20 $ 0.36 $ 0.41 $ 0.65


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

(UNAUDITED)

Equity attributable to owners of the parent

Retained Earnings Other Equity Interest

Notes

Common stock

Capital surplus

Legal reserve

Special reserve

Unappropriated

earnings

Cumulative

translation

differences of

foreign operations

Unrealized gains

(losses) from

financial assets

measured at fair

value through

other

comprehensive

income

Treasury

stocks

Total

Non-controlling

interests

Total equity


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For the six-month period ended June 30, 2019 Balance at January 1, 2019 $ 7,632,738 $ 3,545,053 $ 3,558,894 $ 763,794 $ 2,217,619 ( $ 290,028 ) $ 42,494 ( $ 11,835 ) $ 17,458,729 $ 3,167,430 $ 20,626,159 Profit for the period - - - - 493,537 - - - 493,537 250,833 744,370 Other comprehensive income (loss) - - - - - ( 7,164 ) 29,882 - 22,718 13,919 36,637 Total comprehensive income (loss) - - - - 493,537 ( 7,164 ) 29,882 - 516,255 264,752 781,007 Appropriations of 2018 earnings 6(23) Legal reserve - - 182,754 - ( 182,754 ) - - - - - - Special reserve - - - ( 1,417 ) 1,417 - - - - - - Cash dividends - - - - ( 1,721,210 ) - - - ( 1,721,210 ) ( 529,621 ) ( 2,250,831 ) Employee stock options exercised 6(22) 362 1,316 - - - - - - 1,678 - 1,678 Share-based payment transactions 6(22) - 102,075 - - - - - - 102,075 3,506 105,581 Disposal of investments in equity instruments designated at fair value through other comprehensive income

- - - - ( 2,367 ) - 2,367 - - - - Balance at June 30, 2019 $ 7,633,100 $ 3,648,444 $ 3,741,648 $ 762,377 $ 806,242 ( $ 297,192 ) $ 74,743 ( $ 11,835 ) $ 16,357,527 $ 2,906,067 $ 19,263,594 For the six-month period ended June 30, 2020 Balance at January 1, 2020 $ 7,633,182 $ 3,730,448 $ 3,741,648 $ 762,377 $ 1,481,062 ( $ 383,344 ) ( $ 797,095 ) ( $ 11,835 ) $ 16,156,443 $ 3,190,554 $ 19,346,997 Profit for the period - - - - 310,472 - - - 310,472 251,055 561,527 Other comprehensive income (loss) - - - - ( 244 ) 62,186 ( 46,691 ) - 15,251 ( 26,716 ) ( 11,465 ) Total comprehensive income (loss) - - - - 310,228 62,186 ( 46,691 ) - 325,723 224,339 550,062 Appropriations of 2019 earnings 6(23) Legal reserve - - 116,599 - ( 116,599 ) - - - - - - Special reserve - - - 418,062 ( 418,062 ) - - - - - - Cash dividends - - ( 580,237 ) - ( 946,402 ) - - - ( 1,526,639 ) ( 515,285 ) ( 2,041,924 ) Employee stock options exercised 6(22) 144 455 - - - - - - 599 - 599 Employee stock options exercised by subsidiary

6(22) - 917 - - - - - - 917 - 917

Share-based payment transactions 6(22) - 88,219 - - - - - - 88,219 11,251 99,470 Reorganization 6(22) - 187,351 - - - 591 836 - 188,778 ( 188,778 ) - Non-controlling interests 6(22) - ( 13,788 ) - - - - - - ( 13,788 ) ( 16,216 ) ( 30,004 ) Balance at June 30, 2020 $ 7,633,326 $ 3,993,602 $ 3,278,010 $ 1,180,439 $ 310,227 ( $ 320,567 ) ( $ 842,950 ) ( $ 11,835 ) $ 15,220,252 $ 2,705,865 $ 17,926,117


CONSOLIDATED STATEMENTS OF CASH FLOWS


(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(UNAUDITED)

For the six-month periods ended June 30

Notes 2020 2019

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CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 860,950 $ 983,491 Adjustments Adjustments to reconcile profit (loss) Loss (gain) on valuation of financial assets 6(27) 24,316 ( 56,214 ) Gain on reduction of capital of investments 6(27) - ( 5,158 ) (Gain) loss on disposal of property, plant and

equipment 6(27)

( 29,923 ) 1,353 Gain on lease modification 6(27) ( 370 ) - Share of (profit) loss of associates and joint ventures

accounted for using the equity method 6(7)

( 75,520 ) 208,525 Depreciation 6(29) 399,616 282,881 Amortization 6(29) 76,019 74,638 Expected credit loss 12(2) 21,963 255 Interest income 6(25) ( 71,893 ) ( 131,825 ) Dividend income 6(26) ( 94 ) ( 230 ) Interest expense 6(28) 153,225 124,575 Compensation costs for employee stock options 6(30) 99,470 141,783 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss ( 3,341,837 ) 166,790 Contract assets - current ( 695,842 ) 5,982,512 Notes receivable 47,411 ( 34,915 ) Accounts receivable ( 731,676 ) 4,377,315 Accounts receivable - related parties ( 154,458 ) 447,298 Other receivables 112,111 108,907 Inventories ( 14,162 ) ( 113,081 ) Prepayments ( 871,844 ) ( 1,037,672 ) Other current assets ( 1,316,299 ) 208,887 Other non-current assets 251,098 84,690 Changes in operating liabilities Contract liabilities - current 2,546,975 276,228 Notes payable ( 41,321 ) 3,441 Accounts payable ( 1,839,266 ) ( 327,196 ) Accounts payable - related parties ( 163,486 ) ( 567,492 ) Other payables ( 922,546 ) ( 931,800 ) Other current liabilities ( 1,758,589 ) ( 4,488,308 ) Other non-current liabilities ( 258,686 ) ( 363,273 ) Cash (outflow) inflow generated from operations ( 7,694,658 ) 5,416,405 Interest received 79,346 130,758 Dividends received 36,354 63,685 Income tax refund 22,958 - Interest paid ( 125,635 ) ( 126,758 ) Income tax paid ( 290,817 ) ( 386,692 ) Net cash flows (used in) from operating activities ( 7,972,452 ) 5,097,398

(Continued)


CONSOLIDATED STATEMENTS OF CASH FLOWS


(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(UNAUDITED)

For the six-month periods ended June 30

Notes 2020 2019


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CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from disposal of financial assets at fair value

through other comprehensive income - current

$ - $ 39,388

(Acquisition) disposal of financial assets at amortized cost ( 524,265 ) 297,428

Increase in other receivables - related parties ( 35,343 ) -

Increase in financial assets measured at cost - non-current ( 504,188 ) -

Proceeds from disposal of investments accounted for

using the equity method

- 224,494

Acquisition of property, plant and equipment 6(33) ( 833,053 ) ( 2,209,867 )

Proceeds from disposal of property, plant and equipment 67,548 2,569

Increase in prepayments for equipment ( 260,358 ) ( 380,744 )

Increase in intangible assets ( 17,374 ) ( 24,110 )

Increase in refundable deposits ( 165,757 ) ( 8,562 )

Increase in other non-current assets ( 38,678 ) ( 30,240 )

Net cash flows from acquisition of subsidiaries ( 30,019 ) ( 38,749 )

Net cash flows used in investing activities ( 2,341,487 ) ( 2,128,393 )

CASH FLOWS FROM FINANCING ACTIVITIES

Decrease in short-term borrowings ( 795,982 ) ( 3,018,217 )

(Decrease) increase in short-term notes and bills payable ( 181,928 ) 250,913

Increase in long-term borrowings 112,381 2,067,483

Decrease in lease liabilities ( 92,057 ) ( 105,999 )

Increase (decrease) in deposits received (recognized in

other non-current liabilities)

49,600 ( 71,267 )

Issuance of bonds payable 2,993,839 -

Proceeds from employee stock options exercised 2,484 1,678

Cash dividends paid 6(33) ( 74,537 ) ( 137,017 )

Increase in non-controlling interests 37,515 -

Net cash flows from (used in) financing activities 2,051,315 ( 1,012,426 )

Net (decrease) increase in cash and cash equivalents ( 8,262,624 ) 1,956,579

Cash and cash equivalents at beginning of period 20,767,581 15,070,992

Cash and cash equivalents at end of period $ 12,504,957 $ 17,027,571

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2020 AND 2019

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED)

(UNAUDITED)

1. HISTORY AND ORGANISATION

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

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

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

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

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

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

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

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were reported to the Board of Directors on August 5, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

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

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as

follows:

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

and financial performance based on the Group’s assessment.

New Standards, Interpretations and Amendments

Effective date by

International

Accounting

Standards Board

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

Material’

January 1, 2020

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

Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark

reform’ January 1, 2020

Amendment to IFRS 16, ‘Covid-19-related rent concessions’ June 1, 2020

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

the Group

None.

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

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

endorsed by the FSC are as follows:

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

and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

statements for the year ended December 31, 2019, except for the compliance statement, basis of

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

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

(1) Compliance statement

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

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

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

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

financial statements for the year ended December 31, 2019.

New Standards, Interpretations and Amendments

Effective date by

International Accounting

Standards Board

Amendments to IFRS 4, ‘Extension of the temporary exemption from

applying IFRS 9’

January 1, 2021

Amendments to IFRS 3, ‘Reference to the conceptual framework’ January 1, 2022

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

between an investor and its associate or joint venture’

To be determined by

International Accounting

Standards Board

IFRS 17, ‘Insurance contracts’ January 1, 2023

Amendments to IFRS 17, ‘Insurance contracts’ January 1, 2023

Amendments to IAS 1, ‘Classification of liabilities as current or

non-current’

January 1, 2023

Amendments to IAS 16, ‘Property, plant and equipment: proceeds

before intended use’

January 1, 2022

Amendments to IAS 37, ‘Onerous contracts-cost of fulfilling

a contract’

January 1, 2022

Annual improvements to IFRS Standards 2018-2020 January 1, 2022

~12~

(2) Basis of preparation

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

the historical cost convention:

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

profit or loss.

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

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

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

statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

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

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

2019.

B. Subsidiaries included in the consolidated financial statements:

June 30,

2020

December 31,

2019

June 30,

2019

CTCI Corp. CTCI Advanced

Systems Inc.

Design and

installation of

software

48.72 48.72 48.72 Note 1

CTCI Corp. CTCI

Development

Corp.

Real estate and

leasing business

100.00 100.00 100.00 Note 2

CTCI Corp. CTCI Investment

Corp.

Investments 100.00 100.00 100.00 Note 2

CTCI Corp.

CTCI Investment

Corp.

CTCI Smart

Engineering

Corp.

Planning and design

of construction

projects

97.09 97.09 97.09 Note 2

CTCI Corp. - 99.05 99.05

CTCI

Development

Corp.

0.01 0.01 0.01

CTCI Advanced

Systems Inc.

99.05 - -

Name of InvestorName of

Subsidiary

Main Business

ActivitiesDescription

Note 5

CTCI Resources

Engineering Inc.

Engineering

technology service

Ownership (%)

~13~

June 30,

2020

December 31,

2019

June 30,

2019

CTCI Corp. CTCI Americas,

Inc.

Business

development and

related engineering

services and planning

100.00 100.00 100.00 Note 2

CTCI Corp. CTCI Singapore

Pte. Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Investment

Corp.

CTCI

Development

Corp.

ECOVE

Environment

Services Corp.

CTCI Smart

Engineering

Corp.

CTCI Resources

Engineering Inc.

CTCI Chemical

Corp.

Manufacturing of

chemical products

75.49 75.49 75.49 Note 2

CTCI Corp.

CTCI Investment

Corp.

CTCI

Development

Corp.

ECOVE

Environment

Corp.

Investments 57.72 57.72 57.72

ECOVE

Environment

Corp.

ECOVE Wujih

Energy Corp.

Environmental

engineering

100.00 100.00 100.00

ECOVE

Environment

Corp.

ECOVE Waste

Management

Corp.

Environmental

engineering

100.00 100.00 100.00

ECOVE

Environment

Corp.

ECOVE Waste

Management

Corp.

ECOVE

Environment

Services Corp.

Environmental

engineering

93.16 93.16 93.16

ECOVE

Environment

Corp.

ECOVE

Environment

Services Corp.

ECOVE Miaoli

Energy Corp.

Environmental

engineering

75.00 75.00 75.00

Ownership (%)Name of

Subsidiary

Main Business

ActivitiesName of Investor Description

~14~

June 30,

2020

December 31,

2019

June 30,

2019

ECOVE

Environment

Corp.

Yuan Ding

Resources

Management

Corp.

Environmental

engineering

100.00 100.00 100.00 Note 2

ECOVE

Environment

Services Corp.

ECOVE

Environment

Consulting Corp.

Environmental

engineering

100.00 100.00 100.00 Note 2

CTCI Corp.

ECOVE

Environment

Services Corp.

SINOGAL-

Waste Services

Co., Ltd.

Environmental

engineering

60.00 60.00 60.00 Note 2

CTCI Corp. CTCI Overseas

(BVI) Corp.


CTCI Overseas

(BVI) Corp.

CTCI Overseas

Co., Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Overseas

Co., Ltd.

CTCI Beijing

Co., Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Overseas

Co., Ltd.

CIMAS

Engineering

Company

Planning and design

of construction

projects

100.00 83.00 83.00 Note 2, 3

CTCI Overseas

Co., Ltd.

Universal

Engineering

(BVI)

Corporation

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Overseas

Co., Ltd.

CIPEC

Construction

Company Inc.

Planning and design

of construction

projects

39.93 39.93 39.89 Note 1, 2

CTCI Overseas

Co., Ltd.

CINDA

Engineering &

Construction Pvt.

Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Corp.

CTCI Overseas

Co., Ltd.

CTCI Arabia

Ltd.

Design and

construction of

chemical factories

100.00 100.00 100.00 Note 2

CTCI Beijing

Co., Ltd.

CTCI Shanghai

Co., Ltd.

Consulting services

for construction

projects

100.00 100.00 100.00 Note 2

CTCI Shanghai

Co., Ltd.

CTCI Trading

Shanghai

Co., Ltd.

General trade 100.00 100.00 100.00 Note 2

CTCI Corp.

CTCI Overseas

Co., Ltd.

CTCI

Engineering

& Construction

Sdn. Bhd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

Ownership (%)


Subsidiary

Main Business


~15~

June 30,

2020

December 31,

2019

June 30,

2019

CTCI Overseas

Co., Ltd.

Sumber Mampu

Sdn. Bhd.

Investments 10.00 10.00 10.00 Note 1, 2

Sumber Mampu

Sdn. Bhd.

CTCI

Engineering &

Construction

Sdn. Bhd.

CTCI Malaysia

Sdn. Bhd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Corp.

Superiority

(Thailand) Co.,

Ltd.

CTCI (Thailand)

Co., Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Advanced

Systems Inc.

Century Ahead

Ltd.


Century Ahead

Ltd.

CTCI Advanced

Systems

Shanghai Inc.

Computer skills

services

100.00 100.00 100.00 Note 2

Universal

Engineering

(BVI)

Corporation

Superiority

(Thailand) Co.,

Ltd.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Corp. CTCI Machinery

Corp.

Planning and design

of construction

projects

100.00 100.00 100.00 Note 2

CTCI Corp. CCJV P1

Engineering &

Construction

Sdn. Bhd.

Planning of

construction projects

99.00 99.00 99.00 Note 2

CTCI

Development

Corp.

Crown Asia-2

Investment

Limited


CTCI Singapore

Pte. Ltd.

CTCI

Netherlands B.V.

Engineers and other

technical design and

consultancy

100.00 100.00 100.00 Note 2

CTCI Corp. CTCI-HDEC

(Chungli) Corp.

Waste water

treatment

sewerage system

51.00 51.00 51.00 Note 2

CTCI Corp. CTCI CMCE JV

Sdn. Bhd.

Planning and design

of construction

projects

51.00 51.00 51.00 Note 2

CTCI Corp. PT CTCI

International

Indonesia

Planning and design

of construction

projects

67.00 - - Note 2, 6

Ownership (%)


Subsidiary

Main Business


~16~

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

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

statements.

Note 2: The financial statements of the entity as of and for the six-month periods ended June 30,

2020 and 2019 were not reviewed by independent auditors as the entity did not meet the

definition of significant subsidiary.

Note 3: The equity interest of 33% and 17% was acquired by cash in March 2019 and February

2020, respectively.

Note 4: On October 18, 2019, the subsidiary, ECOVE Central Corp. Ltd., was dissolved after the

merger with the subsidiary, ECOVE Solar Energy Corp.

Note 5: CTCI Corp. sold its 99.05% equity interest in CTCI Resources Engineering Inc. to CTCI

Advanced Systems Inc. in line with the Group’s reorganization in January 2020.

Note 6: The Company jointly established PT CTCI International Indonesia with PT Eptco Dian

Persada and obtained 67% equity interest in January 2020.

Note 7: The financial statements of the entity as of and for the six-month periods ended June 30,

2019 were not reviewed by independent auditors as the entity did not meet the definition

of significant subsidiary.

June 30,

2020

December 31,

2019

June 30,

2019

ECOVE

Environment

Corp.

ECOVE

Environment

Services Corp.

ECOVE Solvent

Recycling Corp.

Environmental

engineering

90.00 90.00 90.00 Note 2

ECOVE

Environment

Corp.

ECOVE Solar

Energy Corp.

Electric Power

Supply

100.00 100.00 100.00

ECOVE Solar

Energy Corp.

ECOVE Solar

Power Corp.

Electric Power

Supply

100.00 100.00 100.00 Note 7

ECOVE Solar

Energy Corp.

ECOVE Central

Corp. Ltd.

Electric Power

Supply

- - 100.00 Note 4, 7

ECOVE Solar

Energy Corp.

ECOVE South

Corp. Ltd.

Electric Power

Supply

100.00 100.00 100.00 Note 2

ECOVE Solar

Energy Corp.

G.D

International,

LLC.

Electric Power

Supply

100.00 100.00 100.00 Note 2

G.D

International,

LLC.

Lumberton Solar

W2-090, LLC.

Electric Power

Supply

100.00 100.00 100.00 Note 7

Ownership (%)


Subsidiary

Main Business


~17~

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

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

E. Significant restrictions: None.

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

As of June 30, 2020, December 31, 2019 and June 30, 2019, the non-controlling interest amounted

to $2,705,865, $3,190,554 and $2,906,067, respectively. The information on non-controlling

interest and respective subsidiaries is as follows:

Summarized financial information of the subsidiary:

Balance sheets

Statements of comprehensive income

Name of

subsidiary

Principal

place

of business Amount

Ownership

(%) Amount

Ownership

(%) Amount

Ownership

(%)

ECOVE

Environment

Corp.

Taiwan 2,351,286$ 42.28% 2,638,453$ 42.28% 2,376,305$ 42.28%

December 31, 2019 June 30, 2019June 30, 2020

Non-controlling interest

June 30, 2020 December 31, 2019 June 30, 2019

Current assets 3,882,995$ 3,555,853$ 3,959,024$

Non-current assets 5,926,768 5,984,964 5,937,924

Current liabilities 2,708,964)( 1,734,603)( 2,521,948)(

Non-current liabilities 2,030,797)( 2,213,411)( 2,337,498)(

Total net assets 5,070,002$ 5,592,803$ 5,037,502$

ECOVE Environment Corp.

2020 2019

Revenue 1,348,638$ 1,255,554$

Profit before income tax 306,825 303,277

Income tax expense 57,737)( 46,516)(

Profit for the period 249,088 256,761

Other comprehensive (loss) income, net of tax 16,647)( 3,453

Total comprehensive income for the period 232,441$ 260,214$

Comprehensive income attributable to

non-controlling interest 40,015$ 51,957$

Dividends paid to non-controlling interest 120,339$ 184,766$


June 30,

For the three-month periods ended

~18~

Statements of cash flows

(4) Employee benefits

Pensions

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

derived from the actuarial valuation at the end of the prior financial year, adjusted for significant

market fluctuations since that time and for significant curtailments, settlements, or other significant

one-off events. Also, the related information is disclosed accordingly.

(5) Income tax

A. The interim period income tax expense is recognized based on the estimated average annual

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

interim period, and the related information is disclosed accordingly.

2020 2019

Revenue 2,648,694$ 2,539,391$

Profit before income tax 604,648 604,482

Income tax expense 113,898)( 103,284)(

Profit for the period 490,750 501,198

Other comprehensive (loss) income, net of tax 26,465)( 20,463

Total comprehensive income for the period 464,285$ 521,661$

Comprehensive income attributable to

non-controlling interest

Dividends paid to non-controlling interest 120,339$ 184,766$

78,565$ 100,292$


For the six-month periods ended June 30,

2020 2019

Net cash (used in) provided by operating

activities

1,022,271)($ 544,025$

Net cash used in investing activities 164,490)( 271,186)(

Net cash (used in) provided by financing

activities 96,923)( 250,103

(Decrease) increase in cash and cash

equivalents for the period 1,283,684)( 522,942

Cash and cash equivalents, beginning of period 1,679,523 1,543,162

Cash and cash equivalents, end of period 395,839$ 2,066,104$


For the six-month periods ended

June 30,

~19~

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

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

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

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

loss is recognized in profit or loss.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

There have been no significant changes as of June 30, 2020. Please refer to Note 5 of the consolidated

financial statements for the year ended December 31, 2019.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

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

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

Note 8.

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


Cash on hand and

revolving funds $ 345,762 $ 92,656 $ 266,366

Checking accounts and

demand deposits 6,022,147 13,914,792 9,889,384

Time deposits 6,137,048 6,760,133 6,871,821

12,504,957$ 20,767,581$ 17,027,571$

Items June 30, 2020 December 31, 2019 June 30, 2019

Current items:

Financial assets

mandatorily measured

at fair value through

profit or loss

Beneficiary certificates 3,682,549$ 275,101$ 368,083$

Derivatives 12,832 - 12,781

3,695,381 275,101 380,864

Valuation adjustment 2,119 744 1,258

3,697,500$ 275,845$ 382,122$

Financial liabilities

mandatorily measured

at fair value through

profit or loss

Derivatives 33,784$ 54,716$ 4,487$

~20~

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

loss are listed below:

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

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

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

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

under hedge accounting.

2020 2019

Financial assets mandatorily measured at

fair value through profit or loss

Beneficiary certificates 3,454$ 1,156$

Derivatives 26,342)( 24,907

22,888)($ 26,063$

2020 2019

Financial assets mandatorily measured at

fair value through profit or loss

Beneficiary certificates 3,508$ 3,807$

Derivatives 27,824)( 52,407

24,316)($ 56,214$

For the three-month periods ended June 30,


Contract Period

Foreign exchange swap contract (1 item) THB 490,000 thousand 2020.03.20~2021.03.19

Foreign exchange swap contract (1 item) THB 73,150 thousand 2020.05.05~2021.05.07

Foreign exchange contract-buy (24 items) USD 98,090 thousand 2019.07.08~2021.02.25

Merchandise exchange contract (4 items) USD 3,787 thousand 2020.04.20~2020.09.04

Contract Period

Foreign exchange swap contract (8 items) USD 80,000 thousand 2019.12.12~2020.01.09

Foreign exchange contract-buy (11 items) USD 35,370 thousand 2019.05.02~2020.09.17

June 30, 2020

Contract Amount

(notional principal)

December 31, 2019

Contract Amount


Contract Period

Foreign exchange swap contract (12 items) USD 91,000 thousand 2019.06.05-2019.07.10

Foreign exchange contract-buy (10 items) USD 34,370 thousand 2018.09.13-2020.06.11

Merchandise exchange contract (2 items) USD 1,203 thousand 2019.05.13-2019.08.22

June 30, 2019

Contract Amount


~21~

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

in Note 12(2).

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

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

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

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

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


Current items:

Debt instruments

Corporate bonds -$ -$ 27,461$

Valuation adjustment - - 170)(

- - 27,291

Equity instruments

Listed stocks 292,064 292,064 310,746

Valuation adjustment 139,696 172,879 191,313

431,760 464,943 502,059

431,760$ 464,943$ 529,350$

Non-current items:

Equity instruments

Unlisted shares 2,722,740$ 2,218,552$ 919,435$

Valuation adjustment 1,381,665)( 1,360,053)( 151,026)(

1,341,075$ 858,499$ 768,409$

2020 2019

Equity instruments at fair value through

other comprehensive income

Fair value change recognized in other

comprehensive income 35,128$ 11,123$

Cumulative loss reclassified to

retained earnings due to derecognition -$ 319)($

Debt instruments at fair value through



comprehensive income -$ 35)($

Exchange loss recognized in

profit or loss -$ 112)($

Interest income recognized in profit or loss -$ 262$


~22~

C. As of December 31, 2019, Powtec ElectroChemical Corp. continued to incur significant losses,

and the current assets are insufficient to cover the current liabilities. In addition, the company was

approved by the Board of Directors in February, 2020 negotiations file for bankruptcy.

Accordingly, the Company has adjusted the book value of the financial asset to $0. And recognized

the loss in valuation under changes in fair value of other comprehensive income.

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

income is provided in Note 12(2).

(4) Financial assets at amortized cost

A. As at June 30, 2020, December 31, 2019 and June 30, 2019, without taking into account any

collateral held or other credit enhancements, the maximum exposure to credit risk in respect of

the amount that best represents the financial assets at amortized cost held by the Group was

$932,149, $407,884 and $180,783, respectively.

B. Details of time deposits pledged to others as collateral are provided in Note 8.

2020 2019

Equity instruments at fair value through



comprehensive income 54,795)($ 47,978$

Cumulative loss reclassified to

retained earnings due to derecognition -$ 2,367)($

Debt instruments at fair value through



comprehensive income -$ 4$

Exchange gain recognized in

profit or loss -$ 508$

Interest income recognized in profit or loss -$ 529$



Current items: Time deposits with

maturity over three

months 768,789$ 277,164$ 72,903$

Non-current items:

Pledged time deposits 163,360$ 130,720$ 107,880$

~23~

(5) Notes and accounts receivable

A. The ageing analysis of notes receivable and accounts receivable is as follows:

The above analysis is calculated based on booking date.

B. As of June 30, 2020, December 31, 2019, June 30, 2019 and January 1, 2019, the balances of

receivables (including notes receivable) from contracts with customers amounted to $4,986,769,

$4,286,050, $4,566,176 and $8,914,287, respectively.

C. As of June 30, 2020, December 31, 2019 and June 30, 2019, without taking into account any

collateral held or other credit enhancements, the maximum exposure to credit risk in respect of

the amount that best represents the receivables (including notes receivable) held by the Group was

$4,943,010, $4,264,175 and $4,540,326, respectively.

D. Information relating to long-term receivables due in one year is provided in Note 6(11).

E. Information relating to credit risk is provided in Note 12(2) C(b).

(6) Prepayments


Notes receivable 15,949$ 63,360$ 109,923$

Accounts receivable 4,970,820 4,222,690 4,456,253

Long-term receivables

due in one year 296,035 312,489 284,357

Less: Allowance for bad

debts 43,759)( 21,875)( 25,850)(

5,239,045$ 4,576,664$ 4,824,683$


Up to 30 days 4,080,129$ 3,404,629$ 3,684,428$

31 to 90 days 144,285 94,072 273,531

91 to 180 days 178,665 346,698 203,121

Over 181 days 583,690 440,651 405,096

4,986,769$ 4,286,050$ 4,566,176$


Prepayment for materials 1,989,223$ 855,305$ 3,703,191$ Prepayment for

construction in progress 477,865 652,900 337,119

Others 1,163,426 1,250,465 1,251,257

3,630,514$ 2,758,670$ 5,291,567$

~24~

(7) Investments accounted for using the equity method

Associates

A. The basic information of the associate that is material to the Group is as follows:

2020 2019

At January 1 2,173,160$ 3,680,933$

Loss on disposal of investments accounted for

using the equity method - 219,336)(

Share of profit or loss of investments accounted

for using the equity method 75,520 208,525)(

Earnings distribution of investments accounted

for using the equity method 36,260)( 63,455)(

Changes in other equity items 32,218)( 14,149)(

At June 30 2,180,202$ 3,175,468$

Associates: June 30, 2020 December 31, 2019 June 30, 2019

Pan Asia Corp. 202,299$ 197,079$ 220,865$

Powtec ElectroChemical

Corp. (formerly

Powertec Energy Corp.) - - 1,038,147

Boretech Resource

Recovery Engineering

Co., Ltd. (Cayman) 485,186 462,705 441,243

MIE Industrial Sdn.

Bhd. 567,075 599,178 575,565

Blue Whale Water

Technology Co., Ltd. 408,061 411,670 399,109

EVER ECOVE Corp. 288,668 291,685 294,998

HDEC-CTCI (Linhai)

Corporation 228,913 210,843 205,541

2,180,202$ 2,173,160$ 3,175,468$

Shareholding ratio

Company name

Principal

place

of business June 30, 2019

Nature of

relationship

Method of

measurement

Powtec ElectroChemical

Corp.

Taiwan 16.03% Associate Equity method

~25~

B. The summarized financial information of the associate that is material to the Group is as follows:

Balance sheet

Statement of comprehensive income

C. The carrying amount of the Group’s interests in all individually immaterial associates and the

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

As of June 30, 2020, December 31, 2019 and June 30, 2019, the carrying amount of the Group’s

individually immaterial associates amounted to $2,180,202, $2,173,160 and $2,137,321,

respectively.

Powtec ElectroChemical Corp.

June 30, 2019

Current assets 679,234$

Non-current assets 22,284,913

Current liabilities 689,243)(

Non-current liabilities 12,162,435)(

Total net assets 10,112,469$

Share in associate’s net assets 1,621,029$

Carrying amount of the associate 1,038,147$


For the three-month period ended

June 30, 2019

Revenue -$

Total comprehensive loss 608,202)($


For the six-month period ended

June 30, 2019

Revenue $ -

Total comprehensive loss 1,178,861)($

2020 2019

Total comprehensive income 203,860$ 320,035$

2020 2019

Total comprehensive income 222,167$ 119,582$



~26~

D. In May 2019, the Board of Directors during its meeting resolved to dispose 19,580,000 shares of

Pan Asia Corp. totaling $224,494, of which $5,158 was recognized as gain on disposal of

investments (shown as other gains and losses).

E. The Group, a director, resigned from Powtec ElectroChemical Corp. in September 2019 for

business consideration. As the Group lost its significant influence over this company, the Group

reclassified the equity investment in Powtec ElectroChemical Corp. as “financial assets at fair

value through other comprehensive income - non-current” and recognized the result of

remeasurement of its investment retained at fair value in gain on disposal, shown as other gains

and losses, amounting to $510,967.

F. The financial statements of above investments accounted for using the equity method as of and

for the six-month periods ended June 30, 2020 and 2019 were not reviewed by independent

accountants.

G. The investments accounted for using the equity method, Pan Asia Corp., Blue Whale Water

Technology Co. Ltd., EVER ECOVE Corp., and HDEC-CTCI (Linhai) Corporation, were

recognized based on the financial statements which were audited by other auditors as of December

31, 2019.

~27~

(8) Property, plant and equipment

Land

Buildings and

structures Machinery

Transportation

equipment

Office

equipment

Unfinished

construction

and

prepayments

for equipment Others Total

At January 1, 2020

Cost 5,494,521$ 4,502,955$ 3,863,852$ 302,719$ 248,188$ 769,306$ 871,920$ 16,053,461$

Accumulated depreciation - 1,917,972)( 1,174,844)( 234,157)( 230,385)( - 707,631)( 4,264,989)(

5,494,521$ 2,584,983$ 2,689,008$ 68,562$ 17,803$ 769,306$ 164,289$ 11,788,472$

For the six-month period

ended June 30, 2020

Opening net book amount 5,494,521$ 2,584,983$ 2,689,008$ 68,562$ 17,803$ 769,306$ 164,289$ 11,788,472$

Additions - 696 43,857 1,536 3,371 779,817 3,776 833,053

Disposals - - 25)( 61)( - - 50)( 136)(

Depreciation charge - 62,115)( 182,008)( 14,949)( 2,650)( - 44,319)( 306,041)(

Reclassifications - 33,306 556,521 - - 179,891)( 9,801 419,737

Net exchange differences 4,973)( 37,202)( 10,740)( 1,658)( 648)( - 1,183)( 56,404)(

Closing net book amount 5,489,548$ 2,519,668$ 3,096,613$ 53,430$ 17,876$ 1,369,232$ 132,314$ 12,678,681$

At June 30, 2020

Cost 5,489,548$ 4,484,755$ 4,333,465$ 296,536$ 222,455$ 1,369,232$ 867,532$ 17,063,523$


5,489,548$ 2,519,668$ 3,096,613$ 53,430$ 17,876$ 1,369,232$ 132,314$ 12,678,681$

~28~

Land

Buildings and

structures Machinery

Transportation

equipment

Office

equipment

Unfinished

construction

and

prepayments

for equipment Others Total

At January 1, 2019

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

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

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


ended June 30, 2019

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

Additions 20 114,559 35,633 3,474 1,093 260,940 8,188 423,907

Disposals - - 3,281)( - 72)( - 569)( 3,922)(

Depreciation charge - 64,055)( 97,865)( 9,403)( 2,284)( - 47,651)( 221,258)(

Reclassifications - - 161,464 - - 116,731)( - 44,733

Net exchange differences 4,958 15,025 7,464 279 89 601 2,167 30,583

Closing net book amount 5,524,028$ 2,542,259$ 2,021,255$ 50,216$ 8,528$ 434,997$ 124,796$ 10,706,079$

At June 30, 2019

Cost 5,524,028$ 4,368,620$ 3,042,742$ 265,920$ 240,760$ 434,997$ 779,348$ 14,656,415$


5,524,028$ 2,542,259$ 2,021,255$ 50,216$ 8,528$ 434,997$ 124,796$ 10,706,079$

~29~

A. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitaliztion are as follows:

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

2020 2019

Amount capitalized 2,464$ 1,625$

Range of the interest rates for capitalization 1.10%~2.04% 1.09%~1.40%


June 30,

~30~

(9) Leasing arrangements - lessee

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

printers, etc. Rental contracts are typically made for periods of 1 to 28 years. Lease terms are

negotiated on an individual basis and contain a wide range of different terms and conditions. The

lease agreements do not impose covenants, but leased assets may not be used as security for

borrowing purposes.

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

C. For the three-month and six-month periods ended June 30, 2020 and 2019, the additions to right-

of-use assets were $52,461, $47,788, $70,856 and $48,899, respectively.


Carrying amount Carrying amount Carrying amount

Land $ 247,592 $ 258,991 $ 197,206

Buildings 54,903 73,633 80,350

Transportation

equipment (Business

vehicles) 43,868 48,233 54,221

Office equipment

(Photocopiers) 22,875 29,338 35,398

Other equipment 40,562 33,659 38,780

409,800$ 443,854$ 405,955$

2020 2019

Depreciation charge Depreciation charge

Land $ 23,492 $ 9,290

Buildings 10,433 12,294

Transportation equipment (Business vehicles) 7,408 8,087

Office equipment (Photocopiers) 4,260 3,425

Other equipment 434 2,204

46,027$ 35,300$

2020 2019

Depreciation charge Depreciation charge

Land $ 45,083 $ 16,999

Buildings 21,870 17,958

Transportation equipment (Business vehicles) 14,947 13,807

Office equipment (Photocopiers) 8,500 7,008

Other equipment 1,126 3,698

91,526$ 59,470$



~31~

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

E. For the three-month and six-month periods ended June 30, 2020 and 2019, the Group’s total cash

outflow for leases were $104,116, $86,446, $222,216 and $266,441, respectively.

F. Variable lease payments:

(a) The Group's lease contract contains a variable lease payment term that is linked to the amount

of electricity generated by solar energy. Changes in variable lease payments are recognized as

expense in the period specified in the contract.

(b) A 1% increase in the electricity generated from solar energy would increase total lease

payments by approximately 1% in accordance with the relevant variable lease contract.

(10) Investment property

2020 2019

Items affecting profit or loss

Interest expense on lease liabilities $ 766 $ 568

Gain on lease modification 370 -

Expense on short-term lease contracts 41,898 75,662

Expense on leases of low-value assets 181 517

Expense on variable lease payments 14,750 4,366

2020 2019

Items affecting profit or loss

Interest expense on lease liabilities $ 1,440 $ 1,186

Gain on lease modification 370 -

Expense on short-term lease contracts 105,500 149,657

Expense on leases of low-value assets 308 517

Expense on variable lease payments 24,351 10,268



Buildings and

Land structures Total

At January 1, 2020

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

Accumulated depreciation - 41,177)( 41,177)(

718,428$ 85,395$ 803,823$


ended June 30, 2020

Opening net book amount 718,428$ 85,395$ 803,823$

Depreciation charge - 2,049)( 2,049)(

Closing net book amount 718,428$ 83,346$ 801,774$

At June 30, 2020

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


718,428$ 83,346$ 801,774$

~32~

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

from the investment property are shown below:

Buildings and

Land structures Total

At January 1, 2019

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


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


ended June 30, 2019

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

Depreciation charge - 2,153)( 2,153)(

Closing net book amount 718,428$ 87,548$ 805,976$

At June 30, 2019

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


718,428$ 87,548$ 805,976$

2020 2019

Rental income from investment property 7,804$ 7,838$

Direct operating expenses arising from the

investment property that generated rental

income during the period 1,024$ 1,076$


investment property that did not generate

rental income during the period -$ -$

2020 2019

Rental income from investment property 15,607$ 15,641$


investment property that generated rental

income during the period 2,049$ 2,153$


investment property that did not generate

rental income during the period -$ -$

For the three-month periods ended

June 30,


June 30,

~33~

B. The fair value of the investment property held by the Group as at June 30, 2020 and 2019 were

$900,940 and $906,867, respectively, which was valued based on the trading prices of nearby

assets recorded in the Actual Selling Price Property Value Reporting, Ministry of Interior. The

fair value of the investment property held by the Group as at December 31, 2019 was $940,000,

which was valued by independent valuers. Valuations were made using the income approach

with key assumptions as follows:

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

Note 8.

(11) Other non-current assets

A. Long-term receivables:

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

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

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

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

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

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

6(5)), and is recognized as long-term receivables if it is expected to be realized more than 12

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

(a) The second-tier subsidiary, ECOVE Wujih Energy Corp., obtained the operation for the

construction of Wujih Refuse Incineration Plant by build - operate - transfer (BOT) mode

since April, 2000. In September, 2000, the “Taichung City waste incineration, commission

contract” between ECOVE Wujih Energy Corp., and Taichung Government had been signed.

The operating period is for 20 years starting from September 6, 2004. However, according to

December 31, 2019

Gross margin 2.54%

Growth rate 1.00%~1.50%

Discount rate 3.40%


Long-term receivables 2,324,139$ 2,503,219$ 2,603,802$ Less: Long-term

receivables due in one

year 296,035)( 312,489)( 284,357)(

2,028,104 2,190,730 2,319,445

Restricted bank deposits 48,872 53,563 64,133

Refundable deposits 312,396 146,639 138,729

Prepayments for business

facilities 208,538 367,916 882,355

Air pollution fee - - 54,267

Costs to fulfill a contract 88,311 120,909 -

Others 195,738 265,283 241,169

2,881,959$ 3,145,040$ 3,700,098$

~34~

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

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

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

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

operation.

(b) The second-tier subsidiary, ECOVE Miaoli Energy Corp., obtained the operation for the

construction of Miaoli County Refuse Incineration Plant by build - operate - transfer (BOT)

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

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

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

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

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

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

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

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

(c) ECOVE Wujih Energy Corp. and ECOVE Miaoli Energy Corp. need to comply with the

guarantee tonnage of waste from government according to the contract during construction

or operation.

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

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

price index”.

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

others as collateral is provided in Note 8.

C. The costs to fulfill a contract refer to the initial reconstruction cost of the Refuse Incineration

Plant for the contract that the subsidiary - ECOVE Environmental Services Corp. entered into

with the owner to operate the plant on its behalf, and it is amortized over the term of the contract.

(12) Short-term borrowings

Type of borrowing June 30, 2020 Interest rate range Collateral

Unsecured borrowings 4,943,624$ 0.88%~8.83% -

Secured borrowings 423,700 1%~1.23% Note 2

5,367,324$

Type of borrowing December 31, 2019 Interest rate range Collateral


Secured borrowings 305,000 0.95%~1.70% Notes 1 and 2

6,163,306$

~35~

Note 1: ECOVE Solvent Recycling Corporation has committed that upon completion of the

construction, ECOVE Solvent Recycling Corporation will complete the registration of

ownership on the construction and pledge with the basement of construction in first priority

to Chang Hwa Bank.

Note 2: The borrowing facilities were 100% jointly guaranteed by the subsidiary - ECOVE

Environment Corp.

Note 3: Properties pledged by the subsidiary-CTCI Development Corp. were guaranteed and

endorsed by the Company.

(13) Accounts payable

(14) Other payables

Type of borrowing June 30, 2019 Interest rate range Collateral


Secured borrowings 2,039,150 1.24%~1.7% Notes 1 and 3

10,396,242$


Materials payable 4,750,436$ 6,250,524$ 4,592,619$ Sub-contract costs

payable 4,655,824 4,996,203 4,664,584 Maintenance costs

payable 303,712 310,079 253,918 Incinerator equipment

usage fee payable 57,371 41,517 60,660

Others 101,681 109,967 92,285

9,869,024$ 11,708,290$ 9,664,066$


Accrued payroll 885,648$ 1,464,481$ 947,440$ Accrued employees’

compensation, directors’

and supervisors’

remuneration 123,913 123,434 153,812

Accrued insurance 73,419 71,953 70,226

Accrued pension 31,488 42,010 40,375

Dividends payable 1,937,086 - 2,113,814

Accrued consultant fee 246,386 250,456 -

Others 589,680 895,687 762,903

3,887,620$ 2,848,021$ 4,088,570$

~36~

(15) Other current assets/liabilities

Joint venture represents an accumulated cost over (under) the accumulated capital injection and bills.

(16) Bonds payable

The terms of the domestic unsecured bonds issued by the Company are as follows:

In 2019 and 2020, the Company issued $6,000,000 and $3,000,000, annual fixed interest rate of

0.9% and 0.77%, domestic unsecured bonds, as approved by the regulatory authority, respectively.

The bonds mature 5 years from the issue date (December 25, 2019 ~ December 25, 2024 and June

22, 2020 ~ June 22, 2025) and will be redeemed at the maturity date. The bonds were approved to

be issued on the Taipei Exchange on December 16, 2019 and June 11, 2020, respectively.

(17) Long-term borrowings

A. Information about the assets that were pledged for bank borrowings as collateral is provided in

Note 8.

B. The promissory note made by the subsidiary - ECOVE Environment Corp. as of June 30, 2020,

December 31, 2019 and June 30, 2019 were $2,016,401, $1,664,080 and $1,711,027, respectively.


Other current assets

Joint venture 1,323,116$ -$ -$

Others - 6,817 -

1,323,116$ 6,817$ -$

Other current liabilities

Joint venture -$ 1,734,466$ 2,938,901$ Long-term borrowings -

current portion 255,256 134,149 195,764

Receipts in advance 17,804 46,992 23,132

Others 81,399 76,334 72,051

354,459$ 1,991,941$ 3,229,848$

June 30, 2020 December 31, 2019

Bonds payable 9,000,000$ 6,000,000$

Less: Discount on bonds payable 15,540)( 10,471)(

8,984,460$ 5,989,529$

Type of borrowings June 30, 2020 December 31, 2019 June 30, 2019

Secured borrowings 5,637,203$ 5,524,822$ 3,619,337$

Less: Current portion 255,256)( 134,149)( 195,764)(

5,381,947$ 5,390,673$ 3,423,573$

Financing amount 7,886,401$ 7,733,525$ 5,789,786$

Interest rate range 1.09%~3.11963% 1.25%~4.38513% 1.36378%~5.029%

~37~

(18) Other non-current liabilities

Deferred revenue is a cash grant received from the New Jersey government in the United States in

2017 since Lumberton builds and operates a solar power station in New Jersey. The construction

period of the solar power station is 15 years.

(19) Pensions

A. Defined benefit pension plan

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

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

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

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

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

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

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

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

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

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

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

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

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

expected to qualify for retirement in the following year, the Company will make contributions

to cover the deficit by next March.

(b) For the aforementioned pension plan, the Group recognized pension costs of $7,788, $10,816,

$15,618 and $21,655 for the three-month and six-month periods ended June 30, 2020 and

2019, respectively.

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

December 31, 2021 amount to $86,581.

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’


Net defined benefit

liabilities

1,160,707$ 1,409,863$ 1,511,544$

Deposits received 375,607 326,007 336,382

Accrued recovery costs 110,693 109,623 97,708

Deferred revenue 147,937 157,648 164,873

Others 81,010 81,899 70,645

1,875,954$ 2,085,040$ 2,181,152$

~38~

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

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

employment.

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

month and six-month periods ended June 30, 2020 and 2019 were $49,669, $51,380,

$101,005 and $103,228, respectively.

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

employees. Appropriation of pension cost for the three-month and six-month periods ended

June 30, 2020 and 2019 were $20,038, $25,549, $40,628 and $57,503, respectively.

(20) Share-based payment - employee compensation

A. The Company

(a) For the six-month periods ended June 30, 2020 and 2019, the Company’s share-based

payment arrangements were as follows:

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

i. Details of the fifth plan of employee stock options outstanding are set forth below:

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting

conditions

Fifth plan of employee

stock options

2017.04.11 20,000 units 6 years Service of 2 to

4 years

Sixth plan of employee

stock options


4 years

Seventh plan of

employee stock options


4 years

Eighth plan of employee

stock options


4 years

No. of units

Weighted-

average No. of units

Weighted-

average

(shares in exercise price (shares in exercise price

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

Options outstanding

at beginning of period 17,264.94 NT$44.10 18,328.55 NT$49.60

Options waived 1,849.27)( - 388.11)( -

Options exercised 3.67)( NT$44.10 36.15)( NT$49.60

Options outstanding

at end of period 15,412.00 NT$44.10 17,904.29 NT$49.60

Options exercisable



2020 2019

~39~

ii. Details of the sixth plan of employee stock options outstanding are set forth below:

iii. Details of the seventh plan of employee stock options outstanding are set forth below:

No. of units

Weighted-


Weighted-

average



Options outstanding


Options waived 671.63)( - 469.32)( -

Options exercised 10.64)( NT$40.80 - -

Options outstanding


Options exercisable

at end of period 7,216.14 NT$40.80 - -


2020 2019

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period 18,886.10 NT$46.50 - -

Options granted - - 20,000.00 NT$48.90

Options waived 751.50)( - 357.44)( -

Options outstanding


Options exercisable

at end of period - - - -


2020 2019

~40~

iv. Details of the eighth plan of employee stock options outstanding are set forth below:

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

ended June 30, 2020 and 2019 were NT$34.61 and NT$46.40, respectively.

(d) As of June 30, 2020, December 31, 2019 and June 30, 2019, the range of exercise prices of

stock options outstanding were NT$36.9~NT$52.2, NT$40.80~NT$46.50 and

NT$45.90~NT$49.60, respectively, and the weighted-average remaining contractual period

were as follows:

No. of units

Weighted-

average

(shares in exercise price

Stock options thousands) (in dollars)

Options outstanding at beginning of period - -

Options granted 20,000.00 NT$36.90

Options waived 840.13)( -

Options outstanding at end of period 19,159.87 NT$36.90

Options exercisable at end of period - -


ended June 30, 2020

Type of arrangement June 30, 2020 December 31, 2019 June 30, 2019

Fifth plan of employee

stock options

3 years 3.5 years 4 years


stock options


Seventh plan of

employee stock

options


Eighth plan of

employee stock

options

5.5 years - -

~41~

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

Relevant information is as follows:

(f) For the three-month and six-month periods ended June 30, 2020 and 2019, expenses

recognized arising from share-based payment amounted to $33,274, $41,507, $79,026 and

$73,170, respectively.

B. Subsidiary – CTCI Advanced System Inc.

(a) For the six-month periods ended June 30, 2020 and 2019, the subsidiary’s share-based

payment transactions are set forth below:

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Fifth plan of

employee stock

options

2017.4.11 NT$ 52.2 NT$ 52.2 28.06%~

29.05%

4~5

years

0% 0.80%~

0.89%

NT$12.19~

NT$14.17

Sixth plan of

employee stock

options

2018.3.9 NT$ 45.9 NT$ 45.9 24.96%~

26.37%

4~5

years

0% 0.63%~

0.72%

NT$ 9.56~

NT$11.29

Seventh plan of

employee stock

options

2019.3.8 NT$ 48.9 NT$ 48.9 22.88%~

23.56%

4~5

years

0% 0.64%~

0.67%

NT$ 9.38~

NT$10.82

Eighth plan of

employee stock

options

2020.1.8 NT$ 36.9 NT$ 36.9 19.14%~

21.50%

4~5

years

0% 0.55%~

0.57%

NT$5.95~

NT$7.44

Type of arrangement Grant date

Quantity

granted

Contract

period

Vesting

conditions


stock options

2018.03.23 600 units 6 years Service of

2 to 4 years

Seventh plan of employee

stock options


2 to 4 years


stock options


2 to 4 years

~42~


i. Details of the sixth plan of employee stock options outstanding are set forth below

ii. Details of the seventh plan of employee stock options outstanding are set forth below:

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period 557.00 NT$41.20 583.00 NT$44.00

Options waived 14.00)( - 15.00)( -

Options exercised 45.75)( NT$41.20 - -

Options outstanding

at end of period 497.25 NT$41.20 568.00 NT$44.00

Options exercisable

at end of period 158.50 NT$41.20 - -


2020 2019

No. of units

Weighted-


Weighted-

average



Options outstanding

at beginning of period 581.00 NT$39.60 - -

Options granted - - 600.00 NT$42.20

Options waived 23.00)( - 12.00)( -

Options outstanding

at end of period 558.00 NT$39.60 588.00 NT$42.20

Options exercisable



2020 2019

~43~

iii. Details of the eighth plan of employee stock options outstanding are set forth below:

(c) For the six-month period ended June 30, 2020, the weighted-average exercise price at the

exercise date for those exercised stock options amounted to NT$41.2. For the six-month

period ended June 30, 2019, no stock options had been exercised.

(d) As of June 30, 2020, December 31, 2019 and June 30, 2019, the exercise price of stock

options outstanding were NT$39.60~NT$49.40, NT$39.60~NT$41.20 and NT$42.20~

NT$44.00, respectively. The weighted-average remaining contractual period were as follows:



No. of units

Weighted-

average




Options granted 600.00 NT$49.40


Options outstanding at end of period 579.00 NT$49.40



ended June 30, 2020


Sixth plan of

employee stock

options

3.75 years 4.25 years 4.75 years

Seventh plan of

employee stock

options

4.75 years 5.25 years 5.75 years

Eighth plan of

employee stock

options

5.5 years - -

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Sixth plan of

employee stock

options

2018.03.23 NT$46.85 NT$46.85 21.33%~

22.13%

4～5

years

0% 0.65%~

0.72%

NT$27.51

Seventh plan of

employee stock

options

2019.03.08 NT$42.20 NT$42.20 19.42%~

20.74%

4～5

years

0% 0.64%~

0.67%

NT$22.82

Eighth plan of

employee stock

options

2020.01.08 NT$49.40 NT$49.40 18.19%~

19.43%

4~5

years

0% 0.55%~

0.57%

NT$25.15

~44~

(f) For the three-month and six-month periods ended June 30, 2020 and 2019, the expenses

incurred on share-based payment transactions were $2,966, $982, $7,966 and $1,444,

respectively.

C. Subsidiary – ECOVE Environment Corp.

(a) For the six-month periods ended June 30, 2020 and 2019, the subsidiary’s share-based

payment transactions are set forth below:


i. Details of the sixth plan of employee stock options outstanding are set forth below:

Type of

arrangement Grant date

Quantity

granted Contract period

Vesting

conditions


stock options

2018.7.09 1,500 units 6 years Service of

2 years

Seventh plan of employee

stock options


2 years


stock options


2 years

No. of units

Weighted-


Weighted-

average



Options outstanding


Options waived 24.64)( - 24.05)( -

Options outstanding


Options exercisable



2020 2019

~45~

ii. Details of the seventh plan of employee stock options outstanding are set forth below:

iii. Details of the eighth plan of employee stock options outstanding are set forth below:

(c) For the six-month periods ended June 30, 2020 and 2019, no stock options had been executed.

(d) As of June 30, 2020, December 31, 2019, and June 30, 2019, the range of exercise prices of

stock options outstanding were NT$155~NT$203, NT$173.5~NT$212.5 and NT$173.5,

respectively, and the weighted-average remaining contractual period were as follows:

No. of units

Weighted-

average



Options outstanding at beginning of period 1,466.32 NT$201.00


Options exercised - -

Options revoked - -




ended June 30, 2020

No. of units

Weighted-

average




Options granted 1,500.00 NT$203.00


Options exercised - -

Options revoked - -




ended June 30, 2020



stock options


Seventh plan of

employee stock

options

5 years 5.5 years -

Eighth plan of 5.75 years - -

employee stock

options

~46~



(f) For the three-month and six-month periods ended June 30, 2020 and 2019, the expenses

incurred on share-based payment transactions were $7,406, $2,442, $12,478 and $4,966,

respectively.

(21) Share capital

A. As of June 30, 2020 and 2019, the Company’s authorized capital was $9,000,000 (including 800

million shares reserved for employee stock options), and the paid-in capital was $7,633,326 and

$7,633,100, consisting of 763,332,551 shares and 763,310,001 shares, respectively, with a par

value of NT$10 per share. Movements in the number of the Company’s ordinary shares

outstanding are as follows:

B. Treasury shares

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

shares are as follows:

Type of

arrangement

Grant

date

Stock

price

(in dollars)

Exercise

price

(in dollars)

Expected

price

volatility

Expected

option life

Expected

dividends

Risk free

interest

rate

Fair value

per unit

(in dollars)

Sixth plan of

employee stock

options

2018.7.9 NT$173.5 NT$173.5 11.38%~

12.71%

4~5

years

0% 0.66%~

0.71%

NT$17.88~

NT$22.44

Seventh plan of

employee stock

options

2019.7.24 NT$212.5 NT$212.5 10.83%~

11.00%

4~5

years

0% 0.56%~

0.58%

NT$20.57~

NT$23.68

Eighth plan of 2020.4.13 NT$203.00 NT$203.00 12.02%~ 4~5 0% 0.41%~ NT$20.26~

employee stock 11.58% years 0.45% NT$23.79

options

2020 2019

At January 1 763,318,240 763,273,848

Employee stock options exercised 14,311 36,153

At June 30 763,332,551 763,310,001

Name of company Reason for Number of shares

holding the shares reacquisition (shares in thousands) Carrying amount

Subsidiary-ECOVE

Environmental Services

Corp.

To maintain

stockholders’

equity

1 $ 10

Subsidiary-CTCI Investment

Corp."

344 3,241

Subsidiary-CTCI Development

Corp."

912 8,584

1,257 $ 11,835

June 30, 2020

~47~

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

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

shares and the amount bought back should not exceed the sum of retained earnings, paid-in

capital in excess of par value and realized capital surplus.

(22) Capital surplus

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

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

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

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

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

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

deficit unless the legal reserve is insufficient.



Subsidiary-ECOVE


Corp.

To maintain

stockholders’

equity

1 $ 10


Corp."

344 3,241


Corp."

912 8,584

1,257 $ 11,835



Subsidiary-ECOVE


Corp.

To maintain

stockholders’

equity

1 $ 10


Corp."

344 3,241


Corp."

912 8,584

1,257 $ 11,835

December 31, 2019

June 30, 2019

~48~

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

C. On November 1, 2019, the Board of Directors resolved to sell its 99.05% equity interest in the

subsidiary, CTCI Resources Engineering Inc., to the subsidiary, CTCI Advanced Systems Inc.,

at a price of $30 (in dollars) per share. This transaction was made for reorganization. The

difference between the sale price of $742,866 and the net equity value was $188,778, which was

adjusted to the equity attributable to the parent company and reduced the non-controlling

interests. The increase in the equity attributable to the parent company was recognized in capital

surplus of $187,351, cumulative translation differences of foreign operations of $591, and

unrealized gain or loss from investments in equity instruments measured at fair value through

other comprehensive income of $836. The transaction was completed on March 2, 2020.

D. Please refer to Note 6 (20) for details about the capital surplus - employee stock options.

(23) Retained earnings

A. When the company generates net profit 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

Share premium

Treasury share

transactions

Difference

between

consideration

and carrying

amount of

subsidiaries

acquired or

disposed

Employee stock

options Others Total

At January 1, 2020 2,867,566$ 5,043$ 211,172$ 637,425$ 9,242$ 3,730,448$

Employee stock options

exercised 455 - - - - 455


exercised by subsidiary - - 917 - - 917

Share-based payment

transaction - - - 88,219 - 88,219

Reorganization 187,351 - - - - 187,351

Non-controlling interests - - 13,788)( - - 13,788)(

At June 30, 2020 $ 3,055,372 $ 5,043 $ 198,301 $ 725,644 $ 9,242 $ 3,993,602

Share premium

Treasury share

transactions

Difference

between

consideration

and carrying

amount of

subsidiaries

acquired or

disposed

Employee stock

options Others Total

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


exercised by subsidiary 1,316 - - - - 1,316

Share-based payment

transaction - - - 102,075 - 102,075

At June 30, 2019 $ 2,867,285 $ 5,043 $ 211,172 $ 555,702 $ 9,242 $ 3,648,444

~49~

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 during their 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.

The Company’s dividend policy takes into consideration the requirements for business expansion

and industry growth, future operating needs and stability of financial structure. Thus, the

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

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

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

20% of total dividends distributed.

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

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

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

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

Company’s paid-in capital.

D. Special reserve

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

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

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

included in the distributable earnings.

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

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

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

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

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

property other than land.

~50~

E. The Company’s appropriations of 2019 and 2018 earnings had been resolved at the stockholders’

meeting on May 28, 2020 and May 29, 2019, respectively. Details are summarized below:

F. The appropriation of 2019 earnings became effective on August 1, 2020, as resolved by the

shareholders during their meeting on May 28, 2020.

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

please refer to Note 6(30).

(24) Operating revenue

Dividends Dividends

per share per share

Amount (in NT dollars) Amount (in NT dollars)

Set aside as legal reserve 116,599$ -$ 182,754$ -$

Set aside as special reserve 419,905 - - -

Reversal of special reserve 1,843)( - 1,417)( -

Distribition of cash dividends

from legal reserve 580,237 0.76 - -

Distribition of cash dividends

from earnings 946,402 1.24 1,721,210 2.255

2,061,300$ 2.00$ 1,902,547$ 2.255$

2019 2018

2020 2019

Revenue from contracts with customers 13,125,068$ 13,079,375$

Other-service concession revenue 136,432 302,090

$ 13,261,500 $ 13,381,465

2020 2019

Revenue from contracts with customers 24,430,625$ 26,656,618$

Other-service concession revenue 275,235 437,305

$ 24,705,860 $ 27,093,923



~51~

A. Disaggregation of revenue from contracts with customers

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

time in the following major product lines and geographical regions:

For the three-month

period ended

June 30, 2020

Construction

Engineering

Revenue Service Revenue

Other Operating

Revenue Total

Total segment

revenue

11,594,692$ 1,211,249$ 319,127$ 13,125,068$

Inter-segment

revenue 548,539 957 104,974 654,470

12,143,231$ 1,212,206$ 424,101$ 13,779,538$

Revenue from

external customer

contracts

Timing of revenue

recognition

At a point time -$ 1,211,249$ 114,245$ 1,325,494$

Over time 11,594,692 - 204,882 11,799,574

11,594,692$ 1,211,249$ 319,127$ 13,125,068$

For the three-month

period ended

June 30, 2019

Construction

Engineering


Other Operating

Revenue Total

Total segment

revenue

11,502,082$ 1,092,311$ 484,982$ 13,079,375$

Inter-segment

revenue 770,008 2,678 43,676 816,362

12,272,090$ 1,094,989$ 528,658$ 13,895,737$

Revenue from

external customer

contracts

Timing of revenue

recognition

At a point time -$ 1,092,311$ 484,982$ 1,577,293$

Over time 11,502,082 - - 11,502,082

11,502,082$ 1,092,311$ 484,982$ 13,079,375$

~52~

B. Contract assets and liabilities

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

For the six-month

period ended

June 30, 2020

Construction

Engineering


Other Operating

Revenue Total

Total segment

revenue

21,483,110$ 2,371,850$ 575,665$ 24,430,625$

Inter-segment

revenue 1,118,833 1,609 218,717 1,339,159

22,601,943$ 2,373,459$ 794,382$ 25,769,784$

Revenue from

external customer

contracts

Timing of revenue

recognition

At a point time -$ 2,371,850$ 215,454$ 2,587,304$

Over time 21,483,110 - 360,211 21,843,321

21,483,110$ 2,371,850$ 575,665$ 24,430,625$

For the six-month

period ended

June 30, 2019

Construction

Engineering


Other Operating

Revenue Total

Total segment

revenue

23,747,085$ 2,235,433$ 674,100$ 26,656,618$

Inter-segment

revenue 1,320,050 8,178 237,896 1,566,124

25,067,135$ 2,243,611$ 911,996$ 28,222,742$

Revenue from

external customer

contracts

Timing of revenue

recognition

At a point time -$ 2,235,433$ 674,100$ 2,909,533$

Over time 23,747,085 - - 23,747,085

23,747,085$ 2,235,433$ 674,100$ 26,656,618$

June 30, December 31, June 30, January 1,

2020 2019 2019 2019

Contract assets-

construction

contract revenue 19,349,327$ 18,653,485$ 18,840,920$ 24,823,432$

Contract liabilities-

construction

contract revenue 14,704,247)( 12,157,272)( 14,196,426)( 13,920,198)(

4,645,080$ 6,496,213$ 4,644,494$ 10,903,234$

~53~

(25) Interest income

(26) Other income

(27) Other gains and losses

2020 2019

Interest income from bank deposits 37,700$ 73,665$

2020 2019

Interest income from bank deposits 71,893$ 131,825$



2020 2019

Rental revenue 2,467$ 2,700$

Dividend income 26 128

Other income-others 30,205 22,166

32,698$ 24,994$

2020 2019

Rental revenue 3,679$ 4,257$

Dividend income 94 230

Other income-others 53,370 37,745

57,143$ 42,232$



2020 2019

Gain (loss) on disposal of property, plant and

equipment

2,051$ 1,383)($

Gain on disposal of investments - 5,158

Gain from lease modification 370 -

Foreign exchange (loss) gain 25,895)( 116,335

(Loss) gain on financial assets at

fair value through profit or loss 22,888)( 26,063

Other losses 5,713)( 3,616)(

52,075)($ 142,557$


~54~

(28) Finance costs

(29) Expenses by nature

2020 2019

Gain (loss) on disposal of property, plant and

equipment

29,923$ 1,353)($

Gain on disposal of investments - 5,158

Gain from lease modification 370 -


(Loss) gain on financial assets at

fair value through profit or loss 24,316)( 56,214

Other losses 8,149)( 6,327)(

226,908)($ 170,421$


2020 2019

Interest expense

Interest on loan 71,772$ 41,950$

Interest on corporate bonds 14,989 -

Interest on lease liability 766 568

87,527$ 42,518$

2020 2019

Interest expense

Interest on loan 123,115$ 123,389$

Interest on corporate bonds 28,670 -

Interest on lease liability 1,440 1,186

153,225$ 124,575$



2020 2019

Subcontract costs 6,744,052$ 4,444,837$

Materials 3,002,234 4,532,180

Employee benefit expense 2,137,324 2,159,197

Amortization charges on buried equipment 118,914 118,609

Temporary equipment - 1,562

Depreciation 190,964 139,728

Amortization 38,819 36,191

Others 569,579 1,581,278

12,801,886$ 13,013,582$


~55~

(30) Employee benefit expense

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

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

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

B. For the three-month and six-month periods ended June 30, 2020 and 2019, employees’

compensation was accrued at $815, ($2,863), $7,645 and $8,074, respectively; directors’

remuneration was accrued at $4,500, $4,500, $9,000 and $9,000, respectively. The

aforementioned amounts were recognized in salary expenses and other expenses.

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

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

six-month period ended June 30, 2020.

Employees’ compensation and directors’ remuneration for 2019 as resolved at the meeting of

Board of Directors were in agreement with those amounts recognized in the 2019 financial

statements.

2020 2019

Subcontract costs 10,546,231$ 9,952,088$

Materials 6,734,860 8,575,287

Employee benefit expense 4,248,116 4,394,498

Amortization charges on buried equipment 227,018 219,740

Temporary equipment - 1,566

Depreciation 399,616 282,881

Amortization 76,019 74,638

Others 1,437,473 2,621,112

23,669,333$ 26,121,810$


2020 2019

Salaries and wages 1,809,171$ 1,739,811$

Employee stock options 43,646 97,865

Labor and health insurance fees 110,290 119,780

Pension costs 77,495 87,745

Other personnel expenses 96,722 113,996

2,137,324$ 2,159,197$

2020 2019

Salaries and wages 3,544,679$ 3,623,810$

Employee stock options 99,470 141,783

Labor and health insurance fees 245,670 253,826

Pension costs 157,251 182,386

Other personnel expenses 201,046 192,693

4,248,116$ 4,394,498$



~56~

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

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

System” at the website of the Taiwan Stock Exchange.

(31) Income tax

A. Income tax expense

Components of income tax expense:

B. Assessment of income tax

The Company’s income tax returns through 2017 have been assessed and approved by the Tax

Authority.

C. The Company disagreed with the result of the 2017 income tax return assessed by the Tax

Authority and filed for further assessment on November 25, 2019.

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

back taxes in the amount of $134,635 thousand (SAR 17,212 thousand) for the years 2007

through 2010. CTCI Arabia Ltd. has appealed the decision but has initially paid the tax in the

amount of $134,635 thousand (SAR 17,212 thousand) in order to conduct subsequent

administrative litigation. Therefore, it is difficult to assess the maximum possible loss that CTCI

Arabia Ltd. could incur from this tax dispute.

2020 2019

Current tax:

Current tax on profits for the period 124,328$ 211,896$

Prior year income tax under (over)

estimation 40,777 33,830)(

Total current tax 165,105 178,066

Deferred tax:

Origination and reversal of temporary

differences 1,731)( 72,033)(

Effect of foreign exchange 186 -

Total deferred tax 1,545)( 72,033)(

Income tax expense 163,560$ 106,033$

2020 2019

Current tax:

Current tax on profits for the period 208,257$ 437,590$

Prior year income tax under (over)

estimation 40,777 33,830)(

Total current tax 249,034 403,760

Deferred tax:

Origination and reversal of temporary

differences 49,903 164,639)(

Effect of foreign exchange 486 -

Total deferred tax 50,389 164,639)(

Income tax expense 299,423$ 239,121$



~57~

(32) Earnings per share

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)

Basic earnings per share

Profit attributable to the

ordinary shareholders of the

parent

153,356$ 762,063 0.20NT$

Diluted earnings per share

Assumed conversion of all

dilutive potential ordinary

shares

Employees’ compensation - 206

Profit attributable to ordinary

shareholders of the parent plus

assumed conversion of all


shares 153,356$ 762,269$ 0.20NT$

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)




parent

272,064$ 762,016 0.36NT$




shares

Employees’ compensation - -


shareholders of the parent

plus assumed conversion of

all dilutive potential ordinary

shares 272,064$ 762,016 0.36NT$

For the three-month period ended June 30, 2020

For the three-month period ended June 30, 2019

~58~

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)




parent

310,472$ 762,063 0.41NT$




shares






shares 310,472$ 762,269$ 0.41NT$

Amount

after tax

Weighted-average

number of ordinary

shares outstanding

(shares in

thousands)

Earnings per share

(in dollars)




parent

493,537$ 762,016 0.65NT$




shares






shares 493,537$ 762,199$ 0.65NT$

For the six-month period ended June 30, 2020


~59~

(33) Supplemental cash flow information

A. Investing activities with partial cash payments

B. Financing activities with partial cash payments:

(34) Changes in liabilities from financing activities

The Group’s liabilities from financing activities for the six-month periods ended June 30, 2020 and

2019 included short-term borrowings, short-term notes and bills payable, corporate bonds payable,

long-term borrowings, and lease liabilities, changes in cash flow from financing, etc. The summary

amount is as follows. For the rest of the information, please refer to the cash flow statement.

2020 2019

Purchase of property, plant and equipment 833,053$ 423,907$

Add: Opening balance of payable on

equipment- 1,785,960

Less: Ending balance of payable on

equipment - -

Cash paid during the period 833,053$ 2,209,867$

2020 2019

Cash dividends 2,041,924$ 2,250,831$

Add: Opening balance of cash dividends

payable - -

Less: Ending balance of cash dividends

payable 1,967,387)( 2,113,814)(

Cash paid during the period 74,537$ 137,017$

2020 2019

At January 1 18,305,180$ 14,966,313$

Changes in cash flow from financing activities 2,036,253 805,820)(

Changes in other non-cash items 59,450 484,646

At June 30 20,400,883$ 14,645,139$

Liabilities from financing activities-gross

~60~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

(2) Significant transactions and balances with related parties

A. Sales of services

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

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

Names of related parties Relationship with the Group

Pan Asia Corp. Associate

MIE Industrial Sdn. Bhd. Associate

ZheJiang Boretech Environmental

Engineering Co., Ltd.

Associate

Blue Whale Water Technology Corp. Associate


(formerly Powertec Energy Corp.)

It was an associate and became a non-related

party starting from September, 2019.

EVER ECOVE CORP. Associate

HDEC-CTCI (Linhai) Corp. Associate

HDEC Corp. Other related party

CTCI Foundation Other related party

CTCI Education Foundation Other related party

PT Eptco Dian Persada Other related party

Topco Scientific Co., Ltd. Other related party

Topco International Investment Co., Ltd. Other related party

2020 2019

Associates 389,281$ 1,035,293$

Other related parties 2,436 4,511

391,717$ 1,039,804$

2020 2019

Associates 964,190$ 1,538,696$

Other related parties 5,620 5,620

969,810$ 1,544,316$



~61~

B. Purchases of services

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

negotiation by both parties.

C. Accounts receivable

D. Loans to related parties (shown as other receivables due from related parties)

Loans to related parties are repayable within one year after loans were granted, and the interest

was collected at 6% per annum for the year ended December 31, 2020.

E. Accounts payable

F. Other payables

G. Leasing arrangements - lessee

(a) The Group leases buildings from other related parties. Rental contracts are made for periods

from 2010 to 2029, and payments are made at the end of each year.

(b) On January 1, 2019 (the date of initial application of IFRS 16), the Group increased right-of-

use assets by $88,886.

2020 2019

Associates 46,647)($ 197,059$

Other related parties 132 20,488

46,515)($ 217,547$

2020 2019

Associates 27,857$ 568,843$

Other related parties 132 34,943

27,989$ 603,786$




MIE Industrial Sdn.

Bhd.

724,456$ 641,882$ 494,211$

Other associates 190,880 112,346 2,562

Other related parties - 6,650 -

915,336$ 760,878$ 496,773$


Other related parties 35,343$ -$ -$


Associates 485,471$ 648,957$ 792,220$


Dividends payable

Other related parties 67,801$ -$ -$

~62~

(c) Lease liability

i. Outstanding balance:

ii. Interest expense

H. Provision for endorsements and guarantees

I. The Group donated $12,000 and $15,000 to the CTCI Education Foundation in March, 2020 and

2019, respectively, for personnel training and enterprise social responsibility.

(3) Key management compensation


Other related

parties 77,153$ 81,077$ 84,988$

2020 2019

Other related parties 262$ 288$



Associates 3,307,300$ 3,307,300$ 3,307,300$

2020 2019

Salaries and other short-term employee

benefits

46,190$ 37,158$

Post-employment benefits 474 872

Other long-term benefits 568 619

Share-based payments 3,265 4,851

50,497$ 43,500$

2020 2019

Salaries and other short-term employee

benefits

136,403$ 131,420$

Post-employment benefits 989 1,131

Other long-term benefits 1,136 1,124

Share-based payments 7,255 7,576

145,783$ 141,251$



~63~

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

In addition to those items which have been disclosed in Note 6 (31), the significant contingent liabilities

and unrecognized contract commitments of the Group as of June 30, 2020 were as follows:

A. Guarantee

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

projects amounting to $5,555,951.

(b) The Group had letters of guarantee for warranty and security deposits under various construction

projects amounting to $46,195,969.

(c) The Group had outstanding notes payable for bank financing amounting to $116,203,624.

B. The Group had unused and outstanding letters of credit of $385,196.

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

accounts payable that were already paid and accrued in the future, of $50,353,735.

D. The Group had entered into contracts for acquisition of materials amounting to $1,336,718.

June 30, December 31, June 30,

Pledged assets 2020 2019 2019 Purpose

Financial assets at

amortized cost

Pledged time deposits 163,360$ 130,720$ 107,880$ Guarantee for

construction contracts

Other non-current assets

Pledged time deposits 41,613 46,305 56,875 Guarantee for oil expense,

litigation deposits,

construction contracts and

short-term borrowing

Refundable deposits 312,396 146,639 138,729 Guarantee for oil expense,

rent, golf certificates,

tender bonds, dormitory

deposit, and wages

Property, plant and

equipment

6,160,735 6,116,344 5,890,809 Guarantee for long-term

and short-term borrowings

Investment property 801,774 803,823 805,976

Guarantee for long-term

and short-term borrowings

7,479,878$ 7,243,831$ 7,000,269$

Book value

~64~

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

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

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

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

Corp. hire others to carry out the pending construction. In addition, because RPTI was unable to

perform the air conditioning construction as stated in the contract, CTCI Smart Engineering Corp.

revoked the air conditioning construction, and re-contract out to Jehng Long Engineering Corp. The

aforementioned construction expenses for hiring others and for working on the terminated

construction and losses were expected to be paid using RPTI’s estimated assessment amount and

retention payment. However, RPTI filed a lawsuit with the Taiwan Taipei District Court, alleging

improper deduction by CTCI Smart Engineering Corp. and requesting construction payment of

$72,024 along with an interest at 5% per annum from November 28, 2007 until the date of repayment.

The case was still in trial and CTCI Smart Engineering Corp. filed a counter-claim on August 8, 2008,

alleging RPTI’s estimated assessment amount and retention amount were insufficient to cover all

payables, and requesting payment of $94,569. The amount of $22,947 of the requested payment of

$94,569 shall be paid along with an interest at 5% per annum from July 16, 2008 until the date of

repayment, while the remaining request amount shall be paid along with an interest at 5% per annum

from the date when RPTI receives the transcription of counter-complaint until the date of repayment.

RPTI expanded its claim to request a payment of $111,079 along with an interest. On April 27, 2015,

Taiwan Taipei District Court rendered a judgement (Year 2008, Zian-Zi No. 21, Civil case) that CTCI

Smart Engineering Corp. needs to pay RPTI an amount of $84,305 which comprises of $72,574 along

with an interest at 5% per annum from November 28, 2007 and of the remaining $11,731 along with

an interest at 5% per annum from December 15, 2010 until the date of repayment. RPTI’s remaining

appeal and CTCI Smart Engineering Corp.’s counter-claim were refuted. CTCI Smart Engineering

Corp. disagreed with the verdict and filed an appeal with the Taiwan High Court in the prescribed

time, asking for rejection to RPTI’s claim and judgment of the counter-claim. The counter-claim is

requesting RPTI to pay an amount of $75,166 which comprises of $22,947 along with an interest at

5% per annum from July 16, 2008 and of remaining $52,218 along with an interest at 5% per annum

from August 9, 2008 until the date of repayment. RPTI filed an incidental appeal requesting CTCI

Smart Engineering Corp. to pay another amount of $7,092 along with an interest at 5% per annum

from November 28, 2007 until the date of repayment. Taiwan High Court rendered the judgement on

August 30, 2017. Refuted the verdict above and commanded that RPTI needs to pay CTCI Smart

Engineering Corp. $57,899 along with an interest at 5% per annum from August 9, 2008 until the

date of repayment. RPTI appealed to the Supreme Court during the legal period because they

disagreed with the judgement. The Supreme Court rendered the judgement that the verdict Taiwan

High Court rendered was void and reverted the case back to the Taiwan High Court for a retrial.

During the retrial, the judge gave explicit instructions that CTCI Smart Engineering Corp. should

obey the tenor sent by the Supreme Court and amend the statement of payment request to the

statement of creditor's rights confirmation request, the statement declares that RPTIC needs to pay

CTCI Smart Engineering Corp. an amount of $57,899 which comprises of $22,947 along with an

interest at 5% per annum from July 16, 2008 and of remaining $34,952 along with an interest at 5%

per annum from August 9, 2008 until the date of repayment and they would be included in the

~65~

Group’s claim in bankruptcy. On March 10, 2020, the Taiwan High Court amended the statement

and rendered the judgement whereby RPTI is required to pay CTCI Smart Engineering Corp. an

amount of $48,144 plus interest. RPTI then filed an appeal with the Supreme Court. According to the

Company’s appointed lawyers, the case is still pending in the Supreme Court, and the case number

is Year 2018, Chong-Shang-Gang-Yi-Zi No. 65.

F. The Company’s second-tier subsidiary, ECOVE Wujih Energy Corp., was ordered to pay $20,000

for air pollution prevention fees by the Environmental Protection Department of the Taichung City

Government on June 16, 2020. ECOVE Wujih Energy Corp. filed an administrative appeal and the

case is still pending with the Taichung City Government.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a

going concern in order to provide returns for shareholders and to maintain an optimal capital

structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group

may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new

shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio.

This ratio is calculated as net debt divided by total capital. Total borrowings include ‘current and

non-current borrowings’ as shown in the consolidated balance sheet. Total capital is calculated as

‘equity’ as shown in the consolidated balance sheet.

The gearing ratios as of June 30, 2020, December 31, 2019 and June 30, 2019 were as follows:


Total borrowings 20,006,980$ 17,877,578$ 14,266,492$

Total equity 17,926,117$ 19,346,997$ 19,263,594$

Gearing ratio 111.61% 92.40% 74.06%

~66~

(2) Financial risk of financial instruments

A. Financial instruments by category


Financial assets

Financial assets at

fair value through

profit or loss

Financial assets

mandatorily

measured at fair

value through

profit or loss 3,697,500$ 275,845$ 382,122$

Financial assets at

fair value through

other comprehensive

income

Designation of equity

instrument 1,772,835 1,323,442 1,270,468

Qualifying debit

instrument - - 27,291

1,772,835$ 1,323,442$ 1,297,759$

Financial assets

Financial assets at

amortized cost

Cash and cash

equivalents 12,504,957$ 20,767,581$ 17,027,571$

Financial assets at

amortized cost 932,149 407,884 180,783

Notes receivable 15,938 63,360 109,921

Accounts receivable 5,223,107 4,513,304 4,714,762

Accounts receivable

due from related

parties 915,336 760,878 496,773

Other receivables 126,171 245,735 230,637

Other receivables

due from related

parties 35,343 - -

Refundable deposits 312,396 146,639 138,729

Long-term

receivables 2,028,104 2,190,730 2,319,445

Other financial assets 48,872 53,563 64,133

22,142,373$ 29,149,674$ 25,282,754$

~67~

B. Risk management policies

(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign

exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

(b) Risk management is carried out by a central treasury department (Group treasury) under

policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges

financial risks in close cooperation with the Group’s operating units. The Board provides

written principles for overall risk management, as well as written policies covering specific

areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of

derivative financial instruments and non-derivative financial instruments, and investment of

excess liquidity.



Financial liabilities at

fair value through

profit or loss


mandatorily

measured at fair

value through profit

or loss 33,784$ 54,716$ 4,487$


at amortised cost

Short-term

borrowings 5,367,324$ 6,163,306$ 10,396,242$

Short-term notes and

bills payable 17,993 199,921 250,913

Notes payable 7,048 48,369 22,229

Accounts payable 9,869,024 11,708,290 9,664,066

Accounts payable due

to related parties 485,471 648,957 792,220

Other payables 3,887,620 2,848,021 4,088,570

Other payables due to

related parties 67,801 - -

Corporate bonds

payable 8,984,460 5,989,529 -

Long-term

borrowings

(including current

portion) 5,637,203 5,524,822 3,619,337

Deposits received 375,607 326,007 336,382

34,699,551$ 33,457,222$ 29,169,959$

Lease liability 393,903$ 427,602$ 378,647$

~68~

C. Significant financial risks and degrees of financial risks

(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the

transactions of the Company and its subsidiaries used in various functional currency,

primarily with respect to the USD and EUR. Exchange rate risk arises from future

commercial transactions and recognized assets and liabilities.

ii. Management has set up a policy to require group companies to manage their foreign

exchange risk against their functional currency. The companies are required to hedge their

entire foreign exchange risk exposure with the Group treasury.

~69~

iii. The Group’s businesses involve some non-functional currency operations (the

Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’

functional currency: USD and RMB). The information on assets and liabilities

denominated in foreign currencies whose values would be materially affected by the

exchange rate fluctuations is as follows:

Foreign Currency

Amount

(In Thousands) Exchange Rate Book Value

(Foreign currency: functional currency)

Financial assets

Monetary items

USD：NTD 69,717$ 29.6600 2,067,806$

EUR：NTD 672 33.2859 22,368

SGD：NTD 1,114 21.2517 23,674

JPY：NTD 344,461 0.2753 94,830

THB：NTD 4,904 0.9605 4,710

MOP：NTD 30,697 3.7101 113,889

RMB：NTD 11,223 4.1956 47,087

USD：VND 1,456 22,815.3846 43,185

USD：IDR 75 14,123.8100 2,225

EUR：VND 178 25,604.5385 5,925


Monetary items

USD：NTD 9,506 29.6600 281,948

EUR：NTD 93 33.2859 3,096

RMB：NTD 8,934 4.1956 37,483

MOP：NTD 1,395 3.7101 5,176

CHF：NTD 113 31.1489 3,520

USD：MYR 57,601 4.2825 1,708,446

USD：VND 283 22,815.3846 8,394

USD：THB 346 30.8798 10,262

SEK：THB 3,877 3.3042 12,304

USD：INR 3,499 75.5476 103,780

EUR：INR 684 84.7832 22,768

EUR：MYR 1,329 4.8060 44,237

June 30, 2020

~70~

Foreign Currency

Amount



Financial assets

Monetary items

USD：NTD 246,678$ 30.1500 7,437,342$

EUR：NTD 15,146 33.7982 511,908

SGD：NTD 56,526 22.3989 1,266,120

JPY：NTD 745,887 0.2775 206,984

MOP：NTD 18,978 3.7535 71,234

THB：NTD 40,364 1.0106 40,792

RMB：NTD 31,826 4.3294 137,787

GBP：NTD 33 39.6141 1,307

USD：VND 1,753 23,192.3077 52,853

USD：THB 3,060 29.8338 92,259

USD：MYR 547 4.0930 16,492

USD：EUR 1,465 0.8921 44,170

USD：SAR 636 3.7513 19,175

USD：PHP 2,956 50.6723 89,123

THB：USD 72,265 0.0335 73,031

RMB：USD 4,238 0.1436 18,347


Monetary items

USD：NTD 17,122 30.1500 516,228

EUR：NTD 1,593 33.7982 53,841

MOP：NTD 4,103 3.7535 15,401

JPY：NTD 43,250 0.2775 12,002

RMB：NTD 3,079 4.3294 13,330

THB：NTD 1,420 1.0106 1,435

USD：MYR 291 4.0930 8,774

USD：VND 309 23,192.3077 9,316

USD：INR 5,922 71.3103 178,548

EUR：USD 455 1.1210 15,378

December 31, 2019

~71~

iv. The unrealized exchange (loss) gain arising from significant foreign exchange variation

on the monetary items held by the Group for the three-month and six-month periods ended

June 30, 2020 and 2019 amounted to ($34,208), $129,705, ($131,588) and $134,193,

respectively.

Foreign Currency

Amount



Financial assets

Monetary items

USD：NTD 148,687$ 31.0560 4,617,623$

EUR：NTD 21,862 35.3091 771,928

JPY：NTD 1,745,108 0.2885 503,464

MOP：NTD 57,345 3.8544 221,031

SGD：NTD 3,441 22.9458 78,956

USD：VND 1,861 23,305.0000 57,795

USD：MYR 1,255 4.1415 38,975

USD：THB 779 30.7851 24,193

RMB：NTD 5,228 4.5180 23,620

THB：NTD 9,042 1.0088 9,122

USD：EUR 92 0.8795 2,857

AUD：NTD 53 21.7625 1,153


Monetary items

USD：NTD 6,199 31.0560 192,516

USD：THB 2,270 30.7851 70,497

EUR：NTD 1,695 35.3091 59,849

USD：MYR 1,001 4.1415 31,087

SGD：NTD 948 22.9458 21,753

MOP：NTD 4,023 3.8544 15,506

RMB：NTD 1,351 4.5180 6,104

THB：NTD 1,589 1.0088 1,603

June 30, 2019

~72~

v. Analysis of foreign currency market risk arising from significant foreign exchange

variation:

Degree of Effect on Profit

Effect on Other

Comprehensive

Variation or Loss Income


Financial assets

Monetary items

USD：NTD 1% 20,678$ -$

EUR：NTD 1% 224 -

SGD：NTD 1% 237 -

JPY：NTD 1% 948 -

THB：NTD 1% 47 -

MOP：NTD 1% 1,139 -

RMB：NTD 1% 471 -

USD：VND 1% 432 -

USD：IDR 1% 22 -

EUR：VND 1% 59 -


Monetary items

USD：NTD 1% 2,819 -

EUR：NTD 1% 31 -

RMB：NTD 1% 375 -

MOP：NTD 1% 52 -

SEK：NTD 1% 35 -

USD：MYR 1% 17,084 -

USD：VND 1% 84 -

USD：THB 1% 103 -

SEK：THB 1% 123 -

USD：INR 1% 1,038 -

EUR：INR 1% 228 -

EUR：MYR 1% 442 -

June 30, 2020

Sensitivity Analysis

~73~


Effect on Other

Comprehensive



Financial assets

Monetary items

USD：NTD 1% 74,373$ -$

EUR：NTD 1% 5,119 -

SGD：NTD 1% 12,661 -

JPY：NTD 1% 2,070 -

MOP：NTD 1% 712 -

THB：NTD 1% 408 -

RMB：NTD 1% 1,378 -

GBP：NTD 1% 13 -

USD：VND 1% 529 -

USD：THB 1% 923 -

USD：MYR 1% 165 -

USD：EUR 1% 442 -

USD：SAR 1% 192 -

USD：PHP 1% 891 -

THB：USD 1% 730 -

RMB：USD 1% 183 -


Monetary items

USD：NTD 1% 5,162 -

EUR：NTD 1% 538 -

MOP：NTD 1% 154 -

JPY：NTD 1% 120 -

RMB：NTD 1% 133 -

THB：NTD 1% 14 -

USD：MYR 1% 88 -

USD：VND 1% 93 -

USD：INR 1% 1,785 -

EUR：USD 1% 154 -

December 31, 2019


~74~


Effect on Other

Comprehensive



Financial assets

Monetary items

USD：NTD 1% 46,176$ -$

EUR：NTD 1% 7,719 -

JPY：NTD 1% 5,035 -

MOP：NTD 1% 2,210 -

SGD：NTD 1% 790 -

USD：VND 1% 578 -

USD：MYR 1% 390 -

USD：THB 1% 242 -

RMB：NTD 1% 236 -

THB：NTD 1% 91 -

USD：EUR 1% 29 -

AUD：NTD 1% 12 -


Monetary items

USD：NTD 1% 1,925 -

USD：THB 1% 705 -

EUR：NTD 1% 598 -

USD：MYR 1% 311 -

SGD：NTD 1% 218 -

MOP：NTD 1% 155 -

RMB：NTD 1% 61 -

THB：NTD 1% 16 -


June 30, 2019

~75~

Price risk

The Group’s equity securities, which are exposed to price risk, are the held financial assets at

fair value through other comprehensive income, financial assets at fair value through profit or

loss and available-for-sale financial assets. To manage its price risk arising from investments

in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done

in accordance with the limits set by the Group.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates

expose the Group to cash flow interest rate risk which is partially offset by cash and cash

equivalents held at variable rates. During the six-month periods ended June 30, 2020 and 2019,

the Group’s borrowings at variable rate were denominated in NTD and USD.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the

clients or counterparties of financial instruments on the contract obligations. According to

the Group’s credit policy, each local entity in the Group is responsible for managing and

analyzing the credit risk for each of their new clients before standard payment and delivery

terms and conditions are offered.

ii. Individual risk limits are controlled by internal risk that assesses the credit quality of the

customers, taking into account their financial position, past experience and other factors.

iii. The Group adopts the assumption under IFRS 9, that is, if the contract payments were past

due over 30 days based on the terms, there has been a significant increase in credit risk on

that instrument since initial recognition.

iv. The Group adopts the assumption under IFRS 9, that is, the default occurs when the

customers’ contract payments are past due over 90 days.

v. The Group classifies customers’ accounts receivable and contract assets in accordance

with customer types. The Group applies the simplified approach using provision matrix

and loss rate methodology to estimate expected credit loss under the provision matrix basis.

~76~

vi. The Group used the forecastability of Taiwan Institute of Economic Research boom

observation report to adjust historical and timely information to assess the default

possibility of accounts receivable. On June 30, 2020, December 31, 2019 and June 30,

2019, the provision matrix is as follows:

Note 1: Government institutions, state-owned enterprises and listed companies.

Note 2: Companies that are not included in Note 1.

Movements in relation to the Group applying the simplified approach to provide loss

allowance for accounts receivable, contract assets and lease payments receivable are as

follows:

Excellent

customers

(Note 1)

General

customers

(Note 2)

Individual

assessment

customers Total

June 30, 2020

Expected loss rate 0.03%~0.4% 0.03%~100% 100%

Total book value 3,973,077$ 3,337,054$ 777$ 7,310,908$

Loss allowance 1,291)( 41,691)( 777)( 43,759)(

Excellent

customers

(Note 1)

General

customers

(Note 2)

Individual

assessment

customers Total

December 31, 2019

Expected loss rate 0.03%~0.4% 0.03%~100% 100%

Total book value 4,304,995$ 2,483,418$ 856$ 6,789,269$

Loss allowance 1,386)( 19,633)( 856)( 21,875)(

Excellent

customers

(Note 1)

General

customers

(Note 2)

Individual

assessment

customers Total

June 30, 2019

Expected loss rate 0.03%~0.4% 0.03%~100% 50%~100%

Total book value 4,503,402$ 2,665,486$ 1,090$ 7,169,978$

Loss allowance 2,230)( 22,530)( 1,090)( 25,850)(

2020 2019

At January 1 21,875$ 25,595$

Provision for impairment 21,963 255

Write-offs 79)( -

At June 30 43,759$ 25,850$

Accounts receivable

~77~

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated

by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity

requirements to ensure it has sufficient cash to meet operational needs so that the Group

does not breach borrowing limits or covenants on any of its borrowing facilities. Such

forecasting takes into consideration the Group’s debt financing plans, covenant

compliance, and compliance with internal balance sheet ratio targets.

ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled

derivative financial liabilities into relevant maturity groupings based on the remaining

period at the balance sheet date to the contractual maturity date for non-derivative

financial liabilities and to the expected maturity date for derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

June 30, 2020 Less than 1 year More than 1 year

Short-term borrowings 5,388,700$ -$

Short-term notes and bills payable 18,014 -

Notes payable 7,048 -

Accounts payable

(including related parties) 10,354,495 -

Other payables 3,955,421 -

Lease liabilities 130,332 268,646

Bonds payable 77,100 9,308,400

Long-term borrowings

(including current portion) 335,975 5,668,809

Non-derivative financial liabilities:

December 31, 2019 Less than 1 year More than 1 year




Accounts payable




Bonds payable 54,000 6,216,000



~78~

(d) Cash flow risk from variations of rates

There is no significant cash flow risk from variations of rates since accounts payable are due

less than one year.

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of

financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the

entity can access at the measurement date. A market is regarded as active if it meets

all the following conditions: the items traded in the market are homogeneous; willing

buyers and sellers can normally be found at any time; and prices are available to the

public. The fair value of the Group’s investment in listed stocks, beneficiary

certificates with quoted market prices is included in Level 1.

Non-derivative financial liabilities:

June 30, 2019 Less than 1 year More than 1 year




Accounts payable






Derivative financial liabilities:

Between 3 months June 30, 2020 Less than 3 months and 1 year

Exchange rate swaps (net-settled) $ - $ 20,109

Forward exchange contracts 9,315 4,360


Between 3 months December 31, 2019 Less than 3 months and 1 year

Exchange rate swaps (net-settled) $ 29,875 $ -

Forward exchange contracts 22,784 2,057


Between 3 months June 30, 2019 Less than 3 months and 1 year

Exchange rate swaps (net-settled) $ 4,162 $ -

Merchandise exchange contracts 19 -

Forward exchange contracts - 306

~79~

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the

asset or liability, either directly or indirectly. The fair value of the Group’s investment

in most derivative instruments is included in Level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data.

B. The related information on financial and non-financial instruments measured at fair value by

level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

(a) The related information on the nature of the assets and liabilities is as follows:

June 30, 2020 Level 1 Level 2 Level 3 Total

Financial assets:

Financial assets at fair value

through profit or loss

Beneficiary certificates 3,684,668$ -$ -$ 3,684,668$

Derivative instruments - 12,832 - 12,832



income

Equity securities - current 431,760 - - 431,760

Equity securities - non-current - - 1,341,075 1,341,075

4,116,428$ 12,832$ 1,341,075$ 5,470,335$

Financial liabilities:

Financial liabilities at fair

value through profit or loss

Derivative instruments -$ 33,784$ -$ 33,784$

~80~

(b) The methods and assumptions the Group used to measure fair value are as follows:

i. The instruments the Group used market quoted prices as their fair values (that is, Level 1)

are listed below by characteristics:

December 31, 2019 Level 1 Level 2 Level 3 Total

Financial assets:



Beneficiary certificates 275,845$ -$ -$ 275,845$

Derivative instruments - - - -



income


Equity securities - non-current - - 858,499 858,499

740,788$ -$ 858,499$ 1,599,287$




　Derivative instruments -$ 54,716$ -$ 54,716$

June 30, 2019 Level 1 Level 2 Level 3 Total

Financial assets:



Beneficiary certificates 369,341$ -$ -$ 369,341$

Derivative instruments - 12,781 - 12,781



income


Equity securities - non-current - - 768,409 768,409

Debt securities - 27,291 - 27,291

871,400$ 40,072$ 768,409$ 1,679,881$




Derivative instruments -$ 4,487$ -$ 4,487$

Listed shares Open-end fund

Market quoted price Closing price Net asset value

~81~

ii. Except for financial instruments with active markets, the fair value of other financial

instruments is measured by using valuation techniques or by reference to counterparty

quotes.

C. There was no transfer between Level 1 and Level 2 for the six-month periods ended June 30,

2020 and 2019.

D. Movements on Level 3 for the six-month periods ended June 30, 2020 and 2019 are as follows:

E. For the six-month period ended June 30, 2020, there was no transfer into or out from Level 3.

F. Group finance segment is in charge of valuation procedures for fair value measurements being

categorized within Level 3, which is to verify independent fair value of financial instruments.

Such assessment is to ensure the valuation results are reasonable by applying independent

information to make results close to current market conditions, confirming the resource of

information is independent, reliable and in line with other resources and represented as the

exercisable price, and frequently calibrating valuation model, performing back-testing, updating

inputs used to the valuation model and making any other necessary adjustments to the fair value.

G. The following is the qualitative information of significant unobservable inputs and sensitivity

analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair

value measurement:

2020 2019

Equity securities Equity securities

At January 1 858,499$ 788,611$

Increase in investments in equity instruments

measured at fair value through other

comprehensive income 504,206 -

Recorded as unrealized losses on

valuation of investments in equity

instruments measured at fair value

through other comprehensive income 21,612)( 20,223)(

Effects of changes in foreign exchange rates 18)( 21

At June 30 1,341,075$ 768,409$

Fair value at

June 30, 2020

Valuation

technique

Significant

unobservable input

Range (weighted

average)

Relationship of

inputs to fair value

171,986$ Median:1.86

Average:1.91

Liquidity discount:

17.50%

Unlisted shares 1,169,089 Net assets value Not applicable - Not applicable

Non-derivative

equity instrument:

Unlisted shares Market

comparable

companies

Price to book ratio

multiple, discount

for lack of

marketability

The higher the

multiple and

control premium,

the higher the fair

value

~82~

H. The Group has carefully assessed the valuation models and assumptions used to measure fair

value. However, use of different valuation models or assumptions may result in different

measurement. The following is the effect of profit or loss or of other comprehensive income from

financial assets and liabilities categorized within Level 3 if the inputs used to valuation models

have changed:

Fair value at

December 31,

2019

Valuation

technique

Significant

unobservable input

Range (weighted

average)

Relationship of


Unlisted shares 193,598$ Market

comparable

companies

Price to book ratio

multiple, discount

for lack of

marketability

Median:1.86

Average:1.91

Liquidity discount:

17.5%

The higher the

multiple and

control premium,

the higher the fair

value

Unlisted shares 664,901 Net assets value Not applicable - Not applicable

Fair value at

June 30, 1019

Valuation

technique

Significant

unobservable input

Range (weighted

average)

Relationship of


Unlisted shares 219,392$ Market

comparable

companies

Price to book ratio

multiple, discount

for lack of

marketability

Median:1.83

Average:1.83

Liquidity discount:

17.5%

The higher the

multiple and

control premium,

the higher the fair

value

Unlisted shares 549,017 Net assets value Not applicable - Not applicable

Non-derivative

equity instrument:

Non-derivative

equity instrument:

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial

assetsEquity

instrument

Price to book

ratio multiple,

discount for lack

of marketability

± 1% -$ -$ 1,720$ 1,720)($

June 30, 2020

Recognized in

profit or loss

Recognized in other

comprehensive income

~83~

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

B. Provision of endorsements and guarantees to others: Please refer to table 2.

C. Holding of marketable securities at the end of the period (not including subsidiaries, associates

and joint ventures): Please refer to table 3.

D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million

or 20% of the Company’s paid-in capital: 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.

H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more:

Please refer to table 6.

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial

assetsEquity

instrument

Price to book

ratio multiple,

discount for lack

of marketability

± 1% -$ -$ 1,936$ 1,936)($

Input Change

Favourable

change

Unfavourable

change

Favourable

change

Unfavourable

change

Financial

assets

Equity

instrument

Price to book

ratio multiple,

discount for lack

of marketability

± 1% -$ -$ 1,716$ 1,741)($

June 30, 2019

Recognized in

profit or loss

Recognized in other


December 31, 2019

Recognized in

profit or loss

Recognized in other


~84~

I. Derivative financial instruments undertaken during the reporting periods: Please refer to Notes

6(2) and 12(2).

J. Significant inter-company transactions during the reporting periods: Please refer to table 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.

(4) Major shareholders information

Names, number of shares and shareholding ratio of major shareholders whose shareholding ratio

more than 5%: Please refer to table 10.

14. SEGMENTAL FINANCIAL INFORMATION

(1) General information

A. The Group has identified which segments should be reported based on the information used by

the Board of Directors to make decisions.

B. The Board of Directors classify reportable segments as construction engineering department,

environmental resource department, sales department and other operating departments.

(2) Measurement of segmental financial information

The Board of Directors evaluates the performance of segments based on segmental income. Interest

income and expenses cannot be attributed to any segment because such activity is handled by the

Company’s financial department.

(3) Segmental income, assets and liabilities of segments

The segmental financial information provided to the Board of Directors is as follows:

~85~

(4) Reconciliation information of segmental income

Intra-segment sales are of arm’s length transactions. The measurement of external revenues reported

to the Board of Directors is consistent with revenues in the statement of comprehensive income. The

reconciliation information of income from continuing operations before income tax and segmental

income is as follows:

Construction

Engineering

Environmental

Resource Sales Other Operating

Department Department Department Departments Total

External revenues 21,483,110$ 2,647,085$ 360,211$ 215,454$ 24,705,860$

Internal revenues 1,118,833 1,609 - 218,717 1,339,159

Segmental revenues 22,601,943$ 2,648,694$ 360,211$ 434,171$ 26,045,019$

Segmental income 235,632$ 574,902$ 57,103$ 121,195$ 988,832$

Depreciation and

amortization 272,117$ 151,991$ 11,290$ 40,237$ 475,635$


Construction

Engineering

Environmental

Resource Sales Other Operating

Department Department Department Departments Total

External revenues 23,747,085$ 2,533,349$ 67,249$ 746,240$ 27,093,923$

Internal revenues 1,320,050 8,178 - 237,896 1,566,124

Segmental revenues 25,067,135$ 2,541,527$ 67,249$ 984,136$ 28,660,047$

Segmental income 238,830$ 592,591$ 44,279$ 90,337$ 966,037$

Depreciation and

amortization 208,702$ 102,591$ 5,704$ 40,522$ 357,519$


2020 2019

Segmental income 988,832$ 966,037$

Adjustment and elimination 47,695 6,076

Share of profit (loss) of associates and joint

ventures accounted for using the equity

method 75,520 208,525)(

Interest income 71,893 131,825


Finance costs 153,225)( 124,575)(

Others 54,971 95,924

Income from continuing operations before

income tax 860,950$ 983,491$


Item Value

0 CTCI Corp. CTCI Arabia Ltd. Other

receivables

Yes 907,620$ 889,800$ -$ - 2 - For

operational

need

-$ None -$ 3,044,050$ 6,088,101$ -

0 CTCI Corp. CTCI Engineering &

Construction

Sdn. Bhd.

Other

receivables

Yes 303,300 296,600 296,600 1.836%~1.908% 2 - For

operational

need

- None - 3,044,050 6,088,101 -

0 CTCI Corp. CTCI Singapore

Pte. Ltd.

Other

receivables

Yes 605,080 593,200 - - 2 - For

operational

need

- None - 3,044,050 6,088,101 -

0 CTCI Corp. CTCI Machinery Corp. Other

receivables

Yes 600,000 600,000 600,000 1.01% 2 - For

operational

need

- None - 3,044,050 6,088,101 -

0 CTCI Corp. CCJV P1 Engineering &

Construction

Sdn. Bhd.

Other

receivables

Yes 1,830,367 1,794,430 1,215,467 1.352%~1.961% 2 - For

operational

need

- None - 3,044,050 6,088,101 -

0 CTCI Corp. CTCI Smart

Engineering Corp.

Other

receivables

Yes 500,000 500,000 500,000 0.93%~1.01% 2 - For

operational

need

- None - 3,044,050 6,088,101 -

0 CTCI Corp. CTCI (Thailand)

Co., Ltd.

Other

receivables

Yes 1,000,000 1,000,000 912,475 1.25%~1.5% 2 - For

operational

need

- None - 3,044,050 6,088,101 -

1 CTCI Overseas

Co., Ltd.

Superiority

(Thailand) Co., Ltd.

Other

receivables

Yes 71,853 - - - 2 - For

operational

need

- None - 736,396 736,396 -

1 CTCI Overseas

Co., Ltd.

CCJV P1 Engineering &

Construction

Sdn. Bhd.

Other

receivables

Yes 432,218 - - - 2 - For

operational

need

- None - 736,396 736,396 -

1 CTCI Overseas

Co., Ltd.

CIPEC

Construction Inc.

Other

receivables

Yes 20,988 - - - 2 - For

operational

need

- None - 736,396 736,396 -

1 CTCI Overseas

Co., Ltd.

CTCI

Americas Inc.

Other

receivables

Yes 124,353 - - - 2 - For

operational

need

- None - 736,396 736,396 -

2 ECOVE

Environment Corp.

ECOVE

Solar Energy Corp.

Other

receivables

Yes 200,000 200,000 200,000 1.01% 2 - For

operational

need

- None - 465,745 1,862,982 -

3 ECOVE

Environment

Services Corp.

ECOVE Solvent

Recycling Corp.

Other

receivables

Yes 36,000 30,000 - - 2 - For

operational

need

- None - 65,766 263,064 -

Allowance

for

doubtful

accounts

Collateral

Limit on loans

granted to

a single party

（Note 7）

Ceiling on

total loans granted

（Note 7） Footnote

Reason

for short-term

financing

（Note 6）

No.

（Note 1） Creditor Borrower

General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

the six-month

period ended

June 30, 2020

(Note 3)

Balance at

June 30, 2020

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

CTCI Corporation and its subsidiaries

Loans to others


Table 1 Expressed in thousands of NTD

(Except as otherwise indicated)

Table 1 Page 1

Item Value

Allowance

for

doubtful

accounts

Collateral

Limit on loans

granted to

a single party

（Note 7）

Ceiling on

total loans granted


Reason

for short-term

financing

（Note 6）

No.

（Note 1） Creditor Borrower

General

ledger

account

（Note 2）

Is a

related

party

Maximum

outstanding

balance during

the six-month

period ended

June 30, 2020

(Note 3)

Balance at

June 30, 2020

（Note 8）

Actual amount

drawn down

Interest

rate

Nature of

loan

（Note 4）

Amount of

transactions

with the

borrower

（Note 5）

3 ECOVE

Environment

Services Corp.

CTCI Smart

Engineering Corp.

Other

receivables

Yes 30,000$ 30,000$ -$ - 2 - For

operational

need

-$ None -$ 65,766$ 263,064$ -

3 ECOVE

Environment

Services Corp.

CTCI Machinery Corp. Other

receivables

Yes 30,000 30,000 30,000 1.01% 2 - For

operational

need

- None - 65,766 263,064 -

3 ECOVE

Environment

Services Corp.

CTCI Corp. Other

receivables

Yes 30,000 - - - 2 - For

operational

need

- None - 65,766 263,064 -

4 ECOVE

Solar Energy Corp.

ECOVE

Solar Power Corp.

Other

receivables

Yes 90,000 90,000 - - 2 - For

operational

need

- None - 409,355 409,355 -

4 ECOVE

Solar Energy Corp.

ECOVE

South Corp. Ltd.

Other

receivables

Yes 94,000 94,000 18,000 1.48% 2 - For

operational

need

- None - 409,355 409,355 -

5 ECOVE Waste

Management Corp.

CTCI Machinery Corp. Other

receivables

Yes 5,000 - - - 2 - For

operational

need

- None - 7,966 31,866 -

5 ECOVE Waste

Management Corp.

CTCI Smart

Engineering Corp.

Other

receivables

Yes 5,000 - - - 2 - For

operational

need

- None - 7,966 31,866 -

6 CTCI Investment

Corp.

CIPEC

Construction Inc.

Other

receivables

Yes 21,480 21,059 20,945 0.841%~0.889% 2 - For

operational

need

- None - 90,484 361,936 -

6 CTCI Investment

Corp.

Superiority

(Thailand) Co., Ltd.

Other

receivables

Yes 70,261 70,261 70,261 1.25% 2 - For

operational

need

- None - 90,484 361,936 -

6 CTCI Investment

Corp.

CTCI

Advanced

System Inc.

Other

receivables

Yes 100,000 90,000 90,000 0.91% 2 - For

operational

need

- None - 90,484 361,936 -

7 PT CTCI International

Indonesia

Pt Eptco

Dian Persada

Other

receivables

Yes 37,026 35,343 35,343 6.00% 2 - For

operational

need

- Guaranteed

by equity

interest

35,343 42,840 42,840 -

8 CTCI Advanced

System Inc.

CTCI Corp. Other

receivables

Yes 45,000 - - - 2 - For

operational

need

- None - 20,798 83,190 -

9 CTCI Resources

Engineering

Inc.

CTCI

Advanced

System Inc.

Other

receivables

Yes 25,000 25,000 - - 2 - For

operational

need

- None - 36,506 146,203 -

Table 1 Page 2

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognized, such as receivables-related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: Fill in the maximum outstanding balance of loans to others during the six-month period ended June 30, 2020.

Note 4: The numbers filled in for the nature of loans are as follows:

　　　(1) Business association is labeled as ‘1’.

　　　(2) Short-term financing is labeled as ‘2’.

Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.

Note 6: Fill in purpose of loan when nature of loan belongs to short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.

Note 7: The calculation and amount on ceiling of loans are as follows:

　　　[The company]

　　　(1) The limit on loans granted to a single party shall not exceed 20% of the Company's net assets value.

　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.

　　　[Domestic subsidiaries and overseas subsidiaries]

　　　(1) The limit on loans granted to a single party by domestic subsidiaries and overseas subsidiaries shall not exceed 10% and 40% of the Company's net assets value, respectively.

　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.

Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Govering Loaning of Funds and Making

of Endorsements/Guarantees by public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they

have not yet been appropriated. However, this balance should excluded the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has

authorised the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/

Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be

excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

Table 1 Page 3

Company name

Relationship with

the endorser/

guarantor

（Note 2）

0 CTCI Corp. Universal Engineering

(BVI) Corporation

2 45,660,756$ 30,330$ 29,660$ -$ -$ 0.19% 91,321,512$ Y N N -

0 CTCI Corp. CTCI Americas, Inc. 2 45,660,756 1,384,050 1,353,475 304,408 - 8.89% 91,321,512 Y N N -

0 CTCI Corp. CTCI Engineering &

Construction Sdn. Bhd.

2 45,660,756 2,042,448 2,016,880 1,298,381 - 13.25% 91,321,512 Y N N -

0 CTCI Corp. CINDA Engineering &

Construction Pvt. Ltd.

2 45,660,756 3,432,561 3,432,561 1,792,017 - 22.55% 91,321,512 Y N N -

0 CTCI Corp. CTCI Arabia Ltd. 2 45,660,756 3,503,115 3,425,730 3,456,755 - 22.51% 91,321,512 Y N N -

0 CTCI Corp. CTCI Singapore Pte. Ltd. 2 45,660,756 3,546,195 3,395,639 1,191,830 - 22.31% 91,321,512 Y N N -

0 CTCI Corp. CTCI Overseas

Co., Ltd.

2 45,660,756 4,330,371 4,236,405 1,350,924 - 27.83% 91,321,512 Y N N -

0 CTCI Corp. CTCI Machinery Corp. 2 45,660,756 13,059,202 12,221,058 11,873,888 - 80.29% 91,321,512 Y N N -

0 CTCI Corp. CTCI Trading Shanghai

Co., Ltd.

2 45,660,756 84,924 83,048 - - 0.55% 91,321,512 Y N Y -

0 CTCI Corp. CTCI Shanghai

Co., Ltd.

2 45,660,756 994,035 964,124 38,989 - 6.33% 91,321,512 Y N Y -

0 CTCI Corp. CTCI Beijing

Co., Ltd.

2 45,660,756 1,329,601 1,291,778 510,731 - 8.49% 91,321,512 Y N Y -

0 CTCI Corp. CCJV P1

Engineering &


2 45,660,756 894,735 163,130 - - 1.07% 91,321,512 Y N N -

0 CTCI Corp. CTCI Smart Engineering

Corp.

2 45,660,756 1,657,806 1,657,806 442,721 - 10.89% 91,321,512 Y N N -

0 CTCI Corp. CTCI (Thailand)

Co., Ltd.

2 45,660,756 2,953,343 2,903,871 754,275 - 19.08% 91,321,512 Y N N -

0 CTCI Corp. CTCI Chemical Corp. 2 45,660,756 19,335 18,908 12,296 - 0.12% 91,321,512 Y N N -

0 CTCI Corp. CTCI-HDEC (Chungli)

Corp.

6 45,660,756 102,000 102,000 102,000 - 0.67% 91,321,512 Y N N -

0 CTCI Corp. CB&I-CTCI B.V. 6 45,660,756 6,426,891 2,532,720 2,532,720 - 16.64% 91,321,512 N N N -

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee amount

to net asset value

of the endorser/

guarantor company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

June 30, 2020

(Note 5)


Provision of endorsements and guarantees to others




Number

（Note 1）

Endorser/

guarantor

Party being

endorsed/guaranteed

Limit on

endorsements/

guarantees

provided for

a single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

June 30, 2020

(Note 4)

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

Table 2 Page 1

Company name

Relationship with

the endorser/

guarantor

（Note 2）

Amount of

endorsements/

guarantees

secured with

collateral

Ratio of

accumulated

endorsement/

guarantee amount

to net asset value

of the endorser/

guarantor company

Ceiling on

total amount of

endorsements/

guarantees

provided

（Note 3）

Provision of

endorsements/

guarantees by

parent

company to

subsidiary

（Note 7）

Provision of

endorsements/

guarantees by

subsidiary to

parent

company

（Note 7）

Outstanding

endorsement/

guarantees

amount at

June 30, 2020

(Note 5)

Number

（Note 1）

Endorser/

guarantor

Party being

endorsed/guaranteed

Limit on

endorsements/

guarantees

provided for

a single party

（Note 3）

Maximum

outstanding

endorsement/

guarantee

amount as of

June 30, 2020

(Note 4)

Provision of

endorsements/

guarantees to

the party in

Mainland

China


Actual amount

drawn down

（Note 6）

0 CTCI Corp. Blue Whale Water

Technology Co., Ltd.

6 45,660,756$ 769,300$ 769,300$ 599,760$ -$ 5.05% 91,321,512$ N N N -

0 CTCI Corp. HDEC-CTCI (Linhai)

Corp.

6 45,660,756 1,215,000 1,215,000 522,000 - 7.98% 91,321,512 N N N -

0 CTCI Corp. CIPEC Construction Inc. 2 45,660,756 549,404 547,451 86,451 - 3.60% 91,321,512 Y N N -

0 CTCI Corp. EVER ECOVE Corp. 6 45,660,756 1,102,500 1,102,500 261,708 - 7.24% 91,321,512 N N N -

0 CTCI Corp. CTCI Malaysia Sdn. Bhd. 2 45,660,756 1,000,890 711,840 16,622 - 4.68% 91,321,512 Y N N -

1 CTCI Advanced

System Inc.

Century Ahead Ltd. 2 207,975 18,198 17,796 - - 7.63% 415,950 N N N -

2 CTCI Chemical

Corp.

CTCI Machinery Corp. 5 731,808 532,830 532,830 532,830 - 218.43% 1,463,617 N N N -

3 CTCI Resources

Engineering

Inc.

CTCI Smart Engineering

Corp.

5 1,095,174 267,102 267,102 267,102 - 65.07% 2,190,348 N N N -

4 ECOVE

Environment Corp.

ECOVE South

Corp. Ltd.

2 9,314,908 150,000 150,000 66,700 - 2.89% 13,972,362 N N N -

4 ECOVE

Environment Corp.

ECOVE Solar Power

Corp.

2 9,314,908 417,000 417,000 286,686 - 8.04% 13,972,362 N N N -

4 ECOVE

Environment Corp.

ECOVE Solar Energy

Corp.

2 9,314,908 2,108,706 2,070,725 1,194,261 - 39.94% 13,972,362 N N N -

4 ECOVE

Environment Corp.

ECOVE Solvent

Recycling Corp.

2 9,314,908 213,400 157,600 115,858 - 3.04% 13,972,362 N N N -

4 ECOVE

Environment Corp.

EVER ECOVE Corp. 6 9,314,908 220,500 220,500 52,342 - 4.25% 13,972,362 N N N -

5 ECOVE Solar Energy

Corp.

ECOVE South

Corp. Ltd.

2 4,093,551 14,000 14,000 11,900 - 1.32% 6,140,326 N N N -

5 ECOVE Solar Energy

Corp.

ECOVE Solar Power

Corp.

2 4,093,551 757,076 757,076 468,584 - 71.17% 6,140,326 N N N -

6 ECOVE Solar Power

Corp.

ECOVE Solar Energy

Corp.

3 1,060,185 12,420 12,420 12,420 - 4.54% 1,590,277 N N N -

Table 2 Page 2

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

(1) Having business relationship.

(2) The endorser/guarantor company owns directly or indirectly more than 50% voting shares of the endorsed/guaranteed company.

(3) The endorsed/guaranteed company owns directly or indirectly more than 50% voting shares of the endorser/guarantor company.

(4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

(5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

(7) The performance guarantees for the sale of pre-sales contracts under the Consumer Protection Law are jointly guaranteed.

Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s

“Procedures for Provision of Endorsements and Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount

of endorsements/guarantees provided in the footnote.

　　[The company]

　　　(1) The limit on endorsements and guarantees granted to a single party shall not exceed 300% of the Company’s net assets value in last financial statements which was reviewed by accountant.

　　　(2) The ceiling on total endorsements and guarantees shall not exceed 600% of the Company’s net assets value in last financial statements which was reviewed by accountant.

　　[Domestic subsidiaries and overseas subsidiaries]

　　　(1) The limit on endorsements and guarantees granted to a single party shall not exceed 100% to 400% of the Company's net assets value in last financial statements which was reviewed by accountant.

　　　(2) The ceiling on total endorsements and guarantees shall not exceed 200% to 600% of the Company's net assets value in last financial statements which was reviewed by accountant.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided.

Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other

events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.

Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2 Page 3

Type Name

Number of shares/

denominations

Book value

(Note 3)

Ownership

(%) Market value

CTCI Corp. Fund Fubon US Preferred Stock ETF - Financial assets at fair value through

profit or loss-current

140,000 2,800$ - 2,292$ -

CTCI Corp. Fund FSITC Taiwan Money Market - Financial assets at fair value through


12,989,248 200,000 - 200,072 -

CTCI Corp. Fund Taishin 1699 Money Market Fund - Financial assets at fair value through


110,206,553 1,500,126 - 1,500,925 -

CTCI Corp. Fund Capital Money Market Fund - Financial assets at fair value through


12,942,975 210,085 - 210,149 -

CTCI Corp. Fund Jih Sun Money Market Fund - Financial assets at fair value through


3,353,903 50,000 - 50,031 -

1,963,011 1,963,469$

Adjustment 458

1,963,469$

CTCI Corp. Common Stock China Steel Chemical Corp. - Financial asset at fair value through

other comprehensive income-current

1,691,916 93,982$ - 177,652$ -

CTCI Corp. Common Stock Taiwan Cement Corp. - Financial asset at fair value through


2,118,815 68,448 - 90,367 -

162,430 268,019$

Adjustment 105,589

268,019$

CTCI Corp. Common Stock Core Pacific City Co., Ltd. - Financial assets at fair value through

other comprehensive income-non-

current

22,428,000 360,000$ 2.26 171,986$ -

CTCI Corp. Common Stock CDIB & Partners Investment

Holding Corp.

The Company is the

supervisor

Financial assets at fair value through


current

27,000,000 250,000 2.48 250,000 -


Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)


Footnote

（Note 4）Securities held by

Relationship with the

securities issuer

(Note 2)

General

ledger account

Table 3

Marketable Securities (Note 1) As of June 30, 2020

Expressed in thousands of NTD


Table 3 Page 1

Type Name

Number of shares/

denominations

Book value

(Note 3)

Ownership

(%) Market value

Footnote



securities issuer

(Note 2)

General

ledger account


CTCI Corp. Common Stock Metro-consultant Co., Ltd. The Company is the

Board of director

Financial assets at fair value through


current

300,000 3,000$ 6.00 3,000$ -

CTCI Corp. Common Stock Ever Victory Global Limited. - Financial assets at fair value through


current

29,805,000 912,314 5.17 912,314 -

CTCI Corp. Common Stock Heng Keng Corp. - Financial assets at fair value through


current

20,000 3,000 5.12 - -

1,528,314 1,337,300$

Adjustment 191,014)(

1,337,300$

CTCI Investment Corp. Fund Franklin Templeton Sinoam Money Market Fund - Financial assets at fair value through


769,016 8,003$ - 8,003$ -

CTCI Investment Corp. Fund Jih Sun Money Market Fund - Financial assets at fair value through


726,367 10,836 - 10,836 -

CTCI Investment Corp. Common Stock CTCI Corp. The Company Financial assets at fair value through


current

344,436 13,640 0.05 13,640 -

CTCI Investment Corp. Common Stock Global Strategic Investment Inc. - Financial assets at fair value through


current

283,500 963 0.65 963 -

CTCI Investment Corp. Common Stock Powtec ElectroChemical Corp. - Financial assets at fair value through


current

211,291,688 - 16.03 - -

CTCI Development Corp. Common Stock CTCI Corp. The Company Financial assets at fair value through


current

912,170 36,122 0.12 36,122 -

CTCI Development Corp. Common Stock CTCI Advanced System Inc. Subsidiary Financial assets at fair value through


current

324,417 20,211 1.38 20,211 -

CTCI Development Corp. Fund Jih Sun Money Market Fund - Financial assets at fair value through


707,447 10,553 - 10,553 -

CTCI Resources

Engineering Inc.

Common Stock Global Strategic Investment Inc. - Financial assets at fair value through


current

567,000 1,924 1.29 1,924 -

CTCI (Thailand)

Co., Ltd.

Common Stock CHIYODA (Thailand) Co. Ltd. - Financial assets at fair value through


current

3,600 345 9.00 345 -

Crown Asia-2

Investment Limited

Common Stock CTCI Corp. The Company Financial assets at fair value through


current

500 20 - 20 -

CTCI Advanced

System Inc.

Common Stock Taiwan Cement Corp. - Financial assets at fair value through


972,277 41,468 - 41,468 -

ECOVE

Environment Corp.



505,902 21,577 - 21,577 -

ECOVE

Environment Corp.

Common Stock TeamWIN Opto-Electronics

Co., Ltd.

- Financial assets at fair value through


current

150,000 475 2.46 475 -

Table 3 Page 2

Type Name

Number of shares/

denominations

Book value

(Note 3)

Ownership

(%) Market value

Footnote



securities issuer

(Note 2)

General

ledger account


ECOVE

Environment Corp.

Common Stock Eastern Pacific Energy Sdn. Bhd. - Financial assets at fair value through


current

10,000 68$ 10.00 68$ -

ECOVE

Environment Corp.

Fund Prudential Financial Money Market Fund - Financial assets at fair value through


5,535,149 88,135 - 88,135 -

ECOVE

Environment Corp.

Fund FSITC Taiwan Money Market - Financial assets at fair value through


12,997,248 200,195 - 200,195 -

ECOVE


Corp.



1,339,745 57,140 - 57,140 -

ECOVE


Corp.

Common Stock CTCI Corp. The Company Financial assets at fair value through


1,028 41 - 41 -

ECOVE


Corp.

Fund Taishin 1699 Money Market Fund - Financial assets at fair value through


18,375,694 250,262 - 250,262 -

ECOVE


Corp.

Fund Jih Sun Money Market Fund - Financial assets at fair value through


17,451,304 260,326 - 260,326 -

ECOVE Wujih

Energy Corp.



508,845 21,702 - 21,702 -

ECOVE Wujih

Energy Corp.



15,142,341 233,236 - 233,236 -

ECOVE Wujih

Energy Corp.



12,276,364 167,194 - 167,194 -

ECOVE Waste

Management Corp.

Common Stock Taiwan Cement Corp. - Financial asset at fair value through


512,411 21,854 - 21,854 -

ECOVE Waste

Management Corp.



5,779,230 89,017 - 89,017 -

ECOVE Waste

Management Corp.



1,468,957 20,006 - 20,006 -

ECOVE Waste

Management Corp.



7,249,583 108,144 - 108,144 -

ECOVE Waste

Management Corp.

Fund Franklin Templeton Sinoam Money Market Fund - Financial assets at fair value through


3,740,998 38,930 - 38,930 -

ECOVE Miaoli Energy

Corporation



4,937,030 76,045 - 76,045 -

ECOVE Miaoli Energy

Corporation



8,786,141 119,660 - 119,660 -

ECOVE Miaoli Energy

Corporation

Fund Franklin Templeton Sinoam Money Market Fund - Financial assets at fair value through


288,525 3,002 - 3,002 -

Yuan Ding Resources

Management Corp.



2,524,271 37,655 - 37,655 -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities in accordance with IFRS 9, ‘Financial instruments’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortized cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 3 Page 3

Number of

shares (thousands) Amount

Number of

shares (thousands) Amount

Number of

shares (thousands) Selling price Book value

Gain (loss) on

disposal

Number of shares

(thousands) Amount

CTCI Corp. Taishin 1699 Money

Market Fund

Financial assets at fair

value through profit or

loss-current

- - - $ - 153,560 $ 2,090,000 43,353 $ 590,018 $ 589,874 $ 144 110,207 $ 1,500,126

CTCI Corp. Capital Money

Market Fund



loss-current

- - - - 33,886 550,000 20,943 340,000 339,915 85 12,943 210,085

CTCI Corp. Ever Victory Global

Limited Common

Stock


value through other

comprehensive income-

non-current

- - 13,181 408,108 16,624 504,206 - - - - 29,805 912,314

ECOVE


Corp.

Jih Sun Money

Market Fund



loss-current

- - - - 22,824 340,000 5,373 80,050 80,000 50 17,451 260,000

ECOVE


Corp.

Taishin 1699 Money

Market Fund



loss-current

- - - - 36,026 490,000 17,650 240,189 239,939 250 18,376 250,061

ECOVE Wujih

Energy Corp.

Taishin 1699 Money

Market Fund



loss-current

- - - - 23,752 323,000 11,475 156,128 155,975 153 12,277 167,025

ECOVE Waste

Management Corp.

Jih Sun Money

Market Fund



loss-current

- - - - 22,094 329,000 14,844 221,125 220,991 134 7,250 108,009

CTCI Resources

Engineering Inc.

Taishin 1699 Money

Market Fund



loss-current

- - 10,920 148,198 13,307 181,000 24,227 329,198 329,551 ( 353) - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.


Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital




Addition

（Note 3）

Balance as at

June 30, 2020

Investor

Marketable

securities

（Note 1）

General

ledger account

Counterparty

（Note 2）

Relationship with

the investor

（Note 2）

Balance as at

January 1, 2020

Disposal

（Note 3）

Table 4 Page 1

Purchases (sales) Amount

Percentage of total

purchases (sales) Credit term Unit price Credit term Balance

Percentage of

total notes/accounts

receivable (payable)

ECOVE Wujih

Energy Corp.

ECOVE Waste

Management Corp.

Second-tier subsidiary (Sales) 222,855)($ 0.90% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

87,568$ 1.43% -

ECOVE Environmental

Services Corp.

ECOVE Waste

Management Corp.

Second-tier subsidiary (Sales) 324,936)( 1.32% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

110,982 1.81% -


Co., Ltd.

Subsidiary (Sales) 115,774)( 0.47% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

8,305 0.14% -

CTCI Corp. EVER ECOVE Corp. Associate (Sales) 632,640)( 2.56% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

190,419 3.10% -

CTCI Corp. HDEC-CTCI (Linhai)

Corp.

Associate (Sales) 278,903)( 1.13% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

321 0.01% -

CTCI Machinery Corp. CTCI Corp. The Company (Sales) 259,411)( 1.05% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

40,280 0.39% -

CTCI Advanced

System Inc.

CTCI Corp. The Company (Sales) 101,201)( 0.41% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

62,793 0.61% -

CTCI Resources

Engineering Inc.

CTCI Development Corp. Subsidiary (Sales) 190,803)( 0.77% )( 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

80,638 0.78% -

ECOVE Waste

Management Corp.

ECOVE Wujih

Energy Corp.

Second-tier subsidiary Purchases 222,855 0.98% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

87,568)( 0.85% )( -

ECOVE Waste

Management Corp.

ECOVE Environmental

Services Corp.

Second-tier subsidiary Purchases 324,936 1.42% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

110,982)( 1.07% )( -

CTCI Overseas Co., Ltd. CTCI Corp. The Company Purchases 115,774 0.51% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

8,305)( 0.08% )( -

CTCI Corp. CTCI Machinery Corp. Subsidiary Purchases 259,411 1.14% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

40,280)( 0.39% )( -


System Inc.

The Company Purchases 101,201 0.44% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

62,793)( 0.61% )( -

CTCI Development Corp. CTCI Resources

Engineering Inc.

Subsidiary Purchases 190,803 0.84% 30 days after

seasonal billings

Negotiated by both

parties

No significant

difference

80,638)( 0.78% )( -


Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more




FootnotePurchaser/seller Counterparty


counterparty

Transaction

Differences in transaction terms

compared to third party

transaction Notes/accounts receivable (payable)

Table 5 Page 1

Table 6

Amount Action taken

CTCI Corp. CTCI Engineering &


Subsidiary 296,600$ Note -$ - -$ -$

CTCI Corp. CTCI Machinery Corp. Subsidiary 600,000 Note - - - -

CTCI Corp. CCJV P1 Engineering &


Subsidiary 1,215,467 Note - - - -

CTCI Corp. CTCI Smart

Engineering Corp.

Subsidiary 500,000 Note - - - -

CTCI Corp. CTCI (Thailand) Co., Ltd. Subsidiary 912,475 Note - - - -

ECOVE Environmental

Services Corp.

ECOVE Waste Management Corp. Second-tier subsidiary 110,982 1.53 - - - -

ECOVE Environment Corp. ECOVE Solar Energy Corp. Second-tier subsidiary 252,217 Note - - - -

CTCI Corp. EVER ECOVE Corp. Associate 190,419 8.37 - - - -

CTCI Engineering &


MIE Industrial Sdn. Bhd. Associate 722,222 0.07 - - - -

Note：Receivables arise from lending capital and personnel's transfer.


Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

June 30, 2020

Expressed in thousands of NTD


Amount collected

subsequent to the

balance sheet date

Allowance for

doubtful accounts Creditor Counterparty

Relationship

with the counterparty

Balance as at

June 30, 2020 Turnover rate

Overdue receivables

Table 6 Page 1

General ledger account Amount Transaction terms

Percentage of consolidated total

operating revenues or total assets

(Note 3)

0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Sales revenue 115,774$ Negotiated by

both parties

0.47%

1 ECOVE Environmental

Services Corp.

ECOVE Waste Management Corp. 3 Sales revenue 324,936 Negotiated by

both parties

1.32%

2 ECOVE Wujih Energy Corp. ECOVE Waste Management Corp. 3 Sales revenue 222,855 Negotiated by

both parties

0.90%

3 CTCI Machinery Corp. CTCI Corp. 2 Sales revenue 259,411 Negotiated by

both parties

1.05%

4 CTCI Advanced System Inc. CTCI Corp. 2 Sales revenue 101,201 Negotiated by

both parties

0.41%

5 CTCI Resources Engineering Inc. CTCI Development Corp. 2 Sales revenue 190,803 Negotiated by

both parties

0.77%

1 ECOVE Environmental

Services Corp.

ECOVE Waste Management Corp. 3 Accounts receivable 110,982 Negotiated by

both parties

0.16%

0 CTCI Corp. CTCI Engineering & Construction Sdn. Bhd. 1 Other receivables 296,600 Negotiated by

both parties

0.42%

0 CTCI Corp. CTCI Machinery Corp. 1 Other receivables 600,000 Negotiated by

both parties

0.86%

0 CTCI Corp. CCJV P1 Engineering & Construction Sdn. Bhd. 1 Other receivables 1,215,467 Negotiated by

both parties

1.74%

0 CTCI Corp. CTCI Smart Engineering Corp. 1 Other receivables 500,000 Negotiated by

both parties

0.72%

0 CTCI Corp. CTCI (Thailand) Co., Ltd. 1 Other receivables 912,475 Negotiated by

both parties

1.31%

6 ECOVE Environment Corp. ECOVE Solar Energy Corp. 3 Other receivables 252,217 Negotiated by

both parties

0.36%

0 CTCI Corp. CTCI Overseas (BVI) Co. and its subsidiaries. 1 Advance

construction receipt

23,082,517 Negotiated by

both parties

33.06%

3 CTCI Machinery Corp. CTCI Corp. 2 Advance


2,031,650 Negotiated by

both parties

2.91%

5 CTCI Resources Engineering Inc. CTCI Corp. 2 Advance


534,033 Negotiated by

both parties

0.76%

7 CTCI (Thailand ) Co., Ltd. CTCI Corp. 2 Advance


635,210 Negotiated by

both parties

0.91%

0 CTCI Corp. CTCI Development Corp. 1 Refundable deposits 120,959 Negotiated by

both parties

0.17%


Significant inter-company transactions during the reporting period




Number

(Note 1) Company name Counterparty

Relationship

(Note 2)

Transaction

Table 7 Page 1

General ledger account Amount Transaction terms

Percentage of consolidated total

operating revenues or total assets

(Note 3)

Number

(Note 1) Company name Counterparty

Relationship

(Note 2)

Transaction

0 CTCI Corp. CTCI Americas, Inc. 1 Guarantee 1,353,475$ Not applicable Not applicable

0 CTCI Corp. CTCI Engineering & Construction Sdn. Bhd. 1 Guarantee 2,016,880 Not applicable Not applicable

0 CTCI Corp. CINDA Engineering & Construction Pvt. Ltd. 1 Guarantee 3,432,561 Not applicable Not applicable

0 CTCI Corp. CTCI Arabia Ltd. 1 Guarantee 3,425,730 Not applicable Not applicable

0 CTCI Corp. CTCI Singapore Pte. Ltd. 1 Guarantee 3,395,639 Not applicable Not applicable

0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Guarantee 4,236,405 Not applicable Not applicable

0 CTCI Corp. CTCI Machinery Corp. 1 Guarantee 12,221,058 Not applicable Not applicable

0 CTCI Corp. CTCI Shanghai Co., Ltd. 1 Guarantee 964,124 Not applicable Not applicable

0 CTCI Corp. CTCI Beijing Co., Ltd. 1 Guarantee 1,291,778 Not applicable Not applicable

0 CTCI Corp. CCJV P1 Engineering & Construction Sdn. Bhd. 1 Guarantee 163,130 Not applicable Not applicable

0 CTCI Corp. CTCI Smart Engineering Corp. 1 Guarantee 1,657,806 Not applicable Not applicable

0 CTCI Corp. CTCI (Thailand) Co., Ltd. 1 Guarantee 2,903,871 Not applicable Not applicable

0 CTCI Corp. CTCI-HDEC (Chungli) Corp. 1 Guarantee 102,000 Not applicable Not applicable

0 CTCI Corp. CIPEC Construction Inc. 1 Guarantee 547,451 Not applicable Not applicable

0 CTCI Corp. CTCI Malaysia Sdn. Bhd. 1 Guarantee 711,840 Not applicable Not applicable

9 CTCI Chemical Corp. CTCI Machinery Corp. 3 Guarantee 532,830 Not applicable Not applicable

5 CTCI Resources Engineering Inc. CTCI Smart Engineering Corp. 3 Guarantee 267,102 Not applicable Not applicable

6 ECOVE Environment Corp. ECOVE South Corp. Ltd. 3 Guarantee 150,000 Not applicable Not applicable

6 ECOVE Environment Corp. ECOVE Solar Power Corp. 3 Guarantee 417,000 Not applicable Not applicable

6 ECOVE Environment Corp. ECOVE Solar Energy Corp. 3 Guarantee 2,070,725 Not applicable Not applicable

6 ECOVE Environment Corp. ECOVE Solvent Recycling Corp. 3 Guarantee 157,600 Not applicable Not applicable

10 ECOVE Solar Energy Corp. ECOVE Solar Power Corp. 3 Guarantee 757,076 Not applicable Not applicable

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between

subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction;

for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Table 7 Page 2

Balance as at

June 30, 2020

Balance as at

December 31,

2019 Number of shares Ownership (%) Book value

CTCI Corp. CTCI Smart Engineering

Corp.

Taiwan Design, management,

and building of nuclear

power, thermal power,

fire pumped storage

power generation and

others related to

engineering

$ 456,251 $ 456,251 59,098,624 97.09 ($ 317,160) ($ 146,618) ($ 142,352) A subsidiary

CTCI Corp. CTCI Resources

Engineering Inc.

Taiwan Engineering technical service - 262,649 - - - 56,825 18,243 A subsidiary


Systems Inc.

Taiwan Systems planning, design,

integration, and

engineering for various

IT systems, etc.

44,409 44,409 11,444,842 48.72 101,329 71,735 34,948 A subsidiary

CTCI Corp. CTCI Development Corp. Taiwan Real estate and leasing business 1,870,000 1,870,000 198,324,591 100.00 2,906,353 63,008 66,818 A subsidiary

CTCI Corp. CTCI Investment Corp. Taiwan General investment 2,072,000 2,072,000 207,200,000 100.00 896,596 ( 3,060) ( 636) A subsidiary

CTCI Corp. ECOVE Environment

Corp.

Taiwan General investment 938,889 938,889 38,457,105 57.31 2,668,087 405,689 231,965 A subsidiary

CTCI Corp. CTCI (Thailand)

Co., Ltd.

Thailand Design and building of

petrochemical plant

116,894 116,894 1,249,500 49.00 ( 326,844) 157,565 77,207 A subsidiary

CTCI Corp. CTCI Machinery Corp. Taiwan Secondary processing

of steel, piping, heat

treatment, manufacture

of pollution control

equipment and nondestructive

testing, etc.

293,800 293,800 20,000,000 100.00 602,032 52,553 52,553 A subsidiary

CTCI Corp. CTCI Arabia Ltd. Arabia Construction and

maintenance of refinery,

storage tanks and

chemical plant

23,312 23,312 500 50.00 ( 585,496) ( 46,365) ( 23,183) A subsidiary


Information on investees (not including investees in Mainland China)




Net profit (loss)

of the investee for the

six-month period

ended June 30, 2020

(Note 2(2))

Investment income

(loss) recognized by

the Company for the

six-month period

ended June 30, 2020

(Note 2(3)) Footnote Investor

Investee

(Notes 1 and 2) Location Main business activities

Initial investment amount Shares held as at June 30, 2020

Table 8 Page 1

Balance as at

June 30, 2020

Balance as at

December 31,


Net profit (loss)


six-month period

ended June 30, 2020

(Note 2(2))

Investment income


the Company for the

six-month period

ended June 30, 2020


Investee



CTCI Corp. Sinogal-Waste Services

Corp.

Macao Management of waste

recycling site and maintenance

of related mechanical and

equipment, etc.

$ 4,958 $ 4,958 - 30.00 $ 30,434 $ 80,011 $ 24,003 A subsidiary

CTCI Corp. CTCI Singapore Pte. Ltd. Singapore Investment and planning of

related engineering

152,254 152,254 5,100,000 100.00 ( 1,114,936) ( 65,500) ( 65,500) A subsidiary


(BVI) Corp.

BVI Investment and planning of

related engineering

308,554 308,554 6,740,000 100.00 2,140,683 173,979 173,979 A subsidiary

CTCI Corp. CTCI Engineering &

Construction Sdn.Bhd.

Malaysia Investment and planning of

related engineering

4,118 4,118 450,000 60.00 63,453 ( 100,748) ( 60,449) A subsidiary

CTCI Corp. CTCI CMCE JV Sdn. Bhd Malaysia Construction planning 2,759 2,759 382,500 51.00 ( 47,623) ( 4,643) ( 2,368) A subsidiary

CTCI Corp. CTCI Americas, Inc. USA To extend foreign business,

the Group strengthen the

collaborative relationship with

local business owners and

suppliers, developing adequate

potential suppliers, and help

them to operate projects,

purchase and other related

businesses

3,217 3,217 100,000 100.00 41,679 53,167 53,167 A subsidiary

CTCI Corp. CCJV P1 Engineering &


Malaysia Construction planning 2,259 2,259 247,500 99.00 ( 551,787) ( 109,765) ( 108,667) A subsidiary

CTCI Corp. CTCI-HDEC (Chungli) Corp. Taiwan Sewerage System BOT

Project

255,000 255,000 25,500,000 51.00 242,040 ( 221) ( 113) A subsidiary

CTCI Corp. PT CTCI International

Indonesia

Indonesia Engineering planning as well as

procurement and construction

76,167 - 341,700,000 67.00 70,812 ( 1,409) ( 944) A subsidiary

CTCI Corp. Blue Whale Water

Technology Co., Ltd.

Taiwan Wastewater Reclamation Unit

BTO Project

347,900 347,900 36,260,000 49.00 408,061 66,635 32,651 An investee

under equity

methodCTCI Corp. Pan Asia Corp. Taiwan Input of foreign labor

and technologies,

technical cooperation

with foreign construction

business, and construction of

engineering construction, etc.

35,826 35,826 19,639,509 17.16 202,299 34,091 5,850 An investee

under equity

method

Table 8 Page 2

Balance as at

June 30, 2020

Balance as at

December 31,


Net profit (loss)


six-month period

ended June 30, 2020

(Note 2(2))

Investment income


the Company for the

six-month period

ended June 30, 2020


Investee



CTCI Corp. EVER ECOVE Corp. Taiwan Waste service, waste clear and

steam power cogeneration

$ 250,000 $ 250,000 25,000,000 25.00 $ 240,557 ($ 10,057) ($ 2,514) An investee

under equity

method

CTCI Corp. HDEC-CTCI (Linhai)

Corp.

Taiwan Reclaimed water operators 202,500 202,500 20,250,000 45.00 228,913 40,156 18,070 An investee

under equity

method

$ 7,899,482 $ 382,728

CTCI Development

Corp.

CTCI Chemical Corp. Taiwan Manufacture, wholesale,

and retail of industrial

chemicals

$ 13,522 $ 13,522 480,661 6.77 $ 18,284 $ 26,140 $ 1,770 A second-tier

subsidiary

CTCI Development

Corp.

ECOVE Environment Corp. Taiwan General investment 11,270 11,270 243,918 0.36 19,595 405,689 1,486 A subsidiary

CTCI Development

Corp.

CTCI Resources

Engineering Inc.

Taiwan Engineering technical service 23 23 1,388 0.01 24 56,577 3 A subsidiary

CTCI Development

Corp.

Crown Asia-2

Investment Limited

Taiwan General investment 2,531 2,531 25,000 100.00 441 ( 30) ( 30) A second-tier

subsidiary

CTCI Investment

Corp.



chemicals

32,153 32,153 1,657,207 23.34 63,038 26,140 6,101 A second-tier

subsidiary

CTCI Investment

Corp.

ECOVE Environment Corp. Taiwan General investment 1,374 1,374 32,132 0.05 2,581 405,689 196 A subsidiary

CTCI Investment

Corp.

CTCI Smart Engineering

Corp.

Taiwan Design, management, and

building of nuclear power,

thermal power, fire pumped

storage power generation and

others related to engineering

11 11 1,000 0.002 ( 3) ( 146,618) - A subsidiary

CTCI Investment

Corp.

MIE Industrial

Sdn. Bhd.

Malaysia Equipment & Instrument,

Procurement & Construction &

Panel

139,885 139,885 10,500,000 21.00 255,436 ( 27,817) ( 3,189) An investee

under equity

method

CTCI Machinery

Corp.

Boretech Resource


Co., Ltd. (Cayman)

Cayman

Islands

Share holding and

investment

154,744 154,744 6,666,667 10.00 169,533 153,250 11,451 An investee

under equity

method

ECOVE Environment

Corp.

ECOVE Waste Management

Corp.

Taiwan International trade and

environmental service of

waste disposal, equipment

installation and mechanical

installation, etc.

20,000 20,000 2,000,000 100.00 79,665 26,700 26,700 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Wujih Energy Corp. Taiwan Environmental service of

waste disposal device

installation, steam power

cogeneration, etc.

450,435 450,435 30,000,000 100.00 756,552 133,117 133,117 A second-tier

subsidiary

Table 8 Page 3

Balance as at

June 30, 2020

Balance as at

December 31,


Net profit (loss)


six-month period

ended June 30, 2020

(Note 2(2))

Investment income


the Company for the

six-month period

ended June 30, 2020


Investee



ECOVE Environment

Corp.

ECOVE Environmental

Services Corp.

Taiwan Management of waste

recycling site and

maintenance

of related mechanical and

equipment, etc.

$ 339,921 $ 339,921 14,065,936 93.15 $ 627,096 $ 156,063 $ 147,376 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Mioali Energy Corp. Taiwan Environmental service of



cogeneration, etc.

1,012,483 1,012,483 56,249,000 74.999 861,428 62,190 46,645 A second-tier

subsidiary

ECOVE Environment

Corp.

ECOVE Solar Energy Corp. Taiwan Energy technology service 1,062,348 1,062,348 84,078,782 100.00 1,147,078 39,540 39,540 A second-tier

subsidiary

ECOVE Environment

Corp.

Yuan Ding Resources

Management Corp.

Taiwan Waste service, waste clear

other environmental service,

and environmental pollution

service, etc.

42,696 42,696 4,500,000 100.00 39,375 40 40 A second-tier

subsidiary

ECOVE Environment

Corp.

Boretech Resource


Co., Ltd. (Cayman)

Cayman

Islands

Share holding and

investment

309,489 309,489 13,333,333 20.00 315,653 153,250 21,493 An investee

under equity

method

ECOVE Environment

Corp.

ECOVE Solvent

Recycling Corp.

Taiwan Operating basic chemical

industry and manufacture of

other chemical products

86,480 86,480 8,099,000 89.99 86,771 6,914 6,222 A second-tier

subsidiary

ECOVE Environment

Corp.

EVER ECOVE Corp. Taiwan Waste service, waste clear and

steam power cogeneration

50,000 50,000 5,000,000 5.00 48,111 ( 10,057) ( 503) An investee

under equity

method

ECOVE

Environmental

Services Corp.



chemicals

24,851 24,851 1,910,241 26.9048 59,517 26,140 7,033 A second-tier

subsidiary

ECOVE

Environmental

Services Corp.

Sinogal-Waste

Services Corp.

Macao Management of waste

recycling site and

maintenance of related

mechanical equipment, etc.

4,964 4,964 - 30.00 30,434 80,011 24,003 A second-tier

subsidiary

ECOVE

Environmental

Services Corp.

ECOVE Mioali

Energy Corp.

Taiwan Environmental service of



cogeneration, etc.

13 13 1,000 0.001 15 62,190 - A second-tier

subsidiary

ECOVE

Environmental

Services Corp.

ECOVE Solvent

Recycling Corp.

Taiwan Operating basic chemical

industry and manufacture of

other chemical products

10 10 1,000 0.010 9 6,914 - A second-tier

subsidiary

ECOVE Waste

Management Corp.

ECOVE Environmental

Services Corp.

Taiwan Management of waste

recycling site and

maintenance of related

mechanical equipment, etc.

53 53 1,000 0.01 55 156,063 - A second-tier

subsidiary

Table 8 Page 4

Balance as at

June 30, 2020

Balance as at

December 31,


Net profit (loss)


six-month period

ended June 30, 2020

(Note 2(2))

Investment income


the Company for the

six-month period

ended June 30, 2020


Investee



ECOVE Solar

Energy Corp.

ECOVE Solar Power

Corp.

Taiwan Energy technology service $ 230,000 $ 230,000 23,000,000 100.00 $ 265,046 $ 25,896 $ 25,896 A second-tier

subsidiary

ECOVE Solar

Energy Corp.

ECOVE South

Corp. Ltd.

Taiwan Energy technology service 30,500 30,500 3,050,000 100.00 32,407 1,088 1,088 A second-tier

subsidiary

ECOVE Solar

Energy Corp.

G.D. International, LLC. USA Energy technology service 189,197 189,197 - 100.00 382,528 9,505 9,505 A second-tier

subsidiary

G.D International,

LLC.

Lumberton Solar

W2-090, LLC

USA Energy technology service 189,197 189,197 - 100.00 381,802 9,540 9,540 A second-tier

subsidiary

CTCI Overseas

(BVI) Corp.

CTCI Overseas

Co., Ltd.

Hong Kong Investment and planning of

related engineering

276,815 276,815 6,740,000 100.00 2,030,990 173,477 173,477 A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CTCI Arabia Ltd. Arabia Construction and


storage tanks and chemical

plant

22,610 22,610 500 50.00 ( 585,496) ( 46,365) ( 23,183) A subsidiary

CTCI Overseas

Co., Ltd.

Universal Engineering

(BVI) Corporation

BVI Investment and planning of

related engineering

1,694 1,694 50,000 100.00 ( 374,140) 80,313 80,313 A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CIPEC Construction Inc. Philippines Construction and


storage tanks and

chemical plant

19,590 19,590 327,445 39.93 571 ( 25,911) ( 10,363) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CIMAS Engineering

Company

Vietnam Chemical, petrochemical,

feasibility atudy & planning,

engineering design, procurement

& fabrication, erection,

construction & commissioning

95,168 65,079 - 100.00 97,075 2,286 2,269 A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

CTCI Engineering &

Construction Sdn.Bhd.


related engineering

2,879 2,879 300,000 40.00 42,302 ( 100,748) ( 40,299) A subsidiary

CTCI Overseas

Co., Ltd.

CINDA

Engineering &

Construction

Private Limited

India Chemical, petrochemical,

feasibility atudy & planning,

engineering design, procurement

& fabrication, erection,

construction & commissioning

31,022 31,022 8,000,000 100.00 ( 144,874) ( 48,173) ( 48,173) A second-tier

subsidiary

CTCI Overseas

Co., Ltd.

Sumber Mampu

Sdn. Bhd.

Malaysia Building of related

engineering

95 95 10,000 100.00 173,718 ( 7,592) ( 7,592) A second-tier

subsidiary

Universal Engineering

(BVI) Corporation

Superiority (Thailand)

Co., Ltd.

Thailand Investment and planning of

related engineering

151 151 2,156 49.00 ( 489,683) 79,583 79,583 A second-tier

subsidiary

Superiority (Thailand)

Co., Ltd.

CTCI (Thailand )

Co., Ltd.

Thailand Design and building of

petrochemical plant

12,628 12,628 1,300,500 51.00 ( 419,558) 157,565 84,605 A subsidiary

CTCI Advanced

Systems Inc.

Century Ahead Ltd. Samoa Professional investment

company

25,097 25,097 750,000 100.00 40,911 1,132 1,132 A second-tier

subsidiary

Table 8 Page 5

Balance as at

June 30, 2020

Balance as at

December 31,


Net profit (loss)


six-month period

ended June 30, 2020

(Note 2(2))

Investment income


the Company for the

six-month period

ended June 30, 2020


Investee



CTCI Advanced

Systems Inc.

CTCI Resources

Engineering Inc.

Taiwan Engineering technical service $ 742,866 $ - 24,762,252 99.05 $ 361,586 $ 56,825 $ 56,220 A second-tier

subsidiary

CTCI Smart

Engineering Corp.



chemicals

7,354 7,354 656,360 9.24 19,351 26,140 2,416 A second-tier

subsidiary

CTCI Resources

Engineering Inc.



chemicals

7,354 7,354 656,360 9.24 19,708 26,140 2,418 A second-tier

subsidiary

CTCI Singapore Pte. Ltd. CTCI Netherlands B.V. Netherlands Engineers and other technical

design and consultancy

11,274 11,274 300,000 100.00 38,861 ( 9,428) ( 9,428) A second-tier

subsidiary

CTCI Engineering &

Construction

Sdn. Bhd.

CTCI Malaysia

Sdn. Bhd.


related engineering

1,357 1,357 150,000 20.00 60,995 ( 9,451) ( 1,890) A second-tier

subsidiary

CTCI Malaysia Sdn. Bhd. MIE Industrial

Sdn. Bhd.

Malaysia Equipment & Instrument,

Procurement & Construction,

Panel

185,537 185,537 14,000,000 28.00 311,639 ( 27,817) ( 7,789) An investee

under

equity

method

Sumber Mampu Sdn. Bhd. CTCI Malaysia

Sdn. Bhd.


related engineering

5,428 5,428 600,000 80.00 243,980 ( 9,451) ( 7,561) A second-tier

subsidiary

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules,

it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at June 30, 2020’ should fill orderly in the Company’s (public company’s)

information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each

(ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

(2) The ‘Net profit (loss) of the investee for the six-month period ended June 30, 2020’ column should fill in amount of net profit (loss) of the investee for this period.

(3) The ‘Investment income (loss) recognized by the Company for the six-month period ended June 30, 2020’ column should fill in the Company (public company) recognized investment income (loss)

of its direct subsidiary and recognized investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognized investment income (loss) of its

direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognized by regulations.

Table 8 Page 6

Remitted to

Mainland

China

Remitted

back to Taiwan

CTCI Beijing

Co., Ltd.

Design, survey, construction

and inspection of various

engineering and construction

projects, plants, machinery

and equipment, and

environmental protection

projects

$ 433,473 2 $ 313,998 $ - $ - $ 313,998 $ 219,134 100.00 $ 219,134 $ 2,352,579 $ 295,938 Note 3

CTCI Shanghai

Co., Ltd.

Design, survey, construction and

inspection of various

engineering and construction

projects

592,787 2 - - - - 13,251 100.00 13,251 524,397 23,530 Note 7

CTCI Advanced

Systems

Shanghai Inc.

Computer technology services 22,613 2 22,613 - - 22,613 1,166 48.72 568 39,801 - Note 4

ECOVE

Environment

Consulting Corp.

Technical development, advisory

and service in environmental

field;environmental pollution

control equipment and related

parts wholesale, import and

export, etc.

4,147 1 4,147 - - 4,147 2,809 53.77 1,510 14,525 24,178 -

FuJian Gulie

Petrochemical

Co., Ltd.

Operating in manufacturing and

selling of ethylene and others

30,344,536 2 408,108 504,206 - 912,314 - 1.31 - 912,314 - Note 5

CTCI Trading

Shanghai

Co., Ltd.

General trade 23,748 2 - - - - 3,252 100.00 3,252 29,830 - Note 6

Footnote

Accumulated

amount

of remittance

from Taiwan to

Mainland

China as of

June 30, 2020

Net income of

investee for

the six-month

period ended

June 30, 2020

Investee in

Mainland China Main business activities Paid-in capital

Investment method

（Note 1）

Accumulated

amount of

remittance from

Taiwan to

Mainland

China

as of

January 1,

2020

Ownership

held by

the

Company

(direct or

indirect)

Investment

income (loss)

recognized

by the Company

for the six-

month period

ended June 30,

2020

（Note 2(2)B）

Book value of

investments in

Mainland China

as of June 30,

2020

Accumulated

amount

of investment

income

remitted back to

Taiwan as of

June 30, 2020

Amount remitted from Taiwan

to Mainland China/

Amount remitted back

to Taiwan for the six-month

period ended June 30, 2020


Information on investees (in Mainland China)




Table 9 Page 1

Company name

Accumulated amount of remittance

from Taiwan to Mainland China

as of June 30, 2020

Investment

amount approved

by the Investment

Commission of

the Ministry of

Economic Affairs

(MOEA)

Ceiling on investments in

Mainland China imposed

by the Investment

Commission of MOEA

CTCI Corp. $ 1,253,072 $ 1,162,689 $ 9,132,151

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

(3) Others

Note 2: In the Investment income (loss) recognized by the Company for the six-month period ended June 30, 2020 column:

(1) FuJian Galie Petrochemical Co., Ltd. did not accrue investment income or loss since it was still in preparation.

(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

A.The financial statements were reviewed and attested by R.O.C. parent company’s CPA.

B. It is an insignificant subsidiary, and its financial report was not reviewed by the independent accountant.

C.Others.

Note 3: Invested by CTCI Overseas Co., Ltd.

Note 4: Invested by Century Ahead Ltd.

Note 5: Invested in Dynamic Ever Investments Limited through Ever Victory Global Limited.

Note 6: Invested by CTCI Shanghai Co., Ltd.

Note 7: Invested by CTCI Beijing Co., Ltd.

Table 9 Page 2

Note 1: (1) The major shareholders information was derived from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were registered and held by

the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements is

different from the actual number of shares issued in dematerialised form because of the different calculation basis.

　 (2) If the aforementioned data contains shares which were held in trust by the shareholders, the data was disclosed as a separate account of client which was set by the trustee. As for the shareholder who

reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio include the self-owned shares and shares held in trust,

at the same time, the shareholder who has the power to decide how to allocate the trust assets. For the information on reported share equity of insider, please refer to Market Observation Post System.

CTCI Foundation 60,862,051 - 7.97%

Fubon Life Insurance Co., Ltd. 58,566,000 - 7.67%

CTBC BANK CO., LTD. (CTCI Corporation Employee Stock Ownership Trust) 62,459,645 - 8.18%


Major shareholders information

June 30, 2020

Table 10

Name of major shareholders

Shares

Total shares owned (common shares) Total shares owned (preference shares) Ownership percentage

Table 10 Page 1

ctci corporation and subsidiaries · 2020. 9. 4. · other current liabilities ( 1,758,589) (...

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