ctci corporation · ctci corporation parent company only balance sheets december 31, 2018 and 2017...

CTCI CORPORATION

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

------------------------------------------------------------------------------------------------------------------------------------ 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 PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

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December 31, 2018 December 31, 2017 Assets Notes AMOUNT % AMOUNT %

Current assets 1100 Cash and cash equivalents 6(1) $ 8,228,593 16 $ 9,824,161 21

1110 Financial assets at fair value through profit or loss - current

6(2) and 12(4) 66,113 - 47,678 -

1120 Financial assets at fair value through other comprehensive

income - current

6(3)

322,355 1 - - 1125 Available-for-sale financial assets

- current 12(4)

- - 406,401 1 1140 Contract assets - current 6(20) and 7 19,713,867 39 - -

1150 Notes receivable, net 2,730 - - - 1170 Accounts receivable, net 6(4) 4,503,941 9 831,810 2

1180 Accounts receivable - related parties

7 623,701 1 144,887 -

1190 Receivables from customers on construction contracts

- - 18,262,745 40

1200 Other receivables 57,549 - 48,947 - 1210 Other receivables - related parties 7 1,058,557 2 540,270 1

1220 Current income tax assets 55,748 - 55,747 - 1410 Prepayments 6(5) 2,009,308 4 1,684,235 4

1470 Other current assets - - 122,377 -

11XX Current Assets 36,642,462 72 31,969,258 69

Non-current assets 1517 Financial assets at fair value

through other comprehensive income - non-current

6(3)

784,840 2 - -

1543 Financial assets measured at cost - non-current

12(4) - - 672,753 1

1550 Investments accounted for using equity method

6(6) 11,851,518 23 12,246,300 27

1600 Property, plant and equipment 6(7) 300,724 1 301,716 1 1760 Investment property, net 6(8) and 7 152,254 - 153,600 -

1780 Intangible assets 40,343 - 90,863 - 1840 Deferred income tax assets 6(23) 414,835 1 396,860 1

1900 Other non-current assets 6(9) and 8 715,924 1 382,275 1

15XX Non-current assets 14,260,438 28 14,244,367 31

1XXX Total assets $ 50,902,900 100 $ 46,213,625 100

(Continued)

CTCI CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

The accompanying notes are an integral part of these parent company only financial statements.

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December 31, 2018 December 31, 2017 Liabilities and Equity Notes AMOUNT % AMOUNT %

Current liabilities 2100 Short-term borrowings 6(10) $ 6,330,000 12 $ 2,770,000 6

2120 Financial liabilities at fair value through profit or loss - current

6(2) and 12(4) 548 - 4,426 -

2130 Contract liabilities - current 6(20) and 7 9,470,793 19 - - 2170 Accounts payable 6(11) 4,903,869 10 5,781,063 12

2180 Accounts payable - related parties 7 442,092 1 1,253,772 3 2190 Payables to customers on

construction contracts

- - 6,220,855 13 2200 Other payables 6(12) 1,307,788 2 1,382,387 3

2220 Other payables - related parties 7 3,700 - 25,819 - 2230 Current income tax liabilities 182,535 - 271,919 1

2300 Other current liabilities 6(13) 7,504,996 15 6,906,706 15

21XX Current Liabilities 30,146,321 59 24,616,947 53

Non-current liabilities 2570 Deferred income tax liabilities 6(23) 170,031 1 231,917 1

2600 Other non-current liabilities 6(6)(14) 3,127,819 6 3,412,729 7

25XX Non-current liabilities 3,297,850 7 3,644,646 8

2XXX Total Liabilities 33,444,171 66 28,261,593 61

Equity Share capital

3110 Common stock 6(17) 7,632,738 15 7,632,738 17 Capital surplus 6(18)

3200 Capital surplus 3,545,053 7 3,395,620 7 Retained earnings 6(19)

3310 Legal reserve 3,558,894 7 3,278,360 7 3320 Special reserve 763,794 2 765,904 2

3350 Unappropriated retained earnings 2,217,619 4 3,061,699 7 Other equity interest

3400 Other equity interest ( 247,534 ) ( 1 ) ( 170,454 ) ( 1 ) 3500 Treasury stocks 6(17) ( 11,835 ) - ( 11,835 ) -

3XXX Total equity 17,458,729 34 17,952,032 39

Significant contigent liabilities

and unrecognised contract commitments

9

Significant events after the balance sheet date

11

3X2X Total liabilities and equity $ 50,902,900 100 $ 46,213,625 100

CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)


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Year ended December 31 2018 2017

Items Notes AMOUNT % AMOUNT % 4000 Operating revenue 6(20) and 7 $ 35,684,680 100 $ 48,591,380 100

5000 Operating costs 6(21)(22) and 7 ( 32,482,095 ) ( 91 ) ( 44,716,778 ) ( 92 )

5900 Net operating margin 3,202,585 9 3,874,602 8

5910 Unrealized profit on sales ( 1,106 ) - - -

5920 Realized profit on sales 1,980 - 1,980 -

5950 Gross profit 3,203,459 9 3,876,582 8

Operating expenses 6(21)(22) and 7

6200 General & administrative expenses ( 927,704 ) ( 3 ) ( 897,134 ) ( 2 )

6300 Research and development expenses ( 120,849 ) - ( 113,993 ) -

6000 Total operating expenses ( 1,048,553 ) ( 3 ) ( 1,011,127 ) ( 2 )

6900 Operating profit 2,154,906 6 2,865,455 6

Non-operating income and expenses

7010 Other income 7 144,834 - 1,051,614 2

7020 Other gains and losses 127,058 - ( 81,852 ) -

7050 Finance costs ( 43,532 ) - ( 11,563 ) -

7070 Share of loss of associates and joint ventures accounted for under equity method

6(6)

( 208,134 ) - ( 620,557 ) ( 1 )

7000 Total non-operating income and expenses

20,226 - 337,642 1

7900 Profit before income tax 2,175,132 6 3,203,097 7

7950 Income tax expense 6(23) ( 347,595 ) ( 1 ) ( 397,749 ) ( 1 )

8200 Profit for the year $ 1,827,537 5 $ 2,805,348 6

Other comprehensive income

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

8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans

6(15)

$ 30,217 - ( $ 59,470 ) -

8316 Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income

31,159 - - -

8330 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss

( 76,465 ) - ( 9,361 ) -

8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss

13,335 - 10,111 -

Components of other comprehensive income that will be reclassified to profit or loss

8361 Cumulative translation differences of foreign operations

6(6) ( 63,746 ) - 9,184 -

8362 Unrealized profit or (loss) on valuation of available-for-sale financial assets

- - 14,767 -

8380 Total Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss

- - ( 5,900 ) -

8300 Other comprehensive loss for the year ( $ 65,500 ) - ( $ 40,669 ) -

8500 Total comprehensive income for the year $ 1,762,037 5 $ 2,764,679 6

Basic earnings per share 6(24)

9750 Basic earnings per share $ 2.40 $ 3.68

Diluted earnings per share 6(24)

9850 Diluted earnings per share $ 2.39 $ 3.67

CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Retained Earnings Other equity interest

Notes

Share capital - common stock

Capital surplus

Legal reserve

Special reserve

Unappropriated retained earnings

Cumulative translation

differences of forign operations

Unrealized gains (loss) from financial assets measured at fair value through

other comprehensive income

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

Treasury stocks

Total equity


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For the year ended December 31,2017 Balance at January 1, 2017 $ 7,632,738 $ 3,322,098 $ 3,056,071 $ 768,121 $ 2,519,655 ( $ 235,466 ) $ - $ 46,961 ( $ 11,835 ) $ 17,098,343 Profit for the period - - - - 2,805,348 - - - - 2,805,348 Other comprehensive income - - - - ( 58,720 ) 9,184 - 8,867 - ( 40,669 ) Total comprehensive income - - - - 2,746,628 9,184 - 8,867 - 2,764,679 Appropriation of 2016 earings 6(19) Legal reserve - - 222,289 - ( 222,289 ) - - - - - Special reserve - - - ( 2,217 ) 2,217 - - - - - Cash dividends - - - - ( 1,984,512 ) - - - - ( 1,984,512 ) Employee stock options exercised by subsidiary - 6,590 - - - - - - - 6,590 Share-based payment transacions - 65,027 - - - - - - - 65,027 Long-term investment did not change according to the proportion of shareholdings - 1,905 - - - - - - - 1,905 Balance at December 31, 2017 $ 7,632,738 $ 3,395,620 $ 3,278,360 $ 765,904 $ 3,061,699 ( $ 226,282 ) $ - $ 55,828 ( $ 11,835 ) $ 17,952,032 For the year ended December 31,2018 Balance at January 1, 2018 $ 7,632,738 $ 3,395,620 $ 3,278,360 $ 765,904 $ 3,061,699 ( $ 226,282 ) $ - $ 55,828 ( $ 11,835 ) $ 17,952,032 Effect of retrospective application and retrospective restatement 12(4) - - - - 166,900 - ( 47,643 ) ( 55,828 ) - 63,429 Balance at January 1 after adjustments 7,632,738 3,395,620 3,278,360 765,904 3,228,599 ( 226,282 ) ( 47,643 ) - ( 11,835 ) 18,015,461 Profit for the period - - - - 1,827,537 - - - - 1,827,537 Other comprehensive income - - - - ( 32,913 ) ( 63,746 ) 31,159 - - ( 65,500 ) Total comprehensive income - - - - 1,794,624 ( 63,746 ) 31,159 - - 1,762,037 Appropriation of 2017 earnings 6(19) Legal reserve - - 280,534 - ( 280,534 ) - - - - - Special reserve - - - ( 2,110 ) 2,110 - - - - - Cash Dividends - - - - ( 2,468,202 ) - - - - ( 2,468,202 ) Employee stock potions exercised by subsidiary - 5,241 - - - - - - - 5,241 Share-based payment transactions - 144,192 - - - - - - - 144,192 Disposal of investments in equity instuments designated at fair-value through other comprehensive income - - - - ( 58,978 ) - 58,978 - - - Balance at December 31, 2018 $ 7,632,738 $ 3,545,053 $ 3,558,894 $ 763,794 $ 2,217,619 ( $ 290,028 ) $ 42,494 $ - ( $ 11,835 ) $ 17,458,729

CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Notes 2018 2017

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CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 2,175,132 $ 3,203,097 Adjustments Adjustments to reconcile profit (loss) Depreciation 6(7)(8) 40,432 42,266 Amortization 135,559 133,411 Provision for allowance for doubtful account ( 3,207 ) ( 956,578 ) (Gain) loss on valuation of financial assets 6(2) ( 31,510 ) 40,379 (Gain) loss on disposal of investments 6(2) ( 67,779 ) 5,997 Investment loss from liquidation of subsidiaries 6(6) - 525 Gain on disposal of property, plant and equipment ( 816 ) ( 326 ) Compensation costs for employee stock options 107,608 49,853 Investment income accounted for under the equity method 6(6) 208,134 620,557 Realized gain from intercompany transactions ( 1,980 ) ( 1,980 ) Unrealised gross margin 1,106 - Interest income ( 69,158 ) ( 24,858 ) Dividends income ( 22,162 ) ( 17,362 ) Interest expense 43,532 11,563 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss 145,871 ( 154,885 ) Contract assets - current ( 19,713,867 ) - Notes receivable, net ( 2,730 ) 959,245 Accounts receivable, net ( 4,147,738 ) 483,023 Other receivables ( 131,916 ) ( 20,682 ) Other receivables - related parties ( 3,982 ) ( 21,301 ) Receivables from customers on construction contracts 18,262,745 ( 535,832 ) Prepayments ( 325,073 ) 643,833 Other current assets 122,377 2,456,372 Other non-current assets ( 139,305 ) 3,115 Changes in operating liabilities Contract liabilities - current 9,470,793 - Notes payable - ( 759 ) Accounts payable ( 877,194 ) ( 2,946,265 ) Accounts payable - related parties ( 811,680 ) 231,576 Payables to customers on construction contracts ( 6,220,855 ) ( 6,057,623 ) Other payables ( 69,995 ) 13,066 Other payables - related parties ( 22,119 ) 14,282 Accured pension labilities ( 306,708 ) ( 282,342 ) Other current liabilities 598,290 6,770,884 Cash (outflow) inflow generated from operations ( 1,658,195 ) 4,662,251 Interest received 65,880 15,118 Interest paid ( 38,929 ) ( 8,581 ) Dividends received 707,115 849,139 Income tax paid ( 502,587 ) ( 236,397 ) Net cash flows (used in) from operating activities ( 1,426,716 ) 5,281,530

(Continued)

CTCI CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Notes 2018 2017


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CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in other receivables - related parties ( $ 393,251 ) $ 382,500 Interest received-related parties 5,537 7,255 Increase in available-for-sale financial assets - ( 72,118 ) Proceeds from disposal available-for-sale financial assets - 6,611 Increase in financial assets at fair value through other

comprehensive income - non current

( 159,452 ) - Decrease in financial assets at fair value through other

comprehensive income - current

104,891 - Increase in financial assets measured at cost - non-current 12(4) - ( 132,773 ) Increase in long-term investment - subsidiaries (Include

prepayment for long-term investments) 6(6)(9)

( 632,500 ) ( 1,105,649 ) Proceeds from liquidation of capital of investee company 6(6) - 10,245 Increase in computer software cost ( 2,133 ) ( 40,624 ) Increase in other non-current assets ( 107,404 ) ( 103,652 ) Acquisition of property, plant and equipment 6(7) ( 38,440 ) ( 22,155 ) Proceeds from disposal of property, plant and equipment 1,162 356 Decrease (increase) in fundable deposits (shown in other non-

current assets)

10,156 ( 399 ) Net cash flows used in investing activities ( 1,211,434 ) ( 1,070,403 )

CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings 6(10) 3,560,000 2,770,000 Interest paid - related parties ( 2,210 ) ( 1,381 ) Other payables - related parties - 10 (Decrease) increase in deposits received ( 47,006 ) 19,556 Cash dividends paid ( 2,468,202 ) ( 1,984,512 ) Net cash flows from financing activities 1,042,582 803,673 Net (decrease) increase in cash and cash equivalents ( 1,595,568 ) 5,014,800 Cash and cash equivalents at beginning of year 9,824,161 4,809,361 Cash and cash equivalents at end of year $ 8,228,593 $ 9,824,161

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CTCI CORPORATION NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,

EXCEPT AS OTHERWISE INDICATED) 1. HISTORY AND ORGANIZATION

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 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 PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION These parent company only financial statements were authorized by the Board of Directors on March 8, 2019.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting

Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows:

New Standards, Interpretations and Amendments

Effective date byInternationalAccounting

Standards BoardAmendments to IFRS 2, ‘Classification and measurement of share-basedpayment transactions’

January 1, 2018

Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS 4,Insurance contracts’

January 1, 2018

IFRS 9, ‘Financial instruments’ January 1, 2018IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contractswith customers’

January 1, 2018

Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealisedlosses’

January 1, 2017

Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018

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Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

IFRS 9, ‘Financial instruments’

A. Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present subsequent changes in the fair value of an investment in an equity instrument that is not held for trading in other comprehensive income.

B. The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses or lifetime expected credit losses (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

In adopting the new standards endorsed by the FSC effective from 2018, the Company applied the new rules under IFRS 9 retrospectively from January 1, 2018, with the practical expedients permitted under the statement. The significant effects of applying the standard as of January 1, 2018 are summarised below.



Standards Board

Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1, ‘First-time adoption of International Financial Reporting Standards’

January 1, 2018

Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12, ‘Disclosure of interests in other entities’

January 1, 2017

Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28, ‘Investments in associates and joint ventures’

January 1, 2018

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A. In accordance with IFRS 9, the Company reclassified available-for-sale financial assets and financial assets measured at cost in the amounts of $406,401 and $1,157,973, respectively, and made an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income by $83,691, and $1,058,892, respectively, and increasing retained earnings, decreasing other equity interest and decreasing accumulated impairment of financial assets measured at cost in the amounts of $166,900, $103,471 and $485,220, respectively.

B. Presentation of contract assets and contract liabilities In line with IFRS 15 requirements, the Company changed the presentation of certain accounts in the balance sheet as follows:

(a) Under IFRS 15, contracts whereby services have been rendered but not yet billed are recognized as contract assets, but were previously presented as part of receivables from customers on construction contracts in the balance sheet. As of January 1, 2018, the balance amounted to $18,262,745.

(b) Under IFRS 15, liabilities in relation to contracts are recognized as contract liabilities, but were previously presented as payable to customers on construction contracts in the balance sheet. As of January 1, 2018, the balance amounted to $6,220,855.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows:

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

IFRS 16, ‘Leases’

IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognize a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors,



Standards BoardAmendments to IFRS 9, ‘Prepayment features with negative compensation’ January 1, 2019IFRS 16, ‘Leases’ January 1, 2019Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ January 1, 2019IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019Annual improvements to IFRSs 2015-2017 cycle January 1, 2019

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which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

The Company expects to recognize the lease contract of lessees in line with IFRS 16. However, the Company does not intend to restate the financial statements of prior period (referred herein as the “modified retrospective approach”). The effects will be adjusted on January 1, 2019.

(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 endorsed by the FSC are as follows:

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement This parent company only financial statement of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation A. Except for the following items, the parent company only financial statements have been prepared

under the historical cost convention: (a) Financial assets and financial liabilities (including derivative instruments) at fair value

through profit or loss. (b) Financial assets and liabilities at fair value through other comprehensive income/ Available-

for-sale financial assets measured at fair value. (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less

present value of defined benefit obligation.


Effective date byInternational Accounting

Standards BoardAmendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition ofMaterial’

January 1, 2020

Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assetsbetween an investor and its associate or joint venture’

To be determined byInternational Accounting

Standards BoardIFRS 17, ‘Insurance contracts’ January 1, 2021

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B. The preparation of financial statements in conformity with International Financial Reporting Standers, International Accounting Standers, IFRIC Interpretations, and SIC interpretations as endorsed by the FSC (collectively referred herein the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognized as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 were not restated. The financial statements for the year ended December 31, 2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting Standard 11 (‘IAS 11’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies, and details of significant accounts.

(3) Foreign currency translation Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional currency. A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

(b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(c) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

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(d) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

B. Translation of foreign operations (a) The operating results and financial position of all the group entities, associates and joint

arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows: i. Assets and liabilities for each balance sheet presented are translated at the closing exchange

rate at the date of that balance sheet; ii. Income and expenses for each statement of comprehensive income are translated at average

exchange rates of that period; and iii. All resulting exchange differences are recognized in other comprehensive income.

(b) When the foreign operation partially disposed of or sold is an associate or joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company still retains partial interest in the former foreign associate or joint arrangement after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangement, such transactions should be accounted for as disposal of all interest in these foreign operations.

(4) Classification of current and non-current items A. As the operating cycle for construction contracts usually exceeds one year, the Company uses the

operating cycle (typically 3～4 years) as its criteria for classifying current and non-current assets and liabilities related to construction contracts. For other assets and liabilities, the criterion is one year.

B. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets: (a) Assets arising from operating activities that are expected to be realized, or are intended to be

sold or consumed within the normal operating cycle; (b) Assets held mainly for trading purposes; (c) Assets that are expected to be realized within twelve months from the balance sheet date; (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are

to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

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C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities: (a) Liabilities that are expected to be settled within the normal operating cycle; (b) Liabilities arising mainly from trading activities; (c) Liabilities that are to be settled within twelve months from the balance sheet date; (d) Liabilities for which the repayment date cannot be extended unconditionally to more than

twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash and cash equivalents Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss A. Financial assets at fair value through profit or loss are financial assets that are not measured at

amortized cost or fair value through other comprehensive income. B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are

recognized and derecognized using trade date accounting. C. At initial recognition, the Company measures the financial assets at fair value and recognizes the

transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) Financial assets at fair value through other comprehensive income A. Financial assets at fair value through other comprehensive income comprise equity securities

which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

(a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

(b) The assets’ contractual cash flows represent solely payments of principal and interest.

B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

~19~

C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

(a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

(8) Impairment of financial assets For debt instruments measured at fair value through other comprehensive income and financial assets at amortized cost, at each reporting date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs

(9) Derecognition of financial assets The Company derecognizes a financial asset when one of the following conditions is met: A. The contractual rights to receive the cash flows from the financial asset expire. B. The contractual rights to receive cash flows of the financial asset have been transferred and the

Company has transferred substantially all risks and rewards of ownership of the financial asset. C. The contractual rights to receive cash flows of the financial asset have been transferred; however,

the Company has not retained control of the financial asset. (10) Investments accounted for using the equity method-subsidiaries and associates

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

B. Inter-company transactions, balances and unrealized gains or losses on transactions between the Company and subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

~20~

C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize the losses in proportion to the ownership.

D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

F. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

H. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

~21~

J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

K. Pursuant to the “Rules Governing the Preparation of Financial Statements by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

(11) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during

the construction period are capitalized. B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset,

as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, from the date of the change. The estimated useful lives of property, plant and equipment are as follows: Buildings 35 ~ 50 years Machinery 3 ~ 10 years Transportation equipment 3 ~ 10 years Office equipment 3 ~ 5 years Other equipment 3~ 20 years

~22~

(12) Investment property An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 years.

(13) Intangible assets Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years.

(14) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed.

(15) Borrowings Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(16) Notes and accounts payable A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes

payable are those resulting from operating and non-operating activities. B. The short-term accounts and notes payable without bearing interest are subsequently measured

at initial invoice amount as the effect of discounting is immaterial. (17) Financial liabilities at fair value through profit or loss

A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.

B. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss

(18) Derecognition of financial liabilities A financial liability is derecognized when the obligation specified in the contract is either discharged or cancelled or expires.

~23~

(19) Offsetting financial instruments Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(20) Non-hedging derivatives Non-hedging derivatives are initially recognized at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognized in profit or loss.

(21) Employee benefits A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions

(a) Defined contribution plans For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans i. Net obligation under a defined benefit plan is defined as the present value of an amount

of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) instead of a currency and term consistent with the currency and term of the employment benefit obligations.

ii. Remeasurements arising on defined benefit plan are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

iii. Past service costs are recognized immediately in profit or loss. C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognizes expense as it can no longer withdraw an offer of termination benefits or it recognizes relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

~24~

D. Employees’ compensation, directors’ and supervisors’ remuneration Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(22) Employee share-based payment For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

(23) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit

or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred income tax liability is settled.

D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

~25~

E. Current tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures, to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

(24) Share capital A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of

new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds. B. Where the Company repurchases the Company’s equity share capital that has been issued, the

consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(25) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(26) Revenue recognition A. The Company provides engineering construction related services. Revenue from providing

services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the actual costs incurred relative to the total expected costs. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.

B. Some contracts include sales and installation services of equipment. The equipment and the installation services provided by the Group are not distinct and are identified to be one performance obligation satisfied over time since the installation services involve significant customisation and modification. The Group recognises revenue on the basis of costs incurred relative to the total expected costs of that performance obligation.

~26~

C. The Company’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these parent company only financial statements requires management to make critical judgments in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Judgements and estimates are continually evaluated and adjusted based on historical experience and other factors. The above information is addressed below: (1) Critical judgements in applying the Company’s accounting policies

None. (2) Critical accounting estimates and assumptions

Revenue recognition

The Company relies on the project condition and objective factors to estimate total cost. The revenue is recognised based on the percentage of input cost, and the reasonableness of estimates is reviewed regularly. The estimated total cost will be affected by industry environment transition and construction status to adjust the revenue recognition amount.

6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents

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

disperse credit risk, so it expects that the probability of counterparty default is remote. B. Details of the Company’s cash and cash equivalents pledged to others as collateral are provided

in Note 8.

December 31, 2018 December 31, 2017Cash on hand and petty cash 16,420$ 21,197$ Checking accounts and demand deposits 5,731,724 2,552,136 Time deposits 2,480,449 7,250,828

8,228,593$ 9,824,161$

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(2) Financial assets at fair value through profit or loss – current

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

loss are listed below:

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

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

The Company entered into forward foreign exchange contracts to hedge exchange rate risk of import or export proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

D. The information on financial assets at fair value through profit or loss as of December 31, 2017 is provided in Note 12(4) C.

Items December 31, 2018Current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 19,602$ Derivatives 48,553

68,155 Valuation adjustment 2,042)(

66,113$ Financial liabilities mandatorily measured at fair value through profit or loss Derivatives $ 548

For the year endedDecember 31, 2018

Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates 2,442)($ Derivatives 52,572 Unlisted shares 49,159

99,289$

Contract PeriodNon-delivery foreign exchange contract-buy (7 items) USD 33,000,000 2018.05.02~2019.06.10Foreign exchange swap contract (5 items) USD 50,000,000 2018.12.05~2019.01.09Merchandise exchange contract (3 items) USD 3,580,000 2018.10.31~2019.03.29

December 31, 2018

Contract Amount(notional principal)

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

A. The Company 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:

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

income is provided in Note 12(2). D. The information on available-for-sale financial assets and financial assets at cost as of December

31, 2017 is provided in Note 12(4) C.

Items December 31, 2018Current items: Equity instruments Listed stocks $ 186,404 Valuation adjustment 135,951

$ 322,355Non-current items: Equity instruments Unlisted shares $ 908,225 Valuation adjustment ( 123,385)

$ 784,840


Equity instrument at fair value through other comprehensive income Fair value change recognized in other comprehensive income $ 31,316Debt instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income ($ 157) Exchange loss recognized in profit or loss $ 814 Interest income recognized in profit or loss $ 3,286

~29~

(4) Accounts receivable

The ageing analysis of notes receivable and accounts receivable that were past due but not impaired is as follows:

The above analysis is calculated based on booking date.

(5) Prepayments

(6) Investments accounted for under the equity method

December 31, 2018 December 31, 2017Accounts receivable 4,504,151$ 835,227$ Less: Allowance for uncollectible accouts 210)( 3,417)(

4,503,941$ 831,810$

December 31, 2018Up to 30 days 4,455,479$ 31 to 91 days 2,773 91 to 180 days 3,960 Over 180 days 41,939

4,504,151$

December 31, 2018 December 31, 2017Prepayment for materials 1,719,721$ 1,294,706$ Prepayment for construction in progress 149,293 28,705 Excess business tax paid - 157,482 Other prepayments 140,294 203,342

2,009,308$ 1,684,235$

2018 2017At January 1 11,048,275$ 11,318,823$ Addition of investments accounted for using equity method

452,500 1,105,649

Remittance of liquidated share capital from investee

- 10,600)(

Share of profit or loss of investments accounted for using equity method

208,134)( 620,557)(

Earnings distribution of investments accounted for under equity method

684,953)( 831,777)(

Changes in capital surplus 41,824 23,669 Changes in other equity items 95,913)( 63,068 At December 31 10,553,599$ 11,048,275$

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A. Subsidiary (a) The basic information of the subsidiaries that are material to the Company is as follows:

Investments under equity method December 31, 2018 December 31, 2017 Subsidiaries CTCI Smart Engineering Corporation 150,695$ 261,339$ CTCI Resources Engineering Inc. 284,047 248,464 CTCI Advanced Systems Inc. 265,289 263,086 CTCI Development Corporation 2,527,615 2,530,655 CTCI Investment Corporation 1,730,250 1,922,352 ECOVE Environment Corp. 2,795,718 2,696,371 CTCI (Thailand) Co. Ltd. 58,735 3,212 CTCI Machinery Corp. 480,434 494,480 Sinogal-waste Services Co., Ltd. 57,921 63,667 CTCI CMCE JV SDN. BHD. 9,041 392 CTCI Overseas (BVI) Co., Ltd. 1,833,752 1,923,648 CTCI Engineering & Construction Sdn. Bhd. - 70,382 CTCI Americas, Inc. 3,954 7,774 CCJV P1 Engineering & Construction Sdn. Bhd. - 608,915 CTCI & HEC Water Business Co., Ltd. 244,516 249,639 Associates Blue Whale Water Technology Co., Ltd. 434,937 364,397

Pan Asia Corp. 526,590 537,527 EVER ECOVE Corp. 246,635 - HDEC-CTCI (Linhai) Corporation 201,389 -

11,851,518$ 12,246,300$ Other non-current liabilities December 31, 2018 December 31, 2017 Subsidiaries CTCI Arabia Ltd. ($ 562,811) ($ 627,735) CTCI Singapore Pte. Ltd. ( 652,532) ( 570,290) CTCI Engineering & Construction Sdn. Bhd. ( 3,066) - CCJV P1 Engineering & Construction Sdn. Bhd. ( 79,510) -

($ 1,297,919) ($ 1,198,025)

December 31,2018

December 31,2017

CTCI DevelopmentCorporation

Taiwan 100.00% 100.00% Subsidiaries Equity method

CTCI Investment Corporation " 100.00% 100.00% " "ECOVE Environment Corp. " 57.31% 57.57% " "CTCI Overseas (BVI) Co., Ltd. BVI 100.00% 100.00% " "CTCI Arabia Ltd. Saudi Arabia 50.00% 50.00% " "CTCI Singapore Pte. Ltd. Singapore 100.00% 100.00% " "

Shareholding ratio

Company name Principal place

of business Nature of

relationship Method of

measurement

~31~

(c) The summarized financial information of the subsidiaries that are material to the Company is as follows:

Note: Including prepayments for long-term investments (shown as ‘Non-current assets’) amounting to $180,000.

December 31, 2018 December 31, 2017Current assets 137,194$ 70,668$ Non-current assets 6,804,582 4,751,499 Current liabilities 4,065,119)( 206,362)( Non-current liabilities 147,390)( 2,063,498)( Total net assets 2,729,267$ 2,552,307$

Share in associate's net assets 2,729,267$ 2,552,307$ Carrying amount of the associate (Note) 2,707,615$ 2,530,655$

CTCI Development Corporation

December 31, 2018 December 31, 2017Current assets 216,086$ 185,050$ Non-current assets 1,544,165 1,770,904 Current liabilities 350)( 12,542)( Non-current liabilities 23,916)( 15,325)( Total net assets 1,735,985$ 1,928,087$

Share in associate's net assets 1,735,985$ 1,928,087$ Carrying amount of the associate 1,730,250$ 1,922,352$

CTCI Investment Corporation

December 31, 2018 December 31, 2017Current assets 353,227$ 887,292$ Non-current assets 4,555,817 3,820,164 Current liabilities 28,059)( 21,610)( Non-current liabilities 2,747)( 2,207)( Total net assets 4,878,238$ 4,683,639$


ECOVE Environment Corp.

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December 31, 2018 December 31, 2017Current assets 23,570$ 23,016$ Non-current assets 1,723,118 1,813,575 Current liabilities 73)( 80)( Total net assets 1,746,615$ 1,836,511$


CTCI Overseas (BVI) Co., Ltd.

December 31, 2018 December 31, 2017Current assets 311,830$ 792,122$ Non-current assets 2,999 81,874 Current liabilities 1,438,370)( 2,126,834)( Non-current liabilities 2,081)( 2,632)( Total net assets 1,125,622)($ 1,255,470)($

Share in associate's net assets 562,811)($ 627,735)($ Carrying amount of the associate 562,811)($ 627,735)($

CTCI Arabia Ltd.

December 31, 2018 December 31, 2017Current assets 699,201$ 620,021$ Non-current assets 144,219 224,930 Current liabilities 1,492,685)( 1,415,241)( Non-current liabilities 3,267)( - Total net assets 652,532)($ 570,290)($

Share in associate's net assets 652,532)($ 570,290)($ Carrying amount of the associate 652,532)($ 570,290)($

CTCI Singapore Pte. Ltd.

~33~

Statement of comprehensive income

Year ended December 31, 2018 Year ended December 31, 2017Revenue 328,792$ 328,819$ Profit for the year from continuing operations

126,065$ 134,541$

Other comprehensiveincome (loss), net of tax 8,119 2,953)( Total comprehensive income 134,184$ 131,588$

Dividends received from associates -$ 102,977$

CTCI Development Corporation

Year ended December 31, 2018 Year ended December 31, 2017Revenue 185,191)($ 24,290)($ Loss for the year from continuing operations

192,980)($ 35,760)($

Other comprehensive (loss) income , net of tax 61)( 1,711 Total comprehensive loss 193,041)($ 34,049)($


Year ended December 31, 2018 Year ended December 31, 2017Revenue 788,696$ 791,864$ Profit for the period from continuing operations

807,348$ 761,339$

Other comprehensive loss, net of tax 436)( 40,255)( Total comprehensive income 806,912$ 721,084$ Dividends received from associates 370,967$ 435,904$

EVOCE Environment Corp.

Year ended December 31, 2018 Year ended December 31, 2017Revenue -$ -$ Total comprehensive income (loss) 170,375$ 358,026)($ Dividends received from associates -$ -$

CTCI Overseas (BVI) Co., Ltd.

~34~

B. Associate

(a) The basic information of the associate that is material to the Company is as follows:

(b) The summarized financial information of the associate that is material to the Company is as

follows:

Balance sheet

Year ended December 31, 2018 Year ended December 31, 2017Revenue 945,874$ 3,107,468$ Total comprehensive income 164,510$ 586,647)($

CTCI Arabia Ltd.

Year ended December 31, 2018 Year ended December 31, 2017Revenue 1,011,015$ 721,118$ Total comprehensive income 79,338)($ 81,074)($


December31, 2018

December31, 2017

Pan Asia Corp. Taiwan 34.27% 34.27% Associate Equity method

Shareholding ratio

Companyname Principal place of business

Nature ofrelationship Method of measurement

December 31, 2018 December 31, 2017Current assets 4,761,098$ 3,341,120$ Non-current assets 497,198 264,665 Current liabilities 3,267,706)( 1,923,122)( Non-current liabilities 454,000)( 114,155)( Total net assets 1,536,590$ 1,568,508$

Share in associate's net assets 526,590$ 537,528$ Carrying amount of the associate 526,590$ 537,527$

Pan Asia Corp.

~35~

Statement of comprehensive income

C. For information on the Company’s subsidiaries, please refer to Note 4 (3) in the Company’s

consolidated financial statements for the year ended December 31, 2018. D. The Company invested $2,759 in CTCI CMCE JV SDN. BHD for 51% of the ownership under

the resolution by the Board of Directors in March 2017. E. The Company invested $670,000 in CTCI Investment Corp. under the resolution by the Board of

Directors in May 2017. F. The Board of Directors during its meeting in December 2017 resolved to invest $246,690 in CTCI

Resources Engineering Inc. G. The Board of Directors during its meeting in December 2017 resolved to invest $186,200 in Blue

Whale Water Technology Co., Ltd.

Year ended December 31, 2018 Year ended December 31, 2017Revenue 5,677,230$ 5,380,591$ Profit for the year from continuing operations 19,375$ 57,009$ Other comprehensiveincome, net of tax 207 2,035 Total comprehensive income 19,582$ 59,044$

Dividends received from associates 17,649$ 7,844$

Pan Asia Corp.

~36~

H. In December 2017, the Board of Directors approved the liquidation of CTCI and Partners Company. The Company received $10,245 (SAR 1,287) from the proceeds of liquidation and recognized a loss on disposal of $525 and a currency exchange gain of $170; both amounts were included in other gains and losses.

I. In August 2018, the Board of Directors during its meeting resolved to jointly establish EVER ECOVE Corporation with Evergreen Steel Corporation, and the investment amount is $250,000.

J. In September 2018, the Board of Directors during its meeting resolved to jointly establish HDEC-CTCI (Linhai) Corporation with Hsin Dar Environment Corp., and the investment amount is $202,500.

K. Under the equity method, the Company recognized investment income and other comprehensive income of $103,927 for the year ended December 31, 2017, from Pan Asia Corp., Blue Whale Water Technology Co., Ltd., CTCI Engineering & Construction San Bhd. CCJV P1 Engineering & Construction Sdn. Bhd., CTCI CMCE JV SDN. BHD, Powertec Energy Corp. that were invested by CTCI Investment Corporation. and CTCI Overseas (BVI) Corp., and its subsidiaries. The above investments accounted for using the equity method have been audited by other independent accountants.

L. The total investment profit or loss and other comprehensive income accounted for using equity method in Pan Asia Corp., Blue Whale Water Technology Co., Ltd., EVER EVOCE Corporation, HDEC-CTCI (Linhai) Corporation, CTCI CMCE JV SDN. BHD., CTCI Engineering & Construction Sdn. Bhd., CCJV P1 Engineering & Construction Sdn. Bhd., Powertec Energy Corp. indirectly invested by CTCI Investment Corporation and certain subsidiaries indirectly invested by CTCI Overseas (BVI) Corp. was ($1,060,127) for the year ended December 31, 2018, which was recognized based solely on the audit reports of other independent accountants.

~37~

(7) Property, plant and equipment

A. No borrowing costs attributable to property, plant and equipment was capitalised for the years ended December 31, 2018 and 2017. B. No property, plant and equipment was pledged to others as collateral for the years ended December 31, 2018 and 2017.

Land Buildings Machinery Transportation

equipment Office

equipment Other

equipment TotalAt January 1, 2018Cost 127,228$ 124,799$ 383,167$ 50,994$ 54,413$ 145,446$ 886,047$ Accumulated depreciation

- 68,057)( 339,527)( 44,819)( 53,941)( 77,987)( 584,331)( 127,228$ 56,742$ 43,640$ 6,175$ 472$ 67,459$ 301,716$

2018Opening net book amount as at January 1

127,228$ 56,742$ 43,640$ 6,175$ 472$ 67,459$ 301,716$

Additions - - 32,522 - 696 5,222 38,440 Disposals - - 346)( - - - 346)( Depreciation charge - 2,386)( 24,547)( 2,883)( 474)( 8,796)( 39,086)( Closing net book amount as at December 31 127,228$ 54,356$ 51,269$ 3,292$ 694$ 63,885$ 300,724$

At December 31, 2018Cost 127,228$ 124,799$ 365,715$ 38,704$ 54,974$ 150,668$ 862,088$ Accumulated depreciation

- 70,443)( 314,446)( 35,412)( 54,280)( 86,783)( 561,364)( 127,228$ 54,356$ 51,269$ 3,292$ 694$ 63,885$ 300,724$

~38~

Land Buildings Machinery Transportation

equipment Office

equipment Other

equipment TotalAt January 1, 2017Cost 127,228$ 124,799$ 375,617$ 56,498$ 54,413$ 144,270$ 882,825$ Accumulated depreciation

- 65,672)( 326,676)( 46,745)( 52,458)( 70,762)( 562,313)( 127,228$ 59,127$ 48,941$ 9,753$ 1,955$ 73,508$ 320,512$

2017Opening net book amount as at January 1

127,228$ 59,127$ 48,941$ 9,753$ 1,955$ 73,508$ 320,512$

Additions - - 20,024 - - 2,131 22,155 Disposals - - 30)( - - - 30)( Depreciation charge - 2,385)( 25,295)( 3,578)( 1,483)( 8,180)( 40,921)( Closing net book amount as at December 31 127,228$ 56,742$ 43,640$ 6,175$ 472$ 67,459$ 301,716$

At December 31, 2017Cost 127,228$ 124,799$ 383,167$ 50,994$ 54,413$ 145,446$ 886,047$ Accumulated depreciation

- 68,057)( 339,527)( 44,819)( 53,941)( 77,987)( 584,331)( 127,228$ 56,742$ 43,640$ 6,175$ 472$ 67,459$ 301,716$

~39~

(8) Investment property

Land Buildings TotalAt January 1, 2018Cost 115,692$ 76,683$ 192,375$ Accumulated depreciation - 38,775)( 38,775)(

115,692$ 37,908$ 153,600$ 2018

Opening net book amount as at January 1 115,692$ 37,908$ 153,600$ Depreciation charge - 1,346)( 1,346)( Closing net book amount as at December 31 115,692$ 36,562$ 152,254$

At December 31, 2018Cost 115,692$ 76,683$ 192,375$ Accumulated depreciation - 40,121)( 40,121)(

115,692$ 36,562$ 152,254$

Land Buildings TotalAt January 1, 2017Cost 115,692$ 76,683$ 192,375$ Accumulated depreciation - 37,430)( 37,430)(

115,692$ 39,253$ 154,945$ 2017

Opening net book amount as at January 1 115,692$ 39,253$ 154,945$ Depreciation charge - 1,345)( 1,345)( Closing net book amount as at December 31 115,692$ 37,908$ 153,600$

At December 31, 2017 115,692$ 76,683$ 192,375$ Cost - 38,775)( 38,775)( Accumulated depreciation 115,692$ 37,908$ 153,600$

~40~

A. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:

B. The fair value of the investment property held by the Company as of December 31, 2018, and 2017

were $375,197 and $348,795, respectively. The above fair values are based on the valuation of market trading prices of similar property belonging to close proximities.

(9) Other non-current assets

Note: It was shown as other non-current assets since the investment of $180,000 in CTCI

Development Corp. under the resolution by the Board of Directors in December 2018 had not yet been registered.

(10) Short-term borrowings

2018 2017Rental income from investment property 6,358$ 6,358$ Direct operating expenses arising from the investment property that generated rental income during the year 1,942$ 1,931$ Direct operating expenses arising from the investment property that did not generate rental income during the year -$ -$

For the years ended December 31,

December 31, 2018 December 31, 2017Long-term receivables 781$ 1,078$ Restricted bank deposits 185,805 46,203 Refundable deposits 197,938 208,094 Prepayments for long-term investments (Note) 180,000 - Others 151,400 126,900

715,924$ 382,275$

Type of borrowings December 31, 2018 Interest rate range CollateralUnsecured borrowings Land Bank of Taiwan 1,447,000$ 0.97% - HSBC 1,240,000 0.68% - BBVA 900,000 0.75% - Bank SinoPac 875,000 0.90% - Mizuho Bank, Ltd. 620,000 0.70% - MUFG Bank Ltd. 548,000 0.81% - Hua Nan Bank 400,000 0.87% - Bank of Taiwan 300,000 0.92% -

6,330,000$

~41~

(11) Accounts payable

(12) Other payables

(13) Other current liabilities

As of December 31, 2018, as the accumulated cost was greater than the accumulated capital injection, the joint venture was recognized in “other current liabilities”.

(14) Other non-current liabilities

Type of borrowings December 31, 2017 Interest rate range CollateralUnsecured borrowings Mizuho Bank, Ltd. 1,250,000$ 0.70% - HSBC 920,000 0.68% - The Bank of Tokyo-Mitsubishi UFJ 580,000 0.72% - Sumitomo Mitsui Banking Corporation 20,000 0.75% -

2,770,000$

December 31, 2018 December 31, 2017Materials payable 2,369,447$ 1,970,824$ Sub-contract costs payable 2,534,422 3,810,239

4,903,869$ 5,781,063$

December 31, 2018 December 31, 2017Accrued payroll 937,611$ 1,000,715$ Accrued employee bonuses, directors' and supervisors' remuneration 69,030 100,697 Accrued insurance 43,847 48,971 Accrued pension 20,275 20,584 Others 237,025 211,420

1,307,788$ 1,382,387$

December 31, 2018 December 31, 2017Joint venture 7,431,697$ 6,847,852$ Receipts under custody 69,970 57,612 Others 3,329 1,242

7,504,996$ 6,906,706$

December 31, 2018 December 31, 2017Net defined benefit liabilities 1,696,327$ 2,033,252$ Guarantee deposits received 54,697 101,703 Investment accounted for under the equity method (credit balance) 1,297,919 1,198,025 Others 78,876 79,749

3,127,819$ 3,412,729$

~42~

(15) Pensions A. Defined benefit pension plan

(a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, 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 Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by 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) The amounts recognized in the balance sheet are as follows:

(c) Movements in net defined benefit liabilities are as follows:

December 31, 2018 December 31, 2017Present value of defined benefit obligations

3,328,547$ 3,502,540$

Fair value of plan assets 1,632,220)( 1,469,288)( Net defined benefit liability 1,696,327$ 2,033,252$

Present value ofdefined benefit

obligations Fair value of

plan assets Net defined

benefit liabilityYear ended December 31, 2018At January 1 3,502,540$ 1,469,288)($ 2,033,252$ Current service cost 17,315 - 17,315 Interest expense (income) 31,523 13,223)( 18,300

3,551,378 1,482,511)( 2,068,867 Remeasurements: Change in demographic assumptions - - - Change in financial assumptions 27,161 - 27,161 Experience adjustments 9,734)( 47,644)( 57,378)(

17,427 47,644)( 30,217)( Pension fund contribution - 342,086)( 342,086)( Paid pension 240,258)( 240,021 237)( At December 31 3,328,547$ 1,632,220)($ 1,696,327$

~43~

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit

pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

Present value ofdefined benefit

obligations Fair value of

plan assets Net defined

benefit liabilityYear ended December 31, 2017At January 1 3,589,967$ 1,333,842)($ 2,256,125$ Current service cost 20,858 - 20,858 Interest expense (income) 43,079 16,006)( 27,073

3,653,904 1,349,848)( 2,304,056 Remeasurements: Change in demographic assumptions 51,189 - 51,189 Change in financial assumptions 89,917 2,066 91,983 Experience adjustments 83,702)( - 83,702)(

57,404 2,066 59,470 Pension fund contribution - 326,403)( 326,403)( Paid pension 208,768)( 204,897 3,871)( At December 31 3,502,540$ 1,469,288)($ 2,033,252$

2018 2017

Discount rate 0.80% 0.90%Future salary increases 3.00% 3.00%


~44~

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analyzing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

(f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2019 amount to $64,263

(g) As of December 31, 2018, the weighted average duration of the retirement plan is eight years. B. Defined contribution pension plan

(a) Effective July 1, 2005, the Company has 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 contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

(b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2018 and 2017 were $120,224 and $119,910, respectively.

(16) Share-based payment-employee compensation A. As of December 31, 2018 and 2017, the Company’s share-based payment arrangements were as

follows:

Increase 0.25%

Decrease 0.25%

Increase 0.25%

Decrease 0.25%

December 31, 2018Effect on present value of defined benefit obligation 67,291)($ 69,368$ 59,510$ 58,131)($ December 31, 2017Effect on present value of defined benefit obligation 75,168)($ 77,602$ 67,154$ 65,503)($

Discount rate Future salary increases

Type of arrangement Grant date Quantitygranted

Contractperiod

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

2018.03.09 20,000 units 6 years Service of 2 to 4 years

~45~

B. The above employee stock options are set forth below: Details of the fifth plan of employee stock options outstanding as of December 31, 2018 and 2017 are set forth below:

Details of the sixth plan of employee stock options outstanding as of December 31, 2018 are set forth below:

C. The weighted-average stock price of stock options at exercise dates for the years ended December

31, 2018 and 2017 were NT$46.68 and NT$52.20, respectively.

Stock options

No. of units(shares inthousand)

Weighted-averageexercise price

(in dollars)

No. of units(shares inthousand)


(in dollars) Options outstanding at beginning of year 19,125.30 NT$49.60 - - Options granted - - 20,000.00 NT$52.20 Options waived 796.75)( - 874.70)( - Options exercised - - - - Options outstanding at end of year 18,328.55 NT$49.60 19,125.30 NT$49.60 Options exercisable at end of year - - - -

For the years ended December 31,2018 2017

Stock options No. of units

(shares in thousand)


(in dollars) Options outstanding at beginning of year - - Options granted 20,000.00 NT$45.90 Options waived 705.46)( - Options exercised - - Options outstanding at end of year 19,294.54 NT$45.90 Options exercisable at end of year - -

2018For the year ended December 31,

~46~

D. As of December 31, 2018 and 2017, the range of exercise prices of stock options outstanding were NT$45.90~NT$49.60 and $49.60, respectively; the weighted-average remaining contractual period was as follows:

E. The fair value of stock options is measured using the Black-Scholes option-pricing model or

other. Relevant information is as follows:

F. For the years ended December 31, 2018 and 2017, expense recognized arising from share-based

payment amounted to $107,608 and $49,853, respectively. (17) Share capital

A. As of December 31, 2018 and 2017, the Company’s authorized capital was $9,000,000 (including 800,000 thousand shares reserved for employee stock options), the paid-in capital was $7,632,738 consisting of 763,273,848 shares with a par value of NT$10 per share.

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

are as follows:

Type of arrangement December 31, 2018 December 31, 2017Fifth plan of employee stock options 4~5 years 4~5 yearsSixth plan of employee stock options 4~5 years -

Type ofarrangement Grant date Stock price

Exerciseprice

Expectedprice

volatility

Expectedoption

lifeExpecteddividend

Risk freeinterest

rateFair valueper unit

Fifth plan ofemployee 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 ofemployee 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

Name of company holding the shares Reason for reacquisition

Number of shares(shares inthousand) Carrying amount

Subsidiary-ECOVE Environmental Services Corp.

To maintainstockholders' equity

1 $ 10

Subsidiary-CTCI Investment Corp.

" 344 3,241

Subsidiary-CTCI Development Corp.

" 912 8,584

11,835$

December 31, 2018

~47~

(18) Capital surplus

A. Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

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

C. Please refer to Note 6 (16) for details about the capital surplus - employee stock options.

Name of company holding the shares Reason for reacquisition

Number of shares(share in

thousand) Carrying amountSubsidiary-ECOVE Environmental Services Corp.

To maintainstockholders' equity

1 $ 10

Subsidiary-CTCI Investment Corp.

" 344 3,241

Subsidiary-CTCI Development Corp.

" 912 8,584

11,835$

December 31, 2017

Share premium Treasury share

transactions

Difference between proceeds on acquisition of disposal of equity interest

in a subsidiary and its carrying amount

Employee stock options

Stock options Others Total

At January 1, 2018 2,865,969$ 5,043$ 205,931$ 309,435$ -$ 9,242$ 3,395,620$ Employee stock options exercised by subsidiary

- - 5,241 - - - 5,241

Share based payment transaction - - - 144,192 - - 144,192 At December 31, 2018 2,865,969$ 5,043$ 211,172$ 453,627$ -$ 9,242$ 3,545,053$

Share premium Treasury share

transactions

Difference between proceeds on acquisition of disposal of equity interest

in a subsidiary and its carrying amount

Employee stock options

Stock options Others Total

At January 1, 2017 2,865,969$ 5,043$ 197,436$ 244,408$ -$ 9,242$ 3,322,098$ Employee stock options exercised by subsidiary

- - 6,590 - - - 6,590

Share based payment transaction - - - 65,027 - - 65,027 Adjustment of long-term equity investment due to changes in shareholding ratio - - 1,905 - - - 1,905 At December 31, 2017 2,865,969$ 5,043$ 205,931$ 309,435$ -$ 9,242$ 3,395,620$

~48~

(19) Retained earnings

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

the effect as at January 1, 2018, please refer to Notes 12(4) B.

A.When net profit occurs in the annual accounts, the Company may, after reserving a sufficient amount of the income before tax to cover the accumulated losses, with the resolution of the Board of Directors, distribute 1.5% to 5% of the income before tax to pay to the employees as remuneration, and distribute no more than 1.5% of the income before tax to pay to the Board of Directors as remuneration. The remuneration could be in the form of stock or cash, and the employee remuneration could be distributed to the employees of subsidiaries of the Company under certain conditions. A report of the distribution of employee remuneration or the Board of Directors’ remuneration shall be submitted to the stockholders’ meeting.

B.The Company shall, after all taxes and dues have been paid and its losses have been covered and at the time of allocating surplus profits, first set aside 10% of such profits as legal reserve. However, when the legal reserve amounts to the authorized capital, this shall not apply. Furthermore, in accordance with the provisions of laws and regulations and the rules prescribed by the central competent authority, a special reserve shall be set aside. If there is recovery of the balance of special reserve, the recovered amount shall be included in the distribution of the profit for the current year.

The allocable profit for the current year, which is the balance after the profit distribution and covering losses aforementioned as the preceding paragraph, together with the undistributed retained earnings accrued from prior years shall be referred to as accumulated distributable earnings, which shall be distributed as dividends to shareholders according to shareholders’ resolutions. To meet the requirements in business expansion and industry growth, fulfilling future operating needs and stabilizing financial structure is the priority of the Company's dividend policy. Thus, the distribution of the accumulated distributable earnings is in accordance with the shareholders’ resolutions. And, the amount of shareholders’ bonus shall not be less than 50% of accumulated distributable earnings of the Company, and in particular cash dividend shall not be less than 20%.

2018 2017At January 1 3,061,699$ 2,519,655$ Effect of retrospective restatement (Note) 166,900 - At January 1 (revised) 3,228,599 2,519,655 Profit for the year 1,827,537 2,805,348 Legal reserve appropriated 280,534)( 222,289)( Cash dividends 2,468,202)( 1,984,512)( Reversal of special reserve 2,110 2,217 Impact of change in tax rate 19,378 - Remeasurement of defined benefit plan 52,291)( 58,720)( Valuation adjustment transferred to retained earnings

58,978)( -

At December 31 2,217,619$ 3,061,699$

~49~

C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

D. Special reserve

(a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

E. The appropriation of 2017 and 2016 earnings had been resolved at the stockholders’ meeting on May 29, 2018 and June 28, 2017, respectively. Details are summarized below:

F. Details of the appropriation of 2018 earnings as proposed by the Board of Directors on March 8,

2019 are as follow:

As of March 8, 2019, the appropriation of 2018 earnings has not been resolved by the shareholders.

G. For information relating to employees’ compensation (bonuses) and directors’ and supervisors’ remuneration, please refer to Note 6(22).

Amount

Dividendsper share

(in NT dollars) Amount

Dividendsper share

(in NT dollars)Sset aside as legal reserve 280,534$ -$ 222,289$ -$ Reversal of special reserve 2,110)( - 2,217)( - Cash dividends 2,468,202 3.23 1,984,512 2.60 Total 2,746,626$ 3.23$ 2,204,584$ 2.60$

2017 2016

Amount

Dividendsper share

(in NT dollars)Legal reserve 182,754$ -$ Reversal of special reserve 1,417)( - Cash dividends 1,721,210 2.255 Total 1,902,547$ 2.255

Year ended December 31, 2018

~50~

(20) Operating revenue

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

B. Contract assets and liabilities

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

Year ended December 31, 2018Revenue from contracts with customer contracts 35,684,680$

35,684,680$


Construction Engineering

Revenue

OtherOperating Revenue Total

Segment revenue 35,537,123$ 147,557$ 35,684,680$ Inter-segment revenue - - -

35,537,123$ 147,557$ 35,684,680$ Revenue from external customer contractsTiming of revenue recognition At a point time -$ 147,557$ 147,557$ In over time 35,537,123 - 35,537,123

35,537,123$ 147,557$ 35,684,680$

December 31, 2018Contract assets-construction contract revenue 19,713,867$ Contract liabilities-construction contract revenue 9,470,793)(

10,243,074$

~51~

(21) Expenses by nature

(22) Employee benefit expense

As of December 31, 2018 and 2017, the Company had 2,614 and 2,730 employees excluding 11 and

11 directors, respectively.

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

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

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

2018 2017

Materials 16,469,759$ 24,453,497$

Subcontract costs 10,082,843 12,144,113

Employee benefit expense 3,986,766 4,219,786

Temporary equipment 78,493 547,619

Rental expenses 451,226 559,593

Insurance expenses 97,549 81,079

Travel expenses 251,649 354,002

Depreciation charges on property,

plant and equipment

39,086 40,921

Amortization on intangible assets 135,559 133,411

Others 1,937,718 3,193,884

33,530,648$ 45,727,905$


Operating costs Operating expenses Total

Salaries and wages 2,684,589$ 581,419$ 3,266,008$

Employee stock options 86,489 21,119 107,608

Labor and health insurance fees 218,942 44,016 262,958

Pension costs 126,410 29,429 155,839

Directors rernuneration - 43,703 43,703

Other personnel expenses 129,162 21,488 150,650

3,245,592$ 741,174$ 3,986,766$

For the year ended December 31, 2018

Operating costs Operating expenses Total

Salaries and wages 2,972,694$ 541,150$ 3,513,844$

Employee stock options 39,952 9,901 49,853

Labor and health insurance fees 247,514 41,478 288,992

Pension costs 142,203 25,638 167,841

Directors rernuneration - 50,946 50,946

Other personnel expenses 128,015 20,295 148,310

3,530,378$ 689,408$ 4,219,786$


~52~

B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $54,826 and $84,160, respectively; directors’ remuneration was accrued at $13,250 and $16,537, respectively. The aforementioned amounts were recognized in salary expenses and other expenses, respectively.

The employees’ compensation and directors’ remuneration were estimated and accrued based on an amount of 1.5% to 5% and not higher than 1.5% of distributable profit of current period for the year ended December 31, 2018.

Employees’ compensation and directors’ remuneration of 2017 as resolved at the meeting of Board of Directors were in agreement with those amounts recognized in the 2017 financial statements.

Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(23) Income tax A. Components of income tax expense:

B. Reconciliation of differences between financial income and taxable income:

Note: The basis of applicable tax rate is calculated by the rate applicable to the Company.

2018 2017Current tax :Current tax on profits for the year 410,263$ 429,013$ Prior year income tax under estimation 3,858 6,843 Total current tax 414,121 435,856 Origination and reversal of temporary differences 56,765)( 38,107)( Impact of change in tax rate 9,761)( - Income tax expense 347,595$ 397,749$


2018 2017Income tax calculated by applying statutory rate to the profit before tax (Note) 435,026$ 544,526$ Effects disallowed by tax regulation 75,842)( 36,572)( Prior year income tax under estimation 3,858 6,843 Effect from investment tax credits 6,603)( 10,657)( Others 917 106,391)( Impact of change in tax rate 9,761)( - Income tax expense 347,595$ 397,749$


~53~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

January 1 Recognised inprofit or loss

Recognised inother

comprehensiveincome December 31

Temporary differences: Deferred tax assets Unrealized loss on unfinished construction 24,620$ 23,413$ -$ 48,033$ Unrealized losses on doubtful debts 17,170 3,030 - 20,200 Unrealized compensated absences 22,833 4,488 - 27,321 Unrealized exchange loss 3,569 3,569)( - - Unrealized loss on financial assets 510 90 - 600 Unrealized golf card annual fee 918 162 - 1,080 Unrealized pension 311,893 25,574)( 14,495 300,814 Others 15,347 1,440 - 16,787 Subtotal 396,860$ 3,480$ 14,495$ 414,835$ Deferred tax liabilities Unrealized gain on foreign investment 225,346)($ 74,864$ -$ 150,482)($ Others 6,571)( 11,818)( 1,160)( 19,549)( Subtotal 231,917)($ 63,046$ 1,160)($ 170,031)($ Total 164,943$ 66,526$ 13,335$ 244,804$

2018

~54~

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

the Tax Authority.

E. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate

January 1 Recognised inprofit or loss

Recognised inother

comprehensiveincome December 31

Temporary differences: Deferred tax assets Unrealized loss on unfinished construction 25,005$ 385)($ -$ 24,620$ Unrealized losses on doubtful debts 17,170 - - 17,170 Unrealized compensated absences 22,983 150)( - 22,833 Unrealized exchange loss 2,766 803 - 3,569 Unrealized loss on financial assets 510 - - 510 Unrealized golf card annual fee 918 - - 918 Unrealized pension 349,092 47,310)( 10,111 311,893 Others 18,982 3,635)( - 15,347 Subtotal 437,426$ 50,677)($ 10,111$ 396,860$ Deferred tax liabilities Unrealized gain on foreign investment 314,130)( 88,784 - 225,346)( Others 6,571)( - - 6,571)( Subtotal 320,701)($ 88,784$ -$ 231,917)($ Total 116,725$ 38,107$ 10,111$ 164,943$

2017

~55~

(24) Earnings per share

Amount after tax

Weighted-average number of ordinary shares outstanding

(shares in thousands)

Earnings pershare

(in dollars)Basic earnings per share

Profit attributable to the ordinary shareholders of the parent 1,827,537$ 762,016 2.40$

Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees' compensation - 1,354 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 1,827,537$ 763,370 2.39$


~56~

(25) Operating leases

The Company leases land and buildings under operating lease agreements. These leases have terms expiring between 2007 and 2029.The lease expense recognized for the years ended December 31, 2018 and 2017 were $451,226 and $559,593, respectively.

The Company’s future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Amount after tax

Weighted-averagenumber of

ordinary sharesoutstanding

(shares in thousands) Earnings per share

(in dollars)Basic earnings per share

Profit attributable to the ordinary shareholders of the parent 2,805,348$ 763,274 3.68$

Diluted earnings per share

Assumed conversion of all dilutive potential ordinary shares Employees' compensation - 1,978 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 2,805,348$ 765,252 3.67$


December 31, 2018 December 31, 2017Not later than one year 310,948$ 315,931$ Later than one year but not later than five years 1,109,197 1,146,058 Later than five years 1,427,339 1,593,660

2,847,484$ 3,055,649$

~57~

7. RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship

Names of related parties Relationship with the Group ECOVE Environment Corp. SubsidiaryCTCI Development Corporation SubsidiaryCTCI Smart Engineering Corporation SubsidiaryCTCI Resources Engineering Inc. SubsidiaryCTCI Advanced Systems Inc. SubsidiaryECOVE Environmental Services Corporation. SubsidiaryCTCI Chemical Corp. SubsidiaryECOVE Waste Management Corporation. SubsidiaryCTCI Overseas Co., Ltd. SubsidiaryECOVE Miaoli Energy Corporation. SubsidiaryCTCI Shanghai Co., Ltd. SubsidiaryCTCI Beijing Co., Ltd. SubsidiaryCTCI Machinery Corp. SubsidiaryCTCI & HEC Water Business Co., Ltd SubsidiaryCTCI Engineering & Construction Sdn. Bhd. SubsidiaryCTCI CMCE JV SDN. BHD. SubsidiaryCINDA Engineering & Construction Private Limited SubsidiaryCTCI Arabia Ltd. SubsidiaryCTCI Netherlands B.V. SubsidiaryCTCI Malaysia Sdn Bhd SubsidiaryUniversal Engineering (BVI) Corporation SubsidiaryCIPEC Construction Inc. SubsidiaryCCJV P1 Engineering & Construction Sdn. Bhd. SubsidiaryCIMAS ENGINEERING COMPANY SubsidiaryCTCI Americas, Inc. SubsidiaryCTCI (Thailand ) Co., Ltd. SubsidiaryCTCI Singapore Pte. Ltd. SubsidiaryBlue Whale Water Technology Corp. AssociatesPowertech Energy Corp. AssociatesPan Asia Corp. AssociatesBoretech Resource Recovery AssociatesMIE INDUSTRIAL SDN. BHD. AssociatesEVER ECOVE CORP. AssociatesHDEL-CTCI (Linhai) Corporation AssociatesCTCI Foundation Other related partiesCTCI Education Foundation Other related parties

~58~

(2) Significant transactions and balances with related parties A. Sales of services:

(a) 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.

(b) The subsidiary, Innovest Investment Corp. invested in Powertec Energy Corporation which became an associated enterprise in August 2014. As of December 31, 2018 and 2017, the Company recognized total operating revenue amounting to $10,519,551 and $10,096,241, respectively. Accounts receivable amounted to $0 and $13,859, respectively. The doubtful accounts of $959,245 were collected in May, 2017. As a result, bad debt expense of $959,245 was reversed and recognized as other gains and losses.

B. Other operating revenue

The rate on the human resource support contracts entered into with related parties are set through negotiation by both parties. The collection terms of 30 days were approximately the same as those with third parties.

C. Purchases of services:

The rate on the construction contracts entered into with related parties are set through negotiation by both parties. The payment terms of 30 days were approximately the same as those with third parties.

2018 2017Associates 833,667$ 695,387$ Subsidiaries 725,310 357,773 Other related parties 371 2,913 1,559,348$ 1,056,073$


2018 2017Subsidiaries 23,210$ 50,796$ Associates 7,067 7,366

30,277$ 58,162$


2018 2017Subsidiaries 1,470,896$ 2,294,389$ Associates 158,471 293,622

1,629,367$ 2,588,011$


~59~

D. Other operating costs

The rate on the sub-contracting projects contracts entered into with related parties are set through negotiation by both parties. The payment terms of 30 days were approximately the same as those with third parties.

E. Accounts receivable

F. Cash dividends receivable (Shown in other receivables - related parties):

G. Other receivables-related parties

Includes advances to related parties for engineering and business travel.

H. Loans to related parties (Shown in other receivables-related parties) (a) Receivables from related parties

(b) Interest income

The loans to subsidiaries are receivable within one year and carry interest at 1.01%~1.09% per annum for the years ended December 31, 2018 and 2017, respectively.

2018 2017Subsidiaries 12,339$ 159,287$


December 31, 2018 December 31, 2017Subsidiaries 248,169$ 129,701$ Associates 375,112 14,398 Other related parties 420 788

623,701$ 144,887$

2018 2017Subsidiaries 121,054$ -$


December 31, 2018 December 31, 2017Subsidiaries 63,155$ 59,018$ Associates 96 252 Other related parties 1 -

63,252$ 59,270$

December 31, 2018 December 31, 2017CTCI Machinery Corp. 432,000 388,000 CTCI (Thailand) Co., Ltd. 392,251 - CTCI Smart Engineering Corporation 50,000 93,000

874,251$ 481,000$

2018 2017Subsidiaries 5,537$ 6,925$


~60~

I. Accounts payable

J. Other payables-related parties

Other payables-related party pertain to tariff and system up grade expense.

K. Progress billings (Shown as contract assets / construction contracts receivable and contract liabilities / construction contracts payable)

L. Rental income

(a) Assets leased to related parties are as follows:

(b) Rental income

M. Rental expense

December 31, 2018 December 31, 2017Subsidiaries 348,680$ 1,042,606$ Associates 93,412 211,166

442,092$ 1,253,772$

December 31, 2018 December 31, 2017Subsidiaries 3,700$ 25,819$

December 31, 2018 December 31, 2017Subsidiaries 12,174,719$ 3,162,899$ Associates 1,737,387 10,955,178 Other related party 2,143 5,476

13,914,249$ 14,123,553$

Leased assets Lessee December 31, 2018 December 31, 2017Land and buidings Subsidiaries 152,254$ 153,600$

Lessee Rental amount 2018 2017Subsidiaries-A $268/month/quarterly collection 3,218$ 3,217$ Subsidiaries-B $265/month/quarterly collection 3,175 3,175 Subsidiaries-C $1,017/month/quarterly collection 12,203 12,895

18,596$ 19,287$


Lessor Leased assets Rental amount 2018 2017

Other related parties Land / Buildings $698/month/semiannual payment 8,372$ 8,372$

Subsidiaries-D Land / Buildings $22,547/month/monthRefundable deposits $128,300

270,570 270,570

278,942$ 278,942$


~61~

N. Donation expense

O. Sales of financial assets

P. Guarantees for related parties

As of December 31, 2018 and 2017, the Company had used guarantees in the amount of $20,409,440 and $18,832,806, respectively, for related parties, and guarantees under various construction contracts amounting to $16,094,763 and $15,580,563, respectively.

Q. Key management compensation

8. PLEDGED ASSETS

December 31, 2018 December 31, 2017Other related party 15,000$ 15,000$

Generalledger account

Amount of traded shares Target of trade Sales price

Gain (loss) on sales

Other related partyFinancial assets at fair value throughprofit-non current

17,556,000 UTECH SOLARCORPORATION

132,851$ 64,277$

2018

December 31, 2018 December 31, 2017Associates 1,984,300$ 769,300$ Subsidiaries 32,683,364 28,931,809

34,667,664$ 29,701,109$

2018 2017Salaries and other short-term employee benefits 95,377$ 97,638$

Share-based payments 9,440 6,314$ Post-employment benefits 445 691 Other long-term benefits 2,508 950

107,770$ 105,593$


Pledged assets December 31, 2018 December 31, 2017 PurposeOther non-current assets

Pledged bank deposits 141,948$ 8,135$ Guarantee for oil expense and bank guaranteeRefundable deposits 197,938 208,094 Guarantee for oil expense, rent, construction contracts

339,886$ 216,229$

Book value

~62~

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

In addition to those items which have been disclosed in Notes 6(25) and 7, the significant contingent liabilities and unrecognized contract commitments of the Company as of December 31, 2018 were as follows:

A. Guarantee (a) The Company had outstanding notes payable for security deposits under various construction

projects amounting to $1,500,470. (b) The Company had outstanding notes payable for bank financing amounting to $73,209,582.

B. The Company had unused and outstanding letters of credit of $544,401. C. The Company had outstanding commitments for construction subcontracts and services contracts,

less accounts payable that were already paid and accrued in the future, of $22,884,153. D. The Company had a joint procurement project with Mitsubishi Heavy Industries, Ltd. in 1996. The

construction was completed on February 19, 2000 and accepted by the Environmental Protection Administration (the “EPA”) on May 16, 2000. According to the contract, the Company provided warranty deposit amounting to $141,690 on the materials of the equipment. As the Kaohsiung County government, the user of the incineration, had a dispute with the operating manufacturer, the EPB rejected to repay the deposit. The EPA availed of the warranty deposit on February 4, 2009. As a result, the Company had to remit $73,253 to the procurement department of Bank of Taiwan Co., Ltd. Consequently, the Company took action to cancel the deposit of $141,690 and filed a lawsuit requiring EPA to repay the warranty deposit. On April 16, 2009, the EPA said that it would repay $9,299, which was the warranty deposit of $73,253 less actual amounts used of $63,954, to the Company. Therefore, the Company reduced the lawsuit claim to $63,954 plus interest of $117 and damage loss of $2,421. The Company won the lawsuit apart from the loss compensation of $1,708. The case was reverted back to the Taiwan High Court after being taken up by the Supreme Court. The Taiwan High Court then reverted the case back again to the Supreme Court. The Taiwan High Court reversed the original judgement and denied the EPA’s claim, the EPA then filed to the third instance. The Supreme Court remanded the case to the Taiwan High Court. The Taiwan High Court denied the appeal of EPA, who then filed to the third instance, and remanded the case to the Taiwan High Court as well. After the case was taken up by the Taiwan High Court as 105-Zhong-Shang-Geng-3-11. The EPA should pay $61,706, reject the company's request for $3,077, and the company's judgment to win most of the cases. Both the Company and the EPA filed a third-trial appeal against the adverse judgments, which is now being taken up by the Supreme Court. According to the Company’s lawyer, the outcome of the case is still uncertain and the EPA received an arbitration award as the defense. Thus, it is difficult to estimate any potential gain or loss on the case.

10. SIGNIFICANT DISASTER LOSS

None.

~63~

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE A. Details of the appropriation of earnings as proposed by the Board of Directors on March 8, 2019 are

provided in Note 6(19) G. B. To fulfil operating capital and repay the bank borrowings, the Board of Directors resolved to issue

domestic unsecured corporate bonds at face value in full or instalments, depending upon the market, under a range of $6 billion on December 12, 2018. As of March 14, 2019, the Company has not submitted an application to the competent authority for approval for raising domestic unsecured corporate bonds.

12. OTHERS (1) Capital risk management

There was no significant change in the reporting period. Please refer to Note 12 in the consolidated financial statements for the year ended December 31, 2017. The gearing ratios as of December 31, 2018 and 2017, were as follows:

(2) Financial risk of financial instruments

A. Financial instruments by category

December 31, 2018 December 31, 2017Total borrowings 6,330,000$ 2,770,000$ Total equity 17,458,729$ 17,952,032$ Gearing ratio 36.26% 15.43%

December 31, 2018 December 31, 2017Financial assets

Financial assets at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss

66,113$ 47,678$

Financial assets at fair value through other comprehensive income

1,107,195$ -$

Available-for-sale financial assets Available-for-sale financial assets - 406,401 Financial assets at cost - 672,753

-$ 1,079,154$

~64~

B. Risk management policies

(a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

(b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

December 31, 2018 December 31, 2017

Financial assets at amortised cost Cash and cash equivalents 8,228,593$ 9,824,161$ Notes receivable 2,730 - Accounts receivable 4,503,941 831,810 Accounts receivable due from related parties 623,701 144,887 Other receivables 57,549 48,947 Other receivables due from related parties 1,058,557 540,270 Refundable deposits 197,938 208,094 Long-term accounts receivable 781 1,078 Other financial assets 185,805 46,203

14,859,595$ 11,645,450$

Financial liabilities Financial liabilities at fair value through profit or loss

Financial liabilities mandatorily measured at fair value through profit or loss

548$ 4,426$

Financial liabilities at amortised cost Short-term borrowings 6,330,000$ 2,770,000$ Accounts payable 4,903,869 5,781,063 Accounts payable due to related parties 442,092 1,253,772 Other payables 1,307,788 1,382,387 Other payables due to related parties 3,700 25,819 Guarantee deposits received 54,697 101,703

13,042,146$ 11,314,744$

~65~

C. Significant financial risks and degrees of financial risks (a) Market risk

Foreign exchange risk i. The Company 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 Company treasury.

iii. The Company’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 CurrencyAmount

(In Thousands) Exchange Rate Book Value (Foreign currency:functional currency)Financial assets

Monetary items USD：NTD 245,383$ 30.7400 7,543,059$ THB：NTD 817,495 0.9491 775,884 EUR：NTD 7,858 35.2327 276,866 JPY：NTD 553,133 0.2779 153,716 SGD：NTD 4,271 22.4552 95,898 SAR：NTD 555 8.1922 4,547 RMB：NTD 716 4.4742 3,205

Financial liabilities Monetary items USD：NTD 5,295 30.7400 162,766

EUR：NTD 932 35.2327 32,837 SGD：NTD 537 22.4552 12,064 SAR：NTD 406 8.1922 3,325 THB：TWD 1,421 0.9491 1,349 RMB：NTD 82 4.4742 368

December 31, 2018

~66~

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

on the monetary items held by the Company for the year ended December 31, 2018 and 2017 amounted to $81,913 and ($34,354), respectively.

Foreign CurrencyAmount

(In Thousands) Exchange Rate Book Value(Foreign currency:functional currency)Financial assets Monetary items USD：NTD 299,914$ 29.84 8,949,434$ EUR：NTD 15,123 35.67 539,366 SGD：NTD 7,277 22.32 162,423 JPY：NTD 442,250 0.26 117,152 VND：NTD 80,377,528 0.0013 104,491 SAR：NTD 5,230 7.96 41,627 RMB：NTD 3,614 4.58 16,548 THB：NTD 2,005 0.92 1,835 GBP：NTD 39 40.21 1,568 Financial liabilities Monetary items USD：NTD 5,568 29.84 166,149 EUR：NTD 2,141 35.67 76,369 SEK：NTD 18,368 3.62 66,468 SGD：NTD 663 22.32 14,801 CHF：NTD 276 30.55 8,432 THB：NTD 3,659 0.92 3,349 RMB：NTD 1,036 4.58 4,744

December 31, 2017

~67~

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

Degree ofVariation

Effect on Profitor Loss

Effect on OtherComprehensive

Income(Foreign currency:functional currency)Financial assets Monetary items USD：NTD 1% 75,431$ -$ THB：NTD 1% 7,759 - EUR：NTD 1% 2,769 - JPY：NTD 1% 1,537 - SGD：NTD 1% 959 - SAR：NTD 1% 45 - RMB：NTD 1% 32 - Financial liabilities

Monetary items USD：NTD 1% 1,628 - EUR：NTD 1% 328 - SGD：NTD 1% 121 - SAR：NTD 1% 33 - THB：NTD 1% 13 - RMB：NTD 1% 4 -

December 31, 2018Sensitivity Analysis

~68~

Price risk The Company’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 Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Cash flow and fair value interest rate risk The Company’s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During the years ended December 31, 2018 and 2017, the Company’s borrowings at variable rate were denominated in NTD and USD.

Degree ofVariation

Effect on Profitor Loss

Effect on OtherComprehensive

Income(Foreign currency:functional currency)Financial assets Monetary items USD：NTD 1% 89,494$ -$ EUR：NTD 1% 5,394 - SGD：NTD 1% 1,624 - JPY：NTD 1% 1,172 - VND：NTD 1% 1,045 - SAR：NTD 1% 416 - RMB：NTD 1% 165 - THB：NTD 1% 18 - GBP：NTD 1% 16 - Financial liabilities Monetary items USD：NTD 1% 1,661 - EUR：NTD 1% 764 - SEK：NTD 1% 665 - SGD：NTD 1% 148 - CHF：NTD 1% 84 - THB：NTD 1% 33 - RMB：NTD 1% 47 -

December 31, 2017Sensitivity Analysis

~69~

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered.

ii. Individual risk limited is controlled by internal risk that assesses the credit quality of the customers, taking into account their financial position, past experience and other factors.

iii. The Company adopts the assumptions under IFRS 9, 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 Company adopts the assumptions under IFRS 9, the default occurs when the customers’ contract payments are past due over 90 days.

v. The Company classifies customers’ accounts receivable and contract assets in accordance with customer types. The Company applies the simplified approach using provision matrix and loss rate methodology to estimate expected credit loss under the provision matrix basis.

vi. The Company 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 December 31, 2018, 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.

Excellentcustomers(Note 1)

Generalcustomers(Note 2)

Individualassessmentcustomers Total

December 31, 2018Expected loss rate 0% 0% 0%Total book value 2,591,543$ 1,908,546$ 4,062$ 4,504,151$ Loss allowance - 210 - 210

~70~

Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable, contract assets and lease payments receivable are as follows:

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.

ii. The table below analyses the Company’s non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

2018 Accounts receivable

At January 1_IAS 39 3,417$ Adjustments under new standards - At January 1_IFRS 9 3,417 Provision for impairment - Reversal of impairment 3,207)( Write-offs - At December 31 210$

Non-derivative financial liabilities:December 31, 2018 Less than 1 year More than 1 year

Short-term borrowings 6,334,801$ -$ Notes payable - - Accounts payable (including related parties) 5,345,961 - Other payables (including related parties) 1,311,488 - Guarantee deposits received - 54,697

~71~

(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 Company’s investment in listed stocks, beneficiary certificates with quoted market prices is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in most derivative instruments is included in Level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data.

B. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

Non-derivative financial liabilities:December 31, 2017 Less than 1 year More than 1 year

Short-term borrowings 2,774,419$ -$ Notes payable - - Accounts payable (including related parties) 7,034,835 - Other payables (including related parties) 1,408,206 - Guarantee deposits received - 101,703

Derivative financial liabilities:

December 31, 2018 Less than 3 monthsBetween 3 months

and 1 yearForward exchange contracts $ 548 $ -

Derivative financial liabilities:

December 31, 2017 Less than 3 monthsBetween 3 months

and 1 yearForward exchange contracts $ 4,426 $ -

~72~

(a) The related information of natures of the assets and liabilities is as follows:

December 31, 2018 Level 1 Level 2 Level 3 TotalFinancial assets:Financial assets at fair value through profit or loss　Mutual funds 17,560$ -$ -$ 17,560$ 　Derivative financial assets - 48,553 - 48,553 Available-for-sale financial assets　Equity securities -current 322,355 - - 322,355 　Equity securities -non current - - 784,840 784,840 Total 339,915$ 48,553$ 784,840$ 1,173,308$

Financial liabilities:Financial liabilities at fair value through profit or loss

　Derivative financial liabilities -$ 548$ -$ 548$

~73~

(b) The methods and assumptions the Company used to measure fair value are as follows:

i. The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

C. There was no transfer between Level 1 and Level 2 for the years ended December 31, 2018 and 2017.

December 31, 2017 Level 1 Level 2 Level 3 TotalFinancial assets:Financial assets at fair value through profit or loss　Mutual funds 47,181$ -$ -$ 47,181$ 　Derivative financial assets - 497 - 497 Available-for-sale financial assets　Equity securities 406,401 - - 406,401 Total 453,582$ 497$ -$ 454,079$

Financial liabilities:Financial liabilities at fair value through profit or loss

　Derivative financial liabilities

-$ 4,426$ -$ 4,426$

Listed shares Open-end fundMarked quated price Closing price Net asset value

~74~

D. Movements on Level 3 for the year ended December 31, 2018 are as follows:

E. For the year ended December 31, 2018, there was no transfer into or out from Level 3.

F. Company 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. Investment property is valuated regularly by the Company’s Finance segment based on the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.

G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

2018 Equity securities

At January 1 736,181$ Gains and losses recognised in profit or lossAdditions 159,452 Recorded as unrealised gains (losses) on valuation of investments in equity instruments measured at fair value through other comprehensive income 27,102)( Sales in this year 83,691)(

At December 31 784,840$

Fair value atDecember 31,

2018 Valuationtechnique

Significantunobservable

input Range (weighted

average)

Relationship ofinputs to fair

valueNon-derivativeequityinstrument:Unlisted shares 239,615$ Market

comparablecompanies

Price to bookratio multiple,discount forlack ofmarketability

Median:1.86Average:1.79Liquidity discount:17.5%

The higher themultiple andcontrolpremium, thehigher the fairvalue

~75~

H. The Company 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:

(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017

A. Summary of significant accounting policies adopted in 2017:

(a) Financial assets at fair value through profit or loss

i. They are financial assets held for trading. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges.

ii. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.

iii. Financial liabilities at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognised in profit or loss.

(b) Available-for-sale financial assets

i. They are non-derivatives that are either designated in this category or not classified in any of the other categories.

ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using settlement date accounting.

Input Change Favourable

change Unfavourable

change Favourable

change Unfavourable

changeFinancial assets

Equity instrument

Price to book ratio multiple, discount for lack of marketability

± 1% $ - $ - $ 24,521 ($ 24,521)

December 31, 2018 Recognised in profit or

loss Recognised in other

comprehensive income

~76~

iii. They are initially recognised at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

(c) Loans and receivables

Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. They are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(d) Impairment of financial assets

i. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

ii. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows:

(i) Significant financial difficulty of the issuer or debtor;

(ii) A breach of contract, such as a default or delinquency in interest or principal payments;

(iii) The Company, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;

(iv) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;

(v) The disappearance of an active market for that financial asset because of financial difficulties;

~77~

(vi) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;

(vii) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;

(viii) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.

iii. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:

(i) Financial assets at amortised cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognised previously. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(ii) Financial assets at cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognised in profit or loss. Impairment loss recognised for this category shall not be reversed subsequently. Impairment loss is recognised by adjusting the carrying amount of the asset through the use of an impairment allowance account.

~78~

(iii) Available-for-sale financial assets

The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognised, such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(e) Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognised in profit or loss.

~79~

B. The reconciliations of carrying amount of financial assets transferred from December 31, 2017, IAS 39, to January 1, IFRS 9, were as follows:

Available-for-sale-equity

Available-for-sale-liability

Measured atfair value

through othercomprehensiveincome-equity

Measured at fair value

through othercomprehensiveincome-liability Total

Retainedearnings

Otherequity

Transferred into and measured at fair value through profit or loss $ - $ - $ 96,980 $ 96,980 13,289)($ -$ Transferred into and measured at fair value through other comprehensive income-equity 328,497 - 575,773 904,270 - -Impairment loss adjustment - - - - 180,418 ( 180,418)Fair value adjustment - - - - - 76,718 Gain or loss of changes in fair value attributable to non-controlling interests - - - - 229)( 229 Transferred into and measured at fair value through other comprehensive income-liability - 77,904 - 77,904 - -

$ 1,079,154 $ 166,900 ($ 103,471)

Measuredat cost

Effects

IAS 39

IFRS 9

~80~

(a) Under IAS 39, because the cash flows of debt instruments, which were classified as: available-for-sale financial assets amounting to $77,904, met the condition that it is intended to settle the principal and interest on the outstanding principal balance, they were reclassified as " financial assets at fair value through other comprehensive income (debt instruments)" on initial application of IFRS 9.

(b) Under IAS 39, because the equity instruments, which were classified as: available-for-sale financial assets, financial assets at cost, amounting to $328,497, $575,773, respectively, were not held for the purpose of trading, they were reclassified as "financial assets at fair value through other comprehensive income (equity instruments)" on initial application of IFRS 9.

(c) Under IAS 39, the equity instruments, which were classified as: financial assets at cost, amounting to $96,980, were reclassified as "financial assets at fair value through profit or loss (equity instruments)", under IFRS 9.

C. The significant accounts as of December 31, 2017, are as follows:

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

i. The Company recognized net loss amounting to $40,379 on financial assets held for trading for the year ended December 31, 2017.

ii. The trading items and contracts information of derivatives are as follows:

Items December 31, 2017 Current items: Financial assets held for trading Beneficiary certificates 43,916$ Non-hedging derivatives 497

44,413 Valuation adjustment of financial assets held for trading 3,265

47,678$

Non-current items: Financial liabilities held for trading non-hedging derivatives 4,426$

Contract amount(notional principal) Contract period

Non-delivery of forward exchange contract-buy (10 item) USD 26,000 thousand 2017.12.19~2018.01.31Foreign exchange contract- buy (2 item) EUR 1,200 thousand 2017.12.20~2018.01.22

December 31, 2017

~81~

(b) Available-for-sale financial assets

i. The Company recognized $14,767 in other comprehensive income for fair value change

for the year ended December 31, 2017.

ii. Due to the global financial crisis in year 2008, listed (TSE and OTC) stocks amounting to $56,044which were initially classified as “financial assets at fair value through profit or loss” were reclassified to “available-for-sale financial assets” on July 1, 2008, in accordance with paragraph 50 (c) of IAS 39. The relevant information is set forth below:

(i.) The above reclassified assets which have not yet been disposed of were as follows:

(ii.) The changes in fair value of the above listed stocks that were recognized in profit or

loss and other comprehensive income were $0 and $6,105, respectively, for the year ended December 31, 2017.

(iii.) If the above listed stocks had not been reclassified to “available-for-sale financial assets” on July 1, 2008, the (loss) gain from change in fair value of those assets should have been recognized for the following periods:

iii. No financial assets at fair value through profits or loss held by the Company was pledged to others.

Items December 31, 2017 Current items: Listed stocks 254,939$ Corporate bonds 85,672

340,611 Valuation adjustment 65,790

406,401$

December 31, 2017Book value/Fair value

Listed (TSE or OTC) stocks 91,574$


Listed (TSE or OTC) stocks 6,105$

~82~

(c) Financial assets at cost

i. Based on the Company’s intention, its investment in stocks should be classified as

available-for-sale financial assets. However, as these investments are not traded in active markets, the fair value of the investment cannot be measured reliably. The Company classified those stocks as ‘financial assets measured at cost’.

ii. In August 2016, the Board of Directors approved the Company’s investment of US $13,181 in Ever Victory Global Limited for an ownership stake of 2.32%. The investment will be made in several installments over several years. In 2017, the Company invested $74,347 (US $2,309) and $58,426 (US $1,921) in March and September, respectively.

iii. As of December 31, 2017, no financial assets at cost held by the Company were pledged to others.

D. As of December 31, 2017, information of credit risk is as follows：

(a) Credit risk information for the year ended December 2017 are as follows :

Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

(b) For the year ended December 31, 2017, no credit limits were exceeded during the reporting periods, and management does not expect any significant losses from non-performance by these counterparties.

Items December 31, 2017 Non-Current items: CDIB & Partners Investment Holding Corp 250,000$ Core Pacific City Co., Ltd. 190,000 Ever Victory Global Limited. 132,773 Utech Solar Corp. 96,980 Metro-consultant Co., Ltd. 3,000 Heng Keng Corp. -

Total 672,753$

~83~

(c) The credit quality information of financial assets that are neither past due nor impaired is as follows:

Group 1：Government or State- owned Enterprises.

Group 2：Listed companies.

Group 3：The company does not belong to either Group 1 or Group 2.

(d) The analysis of the Company’s accounts receivable which have been impaired is as follows:

(i.) As of December 31, 2017, the Company’s notes and accounts receivable that were impaired amounted to $ 3,417.

(ii.) Movements in the provision for impairment of accounts receivable are as follows:

(e) The ageing analysis of financial assets that were past due but not impaired is as follows:

(5) Effects of initial application of IFRS 15 and information on application of IAS11 and IAS 18 in 2017

A. The significant accounting policies applied on revenue recognition for the year ended December 31, 2017 are set out below:

(a) Construction contracts

i. IAS 11, ‘Construction Contracts’, defines a construction contract as a contract specifically negotiated for the construction of an asset. If the outcome of a construction contract can be estimated reliably and it is probable that this contract would make a profit, contract revenue should be recognised by reference to the stage of completion of the contract activity, using the percentage-of-completion method of accounting, over the contract term. Contract costs are expensed as incurred. The stage of completion of a contract is measured

Group 1 Group 2 Group 3Notes and accounts receivable 26,925$ 424,951$ 222,814$

December 31, 2017

2017At Januay 1 959,995$ Provision of impairment 3,417 Reversal for impairment 959,995)( At December 31 3,417$

December 31, 2017Note and accounts receivableUp to 30 days 66,371$ 31 to 90 days 66,157 91 to 180 days 167,354 Over 181 days 2,125

302,007$

~84~

by the proportion of contract costs incurred for work performed to date to the estimated total costs for the contract. An expected loss where total contract costs will exceed total contract revenue on a construction contract should be recognised as an expense as soon as such loss is probable. If the outcome of a construction contract cannot be estimated reliably, contract revenue should be recognised only to the extent of contract costs incurred that it is probable will be recoverable.

ii. Contract revenue should include the revenue arising from variations from the original contract work, claims and incentive payments that are agreed by the customer and can be measured reliably.

iii.The excess of the cumulative costs incurred plus recognised profits (less recognised losses) over the progress billings on each construction contract is presented as an asset within ‘Receivables from customers on construction contracts’. While, the excess of the progress billings over the cumulative costs incurred plus recognised profits (less recognised losses) on each construction contract is presented as a liability within ‘Payables to customers on construction contracts’.

B. The construction contract receivable/payable recognised by using above construction contract accounting policies as of December 31, 2017 are as follows:

As of December 31, 2017, there were no retentions relating to construction contracts; the advances received before the related construction work is performed amounted to $591,298.

December 31, 2017Aggregate costs incurred plus recognised profits (less recognised losses)

305,319,806$

Less: Progress billings 293,277,916)( Net balance sheet position for construction in progress 12,041,890$

Presented as:Receivables from customers on construction contracts 18,262,745$ Payables to customers on construction contracts 6,220,855)(

12,041,890$

~85~

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: Please refer to table 5.

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 6.

H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 7.

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 8.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China)：Please refer to table 9.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 10.

B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

Item Value0 CTCI Corp. CTCI

Engineering & Construction Sdn. Bhd.

Otherreceivables

Yes 1,075,900$ 1,075,900$ -$ - 2 - Foroperational

need

-$ - -$ 3,491,746$ 6,983,492$ -

0 CTCI Corp. CTCI Singapore Pte. Ltd.

Otherreceivables

Yes 1,383,300 1,383,300 - - 2 - Foroperational

need

- - - 3,491,746 6,983,492 -

0 CTCI Corp. CTCI ArabiaLtd.

Otherreceivables

Yes 1,444,780 1,444,780 - - 2 - Foroperational

need

- - - 3,491,746 6,983,492 -

0 CTCI Corp. CTCI Machinery Corp.

Otherreceivables

Yes 650,000 650,000 432,000 1.01% 2 - Foroperational

need

- - - 3,491,746 6,983,492 -

0 CTCI Corp. CTCI Smart Engineering Corp.

Otherreceivables


need

- - - 3,491,746 6,983,492 -

Allowancefor

doubtful accounts

CollateralLimit on loans

granted to a single party（Note 7）

Ceiling on total loans

granted（Note 7） Footnote

Reasonfor short-term

financing（Note 6）

No.（Note 1） Creditor Borrower

General ledgeraccount（Note 2）

Is arelatedparty

Maximumoutstanding

balance duringyear ended

December 31,2018

(Note 3)

Balance atDecember 31,

2018（Note 8）

Actual amountdrawn down

Interest rate

Nature ofloan

（Note 4）

Amount oftransactions

with theborrower（Note 5）

CTCI CorporationLoans to others


Table 1 Expressed in thousands of NTD(Except as otherwise indicated)

Table 1 Page 1

Item Value

Allowancefor

doubtful accounts









Is arelatedparty

Maximumoutstanding


December 31,2018

(Note 3)


2018（Note 8）


Interest rate

Nature ofloan

（Note 4）



0 CTCI Corp. CTCI Shanghai Co., Ltd.

Otherreceivables-relatedparties

Yes 92,019$ -$ -$ - 2 - Foroperational

need

-$ - -$ 3,491,746$ 6,983,492$ -

0 CTCI Corp. CTCI (Thailand) Co., Ltd.

Otherreceivables


need

- - - 3,491,746 6,983,492 -

0 CTCI Corp. CIPECConstruction Inc.

Otherreceivables

Yes 614,800 614,800 - - 2 - Foroperational

need

- - - 3,491,746 6,983,492 -

1 CTCI Advanced Systems Inc.

CTCI Corp. Otherreceivables


need

- - - 54,452 217,807 -

2 CTCI Overseas Co., Ltd.

Superiority (Thailand) Co., Ltd.

Otherreceivables


need

- - - 688,802 688,802 -


CIPECConstruction Inc.

Otherreceivables


need

- - - 688,802 688,802 -


CTCI CMCE JV SDN. BHD.

Otherreceivables


need

- - - 688,802 688,802 -

Table 1 Page 2

Item Value

Allowancefor

doubtful accounts









Is arelatedparty

Maximumoutstanding


December 31,2018

(Note 3)


2018（Note 8）


Interest rate

Nature ofloan

（Note 4）




CTCI Netherlands B.V.



need

-$ - -$ 688,802$ 688,802$ -

3 CTCI Overseas (BVI) Co., Ltd.

CIPECConstruction Inc.

Otherreceivables


need

- - - 698,646 698,646 -

4 ECOVEEnviroment Corporation

ECOVE SolarEnergyCorporation



need

- - - 487,824 1,951,295 -

5 ECOVE Waste Management Corporation



need

- - - 11,346 45,385 -


CTCI Machinery Corp.

Otherreceivables


need

- - - 11,346 45,385 -


CTCI Smart Engineering Corp.

Otherreceivables


need

- - - 11,346 45,385 -

6 ECOVE Environmental Services Corporation

ECOVE Solvent Recycling Corporation

Otherreceivables


need

- - - 96,634 386,534 -

Table 1 Page 3

Item Value

Allowancefor

doubtful accounts









Is arelatedparty

Maximumoutstanding


December 31,2018

(Note 3)


2018（Note 8）


Interest rate

Nature ofloan

（Note 4）




ECOVE Miaoli Energy Corporation

Otherreceivables

Yes 70,000$ 70,000$ 39,500$ 1.01% 2 - Foroperational

need

-$ - -$ 96,634$ 386,534$ -



Otherreceivables


need

- - - 96,634 386,534 -


CTCI Resources Engineering Inc.

Otherreceivables


need

- - - 96,634 386,534 -




need

- - - 96,634 386,534 -



Otherreceivables


need

- - - 96,634 386,534 -

Table 1 Page 4

Item Value

Allowancefor

doubtful accounts









Is arelatedparty

Maximumoutstanding


December 31,2018

(Note 3)


2018（Note 8）


Interest rate

Nature ofloan

（Note 4）



7 CTCI Shanghai Co., Ltd.

CTCI Trading Shanghai Co., Ltd.



need

-$ - -$ 196,870$ 196,870$ -

8 ECOVE SolarEnergy Corporation

ECOVE SouthCorporation Ltd.

Otherreceivables


need

- - - 292,439 292,439 -


ECOVE SolarPowerCorporation

Otherreceivables


need

- - - 292,439 292,439 -


ECOVE CentralCorporation Ltd.

Otherreceivables


need

- - - 292,439 292,439 -

9 CTCI Beijing Co., Ltd.

CTCI Shanghai Co., Ltd.

Otherreceivables


need

- - - 712,899 712,899 -

Table 1 Page 5

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows: (1)The Company is ‘0’. (2)The subsidiaries are numbered in order starting from ‘1’.Note 2: Fill in the name of account in which the loans are recognised, such as receivables-related parties, current account with stockholders, prepayments, temporary payments, etc.Note 3: Fill in the maximum outstanding balance of loans to others during the year ended December 31, 2018Note 4:.The numbers filled in for the nature of loans are as follows:　　　(1) Business association is labeled as “1”　　　(2) Short-term financing is labeled as “2”.Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.Note 6: Fill in purpose of loan when nature of loan belongs to short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.Note 7: The calculation and amount on ceiling of loans are as follows:　　　[The company]　　　(1) The limit on loans granted to a single party shall not exceed 20% of the Company's net assets value.　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.　　　[Domestic subsidiaries and overseas subsidiaries]　　　(1) The limit on loans granted to a single party by domestic subsidiaries and overseas subsidiaries shall not exceed 10% and 40% of the Company's net value, respectively.　　　(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Govering Loaning of Funds and Making of Endorsements/Guarantees by public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated. However, this balance should excluded the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has authorised the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2,of the “Regulations Governing Loaning of Funds and Making of Endorsements/ Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.

Table 1 Page 6

Company name

Relationshipwith theendorser/guarantor（Note 2）

0 CTCI Corp. Universal Engineering (BVI) Corporation

2 52,376,187$ 30,944$ 30,740$ -$ -$ 0.18% 104,752,374$ Y N N -

0 CTCI Corp. CTCI Development Corporation

2 52,376,187 500,000 500,000 130,000 - 2.86% 104,752,374 Y N N -

0 CTCI Corp. CTCI Americas, Inc. 2 52,376,187 1,412,068 1,402,759 85,567 - 8.03% 104,752,374 Y N N -

0 CTCI Corp. CTCI Engineering & Construction Sdn. Bhd.

2 52,376,187 1,896,077 1,820,025 1,389,665 - 10.42% 104,752,374 Y N N -

0 CTCI Corp. CTCI Machinery Corp.

2 52,376,187 2,074,388 2,074,115 2,033,001 - 11.88% 104,752,374 Y N N -

Amount ofendorsements/

guarantees secured with

collateral

Ratio ofaccumulatedendorsement/

guaranteeamount to netasset value ofthe endorser/

guarantorcompany

Ceiling ontotal amount ofendorsements/

guaranteesprovided（Note 3）

Provision ofendorsements/guarantees by

parentcompany tosubsidiary（Note 7）

Provision ofendorsements/guarantees bysubsidiary to

parentcompany（Note 7）

Outstandingendorsement/

guaranteesamount at

December 31,2018

（Note 5）

CTCI Corporation

Provision of endorsements and guarantees to others


Table 2 Expressed in thousands of NTD

(Except as otherwise indicated)

Number（Note 1）

Endorser/guarantor

Party beingendorsed/guaranteed

Limit onendorsements/

guaranteesprovided for asingle party（Note 3）

Maximumoutstanding

endorsement/guarantee

amount as ofDecember 31,

2018（Note 4）

Provision ofendorsements/guarantees tothe party inMainland

China（Note 7） Footnote

Actual amountdrawn down（Note 6）

Table 2 Page 1

Company name




collateral



guarantorcompany








guaranteesamount at

December 31,2018

（Note 5）Number（Note 1）

Endorser/guarantor




Maximumoutstanding



2018（Note 4）




0 CTCI Corp. CTCI Singapore Pte. Ltd.

2 52,376,187$ 2,464,164$ 2,452,437$ 1,449,722$ -$ 14.05% 104,752,374$ Y N N -

0 CTCI Corp. CINDA Engineering & Construction Pvt. Ltd.

2 52,376,187 2,896,201 2,851,682 1,666,208 - 16.33% 104,752,374 Y N N -

0 CTCI Corp. CTCI Arabia Ltd. 2 52,376,187 3,988,604 3,778,442 3,408,411 - 21.64% 104,752,374 Y N N -

0 CTCI Corp. CTCI Overseas Co., Ltd.

2 52,376,187 7,029,248 4,823,865 1,465,674 - 27.63% 104,752,374 Y N N -

0 CTCI Corp. CTCI Trading Shanghai Co., Ltd.

2 52,376,187 162,734 161,239 - - 0.92% 104,752,374 Y N Y -

0 CTCI Corp. CTCI Shanghai Co., Ltd.

2 52,376,187 899,291 865,925 482,960 - 4.96% 104,752,374 Y N Y -

0 CTCI Corp. CTCI Beijing Co., Ltd.

2 52,376,187 1,068,175 1,068,175 49,412 - 6.12% 104,752,374 Y N Y -

Table 2 Page 2

Company name




collateral



guarantorcompany








guaranteesamount at

December 31,2018


Endorser/guarantor




Maximumoutstanding



2018（Note 4）




0 CTCI Corp. CCJV P1 E&C Sdn. Bhd.

2 52,376,187$ 1,222,288$ 1,214,230$ -$ -$ 6.95% 104,752,374$ Y N N -

0 CTCI Corp. CTCI Smart Engineering Corp.

2 52,376,187 29,010 28,819 - - 0.17% 104,752,374 Y N N -

0 CTCI Corp. CTCI (Thailand) Co., Ltd.

2 52,376,187 2,439,869 1,152,996 496,564 - 6.60% 104,752,374 Y N N -

0 CTCI Corp. CTCI Chemical Corp.

2 52,376,187 19,727 19,597 12,101 - 0.11% 104,752,374 Y N N -

0 CTCI Corp. CTCI CMCE JV Sdn. Bhd.

6 52,376,187 471,076 467,970 - - 2.68% 104,752,374 N N N -

0 CTCI Corp. CTCI & HEC Water Business Co., Ltd.

6 52,376,187 102,000 102,000 102,000 - 0.58% 104,752,374 Y N N -

0 CTCI Corp. CB&I-CTCI B.V. 6 52,376,187 6,556,996 6,513,769 6,513,769 - 37.31% 104,752,374 N N N -

Table 2 Page 3

Company name




collateral



guarantorcompany








guaranteesamount at

December 31,2018


Endorser/guarantor




Maximumoutstanding



2018（Note 4）




0 CTCI Corp. Blue Whale Water Technology Co., Ltd.

6 52,376,187$ 769,300$ 769,300$ 722,260$ -$ 4.41% 104,752,374$ N N N -

0 CTCI Corp. HDEC-CTCI (Linhai) Corporation

6 52,376,187 1,215,000 1,215,000 180,000 - 6.96% 104,752,374 N N N -

0 CTCI Corp. CIPEC Construction Inc.

2 52,376,187 525,193 524,599 206,599 - 3.00% 104,752,374 Y N N -

0 CTCI Corp. CTCI Malaysia Sdn. Bhd.

2 52,376,187 863,840 829,980 15,527 - 4.95% 104,752,374 Y N N -

1 CTCI Advanced Systems Inc.

Century Ahead Ltd. 2 544,517 18,566 18,444 - - 0.54% 1,089,034 N N N -

2 CTCI Smart Engineering Corp


5 462,218 253,413 - - - - 924,435 N N Y -

2 CTCI Smart Engineering Corp.


5 462,218 1,698,800 - - - - 924,435 N N N -

Table 2 Page 4

Company name




collateral



guarantorcompany








guaranteesamount at

December 31,2018


Endorser/guarantor




Maximumoutstanding



2018（Note 4）




3 CTCI Machinery Corp.


5 1,438,350$ 560,000$ 560,000$ 560,000$ - 116.80% 2,876,700$ N N N -

4 CTCI Chemical Corp.


5 716,009 245,000 - - - - 1,432,018 N N N -

4 CTCI Chemical Corp.

CTCI Corp. 3 716,009 18,817 18,817 18,817 - 7.88% 1,432,018 N Y N -

5 CTCI Shanghai Co., Ltd.


2 1,476,525 169,071 67,113 67,113 - 13.64% 2,953,050 N N Y -

6 CTCI Resources Engineering Inc.


5 867,505 267,102 267,102 267,102 - 92.37% 1,735,011 N N N -


CTCI Americas, Inc. 3 5,166,013 5,936 - - - - 10,322,026 N N N -

8 ECOVE Environment Corp.

ECOVE Solar Energy Corporation

2 9,756,476 1,143,589 1,143,589 968,043 - 23.44% 14,634,714 N N N -

Table 2 Page 5

Company name




collateral



guarantorcompany








guaranteesamount at

December 31,2018


Endorser/guarantor




Maximumoutstanding



2018（Note 4）




9 ECOVE Solar Energy Corporation

ECOVE South Corporation Ltd.

2 1,462,194$ 14,000$ 14,000$ 14,000$ - 1.91% 2,193,291$ N N N -


ECOVE Central Corporation Ltd.

2 1,462,194 19,790 16,790 16,790 - 2.71% 2,193,291 N N N -


ECOVE Solar Power Corporation

2 1,462,194 694,248 694,248 600,355 - 94.96% 2,193,291 N N N -

10 ECOVE Solar Power Corporation


5 408,122 12,420 12,420 12,420 - 6.09% 612,183 N N N -

Table 2 Page 6

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows: (1)The Company is ‘0’. (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 six categories; fill in the number of category each case belongs to: (1)Having business relationship. (2)The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary. (3)The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company. (4)The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary. (5)Mutual guarantee of the trade as required by the construction contract. (6)Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote.　　[The company]　　　(1)The limit on endorsements and guarantees granted to a single party shall not exceed 300% of the Company’s net assets value in last financial statements which was audited by accountant.　　　(2)The ceiling on total endorsements and guarantees shall not exceed 600% of the Company’s net assets value in last financial statements which was audited by accountant.　　[Domestic subsidiaries and overseas subsidiaries]　　　(1)The limit on endorsements and guarantees granted to a single party shall not exceed 100% to 300% of the Company's net assets value in last financial statements which was audited by accountant.　　　(2)The ceiling on total endorsements and guarantees shall not exceed 200% to 600% of the Company's net assets value in last financial statements which was audited by accountant.Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.Note 5: Once endorsement/guarantee contracts or promissory notes are signed/issued by the endorser/guarantor company to the banks, the endorser/guarantor company bears endorsement/guarantee liabilities. And all other events involve endorsements and guarantees should be included in the balance of outstanding endorsements and guarantees.Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 2 Page 7

Type of marketablesecurities Name of Investee company

Number of shares/denominations

Book value(Note 3) Ownership (%) Market value

CTCI Corp. Fund Fuh Hwa China New EconomyBalance

N/A Financial assets at fairvalue through profit or

loss-current

500,000 5,000$ - 4,610$ -

CTCI Corp. Fund BlackRock Global Fund - EuropeanValue Fund A2 USD Hedged

N/A Financial assets at fairvalue through profit or

loss-current

12,438 4,602 - 3,835 -

CTCI Corp. Fund Fubon US Preferred Stock ETF N/A Financial assets at fairvalue through profit or

loss-current

500,000 10,000 - 9,115 -

19,602$ 17,560$ Adjustment 2,042)(

17,560$

CTCI Corp. Common Stock China Steel Chemical Corp. The Company is thesupervisor

Financial asset at fair valuethrough other comprehensive

income-current

1,776,916 100,615$ - 239,883$ -

CTCI Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial asset at fair valuethrough other comprehensive

income-current

1,717,015 17,342 - 12,380 -

CTCI Corp. Common Stock Taiwan Cement Corp. N/A Financial asset at fair valuethrough other comprehensive

income-current

1,980,000 68,447 - 70,092 -

186,404$ 322,355$ Adjustment 135,951

322,355$

Footnote（Note 4）

CTCI CorporationHolding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

For the year ended December 31, 2018Table 3 Expressed in thousands of NTD


Securities held by

(Note 1)Relationship with the

securities issuer (Note 2)


As of December 31, 2018

Table 3 Page 1




Footnote（Note 4）Securities held by





CTCI Corp. Common Stock Core Pacific City Co., Ltd. N/A Financial assets at fair valuethrough other comprehensive

income-non-current

22,428,000 360,000$ 2.26 239,615$ -

CTCI Corp. Common Stock CDIB & PartnersInvestment HoldingCorp.

The Company is thesupervisor

Financial assets at fair valuethrough other comprehensive

income-non-current

27,000,000 250,000 2.48 250,000 -

CTCI Corp. Common Stock Metro-consultant Co.,Ltd.

The Company is theBoard of director


income-non-current

300,000 3,000 6.00 3,000 -

CTCI Corp. Common Stock Ever Victory Global Limited. N/A Financial assets at fair valuethrough other comprehensive

income-non-current

4,230,000 292,225 2.32 292,225 -

CTCI Corp. Common Stock Heng Keng Corp. N/A Financial assets at fair valuethrough other comprehensive

income-non-current

20,000 3,000 5.12 - -

908,225 784,840$

Less: Accumulated impairment 123,385)(

784,840$

CTCI Investment Corp. Fund Franklin Templeton Sinoam MoneyMarket Fund

N/A Financial assets at fair valuethrough profit or loss-current

671,211 6,927$ - 6,927$ -

CTCI Investment Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair valuethrough other comprehensive

income-current

265,030 1,911 - 1,911 -

CTCI Investment Corp. Common Stock CTCI Corp. The Company Financial assets at fair valuethrough other comprehensive

income-non-current

344,436 15,155 0.05 15,155 -

CTCI Investment Corp. Common Stock Global Strategic Investment Inc. N/A Financial assets at fair valuethrough other comprehensive

income non-current

283,500 962 0.65 962 -

Table 3 Page 2









CTCI Development Corp. Common Stock CTCI Corp. The Company Financial assets at fair valuethrough other comprehensive

income-non-current

912,170 40,135$ 0.12 40,135$ -

CTCI Development Corp. Common Stock CTCI AdvancedSystem Inc.

Subsidiary Financial assets at fair valuethrough other comprehensive

income-non-current

324,417 13,463 1.38 13,463 -

CTCI Development Corp. Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair valuethrough other comprehensive

income-current

675,010 4,867 - 4,867 -

CTCI Development Corp. Fund FSITC Taiwan Money Market N/A Financial assets at fair valuethrough profit or loss-current

100,539 1,536 - 1,536 -

CTCI Development Corp. Fund Taishin 1699 Money Market Fund N/A Financial assets at fair valuethrough profit or loss-current

8,143,624 109,997 - 109,997 -


Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair valuethrough other comprehensive

income-current

726,080 5,235 - 5,235 -


Common Stock Global Strategic Investment Inc. N/A Financial assets at fair valuethrough other comprehensive

income-non-current

567,000 1,924 1.29 1,924 -


Fund Yuanta De-Li Money Market Fund N/A Financial assets at fair valuethrough profit or loss-current

3,685,390 59,999 - 59,999 -


Fund Taishin 1699 Money Market Fund N/A Financial assets at fair valuethrough profit or loss-current

1,850,906 25,000 - 25,000 -

ECOVE Waste Management Corporation

Fund Prudential Financial Money Market N/A Financial assets at fair valuethrough profit or loss-current

207,498 3,277 - 3,277 -

Table 3 Page 3










Fund FSITC Taiwan Money Market N/A Financial assets at fair valuethrough profit or loss-current

1,311,441 20,033$ - 20,033$ -



1,333,007 18,005 - 18,005 -


Fund Franklin Templeton Sinoam MoneyMarket Fund


891,706 9,202 - 9,202 -


Common Stock Taiwan Cement Corp. N/A Financial assets at fair valuethrough other comprehensive

income-current

478,841 16,951 - 16,951 -

ECOVE Wujih Energy Corporation


65,511 1,001 - 1,001 -



148,083 2,000 - 2,000 -




4,616,996 47,650 - 47,650 -



income-current

475,508 16,833 - 16,833 -



income-current

472,758 16,735 - 16,735 -




198,085 2,044 - 2,044 -

Table 3 Page 4











income-current

455,157 3,282$ - 3,282$ -


Common Stock TeamWIN Opto-ElectronicsCo., Ltd.

N/A Financial assets at fair valuethrough other comprehensive

income-non-current

150,000 475 2.46 475 -


Common Stock Eastern Pacific Energy Sdn. Bhd. ECOVE Environment Corp.'s President is the

director


income-non-current

10,000 68 10.00 68 -

ECOVE Environmental Services Corporation

Common Stock CTCI Corp. The Company Financial assets at fair valuethrough other comprehensive

income-current

1,028 45 - 45 -



income-current

1,251,971 44,320 - 44,320 -



income-current

559,567 4,034 - 4,034 -


Fund Schroder 2022 Emerging MarketSovereign Bond Fund


35,000 10,596 - 10,596 -



3,366,412 45,470 - 45,470 -


Fund Capital Money Market Fund N/A Financial assets at fair valuethrough profit or loss-current

620,717 10,000 - 10,000 -

ECOVE Mioali EnergyCorporation


518,246 7,000 - 7,000 -

Table 3 Page 5











65,579 1,001$ - 1,001$ -




581,852 6,005 - 6,005 -

CTCI (Thailand) Co.,Ltd.

Common Stock CHIYODA(Thailand) Co. Ltd. N/A Financial assets at fair valuethrough other comprehensive

income-non-current

3,600 342 9.00 342 -

Crown Asia-2 Investment Limited

Common Stock CTCI Corp. The Company Financial assets at fair valuethrough other comprehensive

income-current

500 22 - 22 -

CTCI Advanced System Inc.


6,547,236 100,016 - 100,016 -



income-current

908,578 32,164 - 32,164 -



income-current

674,430 4,862 - 4,862 -


Bonds BANK OF CHINA LTD PARIS N/A Financial assets at fair valuethrough other comprehensive

income-current

6,000,000 26,778 - 26,778 Note 5

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities in accordance with IAS 39, ‘Financial instruments: recognition and measurement’.Note 2: Leave the column blank if the issuer of marketable securities is non-related party.Note 3: Fill in the book value without deduction of allowance for valuation loss of the marketable securities.Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.Note 5: The book value of bonds denominated in CNY.

Table 3 Page 6

Number of shares

(thousands) Amount

Number of shares

(thousands) Amount

Number of shares

(thousands) Selling price Book valueGain (loss) on

disposal

Number ofshares

(thousands) AmountCTCI Advanced Systems Inc.

FSITC Taiwan Money Market Financial assets at fairvalue through profit or

loss-current

- - 3,946 $ 60,000 34,645 $ 528,000 32,043 $ 488,294 $ 488,000 $ 294 6,547 $ 100,000


ECOVE Solar Energy Corporation Equity investmentsaccounted for under the

equity method

Gintech EnergyCorporation.

Other relatedparty

28,270 311,114 34,976 532,213(Note 5)

- - - - 63,246 854,787


Franklin Templeton Sinoam MoneyMarket Fund

Financial assets at fairvalue through profit or loss

- - 18,013 185,030 13,614 140,000 31,627 325,408 325,030 378 - -

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.Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.Note 5: The company additionally invest in ECOVE Solar Energy Corporation on September, 2018 at total amount of $482,884. Included total amount of remeasured original holding shares, investment income of this period, and net value adjustment $49,329.



Balance as at December 31,2018

CTCI Corporation

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）

Disposal（Note 3）

Investor

Marketable securities（Note 1）


Counterparty（Note 2）

Relationshipwith

the investor（Note 2）

Balance as atJanuary 1, 2018

Table 4 Page 1



Reason for

Relationship Basis or acquisition of

Relationship Original owner who between theoriginal Date of the reference used real estate and

Real estate Real estate Date of the Transaction Status of with the sold the real estate owner and the original in setting the status of the Otheracquired by acquired event amount payment Counterparty counterparty to the counterparty acquirer transaction Amount price real estate commitments

CTCIDevelopment

Corp.Land 2018/1/23 1,984,400$ 198,440$

Xintianmu Development

Co., Ltd.None - - - -$ Appraisal

reportTo build secondoffice building None

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate acquired should be appraised pursuant to the regulations.Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.Note 3: Date of the event referred to herein is the date of contract signing date, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more


the real estate is disclosed below:If the counterparty is a related party, information as to the last transaction of

CTCI Corporation

Table 5, Page 1

Purchases(sales) Amount

Percentage of totalpurchases (sales) Credit term Unit price Credit term Balance

Percentage oftotal notes/accountsreceivable (payable)

ECOVE EnvironmentalServices Corporation

ECOVE Waste ManagementCorporation

Second-tiersubsidiary (Sales) 572,562)($ 0.89% )( 30 days after

seasonally billingsNegotiated byboth parties

No significantdifference 100,417$ 1.00% -


ECOVE Wujih EnergyCorporation

Second-tiersubsidiary (Sales) 236,890)( 0.37% )( 30 days after


No significantdifference 83,809 0.84% -







ECOVE Solvent RecyclingCorporation









CTCI Corp. Blue Whale WaterTechnology Co., Ltd. Associate (Sales) 369,767)( 0.58% )( 30 days after


No significantdifference 539 0.01% -

CTCI Corp. Powertec Energy Corp. Associate (Sales) 423,310)( 0.66% )( 30 days afterseasonally billings

Negotiated byboth parties

No significantdifference - - -

CTCI Corporation

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

Relationshipwith the

counterparty

Transaction

Differences in transaction terms compared to third party

transaction Notes/accounts receivable (payable)

Tabl e 6 Page 1



Percentage oftotal notes/accountsreceivable (payable) FootnotePurchaser/seller Counterparty


counterparty

Transaction



CTCI Corp. CTCI Overseas Co., Ltd Subsidiary (Sales) 565,150)($ 0.88% )( 30 days afterseasonally billings



CTCI Overseas Co., Ltd. CTCI Corp. The Company (Sales) 316,188)( 0.49% )( 30 days afterseasonally billings



CTCI Engineering &Construction Sdn. Bhd.

CCJV P1 Engineering &Construction Sdn. Bhd. Subsidiary (Sales) 400,143)( 0.62% )( 30 days after



CTCI Advanced SystemsInc. CTCI Corp. The Company (Sales) 293,102)( 0.46% )( 30 days after



CTCI Development Corp. CTCI Corp. The Company (Sales) 302,282)( 0.47% )( 30 days afterseasonally billings



CTCI Machinery Corp. CTCI Corp. The Company (Sales) 347,699)( 0.54% )( 30 days afterseasonally billings



CTCI (Thailand) Co., Ltd. CTCI Corp. The Company (Sales) 360,643)( 0.56% )( 30 days afterseasonally billings



CTCI Smart EngineeringCorp.

ECOVE Solar EnergyCorporation




CTCI Beijing Co., Ltd. CTCI Corp. The Company (Sales) 211,770)( 0.33% )( 30 days afterseasonally billings



CIMAS EngineeringCompany CTCI Corp. The Company (Sales) 123,762)( 0.19% )( 30 days after



Tabl e 6 Page 2





counterparty

Transaction



CTCI Engineering &Construction Sdn. Bhd.

MIE INDUSTRIAL SDN.BHD. Associate (Sales) 463,873)($ 0.72% )( 30 days after



CTCI Corp. EVER ECOVE Corp. Associate (Sales) 44,447)( 0.07% )( 30 days afterseasonally billings





Second-tiersubsidiary Purchases 572,562 0.89% 30 days after


No significantdifference 100,417)( 0.89% )( -
















ECOVE Solvent RecyclingCorporation





CTCI Corp. Pan Asia Corp. Associate Purchases 145,731 0.23% 30 days afterseasonally billings



CTCI Corp. CTCI Advanced SystemsInc. Subsidiary Purchases 293,102 0.46% 30 days after



CTCI Corp. CTCI Machinery Corp. Subsidiary Purchases 347,699 0.54% 30 days afterseasonally billings



Tabl e 6 Page 3





counterparty

Transaction



CTCI Corp. CTCI Development Corp. Subsidiary Purchases 302,282$ 0.47% 30 days afterseasonally billings


No significantdifference 1,457)($ 0.01% )( -

CTCI Corp. CTCI (Thailand ) Co., Ltd. Subsidiary Purchases 360,643 0.56% 30 days afterseasonally billings



CTCI Corp. CTCI Overseas Co., Ltd. Subsidiary Purchases 316,188 0.49% 30 days afterseasonally billings



CTCI Engineering& Construction Sdn. Bhd.

MIE INDUSTRIAL SDN.BHD. Associate Purchases 1,598,407 2.49% 30 days after



CCJV P1 Engineering &Construction Sdn. Bhd.

MIE INDUSTRIAL SDN.BHD. Associate Purchases 1,589,866 2.48% 30 days after


No significantdifference 1,060,653)( 9.39% )( -


CTCI Engineering &Construction Sdn. Bhd. Subsidiary Purchases 400,143 0.62% 30 days after



CTCI Overseas Co., Ltd. CTCI Corp. The Company Purchases 565,150 0.88% 30 days afterseasonally billings



CTCI Corp. CTCI Beijing Co., Ltd. Second-tiersubsidiary Purchases 211,770 0.33% 30 days after



CTCI Corp. CIMAS EngineeringCompany




Note: ECOVE Solvent Recycling Corporation are accuunted in property, plant, and equipment.

Tabl e 6 Page 4

Table 7

Amount Action taken

CTCI Corp. CTCI Machinery Corp. Subsidiary 432,000$ Note 1 -$ - -$ -

CTCI Corp. EVER ECOVE Corp. Associate 374,425 0.24 - - - -

CTCI Corp. CTCI Development Corp. Subsidiary 121,054 Note 2 - - - -

CTCI Engineering & Construction Sdn.Bhd. MIE INDUSTRIAL SDN. BHD. Associate 565,408 1.64 - - - -

CTCI Corp. CTCI (Thailand ) Co., Ltd. Subsidiary 397,044 Note 1 - - - -

ECOVE Environmental ServicesCorporation.

ECOVE Waste ManagementCorporation. Second-tier subsidiary 100,417 3.83 - - - -

Note 1：Other accounts receivable arise from lending capital.

Note 2：Cash dividends

CTCI Corporation

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more


Expressed in thousands of NTD


Amount collectedsubsequent to the

balance sheet dateAllowance for

doubtful accounts Creditor CounterpartyRelationship

with the counterpartyBalance as at December 31,

2018 Turnover rate

Overdue receivables

Table 7 Page 1

General ledger account Amount Transaction termsPercentage of consolidated total operating revenues or

total assets (Note 3)0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Sales revenue 565,150)($ Negotiated by both parties 0.88% )(

1 ECOVE Environmental ServicesCorporation


3 〃 572,562)( 〃 0.89% )(

1 〃 ECOVE Mioali EnergyCorporation

3 〃 149,943)( 〃 0.23% )(

1 〃 ECOVE Wujih EnergyCorporation

3 〃 236,890)( 〃 0.37% )(

1 〃 ECOVE Solvent RecyclingCorporation

3 〃 108,464)( 〃 0.17% )(

2 CTCI Machinery Corp. CTCI Corp. 2 〃 347,699)( 〃 0.54% )(

3 CTCI (Thailand ) Co., Ltd. 〃 2 〃 360,643)( 〃 0.56% )(

4 CTCI Advanced Systems Inc. 〃 2 〃 293,102)( 〃 0.46% )(

5 CTCI Development Corp. 〃 2 〃 302,282)( 〃 0.47% )(

6 CTCI Engineering & Construction Sdn.Bhd.


3 〃 400,143)( 〃 0.62% )(

7 ECOVE Wujih Energy Corporation ECOVE Waste ManagementCorporation

3 〃 382,669)( 〃 0.60% )(

8 CTCI Overseas Co., Ltd. CTCI Corp. 2 〃 316,188)( 〃 0.49% )(

9 CTCI Smart Engineering Corp ECOVE Solar EnergyCorporation

3 〃 211,230)( 〃 0.33% )(

10 CTCI Beijing Co., Ltd. CTCI Corp. 2 〃 211,770)( 〃 0.33% )(

11 CIMAS Engineering Company 〃 2 〃 123,762)( 〃 0.19% )(

CTCI Corporation

Significant inter-company transactions during the reporting years




Number(Note 1) Company name Counterparty

Relationship(Note 2)

Transaction

Table 8 Page 1


total assets (Note 3)Number(Note 1) Company name Counterparty


Transaction

1 ECOVE Environmental ServicesCorporation


3 Accounts receivable 100,417$ Negotiated by both parties 0.16%

3 CTCI (Thailand ) Co., Ltd. CTCI Corp. 2 Other receivables 392,251 〃 0.61%

0 CTCI Corp. CTCI Machinery Corp. 1 〃 432,000 〃 0.67%

0 〃 CTCI (Thailand ) Co., Ltd. 1 〃 397,044 〃 0.62%

0 〃 CTCI Overseas (BVI) Co.and its subsidiaries.

1 Advance constructionreceipt

5,795,050 〃 9.04%

0 〃 CTCI Machinery Corp. 1 〃 132,269 〃 0.21%

2 CTCI Machinery Corp. CTCI Corp. 2 〃 2,497,560 〃 3.90%

12 CTCI Resources Engineering Inc. 〃 2 〃 252,390 〃 0.39%

3 CTCI (Thailand ) Co., Ltd. 〃 2 〃 720,506 〃 1.12%

0 CTCI Corp. CTCI Development Corp. 1 Refundable deposits 128,300 〃 0.20%

0 〃 CTCI (Thailand ) Co., Ltd. 1 Guarantee 1,152,996 Not applicable Not applicable

0 〃 CCJV P1 E&C SDN. BHD. 1 〃 1,214,230 〃〃

0 〃 CTCI Overseas Co., Ltd. 1 〃 4,823,865 〃〃

0 〃 CINDA Engineering &Construction Private Limited

1 〃 2,851,682 〃〃

0 〃 CTCI Arabia Ltd. 1 〃 3,778,442 〃〃

0 〃 CTCI Engineering &Construction Sdn. Bhd.

1 〃 1,820,025 〃〃

0 〃 CTCI Americas, Inc. 1 〃 1,402,759 〃〃

0 〃 CTCI Beijing Co., Ltd. 1 〃 1,068,175 〃〃

0 〃 CTCI Shanghai Co., Ltd. 1 〃 865,925 〃〃

Table 8 Page 2


total assets (Note 3)Number(Note 1) Company name Counterparty


Transaction

0 CTCI Corp. CTCI Trading Shanghai Co.,Ltd.

1 Guarantee 161,239$ Not applicable Not applicable

0 〃 CTCI Singapore Pte. Ltd. 1 〃 2,452,437 〃〃

0 〃 CTCI Machinery Corp. 1 〃 2,074,115 〃〃

0 〃 CTCI & HEC Water BusinessCo., Ltd.

1 〃 102,000 〃〃

0 〃 CTCI Malaysia Sdn. Bhd. 1 〃 829,980 〃〃

0 〃 CTCI Development Corp. 1 〃 500,000 〃〃

0 〃 CTCI CMCE JV Sdn. Bhd. 1 〃 467,970 〃〃

0 〃 CIPEC Construction Inc. 1 〃 524,599 〃〃

2 CTCI Machinery Corp. CTCI Smart EngineeringCorp.

3 〃 560,000 〃〃

12 CTCI Resources Engineering Inc. CTCI Smart EngineeringCorp.

3 〃 267,102 〃〃

13 ECOVE Environment Corp. ECOVE Solar EnergyCorporation

3 〃 1,143,589 〃〃

14 ECOVE Solar Energy Corporation ECOVE Solar PowerCorporation

3 〃 694,248 〃〃

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.Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

Table 8 Page 3

Balance as atDecember 31, 2018

Balance as atDecember 31, 2017 Number of shares Ownership (%) Book value

CTCI Corp. CTCI Smart Engineering Corp.

Taiwan Design, management,and building of nuclearpower, thermal power,fire pumped storagepower generation andothers related toengineering.

$ 456,251 $ 456,251 59,098,624 97.09 $ 150,695 ($ 325,492) ($ 316,020) A subsidiary

CTCI Corp. CTCI Resources Engineering Inc.

Taiwan Mining of geology, sea oiland gas, marbal andrare；planning, design,monitor of civil, trafficenvironment and variousmechanical andelectrical equipment.

263,455 263,455 24,762,252 99.05 284,047 33,446 30,724 A subsidiary

CTCI Corp. CTCI Advanced Systems Inc.

Taiwan Systems planning, design,integration, andengineering for variousIT systems, etc.

44,409 44,409 11,444,842 48.72 265,289 76,235 37,141 A subsidiary

CTCI Corp. CTCI Development Corp.

Taiwan Real estate and leasing business. 1,870,000 1,690,000 187,000,000 100.00 2,527,615 126,065 126,065 A subsidiary

CTCI Corp. CTCI Investment Corporation

Taiwan General investment. 2,072,000 2,072,000 207,200,000 100.00 1,730,250 ( 192,980) ( 192,980) A subsidiary

CTCI Corp. ECOVE Environment Corp.

Taiwan General investment. 938,889 938,889 38,457,105 57.31 2,795,718 806,912 462,434 A subsidiary

CTCI Corp. CTCI (Thailand) Co., Ltd.

Thailand Design and building ofpetrochemical plant.

116,894 116,894 1,249,500 49.00 58,735 111,154 54,465 A subsidiary

CTCI Corp. CTCI Machinery Corp.

Taiwan Secondary processingof steel, piping, heattreatment, manufactureof pollution controlequipment and non-destructive testing, etc.

293,800 293,800 20,000,000 100.00 480,434 67,207 67,207 A subsidiary

Net profit (loss) of the investee for the yearended December 31, 2018

(Note 2(2))

Investment income(loss)recognised by the Company forthe year ended December 31,

2018（Note 2(3)） Footnote InvestorInvestee

(Notes 1 and 2) Location Main business activities

Initial investment amount Shares held as at December 31, 2018

CTCI Corporation

Information on investees (not including investees in Mainland China)




Table 9 Page 1




(Note 2(2))





CTCI Corp. CTCI Arabia Ltd. Arabia Construction andmaintenance of refinery, storagetanks andchemical plant.

$ 23,312 $ 23,312 500 50.00 ($ 562,811) $ 164,510 $ 82,255 A subsidiary

CTCI Corp. Sinogal-Waste Services Corp.

Macao Management of waste recyclingsite andmaintenance of relatedmechanical andequipment, etc.

4,958 4,958 - 30.00 57,921 167,023 50,107 A subsidiary

CTCI Corp. CTCI Singapore Pte. Ltd.

Singapore Investment and planningof related engineering.

152,254 152,254 5,100,000 100.00 ( 652,532) ( 79,338) ( 79,338) A subsidiary

CTCI Corp. CTCI Overseas (BVI) Corp.

BVI Investment and planningof related engineering.

308,554 308,554 6,740,000 100.00 1,833,752 170,375 170,375 A subsidiary

CTCI Corp. CTCI Engineering & Construction Sdn. Bhd.

Malaysia Investment and planningof related engineering.

4,118 4,118 450,000 60.00 ( 3,066) ( 124,226) ( 74,535) A subsidiary

CTCI Corp. CTCI CMCE JV SDN.BHD.

Malaysia Construction planning. 2,759 2,759 382,500 51.00 9,041 9,945 8,739 A subsidiary

CTCI Corp. CTCI Americas, Inc. USA To extend foreign business, theGroup strengthen the collaborativerelationship with local businessowner and supplier, developingadequate potential supplier, andhelp them to operate projects,purchase and other relatedbusinesses.

3,217 3,217 100,000 100.00 3,954 ( 3,974) ( 3,974) A subsidiary

CTCI Corp. CCJV P1 Engineering & Construction Sdn. Bhd.

Malaysia Construction planning. 2,259 2,259 247,500 99.00 ( 79,510) ( 705,433) ( 698,379) A subsidiary

CTCI Corp. CTCI & HEC Water Business Co., Ltd.

Taiwan Sewerage System BOT Project. 255,000 255,000 25,500,000 51.00 244,516 ( 10,045) ( 5,123) A subsidiary

CTCI Corp. Blue Whale Water Technology Co., Ltd.

Taiwan Wastewater Reclamation UnitBTO Project.

347,900 347,900 34,790,000 49.00 434,937 143,958 70,539 An investee underequity method

Table 9 Page 2




(Note 2(2))





CTCI Corp. Pan Asia Corp. Taiwan Input of foreign laborand technologies,technical cooperationwith foreign constructionbusiness, and construction ofengineering construction, etc.

$ 71,543 $ 71,543 39,219,509 34.27 $ 526,590 $ 19,375 $ 6,640 An investee underequity method

CTCI Corp. EVER ECOVE Corp. Taiwan Waste service, waste clear andsteam power cogeneration.

250,000 - 25,000,000 25.00 246,635 ( 13,460) ( 3,365) An investee underequity method

CTCI Corp. HDEC-CTCI (Linhai)Corporation

Taiwan Reclaimed water operators. 202,500 - 20,250,000 45.00 201,389 ( 2,469) ( 1,111) An investee underequity method

$ 10,553,599 ($ 208,134)

CTCI Development Corp.

CTCI Chemical Corp.

Taiwan Manufacture wholesale,and retail of industrialchemicals.

13,522 13,522 480,661 6.77 16,158 58,813 3,982 A second-tiersubsidiary



Taiwan General investment. 11,270 11,270 243,918 0.36 17,762 806,912 3,084 A subsidiary



Taiwan Mining of geology, sea oiland gas, marbal andrare；planning, design,monitor of civil, trafficenvironment and variousmechanical andelectrical equipment.

23 23 1,388 0.01 16 33,446 2 A subsidiary


Crown Asia-2 Investment Limited

Taiwan General investment. 2,531 2,531 25,000 100.00 1,111 504 504 A second-tiersubsidiary


CTCI Chemical Corp.


32,153 32,153 1,657,207 23.34 55,708 58,813 13,728 A second-tiersubsidiary

Table 9 Page 3




(Note 2(2))







Taiwan General investment. $ 1,374 $ 1,374 32,132 0.05 $ 2,339 $ 806,912 $ 406 A subsidiary



Taiwan Design, management,and building of nuclearpower, thermal power,fire pumped storagepower generation andothers related toengineering.

11 11 1,000 0.002 3 ( 325,492) ( 2) A subsidiary


Powertec Energy Corp.

Taiwan Basically chemical industrypower generation, rotationelectric, machinerymanufacturing of electricpower and services ofenergy technologies.

1,832,107 1,832,107 211,291,668 16.03 1,227,090 ( 1,565,744) ( 257,825) An investee underequity method


MIE INDUSTRIAL SDN. BHD.

Malaysia Equipment & Instrument,Procurement & Contruction &Panel.



Boretech Resource Recovery Engineering Co., Ltd. (Cayman)

CaymanIsland

Share holding andinvestment.

154,744 154,744 6,666,667 10.00 146,084 2,188 277 An investee underequity method


ECOVE WasteManagement Corporation

Taiwan International trade andenvironmental service of wastedisposal, equipment installationand mechanical installation, etc.




Taiwan Environmental service ofwaste disposal deviceinstallation, steam powercogeneration, etc.

425,085 425,085 29,400,000 98.00 1,242,060 275,512 270,002 A second-tiersubsidiary



Taiwan Management of wasterecycling site and maintenance ofrelatedmechanical andequipment, etc.


Table 9 Page 4




(Note 2(2))






ECOVE Mioali Energy Corporation


$ 1,012,483 $ 1,012,483 56,249,000 75.00 $ 1,003,951 $ 129,055 $ 96,790 A second-tiersubsidiary



Taiwan Energy technology service. 762,349 279,465 63,245,452 100.00 854,787 43,423 27,700 A second-tiersubsidiary


Yuan Ding Resources Management Corp.

Taiwan Waste service, waste clear otherenvironmental service, andenvironmental pollution service,etc.

27,000 27,000 2,700,000 60.00 23,543 78 47 A second-tiersubsidiary


Boretech Resource Recovery Engineering Co., Ltd. (Cayman)

CaymanIsland

Share holding andinvestment.

309,489 309,489 13,333,333 20.00 292,168 2,188 554 An investee underequity method



Taiwan Operating basic chemical industryand manufacture of other chemicalproducts.

86,480 - 8,099,000 90.00 80,168 ( 7,015) ( 6,312) A second-tiersubsidiary


EVER ECOVE Corp. Taiwan Waste service, waste clear andsteam power cogeneration.

50,000 - 5,000,000 5.00 49,336 ( 13,460) ( 664) An investee underequity method

ECOVEEnvironmental Services Corporation





CTCI Chemical Corp.

Taiwan Manufacture, wholesale,and retail of industrialchemicals.



Sinogal-Waste Services Corp.

Macao Management of wasterecycling site andmaintenance of relatedmechanical andequipment, etc.

4,964 4,964 - 30.00 57,921 167,023 50,107 A second-tiersubsidiary

Table 9 Page 5




(Note 2(2))






ECOVE Mioali Energy Corporation


$ 13 $ 13 1,000 0.001 $ 18 $ 129,055 $ 2 A second-tiersubsidiary



Taiwan Operating basic chemical industryand manufacture of other chemicalproducts.

10 - 1,000 0.01 8 ( 7,015) 2 A second-tiersubsidiary



Taiwan Management of wasterecycling site and maintenance ofrelatedmechanical andequipment, etc.

53 53 1,000 0.01 64 367,025 23 A second-tiersubsidiary


Yuan Ding Resources Management Corp.

Taiwan Waste service, waste clear otherenvironmental service, andenvironmental pollution service,etc.

18,000 18,000 1,800,000 40.00 15,695 78 31 A second-tiersubsidiary


ECOVE Solar Power Corporation

Taiwan Energy technology service. 180,000 180,000 18,000,000 100.00 204,061 18,678 18,678 A second-tiersubsidiary


ECOVE CentralCorporation Ltd.

Taiwan Energy technology service. 7,500 7,500 750,000 100.00 8,737 719 719 A second-tiersubsidiary


ECOVE South Corporation Ltd.

Taiwan Energy technology service. 16,500 16,500 1,650,000 100.00 17,969 918 918 A second-tiersubsidiary


G.D. International, LLC. USA Energy technology service. 189,197 189,197 - 100.00 368,589 27,685 27,927 A second-tiersubsidiary

G.D International,LLC.

Lumberton Solar W2-090, LLC.

USA Energy technology service. 189,197 189,197 - 100.00 367,710 27,685 27,685 A second-tiersubsidiary

CTCI Overseas (BVI) Corp.

CTCI Overseas Co., Ltd.

Hong Kong Investment and planningof related engineering.

276,815 276,815 6,740,000 100.00 1,723,118 170,493 170,493 A second-tiersubsidiary

Table 9 Page 6




(Note 2(2))






CTCI Arabia Ltd. Arabia Construction andmaintenance of refinery, storagetanks andchemical plant.

$ 22,610 $ 22,610 500 50.00 ($ 562,811) $ 164,510 $ 82,255 A subsidiary


Universal Engineering (BVI) Corp.

BVI Investment and planningof related engineering.



CIPEC Construction Inc.

Philippines Construction andmaintenance of refinery, storagetanks andchemical plant.

663 663 9,973 39.89 ( 10,282) ( 26,131) ( 10,432) A second-tiersubsidiary


CIMAS Engineering Corp.

Vietnam Chemical, petrochemical,feasibility study &planning, engineeringdesign, procurement &fabrication, erection,construction &commissioning.

26,330 26,330 - 50.00 45,776 349 174 A second-tiersubsidiary


CTCI Engineering & Construction Sdn. Bhd.


2,879 2,879 300,000 40.00 ( 2,044) ( 124,226) ( 49,691) A subsidiary


CINDA Engineering & Construction Private Limited

India Chemical, petrochemical,feasibility study &planning, engineeringdesign, procurement &fabrication, erection,construction &commissioning.

31,022 31,022 8,000,000 100.00 ( 33,345) ( 190,178) ( 190,178) A second-tiersubsidiary


SUMBER MAMPU SDN.BHD.

Malaysia Building of related engineering. 95 95 12,040 10.00 167,588 62,121 62,121 A second-tiersubsidiary

Table 9 Page 7




(Note 2(2))





Universal Engineering (BVI) Corp.


Thailand Investment and planningof related engineering.

$ 151 $ 151 2,156 49.00 ($ 83,961) $ 55,884 $ 55,884 A second-tiersubsidiary


CTCI (Thailand) Co., Ltd.

Thailand Design and building ofpetrochemical plant.

12,628 12,628 1,300,500 51.00 ( 75,577) 111,154 56,689 A subsidiary

CTCI Advanced Systems Inc.

Century Ahead Ltd. Samoa Professional investment company. 25,097 25,097 750,000 100.00 32,800 7,609 7,609 A second-tiersubsidiary


CTCI Chemical Corp.




CTCI Chemical Corp.




CTCI Netherlands B.V. Netherlands Engineers and other technicaldesign and consultancy.


CTCI Engineering & Construction Sdn. Bhd.

CTCI Malaysia SDN. BHD.




MIE INDUSTRIAL SDN. BHD.

Malaysia Equipment & Instrument,Procurement & Construction,Panel.


SUMBER MAMPU SDN. BHD.




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 December 31, 2018’ 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 year ended December 31, 2018’ column should fill in amount of net profit (loss) of the investee for this period.

Table 9 Page 8

Remitted toMainland China

Remitted backto 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$ $ 266,564 100.00 $ 266,564 $ 1,782,248 $ 295,938 Note 3


Design, survey, construction and inspection of various engineering and construction projects.

592,787 2 534,974 - 46,265 488,709 80,530 100.00 80,530 496,930 23,530 -

CTCI Advanced Systems Shanghai Inc.

Computer technology services. 23,055 2 23,055 - - 23,055 7,594 48.72 3,700 31,552 - 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 6,720 53.39 3,588 12,355 - -

FuJian Gulie Petrochemical Co., Ltd.

Operating in manufacturing and sellingof ethylene and othres.

10,277,948 2 132,773 159,452 - 292,225 - 1.31 - 292,225 - Note 5


General trade. 23,748 2 - - - - 20,281 100.00 20,281 64,678 - Note 6

CTCI Corporation

Information on investees (not including investees in Mainland China)


Expressed in thousands of NTD

Investee inMainland China


Book value ofinvestments in

Mainland Chinaas of December

31, 2018

Accumulatedamount

of investmentincome

remitted back toTaiwan as ofDecember 31,

2018

Table 10

Footnote Main business activities Paid-in capitalInvestment method

（Note 1）

Accumulatedamount of

remittance fromTaiwan to

Mainland Chinaas of January 1,

2018

Accumulatedamount

of remittancefrom Taiwan toMainland Chinaas of December

31, 2018

Ownershipheld by

theCompany(direct orindirect)

Investment income(loss) recognisedby the Company

for the year endedDecember 31, 2018（Note 2(2)B）

Net income ofinvestee as ofDecember 31,

2018

Amount remitted from Taiwan toMainland China/

Amount remitted backto Taiwan for the year ended

December 31, 2018

Table 10 Page 1

Company name

Accumulated amount of remittancefrom Taiwan to Mainland China

as of December 31, 2018

Investment amount approvedby the Investment

Commission of the Ministryof Economic Affairs

(MOEA)

Ceiling on investments inMainland China imposed

by the InvestmentCommission of MOEA

CTCI Corp. $ 1,122,134 $ 1,183,170 $ 10,475,237

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)OthersNote 2: In the Investment income (loss) recognised by the Company for the year ended December 31, 2018 column: (1)FuJian Galie Petrochemical Co., Ltd did not accrue investment income or loss since it was still in preparation. (2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories: A.The financial statements that are audited and attested by R.O.C. parent company’s CPA. B.It is an insignificant subsidiary, and its financial report was not audited 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.

Table 10 Page 2

CTCI CORPORATION DETAILS OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2018 (EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)

Sheet 1

Sheet1 page 1

Items Summary AmountCash on hand and petty cash 16,420$

Bank deposits: Checking accounts 1,128 Demand deposits －USD USD $ 96,955 rate 30.74 2,980,382 －EUR EUR $ 7,850 rate 35.2327 276,594 －JPY JPY $ 548,410 rate 0.2779 152,403 －SGD SGD $ 4,271 rate 22.4552 95,898 －NTD 2,216,580 －Others 8,739

5,730,596

Time depostis －USD USD $ 74,123 rate 30.74 2,278,549 －NTD 201,900

2,480,449 8,228,593$

CTCI CORPORATION DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT


Sheet 2

Sheet2 page1

Financial CommoditiesNumber of

Shares/UnitsPar value

(in dollars) Amount CostsPrice

(in dollars) Amount NotesMutual funds Fuh Hwa China New Economy Balance 500,000 10.00$ 5,000$ 5,000$ 9.22$ 4,610$ BlackRock Global Fund - European Value Fund A2 USD Hedged 12,438 370.00 4,602 4,602 308.32 3,835 Fubon US Preferred Stock ETF 500,000 20.00 10,000 10,000 18.23 9,115 Subtotal 19,602 17,560 Valuation adjustment 2,042)( - Derivatives 48,553 48,553

Total 66,113$ 66,113$

Fair value

CTCI CORPORATION DETAILS OF ACCOUNTS RECEIVABLE


Sheet 3

Sheet3 page1

Client Name Amount Notes

Client:SPCC Joint Venture 1,503,401$ Taiwan Power Company Nuclear & ThermalPower Engineering Office 1,231,871 CPC Corporation LNG 931,541 GCGV A.H LLC 316,071 HDEC Corporation 244,026

Others 277,241 Each individual customer balance did notexceed 5% of the account balance

4,504,151 Less:Allowance for bad debts 210)(

4,503,941$

CTCI CORPORATION DETAILS OF CONSTRUCTION IN PROGRESS FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS) Sheet 4

Sheet4 page1

Project No.

Balance at January 1,

2018 CostProject

(loss) gainCompletedand roll-out


2018 11 0789A 37,082,180$ 3,942,021$ 737,517)($ $ - 40,286,684$ 08 1305 26,079,300 141,757 54,747)( - 26,166,310 12 1000A 23,977,836 1,488,634 265,765)( - 25,200,705 09 0001A 23,189,731 862 8,527 - 23,199,120 15 2200C 18,385,979 11,520,435 1,407,088 - 31,313,502 13 1500A 17,864,443 1,989,397 92,754 - 19,946,594 14 1758E 13,661,435 2,401,831 1,069,030 - 17,132,296 14 1717A 10,267,783 224,906 173,297)( - 10,319,392 11 0570A 10,020,839 1,201)( 62,943 - 10,082,581 04VKX0088A 5,554,387 - - - 5,554,387 10 0347A 5,175,683 408)( 8,676 - 5,183,951 00 2902 5,029,899 6,071 21,033 - 5,057,003 10 0541A 4,218,827 190,141 106,819)( 4,302,149)( - 13 1336C 4,206,275 14,952)( 233,555 - 4,424,878 09 0171A 4,176,582 - 7,093 4,183,675)( - 13 1515A 4,145,360 3,192 3,665)( - 4,144,887 11 0845A 3,919,885 24,386)( 3,736)( - 3,891,763 12 0888A 3,892,845 1,224 127)( - 3,893,942 02 3288 3,334,746 9,281 12,398 3,356,425)( - 10 0523B 3,333,412 32)( 1,580 - 3,334,960 97 2262 3,196,097 2 2)( - 3,196,097 10 0542A 3,022,023 124,930 340,389)( - 2,806,564 06 1165 3,399,449 14,560)( 32,811 - 3,417,700 14 1788S 2,955,930 47,275 42,524)( - 2,960,681 12 0977A 2,938,919 58 14,053 - 2,953,030 15 1988A 2,536,950 73,758 59,455 - 2,670,163 14 1787A 2,033,894 100,095 104,031)( - 2,029,958 11 0625A 1,973,936 60,011 255,257 - 2,289,204 16 2727A 1,913,806 166,716 110,790 - 2,191,312

Other 53,831,375 10,044,163 1,639,035 31,067,385)( 34,447,188 305,319,806$ 32,481,221$ 3,203,459$ 42,909,634)($ 298,094,852$

Shown as contract assets 180,899,970$ Shown as a deduction item to contract liabilities 117,194,882$

Current change

CTCI CORPORATION DETAILS OF INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2018 (EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)

Sheet 5

Sheet5 Page1

NameNumber of

Shares AmountsNumber of

Shares Amounts

Investmentincome

(loss) gainNumber of

Shares Ownership Amounts Fair value CollateralCTCI Smart Engineering Corporation 59,098,624 261,339$ - 205,376$ 316,020)($ 59,098,624 97.09 150,695$ 150,695$ NoneCTCI Resources Engineering Inc. 24,762,252 248,464 - 4,859 30,724 24,762,252 99.05 284,047 284,047 "CTCI Advanced Systems Inc. 11,444,842 263,086 - 34,938)( 37,141 11,444,842 48.72 265,289 474,961 "CTCI Development Corporation 169,000,000 2,530,655 - 129,105)( 126,065 169,000,000 100.00 2,527,615 2,527,615 "CTCI Investment Corporation 207,200,000 1,922,352 - 878 192,980)( 207,200,000 100.00 1,730,250 1,730,250 "ECOVE Environment Corp. 38,457,105 2,696,371 - 363,087)( 462,434 38,457,105 57.31 2,795,718 6,633,851 "CTCI (Thailand) Co., Ltd. 1,249,500 3,212 - 1,058 54,465 1,249,500 49.00 58,735 58,735 "CTCI Machinery Corp. 20,000,000 494,480 - 81,253)( 67,207 20,000,000 100.00 480,434 480,434 "Sinogal-Waste Service Corp. - 63,667 - 55,853)( 50,107 - 30.00 57,921 57,921 "CTCI Singapore Pte. Ltd. 5,100,000 570,290)( - 2,904)( 79,338)( 5,100,000 100.00 652,532)( 652,532)( "CTCI Overseas (BVI) Corp. 6,740,000 1,923,648 - 260,271)( 170,375 6,740,000 100.00 1,833,752 1,833,752 "CTCI Engineering & Construction Sdn. Bhd. 450,000 70,382 - 1,087 74,535)( 450,000 60.00 3,066)( 3,066)( "CTCI CMCE JV SDN. BHD. 382,500 392 - 90)( 8,739 382,500 51.00 9,041 9,041 "

CTCI Americas, Inc. 100,000 7,774 - 154 3,974)( 100,000 100.00 3,954 3,954 "CCJV P1 Engineering & Construction Sdn.Bhd. 247,500 608,915 - 9,954 698,379)( 247,500 99.00 79,510)( 79,510)( "Pan Asia Corp. 39,219,509 537,527 - 17,577)( 6,640 39,219,509 34.27 526,590 526,590 "CTCI Arabia Ltd. 500 627,735)( - 17,331)( 82,255 500 50.00 562,811)( 562,811)( "CTCI & HEC Water Business Co., Ltd. 25,500,000 249,639 - - 5,123)( 25,500,000 51.00 244,516 244,516 "Blue Whale Water Technology Co., Ltd. 34,790,000 364,397 - 1 70,539 34,790,000 49.00 434,937 434,937 "EVER ECOVE Corp. - - 25,000,000 250,000 3,365)( 25,000,000 25.00 246,635 246,635 "HDEC-CTCI (Linhai) Corporation - - 20,250,000 202,500 1,111)( 20,250,000 45.00 201,389 201,389 "

11,048,275$ 286,542)($ 208,134)($ 10,553,599$ 14,601,404$

Balance at January 1, 2018 Additions (Deductions) Balance at December 31, 2018

CTCI CORPORATION DETAILS OF ACCOUNTS PAYABLE


Sheet 6

Sheet6 page1

Client name Amounts Notes

Client: China Steel Machinery Corporation 228,238$ CHIA CHENG CONSTRUCTION CO., LTD. 169,343 Tenaga Switchgear Sdn. 125,289

Pandrol UK Limited 120,344 LIANG-JI CONSTRUCTION CO., LTD. 115,999 Rujin Construction Co., Ltd. 115,747 TAICHENG MACHINERY CO., LTD. 114,400 WANCHI STEEL INDUSTRIAL CO., LTD. 109,615

Others 3,804,894

Each individual customer balancedid not exceed 2% of the accountbalance

4,903,869$

CTCI CORPORATION DETAILS OF PARTIAL CONSTRUCTION BILLINGS


Sheet 7

Sheet7 page1

Project No.

Balance atJanuary 1,

2018Additions

(Deductions)Completed and

roll-out


2018 11 0789A 33,414,260$ 3,480,040$ -$ 36,894,300$ 08 1305 26,083,106 86,581 - 26,169,687 12 1000A 19,853,249 2,369,791 - 22,223,040 09 0001A 23,199,120 - - 23,199,120 15 2200C 15,690,449 10,664,789 - 26,355,238 13 1500A 13,512,709 2,762,346 - 16,275,055 14 1758E 15,288,144 - - 15,288,144 14 1717A 9,920,970 321,000 - 10,241,970 11 0570A 10,290,851 - - 10,290,851 04VKX0088A 5,239,853 - - 5,239,853 10 0347A 5,183,951 - - 5,183,951 00 2902 5,057,038 - - 5,057,038 10 0541A 4,302,149 - 4,302,149)( - 13 1336C 3,960,081 526,039 - 4,486,120 09 0171A 4,183,675 - 4,183,675)( - 13 1515A 4,158,837 - - 4,158,837 11 0845A 3,923,182 - - 3,923,182 12 0888A 3,905,310 - - 3,905,310 02 3288 3,356,425 - 3,356,425)( - 10 0523B 3,319,326 - - 3,319,326 97 2262 3,208,286 - - 3,208,286 10 0542A 3,064,049 - - 3,064,049 06 1165C 3,012,074 - - 3,012,074 14 1788S 2,858,403 83,320 - 2,941,723 12 0977A 2,953,338 - - 2,953,338 15 1988A 2,572,968 87,454 - 2,660,422 14 1787A 1,784,539 167,883 - 1,952,422 11 0625A 1,811,609 77,851 - 1,889,460 16 2727A 2,054,506 152,496 - 2,207,002

Other 56,115,459 16,703,906 31,067,385)( 41,751,980 293,277,916$ 37,483,496$ 42,909,634)($ 287,851,778$

Shown as contract assets 126,655,675$ Shown as a deduction item to contract liabilities 161,186,103$

CTCI CORPORATION DETAILS OF OPERATING REVENUE


Sheet 8

Sheet8 page1

Items Summary Amount NotesRefining and petrochemical project 22,868,343$

Basic construction 2,687,721

Resources environmental 10,082,387

Others 46,229

35,684,680$

CTCI CORPORATION

DETAILS OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2018

(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)

Sheet 9

Sheet9 page1

Items Summary Amount

Balance at January 1, 2018 -$

Add : Purchasing 16,475,790

Less : transferred to indirect materials 6,031)(

Balance at December 31, 2018 -

Consumption materials 16,469,759

Consumption indirect materials 6,031

Direct labor 1,877,791

Manufacturing expenses 3,973,195

Subcontract costs 10,059,980

Input costs 32,386,756

Estimated project loss at January 1, 2018 144,824)(

Estimated project loss at December 31, 2018 240,163

Operating costs 32,482,095$

CTCI CORPORATION

DETAILS OF MANUFACTURING EXPENSES



Sheet 10

Sheet10 page1

Items Summary Amount

Indirect labor 893,287$

Temporary equipment 78,493

Rental expenses 407,915

Travelling expenses 219,828

Delivery expenses 1,627

Finance costs 103,175

Pension 126,410

Various amortizations 122,794

Taxes 157,624

Meals expenses 66,801

Employee benefits 56,281

Depreciation charges on property,

plant and equipment 30,421

Utilities expenses 52,309

Repairs and maintenance expenses 24,535

Fuel consumption 12,473

Postage expenses 27,172

Apportion of office 23,170

Photocopier expenses 14,782

Entertainment expenses 9,174

Other expenses 1,544,924

3,973,195$

CTCI CORPORATION

DETAILS OF OPERATING EXPENSES



Sheet 11

Sheet11 page1

Items

General and

administrative

expenses

Research and

development

expenses Total

Payroll expenses 558,368$ 74,623$ 632,991$

Pension 25,912 3,517 29,429

Rental expenses 34,920 8,391 43,311

Office supplies expenses 944 14 958

Travelling expenses 31,328 493 31,821

Utilities expenses 1,951 529 2,480

Entertainment expenses 5,436 61 5,497

Donation expenses (Note) 18,050 - 18,050

Depreciation charges on

property, plant and equipment 6,237 2,428 8,665

Various amortizations 8,703 4,062 12,765

Employee benefits 4,882 1,427 6,309

Professional service fees 16,277 - 16,277

Office miscellaneous expenses 2,938 832 3,770

Meals expenses 5,409 1,789 7,198

Miscellaneous expenses 206,349 22,683 229,032

927,704$ 120,849$ 1,048,553$

Note: As of December 31, 2018 the Company contributed $15,000 cash to CTCI Education Foundation.

ctci corporation · ctci corporation parent company only balance sheets december 31, 2018 and 2017...

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