CTCI CORPORATION AND SUBSIDIARIES · 2020. 6. 15. · 227,985 - Increase in other receivables -...
Transcript of CTCI CORPORATION AND SUBSIDIARIES · 2020. 6. 15. · 227,985 - Increase in other receivables -...
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CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS AND
REVIEW REPORT OF INDEPENDENT
ACCOUNTANTS
MARCH 31, 2020 AND 2019
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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying
financial statements have been translated into English from the original Chinese version prepared and used in
the Republic of China. In the event of any discrepancy between the English version and the original Chinese
version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and
financial statements shall prevail.
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CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (The balance sheets as of March 31, 2020 and 2019 are reviewed, not audited)
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March 31, 2020 December 31, 2019 March 31, 2019 Assets Notes AMOUNT % AMOUNT % AMOUNT %
Current assets 1100 Cash and cash equivalents 6(1) $ 16,901,415 25 $ 20,767,581 30 $ 17,013,679 24 1110 Financial assets at fair value
through profit or loss - current 6(2)
36,742 - 275,845 1 410,613 1 1120 Financial assets at fair value
through other comprehensive
income - current
6(3)
392,579 1 464,943 1 517,490 1 1136 Financial assets at amortized
cost - current 6(4)
49,179 - 277,164 - 30,460 - 1140 Contract assets - current 6(24) 15,527,470 23 18,653,485 27 20,803,659 30 1150 Notes receivable, net 6(5) 30,708 - 63,360 - 14,614 - 1170 Accounts receivable, net 6(5) 6,998,445 10 4,513,304 7 5,284,252 8 1180 Accounts receivable - related
parties 7
940,007 1 760,878 1 461,030 1 1200 Other receivables 103,815 - 245,735 - 170,805 - 1210 Other receivables - related
parties 7
31,977 - - - - - 1220 Current income tax assets 205,545 - 204,024 - 144,683 - 130X Inventories 149,190 - 144,407 - 186,176 - 1410 Prepayments 6(6) 3,161,064 5 2,758,670 4 4,305,582 6 1460 Non-current assets or disposal
groups classified as held for
sale, net
- - 38,380 - - - 1470 Other current assets 6(15) 2,370,290 4 6,817 - 277,399 - 11XX Total current assets 46,898,426 69 49,174,593 71 49,620,442 71 Non-current assets 1517 Financial assets at fair value
through other comprehensive
income - non-current
6(3)
840,909 1 858,499 1 780,958 1 1535 Financial assets at amortized
cost - non-current 6(4) and 8
130,720 - 130,720 - 107,880 - 1550 Investments accounted for
using equity method 6(7)
2,175,411 3 2,173,160 3 3,538,560 5 1600 Property, plant and equipment,
net 6(8) and 8
12,216,376 18 11,788,472 17 10,602,336 15 1755 Right-of-use assets 6(9) and 8 414,038 1 443,854 1 393,422 1 1760 Investment property, net 6(10) and 8 802,798 1 803,823 1 807,052 1 1780 Intangible assets 198,959 1 191,971 - 189,587 - 1840 Deferred income tax assets 778,493 1 784,379 1 575,125 1 1900 Other non-current assets 6(11) and 8 3,386,244 5 3,145,040 5 3,263,263 5 15XX Total non-current assets 20,943,948 31 20,319,918 29 20,258,183 29 1XXX Total assets $ 67,842,374 100 $ 69,494,511 100 $ 69,878,625 100
(Continued)
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CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (The balance sheets as of March 31, 2020 and 2019 are reviewed, not audited)
The accompanying notes are an integral part of these consolidated financial statements.
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March 31, 2020 December 31, 2019 March 31, 2019 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %
Current liabilities 2100 Short-term borrowings 6(12) $ 5,898,549 9 $ 6,163,306 9 $ 10,947,586 16 2110 Short-term notes and bills
payable
215,891 - 199,921 - - - 2120 Financial liabilities at fair value
through profit or loss - current 6(2)
16,891 - 54,716 - 36 - 2130 Contract liabilities - current 6(24) 14,723,131 22 12,157,272 18 15,629,871 22 2150 Notes payable 38,249 - 48,369 - 11,319 - 2170 Accounts payable 6(13) 10,469,322 16 11,708,290 17 9,790,524 14 2180 Accounts payable - related
parties 7
537,144 1 648,957 1 717,262 1 2200 Other payables 6(14) 1,621,945 2 2,848,021 4 1,689,094 2 2230 Current income tax liabilities 282,959 - 217,180 - 494,799 1 2280 Current lease liabilities 7 114,153 - 146,499 - 147,908 - 2300 Other current liabilities 6(15)(17) 234,632 - 1,991,941 3 3,137,767 5 21XX Total current liabilities 34,152,866 50 36,184,472 52 42,566,166 61 Non-current liabilities 2530 Bonds payable 6(16) 5,989,911 9 5,989,529 9 - - 2540 Long-term borrowings 6(17) 5,570,521 8 5,390,673 8 3,407,744 5 2570 Deferred income tax liabilities 262,745 - 216,697 - 400,994 1 2580 Non-current lease liabilities 7 284,968 1 281,103 - 197,096 - 2600 Other non-current liabilities 6(18) 1,867,606 3 2,085,040 3 2,232,207 3 25XX Total non-current
liabilities
13,975,751 21 13,963,042 20 6,238,041 9 2XXX Total liabilities 48,128,617 71 50,147,514 72 48,804,207 70 Equity attributable to owners of
parent
Share capital 6(21) 3110 Common stock 7,633,213 11 7,633,182 11 7,632,738 11 Capital surplus 6(22) 3200 Capital surplus 3,954,225 6 3,730,448 5 3,587,786 5 Retained earnings 6(23) 3310 Legal reserve 3,741,648 5 3,741,648 5 3,558,894 5 3320 Special reserve 762,377 1 762,377 1 763,794 1 3350 Unappropriated retained
earnings
1,637,934 2 1,481,062 2 2,437,044 3 Other equity interest 3400 Other equity interest ( 1,145,000 ) ( 1 ) ( 1,180,439 ) ( 1 ) ( 223,456 ) - 3500 Treasury stocks 6(21) ( 11,835 ) - ( 11,835 ) - ( 11,835 ) - 31XX Equity attributable to
owners of the parent
16,572,562 24 16,156,443 23 17,744,965 25 36XX Non-controlling interest 4(3) 3,141,195 5 3,190,554 5 3,329,453 5 3XXX Total equity 19,713,757 29 19,346,997 28 21,074,418 30 Significant contingent liabilities
and unrecognized contract
commitments
9
Significant events after the
balance sheet date 11
3X2X Total liabilities and equity $ 67,842,374 100 $ 69,494,511 100 $ 69,878,625 100
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CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS) (UNAUDITED)
The accompanying notes are an integral part of these consolidated financial statements.
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Three months ended March 31
2020 2019
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(24) and 7 $ 11,444,360 100 $ 13,712,458 100 5000 Operating costs 6(28)(29) and 7 ( 10,455,934 ) ( 91 ) ( 12,673,888 ) ( 92 )
5900 Gross profit 988,426 9 1,038,570 8
Operating expenses 6(28)(29) 6200 General and administrative expenses ( 381,642 ) ( 4 ) ( 409,167 ) ( 3 ) 6300 Research and development expenses ( 29,871 ) - ( 25,173 ) -
6000 Total operating expenses ( 411,513 ) ( 4 ) ( 434,340 ) ( 3 )
6900 Operating income 576,913 5 604,230 5
Non-operating income and expenses 7010 Other income 6(25) 58,638 1 75,398 1 7020 Other gains and losses 6(26) ( 174,833 ) ( 1 ) 27,864 - 7050 Finance costs 6(27) ( 65,698 ) ( 1 ) ( 82,057 ) ( 1 ) 7060 Share of profit (loss) of associates
and joint ventures accounted for
under equity method
6(7)
21,236 - ( 148,680 ) ( 1 )
7000 Total non-operating income and
expenses
( 160,657 ) ( 1 ) ( 127,475 ) ( 1 )
7900 Profit before income tax 416,256 4 476,755 4 7950 Income tax expense 6(30) ( 135,863 ) ( 1 ) ( 133,088 ) ( 1 )
8200 Profit for the period $ 280,393 3 $ 343,667 3
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311 Actuarial losses on defined benefit
plans
( $ 244 ) - $ - - 8316 Unrealized (losses) gains from
investments in equity instruments
measured at fair value through other
comprehensive income
6(3)
( 89,923 ) ( 1 ) 36,894 - Components of other comprehensive
income that will be reclassified to
profit or loss
8361 Cumulative translation differences
of foreign operations
113,085 1 23,971 -
8300 Total other comprehensive income
for the period
$ 22,918 - $ 60,865 -
8500 Total comprehensive income for the
period
$ 303,311 3 $ 404,532 3
Profit attributable to: 8610 Owners of the parent $ 157,116 2 $ 221,473 2 8620 Non-controlling interest 123,277 1 122,194 1
$ 280,393 3 $ 343,667 3
Comprehensive income attributable
to:
8710 Owners of the parent $ 190,884 2 $ 243,503 2 8720 Non-controlling interest 112,427 1 161,029 1
$ 303,311 3 $ 404,532 3
9750 Basic earnings per share (in NT
dollars)
6(31)
$ 0.21 $ 0.29
9850 Diluted earnings per share (in NT
dollars)
6(31)
$ 0.21 $ 0.29
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CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
(UNAUDITED)
Equity attributable to owners of the parent
Retained Earnings Other Equity Interest
Notes
Common stock
Capital surplus
Legal reserve
Special reserve
Unappropriated
earnings
Cumulative
translation
differences of
foreign operations
Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
Treasury
stocks
Total
Non-controlling
interests
Total equity
The accompanying notes are an integral part of these consolidated financial statements.
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For the three-month period ended March 31, 2019
Balance at January 1, 2019 $ 7,632,738 $ 3,545,053 $ 3,558,894 $ 763,794 $ 2,217,619 ( $ 290,028 ) $ 42,494 ( $ 11,835 ) $ 17,458,729 $ 3,167,430 $ 20,626,159
Profit for the period - - - - 221,473 - - - 221,473 122,194 343,667
Other comprehensive income (loss) - - - - - ( 6,186 ) 28,216 - 22,030 38,835 60,865
Total comprehensive income (loss) - - - - 221,473 ( 6,186 ) 28,216 - 243,503 161,029 404,532
Employee stock options exercised by subsidiary
6(22) - 31 - - - - - - 31 - 31
Share-based payment transactions 6(22) - 42,702 - - - - - - 42,702 994 43,696
Disposal of investments in equity instruments designated at fair value through other comprehensive income
- - - - ( 2,048 ) - 2,048 - - - -
Balance at March 31, 2019 $ 7,632,738 $ 3,587,786 $ 3,558,894 $ 763,794 $ 2,437,044 ( $ 296,214 ) $ 72,758 ( $ 11,835 ) $ 17,744,965 $ 3,329,453 $ 21,074,418
For the three-month period ended March 31, 2020
Balance at January 1, 2020 $ 7,633,182 $ 3,730,448 $ 3,741,648 $ 762,377 $ 1,481,062 ( $ 383,344 ) ( $ 797,095 ) ( $ 11,835 ) $ 16,156,443 $ 3,190,554 $ 19,346,997
Profit for the period - - - - 157,116 - - - 157,116 123,277 280,393
Other comprehensive income (loss) - - - - ( 244 ) 129,067 ( 95,055 ) - 33,768 ( 10,850 ) 22,918
Total comprehensive income (loss) - - - - 156,872 129,067 ( 95,055 ) - 190,884 112,427 303,311
Employee stock options exercised 6(22) 31 98 - - - - - - 129 - 129
Share-based payment transactions 6(22) - 50,116 - - - - - - 50,116 5,708 55,824
Reorganisation - 187,351 - - - 591 836 - 188,778 ( 188,778 ) -
Non-controlling interests - ( 13,788 ) - - - - - - ( 13,788 ) 21,284 7,496
Balance at March 31, 2020 $ 7,633,213 $ 3,954,225 $ 3,741,648 $ 762,377 $ 1,637,934 ( $ 253,686 ) ( $ 891,314 ) ( $ 11,835 ) $ 16,572,562 $ 3,141,195 $ 19,713,757
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CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (UNAUDITED)
For the three-month periods ended March 31
Notes 2020 2019
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CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 416,256 $ 476,755 Adjustments Adjustments to reconcile profit (loss) Loss (gain) on valuation of financial assets 6(26) 1,428 ( 30,151 ) Gain on disposal of property, plant and
equipment 6(26)
( 27,872 ) ( 30 ) Share of (profit) loss of associates and joint
ventures accounted for under equity method 6(7)
( 21,236 ) 148,680 Depreciation 6(28) 208,652 143,153 Amortization 6(28) 37,200 38,447 Expected credit (gain) loss 12(2) ( 1,620 ) 13,666 Interest income 6(25) ( 34,193 ) ( 58,160 ) Interest expense 6(27) 65,698 82,057 Compensation costs of employee stock options 6(29) 55,824 43,549 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or
loss
386,897 108,517 Contract assets - current 3,126,015 4,019,773 Notes receivable 32,652 60,392 Accounts receivable ( 2,483,521 ) 3,794,414 Accounts receivable - related parties ( 179,129 ) 483,041 Other receivables 144,511 159,991 Inventories ( 4,783 ) ( 18,831 ) Prepayments ( 402,394 ) ( 25,348 ) Other current assets ( 2,363,473 ) 271,359 Other non-current assets 174,265 157,462 Changes in operating liabilities Contract liabilities - current 2,565,859 1,709,673 Notes payable ( 10,120 ) ( 7,469 ) Accounts payable ( 1,238,968 ) ( 200,738 ) Accounts payable - related parties ( 111,813 ) ( 642,450 ) Other payables ( 1,222,194 ) ( 1,223,615 ) Other current liabilities ( 1,773,992 ) ( 4,585,497 ) Other non-current liabilities ( 233,595 ) ( 345,898 ) Cash (outflow) inflow generated from operations ( 2,893,646 ) 4,572,742 Interest received 31,602 65,841 Interest paid ( 69,199 ) ( 75,904 ) Income tax paid ( 32,245 ) ( 19,185 ) Net cash flows (used in) from operating
activities
( 2,963,488 ) 4,543,494
(Continued)
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CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (UNAUDITED)
For the three-month periods ended March 31
Notes 2020 2019
The accompanying notes are an integral part of these consolidated financial statements.
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CASH FLOWS FROM INVESTING ACTIVITIES
Prepayments for long-term investment ( $ 504,206 ) $ -
Proceeds from disposal of financial assets at fair
value through other comprehensive income -
current
- 23,074
Proceeds from disposal of financial assets at
amortized cost
227,985 -
Increase in other receivables - related parties ( 31,977 ) -
Acquisition of property, plant and equipment 6(32) ( 331,575 ) ( 1,874,915 )
Proceeds from disposal of property, plant and
equipment
27,981 186
Increase in intangible assets ( 16,269 ) -
(Increase) decrease in refundable deposits ( 124,429 ) 8,836
Increase in other non-current assets ( 887 ) ( 7,096 )
Prepayments for engineering equipment ( 76,062 ) ( 164,347 )
Net cash flows from acquisitionn of subsidiaries ( 30,019 ) ( 38,749 )
Net cash flows used in investing activities ( 859,458 ) ( 2,053,011 )
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings ( 264,757 ) ( 2,466,873 )
Short-term notes and bills payable 15,970 -
Increase in long-term borrowings 196,532 2,056,762
Decrease in lease liabilities ( 44,770 ) ( 100,098 )
Increase (decrease) in deposits received (recognized
in other non-current liabilities)
16,161 ( 37,587 )
Proceeds from employee stock options exercised 129 -
Increase in non-controlling interests 37,515 -
Net cash flows used in financing activities ( 43,220 ) ( 547,796 )
Net (decrease) increase in cash and cash equivalents ( 3,866,166 ) 1,942,687
Cash and cash equivalents at beginning of period 20,767,581 15,070,992
Cash and cash equivalents at end of period $ 16,901,415 $ 17,013,679
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CTCI CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2020 AND 2019
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,
EXCEPT AS OTHERWISE INDICATED)
(UNAUDITED)
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 and its subsidiaries (collectively referred
herein as the “Group”) are the design, survey, construction and inspection of various engineering and
construction projects, plants, machinery and equipment and environmental protection projects. The
Company’s shares have been listed and traded on the Taiwan Stock Exchange since May 1993.
2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORIZATION
These consolidated financial statements were reported to the Board of Directors on May 6, 2020.
3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting
Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as
follows:
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of
Material’
January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020
Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark
reform’ January 1, 2020
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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
None.
(3) IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as
endorsed by the FSC are as follows:
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted are consistent with Note 4 in the consolidated financial
statements for the year ended December 31, 2019, except for the compliance statement, basis of
preparation, basis of consolidation and additional policies as set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
(1) Compliance statement
A. The consolidated financial statements of the Group have been prepared in accordance with the
“Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the
International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated
financial statements for the year ended December 31, 2019.
(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under
the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss.
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
To be determined by
International
Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
January 1, 2022
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(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less
present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting
Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as
endorsed by the FSC (collectively referred herein as the“IFRSs”), requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 5.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
The basis for preparation of these consolidated financial statements is the same as that for the
preparation of the consolidated financial statements as of and for the year ended December 31,
2019.
B. Subsidiaries included in the consolidated financial statements:
March 31,
2020
December 31,
2019
March 31,
2019
CTCI Corp. CTCI Advanced
Systems Inc.
Design and
installation of
software
48.72 48.72 48.72 Note 1
CTCI Corp. CTCI
Development
Corp.
Real estate and
leasing business
100.00 100.00 100.00 Note 2
CTCI Corp. CTCI Investment
Corp.
Investments 100.00 100.00 100.00 Note 2
CTCI Corp.
CTCI Investment
Corp.
CTCI Smart
Engineering
Corp.
Planning and design
of construction
projects
97.09 97.09 97.09 Note 2
CTCI Corp. - 99.05 99.05
CTCI
Development
Corp.
0.01 0.01 0.01
CTCI Advanced
Systems Inc.
99.05 - -
Description
Note 6, 8
CTCI Resources
Engineering Inc.
Engineering
technology service
Ownership (%)
Name of InvestorName of
Subsidiary
Main Business
Activities
-
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March 31,
2020
December 31,
2019
March 31,
2019
CTCI Corp. CTCI Americas,
Inc.
Business
development and
related engineering
services and planning
100.00 100.00 100.00 Note 2
CTCI Corp. CTCI Singapore
Pte. Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Investment
Corp.
CTCI
Development
Corp.
ECOVE
Environment
Services Corp.
CTCI Smart
Engineering
Corp.
CTCI Resources
Engineering Inc.
CTCI Chemical
Corp.
Manufacturing of
chemical products
75.49 75.49 75.49 Note 2
CTCI Corp.
CTCI Investment
Corp.
CTCI
Development
Corp.
ECOVE
Environment
Corp.
Investments 57.72 57.72 57.72
ECOVE
Environment
Corp.
100.00 100.00 98.00
ECOVE
Environment
Services Corp.
- - 2.00
ECOVE
Environment
Corp.
ECOVE Waste
Management
Corp.
Environmental
engineering
100.00 100.00 100.00
ECOVE
Environment
Corp.
ECOVE Waste
Management
Corp.
ECOVE
Environment
Services Corp.
Environmental
engineering
93.16 93.16 93.16
ECOVE
Environment
Corp.
ECOVE
Environment
Services Corp.
ECOVE Miaoli
Energy Corp.
Environmental
engineering
75.00 75.00 75.00
Name of InvestorName of
Subsidiary
Main Business
ActivitiesDescription
Note 4
Ownership (%)
ECOVE Wujih
Energy Corp.
Environmental
engineering
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March 31,
2020
December 31,
2019
March 31,
2019
ECOVE
Environment
Corp.
100.00 100.00 60.00
ECOVE Waste
Management
Corp.
- - 40.00
ECOVE
Environment
Services Corp.
ECOVE
Environment
Consulting Corp.
Environmental
engineering
100.00 100.00 100.00 Note 2
CTCI Corp.
ECOVE
Environment
Services Corp.
SINOGAL-
Waste Services
Co., Ltd.
Environmental
engineering
60.00 60.00 60.00 Note 2
CTCI Corp. CTCI Overseas
(BVI) Corp.
Investments 100.00 100.00 100.00 Note 2
CTCI Overseas
(BVI) Corp.
CTCI Overseas
Co., Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Overseas
Co., Ltd.
CTCI Beijing
Co., Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Overseas
Co., Ltd.
CIMAS
Engineering
Company
Planning and design
of construction
projects
100.00 83.00 83.00 Note 2, 3
CTCI Overseas
Co., Ltd.
Universal
Engineering
(BVI) Corp.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Overseas
Co., Ltd.
CIPEC
Construction
Company Inc.
Planning and design
of construction
projects
39.93 39.93 39.89 Note 1, 2
CTCI Overseas
Co., Ltd.
CINDA
Engineering &
Construction Pvt.
Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Corp.
CTCI Overseas
Co., Ltd.
CTCI Arabia
Ltd.
Design and
construction of
chemical factories
100.00 100.00 100.00 Note 2
CTCI Beijing
Co., Ltd.
CTCI Shanghai
Co., Ltd.
Consulting services
for construction
projects
100.00 100.00 100.00 Note 2
CTCI Shanghai
Co., Ltd.
CTCI Trading
Shanghai
Co., Ltd.
General trade 100.00 100.00 100.00 Note 2
CTCI Corp.
CTCI Overseas
Co., Ltd.
CTCI
Engineering
& Construction
Sdn. Bhd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
Yuan Ding
Resources
Management
Corp.
Environmental
engineering
Note 2, 4
Ownership (%)
Name of InvestorName of
Subsidiary
Main Business
ActivitiesDescription
-
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March 31,
2020
December 31,
2019
March 31,
2019
CTCI Overseas
Co., Ltd.
Sumber Mampu
Sdn. Bhd.
Investments 10.00 10.00 10.00 Note 1, 2
Sumber Mampu
Sdn. Bhd.
CTCI
Engineering &
Construction
Sdn. Bhd.
CTCI Malaysia
Sdn. Bhd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Corp.
Superiority
(Thailand) Co.,
Ltd.
CTCI (Thailand)
Co., Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Advanced
Systems Inc.
Century Ahead
Ltd.
Investments 100.00 100.00 100.00 Note 2
Century Ahead
Ltd.
CTCI Advanced
Systems
Shanghai Inc.
Computer skills
services
100.00 100.00 100.00 Note 2
Universal
Engineering
(BVI) Corp.
Superiority
(Thailand) Co.,
Ltd.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Corp. CTCI Machinery
Corp.
Planning and design
of construction
projects
100.00 100.00 100.00 Note 2
CTCI Corp. CCJV P1
Engineering &
Construction
Sdn. Bhd.
Planning of
construction projects
99.00 99.00 99.00 Note 2
CTCI
Development
Corp.
Crown Asia-2
Investment
Limited
Investments 100.00 100.00 100.00 Note 2
CTCI Singapore
Pte. Ltd.
CTCI
Netherlands B.V.
Engineers and other
technical design and
consultancy
100.00 100.00 100.00 Note 2
CTCI Corp. CTCI-HDEC
(Chungli) Corp.
Waste water
treatment
sewerage system
51.00 51.00 51.00 Note 2
CTCI Corp. CTCI CMCE JV
Sdn. Bhd.
Planning and design
of construction
projects
51.00 51.00 51.00 Note 2
CTCI Corp. PT CTCI
International
Indonesia
Planning and design
of construction
projects
67.00 - - Note 2, 7
Ownership (%)
Name of InvestorName of
Subsidiary
Main Business
ActivitiesDescription
-
~16~
Note 1: Being the Company’s controlled entities, these subsidiaries that were under 50% owned
by the Company directly or indirectly were included in the consolidated financial
statements.
Note 2: The financial statements of the entity as of and for the three-month periods ended March
31, 2020 and 2019 were not reviewed by independent accountants as the entity did not
meet the definition of significant subsidiary.
Note 3: The equity interest of 33% and 17% was acquired by cash in March 2019 and February
2020, respectively.
Note 4: In May 2019, the Group implemented an organizational restructuring. ECOVE
Environment Services Corp. and ECOVE Waste Management Corp. sold its originally
held 2% equity interest in ECOVE Wujih Energy Corp. and 40% equity interest in Yuan
Ding Resources Management Corp. to ECOVE Environment Corp.
Note 5: On October 18, 2019, the subsidiary, ECOVE Central Corp. Ltd., was dissolved after the
merger with the subsidiary, ECOVE Solar Energy Corp.
Note 6: CTCI Corp. sold its 99.05% equity interest in CTCI Resources Engineering Inc. to CTCI
Advanced Systems Inc. due to the Group’s reorganization in January 2020.
Note 7: The Company jointly established PT CTCI International Indonesia with PT Eptco Dian
Persada and obtained 67% equity interest in January 2020.
March 31,
2020
December 31,
2019
March 31,
2019
ECOVE
Environment
Corp.
ECOVE
Environment
Services Corp.
ECOVE Solvent
Recycling Corp.
Environmental
engineering
90.00 90.00 90.00 Note 2
ECOVE
Environment
Corp.
ECOVE Solar
Energy Corp.
Electric Power
Supply
100.00 100.00 100.00
ECOVE Solar
Energy Corp.
ECOVE Solar
Power Corp.
Electric Power
Supply
100.00 100.00 100.00
ECOVE Solar
Energy Corp.
ECOVE Central
Corp. Ltd.
Electric Power
Supply
- - 100.00 Note 5
ECOVE Solar
Energy Corp.
ECOVE South
Corp. Ltd.
Electric Power
Supply
100.00 100.00 100.00 Note 2
ECOVE Solar
Energy Corp.
G.D
International,
LLC.
Electric Power
Supply
100.00 100.00 100.00 Note 2
G.D
International,
LLC.
Lumberton Solar
W2-090, LLC.
Electric Power
Supply
100.00 100.00 100.00 Note 2
Ownership (%)
Name of InvestorName of
Subsidiary
Main Business
ActivitiesDescription
-
~17~
Note 8: The financial statements of the entity as of and for the three-month period ended March
31, 2020 were not reviewed by independent accountants as the entity did not meet the
definition of significant subsidiary.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet date: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group:
As of March 31, 2020, December 31, 2019 and March 31, 2019, the non-controlling interest
amounted to $3,141,195, $3,190,554 and $3,329,453, respectively. The information on non-
controlling interest and respective subsidiaries is as follows:
Summarized financial information of the subsidiary:
Balance sheets
Name of
subsidiary
Principal
place
of business Amount
Ownership
(%) Amount
Ownership
(%) Amount
Ownership
(%)
ECOVE
Environment
Corp.
Taiwan 2,739,312$ 42.28% 2,638,453$ 42.28% 2,693,511$ 42.28%
December 31, 2019 March 31, 2019March 31, 2020
Non-controlling interest
March 31, 2020 December 31, 2019 March 31, 2019
Current assets 3,684,334$ 3,555,853$ 3,820,332$
Non-current assets 5,920,027 5,984,964 5,660,221
Current liabilities 1,543,711)( 1,734,603)( 1,466,318)(
Non-current liabilities 2,230,706)( 2,213,411)( 2,328,776)(
Total net assets 5,829,944$ 5,592,803$ 5,685,459$
ECOVE Environment Corp.
-
~18~
Statements of comprehensive income
Statements of cash flows
(4) Employee benefits
Pensions
Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate
derived from the actuarial valuation at the end of the prior financial year, adjusted for significant
market fluctuations since that time and for significant curtailments, settlements, or other significant
one-off events. Also, the related information is disclosed accordingly.
(5) Income tax
A. The interim period income tax expense is recognized based on the estimated average annual
effective income tax rate expected for the full financial year applied to the pretax income of the
interim period, and the related information is disclosed accordingly.
2020 2019
Revenue 1,300,056$ 1,283,837$
Profit before income tax 297,823 301,205
Income tax expense 56,161)( 56,768)(
Profit for the period 241,662 244,437
Other comprehensive (loss) income, net of tax 9,818)( 17,010
Total comprehensive income for the period 231,844$ 261,447$
Comprehensive income attributable to
non-controlling interest 38,550$ 48,335$
Dividends paid to non-controlling interest -$ -$
ECOVE Environment Corp.
March 31,
For the three-month periods ended
2020 2019
Net cash provided by operating activities 265,147$ 83,839$
Net cash provided by investing
activities 118,059 115,362
Net cash (used in) provided by financing
activities 16,167)( 81,799
Increase in cash and cash equivalents for the
period 367,039 281,000
Cash and cash equivalents, beginning of period 1,679,523 1,543,162
Cash and cash equivalents, end of period 2,046,562$ 1,824,162$
ECOVE Environment Corp.
For the three-month periods ended
March 31,
-
~19~
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group
recognizes the effect of the change immediately in the interim period in which the change occurs.
The effect of the change on items recognized outside profit or loss is recognized in other
comprehensive income or equity while the effect of the change on items recognized in profit or
loss is recognized in profit or loss.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
There have been no significant changes as of March 31, 2020. Please refer to Note 5 of the consolidated
financial statements for the year ended December 31, 2019.
6. DETAILS OF SIGNIFICANT ACCOUNTS
(1) Cash and cash equivalents
A. The Group transacts with a variety of financial institutions all with high credit quality to disperse
credit risk, so it expects that the probability of counterparty default is remote.
B. Details of the Group’s cash and cash equivalents pledged to others as collateral are provided in
Note 8.
March 31, 2020 December 31, 2019 March 31, 2019
Cash on hand and
revolving funds $ 105,091 $ 92,656 $ 285,976
Checking accounts and
demand deposits 8,681,415 13,914,792 10,229,321
Time deposits 8,114,909 6,760,133 6,498,382
16,901,415$ 20,767,581$ 17,013,679$
-
~20~
(2) Financial assets and liabilities 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 Group entered into contracts relating to derivative financial assets and liabilities which were
not accounted for under hedge accounting. The information is listed below:
Items March 31, 2020 December 31, 2019 March 31, 2019
Current items:
Financial assets
mandatorily measured
at fair value through
profit or loss
Beneficiary certificates 30,135$ 275,101$ 345,546$
Derivatives 7,392 - 64,569
37,527 275,101 410,115
Valuation adjustment 785)( 744 498
36,742$ 275,845$ 410,613$
Financial liabilities
mandatorily measured
at fair value through
profit or loss
Derivatives 16,891$ 54,716$ 36$
2020 2019
Financial assets mandatorily measured at
fair value through profit or loss
Beneficiary certificates 54$ 2,651$
Derivatives 1,482)( 27,500
1,428)($ 30,151$
For the three-month periods ended March 31,
Contract Period
Foreign exchange swap contract (1 item) THB 490,000 thousand 2020.03.20~2021.03.19
Foreign exchange contract-buy (12 items) USD 40,370 thousand 2019.05.02~2020.09.17
Contract Period
Foreign exchange swap contract (8 items) USD 80,000 thousand 2019.12.12~2020.01.09
Foreign exchange contract-buy (11 items) USD 35,370 thousand 2019.05.02~2020.09.17
March 31, 2020
Contract Amount
(notional principal)
December 31, 2019
Contract Amount
(notional principal)
-
~21~
The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import
or export proceeds. However, these forward foreign exchange contracts are not accounted for
under hedge accounting.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided
in Note 12(2).
(3) Financial assets at fair value through other comprehensive income
Contract Period
Foreign exchange swap contract (1 item) THB 69,250 thousand 2018.05.18~2019.05.22
Foreign exchange swap contract (11 items) USD 90,000 thousand 2019.03.05~2019.04.11
Foreign exchange contract-buy (11 items) USD 35,370 thousand 2018.05.02~2019.09.17
Merchandise exchange contract (1 item) USD 1,160 thousand 2019.01.03~2019.04.03
March 31, 2019
Contract Amount
(notional principal)
Items March 31, 2020 December 31, 2019 March 31, 2019
Current items:
Debt instruments
Corporate bonds -$ -$ 27,572$
Valuation adjustment - - 126)(
- - 27,446
Equity instruments
Listed stocks 292,064 292,064 323,576
Valuation adjustment 100,515 172,879 166,468
392,579 464,943 490,044
392,579$ 464,943$ 517,490$
Non-current items:
Equity instruments
Unlisted shares 2,218,552$ 2,218,552$ 919,414$
Valuation adjustment 1,377,643)( 1,360,053)( 138,456)(
840,909$ 858,499$ 780,958$
-
~22~
A. The Group has elected to classify investments that are considered to be strategic investments or
steady dividend income as financial assets at fair value through other comprehensive income.
B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial
assets at fair value through other comprehensive income are listed below:
C. As of December 31, 2019, Powtec ElectroChemical Corp. continued to incur significant losses,
and its current assets are insufficient to cover its current liabilities. In addition, in February 2020,
the company’s Board of Directors approved negotiations call for bankruptcy. Accordingly, the
Company has adjusted the book value of the financial asset to $0, and recognized loss on valuation
under changes in fair value of other comprehensive income.
D. Information relating to credit risk of financial assets at fair value through other comprehensive
income is provided in Note 12(2).
(4) Financial assets at amortized cost
As at March 31, 2020, December 31, 2019 and March 31, 2019, without taking into account any
collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the
amount that best represents the financial assets at amortized cost held by the Group was $179,899,
$407,884 and $138,340, respectively.
2020 2019
Equity instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive income 89,923)($ 36,855$
Cumulative loss reclassified to
retained earnings due to derecognition -$ 2,048)($
Debt instruments at fair value through
other comprehensive income
Fair value change recognized in other
comprehensive income -$ 39$
Exchange gain recognized in
profit or loss -$ 620$
Interest income recognized in profit or loss -$ 267$
For the three-month periods ended March 31,
Items March 31, 2020 December 31, 2019 March 31, 2019
Current items: Time deposits with
maturity over three
months 49,179$ 277,164$ 30,460$
Non-current items:
Pledged time deposits 130,720$ 130,720$ 107,880$
-
~23~
(5) Notes and accounts receivable
A. The ageing analysis of notes receivable and accounts receivable is as follows:
The above analysis is calculated based on booking date.
B. As of March 31, 2020, December 31, 2019, March 31, 2019 and January 1, 2019, the balances of
receivables (including notes receivable) from contracts with customers amounted to $6,756,357,
$4,286,050, $5,056,626 and $8,914,287, respectively.
C. As of March 31, 2020, December 31, 2019, and March 31, 2019, without taking into account any
collateral held or other credit enhancements, the maximum exposure to credit risk in respect of
the amount that best represents the receivables (including notes receivable) held by the Group was
$6,736,102, $4,264,175 and $5,017,365, respectively.
D. Information relating to long-term receivables due in one year is provided in Note 6(11).
E. Information relating to credit risk is provided in Note 12(2) C(b).
(6) Prepayments
March 31, 2020 December 31, 2019 March 31, 2019
Notes receivable 30,708$ 63,360$ 14,614$
Accounts receivable 6,725,649 4,222,690 5,042,012
Long-term receivables
due in one year 293,051 312,489 281,501
Less: Allowance for bad
debts 20,255)( 21,875)( 39,261)(
7,029,153$ 4,576,664$ 5,298,866$
March 31, 2020 December 31, 2019 March 31, 2019
Up to 30 days 6,214,003$ 3,717,118$ 3,369,773$
31 to 90 days 112,280 94,072 1,141,481
91 to 180 days 99,452 346,698 194,641
Over 181 days 623,673 440,651 592,971
7,049,408$ 4,598,539$ 5,298,866$
March 31, 2020 December 31, 2019 March 31, 2019
Prepayment for materials 1,275,214$ 855,305$ 2,861,470$ Prepayment for
construction in progress 722,739 652,900 517,938
Others 1,163,111 1,250,465 926,174
3,161,064$ 2,758,670$ 4,305,582$
-
~24~
(7) Investments accounted for under the equity method
Associates
A. The basic information of the associate that is material to the Group is as follows:
2020 2019
At January 1 2,173,160$ 3,680,933$
Share of profit or loss of investments accounted
for using equity method 21,236 148,680)(
Changes in other equity items 18,985)( 6,307
At March 31 2,175,411$ 3,538,560$
Associates: March 31, 2020 December 31, 2019 March 31, 2019
Pan Asia Corp. 198,450$ 197,079$ 435,571$
Powtec ElectroChemical
Corp. (formerly
Powertec Energy Corp.) - - 1,135,627
Boretech Resource
Recovery Engineering
Co., Ltd. (Cayman) 461,692 462,705 442,164
MIE Industrial Sdn.
Bhd. 583,710 599,178 570,571
Blue Whale Water
Technology Co., Ltd. 423,436 411,670 455,274
EVER ECOVE Corp. 289,984 291,685 295,957
HDEC-CTCI (Linhai)
Corporation 218,139 210,843 203,396
2,175,411$ 2,173,160$ 3,538,560$
Shareholding ratio
Company name
Principal
place
of business March 31, 2019
Nature of
relationship
Method of
measurement
Powtec ElectroChemical
Corp.
Taiwan 16.03% Associate Equity method
-
~25~
B. The summarized financial information of the associate that is material to the Group is as follows:
Balance sheet
Statement of comprehensive income
C. The carrying amount of the Group’s interests in all individually immaterial associates and the
Group’s share of the operating results are summarized below:
As of March 31, 2020, December 31, 2019 and March 31, 2019, the carrying amount of the
Group’s individually immaterial associates amounted to $2,175,411, $2,173,160 and $2,402,933,
respectively.
D. In May 2019, the Board of Directors during its meeting resolved to dispose 19,580,000 shares of
Pan Asia Corp. totaling $224,494, of which $5,158 was recognized as gain on disposal of
investments (shown as other gains and losses).
E. The Group resigned from Powtec ElectroChemical Corp. as a director in September 2019 due to
business consideration. As the Group lost its significant influence over this company, the Group
reclassified the equity investment in Powtec ElectroChemical Corp. as “financial assets at fair
value through other comprehensive income - non-current” and recognized the result of
remeasurement of its remaining investment at fair value in gain on disposal, shown as other gains
and losses, amounting to $510,967.
Powtec ElectroChemical Corp.
March 31, 2019
Current assets 1,436,352$
Non-current assets 21,186,451
Current liabilities 449,018)(
Non-current liabilities 11,482,981)(
Total net assets 10,690,804$
Share in associate’s net assets 1,713,736$
Carrying amount of the associate 1,135,627$
Powtec ElectroChemical Corp.
For the three-month period ended
March 31, 2019
Revenue -$
Total comprehensive loss 570,659)($
2020 2019
Total comprehensive income 18,307$ 200,453)($
For the three-month periods ended March 31,
-
~26~
F. The financial statements of above investments accounted for using the equity method as of and for
the three-month periods ended March 31, 2020 and 2019 were not reviewed by independent
accountants.
G. The investments accounted for using the equity method, Pan Asia Corp., Blue Whale Water
Technology Co. Ltd., EVER ECOVE Corp., and HDEC-CTCI (Linhai) Corporation, were
recognized based on the financial statements which were audited by other auditors as of December
31, 2019.
-
~27~
(8) Property, plant and equipment
Land
Buildings and
structures Machinery
Transportation
equipment
Office
equipment
Unfinished
construction
and
prepayments
for equipment Others Total
At January 1, 2020
Cost 5,494,521$ 4,502,955$ 3,863,852$ 302,719$ 248,188$ 769,306$ 871,920$ 16,053,461$
Accumulated depreciation - 1,917,972)( 1,174,844)( 234,157)( 230,385)( - 707,631)( 4,264,989)(
5,494,521$ 2,584,983$ 2,689,008$ 68,562$ 17,803$ 769,306$ 164,289$ 11,788,472$
For the three-month period
ended March 31, 2020
Opening net book amount 5,494,521$ 2,584,983$ 2,689,008$ 68,562$ 17,803$ 769,306$ 164,289$ 11,788,472$
Additions - 640 14,886 1,536 422 312,097 1,994 331,575
Disposals - - 3)( 62)( - - 44)( 109)(
Depreciation charge - 32,909)( 98,189)( 7,551)( 1,221)( - 22,258)( 162,128)(
Reclassifications - 25,426 426,012 - - 170,531)( 8,321 289,228
Net exchange differences 5,222)( 22,633)( 1,178 1,754)( 899)( - 1,332)( 30,662)(
Closing net book amount 5,489,299$ 2,555,507$ 3,032,892$ 60,731$ 16,105$ 910,872$ 150,970$ 12,216,376$
At March 31, 2020
Cost 5,489,299$ 4,499,388$ 4,235,925$ 302,439$ 247,711$ 910,872$ 880,859$ 16,566,493$
Accumulated depreciation - 1,943,881)( 1,203,033)( 241,708)( 231,606)( - 729,889)( 4,350,117)(
5,489,299$ 2,555,507$ 3,032,892$ 60,731$ 16,105$ 910,872$ 150,970$ 12,216,376$
-
~28~
Land
Buildings and
structures Machinery
Transportation
equipment
Office
equipment
Unfinished
construction
and
prepayments
for equipment Others Total
At January 1, 2019
Cost 5,519,050$ 4,254,061$ 2,853,926$ 262,446$ 239,739$ 290,187$ 771,729$ 14,191,138$
Accumulated depreciation - 1,777,331)( 936,086)( 206,580)( 230,037)( - 609,068)( 3,759,102)(
5,519,050$ 2,476,730$ 1,917,840$ 55,866$ 9,702$ 290,187$ 162,661$ 10,432,036$
For the three-month period
ended March 31, 2019
Opening net book amount 5,519,050$ 2,476,730$ 1,917,840$ 55,866$ 9,702$ 290,187$ 162,661$ 10,432,036$
Additions 20 89 14,824 1,244 195 69,464 3,119 88,955
Disposals - - 16)( - - - 140)( 156)(
Depreciation charge - 31,550)( 52,845)( 4,854)( 1,234)( - 27,423)( 117,906)(
Reclassifications - 114,413 139,899 - - 88,614)( - 165,698
Net exchange differences 1,617 27,645 2,476 289 84 352 1,246 33,709
Closing net book amount 5,520,687$ 2,587,327$ 2,022,178$ 52,545$ 8,747$ 271,389$ 139,463$ 10,602,336$
At March 31, 2019
Cost 5,520,687$ 4,368,563$ 3,008,633$ 263,690$ 239,934$ 271,389$ 774,708$ 14,447,604$
Accumulated depreciation - 1,781,236)( 986,455)( 211,145)( 231,187)( - 635,245)( 3,845,268)(
5,520,687$ 2,587,327$ 2,022,178$ 52,545$ 8,747$ 271,389$ 139,463$ 10,602,336$
-
~29~
A. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitaliztion are as follows:
B. Please refer to Note 8 for the details of pledged property, plant and equipment.
2020 2019
Amount capitalized 1,339$ 787$
Range of the interest rates for capitalization 1.01%~2.04% 1.09%~1.40%
For the three-month periods ended
March 31,
-
~30~
(9) Leasing arrangements-lessee
A. The Group leases various assets including land, buildings, business vehicles, multifunction
printers, etc. Rental contracts are typically made for periods of 1 to 28 years. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions. The
lease agreements do not impose covenants, but leased assets may not be used as security for
borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:
C. For the three-month periods ended March 31, 2020 and 2019, the additions to right-of-use assets
were $18,395 and $1,111, respectively.
D. The information on income and expense accounts relating to lease contracts is as follows:
E. For the three-month periods ended March 31, 2020 and 2019, the Group’s total cash outflow for
leases were $118,100 and $100,098, respectively.
March 31, 2020 December 31, 2019 March 31, 2019
Carrying amount Carrying amount Carrying amount
Land $ 237,836 $ 258,991 $ 217,610
Buildings 63,142 73,633 49,386
Transportation
equipment (Business
vehicles) 46,457 48,233 44,349
Office equipment
(Photocopiers) 25,832 29,338 44,459
Other equipment 40,771 33,659 37,618
414,038$ 443,854$ 393,422$
2020 2019
Depreciation charge Depreciation charge
Land $ 21,591 $ 7,709
Buildings 11,437 5,664
Transportation equipment (Business vehicles) 7,539 5,720
Office equipment (Photocopiers) 4,240 3,583
Other equipment 692 1,494
45,499$ 24,170$
For the three-month periods ended March 31,
2020 2019
Items affecting profit or loss
Interest expense on lease liabilities $ 674 $ 618
Expense on short-term lease contracts 63,602 73,995
Expense on leases of low-value assets 127 -
Expense on variable lease payments 9,601 5,902
For the three-month periods ended March 31,
-
~31~
F. Variable lease payments:
(a) The Group's lease contract contains a variable lease payment term that is linked to the amount
of electricity generated by solar energy. Changes in variable lease payments are recognized as
expense in the period specified in the contract.
(b) A 1% increase in the electricity generated from solar energy would increase total lease
payments by approximately 1% in accordance with the relevant variable lease contract.
(10) Investment property
Buildings and
Land structures Total
At January 1, 2020
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 41,177)( 41,177)(
718,428$ 85,395$ 803,823$
For the three-month period
ended March 31, 2020
Opening net book amount 718,428$ 85,395$ 803,823$
Depreciation charge - 1,025)( 1,025)(
Closing net book amount 718,428$ 84,370$ 802,798$
At March 31, 2020
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 42,202)( 42,202)(
718,428$ 84,370$ 802,798$
Buildings and
Land structures Total
At January 1, 2019
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 36,871)( 36,871)(
718,428$ 89,701$ 808,129$
For the three-month period
ended March 31, 2019
Opening net book amount 718,428$ 89,701$ 808,129$
Depreciation charge - 1,077)( 1,077)(
Closing net book amount 718,428$ 88,624$ 807,052$
At March 31, 2019
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 37,948)( 37,948)(
718,428$ 88,624$ 807,052$
-
~32~
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 values of the investment property held by the Group as at March 31, 2020 and 2019
were $853,588 and $923,715, respectively, which were valued based on the trading prices of
nearby assets recorded in the Actual Selling Price Property Value Reporting, Ministry of Interiors.
The fair value of the investment property held by the Group as at December 31, 2019 was
$940,000, which was valued by independent valuers. Valuations were made using the income
approach with key assumptions as follows:
C. Information about the investment property that was pledged to others as collateral is provided in
Note 8.
(11) Other non-current assets
2020 2019
Rental income from investment property 7,803$ 7,803$
Direct operating expenses arising from the
investment property that generated rental
income during the period 1,025$ 1,077$
Direct operating expenses arising from the
investment property that did not generate
rental income during the period -$ -$
For the three-month periods ended
March 31,
December 31, 2019
Gross margin 2.54%
Growth rate 1.00%~1.50%
Discount rate 3.40%
March 31, 2020 December 31, 2019 March 31, 2019
Long-term receivables 2,396,348$ 2,503,219$ 2,631,986$ Less: Long-term
receivables due in one
year 293,051)( 312,489)( 281,501)(
2,103,297 2,190,730 2,350,485
Restricted bank deposits 49,201 53,563 12,064
Refundable deposits 271,068 146,639 121,331
Long-term prepayments
for investments 504,206 - -
Prepayments for business
facilities 154,750 367,916 544,993
Air pollution fee - - 54,267
Costs to fulfill a contract 104,610 120,909 -
Others 199,112 265,283 180,123
3,386,244$ 3,145,040$ 3,263,263$
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A. Long-term receivables:
The Group contracted with the government (grantor) a service concession arrangement. The
consideration receivable from the grantor in respect of the service concession arrangement is
recognized at its fair value. Such consideration is recognized as a financial asset based on the
way of the consideration from the grantor to the operator being made as specified in the
arrangement. The consideration receivable from the grantor is recognized as accounts receivable
if it is expected to be realized within 12 months after the balance sheet date (please refer to Note
6(5)), and is recognized as long-term receivables if it is expected to be realized more than 12
months after the balance sheet date. The major terms of the arrangement are as follows:
(a) The second-tier subsidiary, ECOVE Wujih Energy Corp., obtained the operation for the
construction of Wujih Refuse Incineration Plant by build - operate - transfer (BOT) mode
since April, 2000. In September, 2000, the “Taichung City waste incineration, commission
contract” between ECOVE Wujih Energy Corp., and Taichung Government had been signed.
The operating period is for 20 years starting from September 6, 2004. However, according to
the contract, if it is expired in advance or extended during construction or operation, duration
of the operation will be deemed to be matured or extended, but not to exceed 50 years. In
order to work the “Waste Incineration Taichung City Commission Contract”, ECOVE Wujih
Energy Corp., obtained the land-use right that has continued for 20 years since the plant began
operation.
(b) The second-tier subsidiary, ECOVE Miaoli Energy Corp., obtained the operation for the
construction of Miaoli County Refuse Incineration Plant by build - operate - transfer (BOT)
mode since August, 2002. In September, 2002, the “Waste Incineration Commission Contract”
between ECOVE Miaoli Energy Corp., and Miaoli County Government had been signed. The
operating period is for 20 years starting from February 29, 2008. However, according to the
contract, if it is expired in advance or extended during construction or operation, duration of
the operation will be deemed to be matured or extended, but not to exceed 50 years. In order
to work the “Waste Incineration Miaoli County Commission Contract”, ECOVE Miaoli
Energy Corp., obtained the land-use right of Miaoli Refuse Incineration Plant. Therefore,
duration of the land – use right is from September 13, 2002 to March 12, 2026.
(c) ECOVE Wujih Energy Corp., and ECOVE Miaoli Energy Corp. need to comply with the
guarantee tonnage of waste from government according to the contract during construction
or operation.
(d) Per service cost is calculated and adjusted based on the “Waste Incineration Commission
Contract”, “Index of average regular earnings of employees-manufacturing” and “Consumer
price index”.
B. Long-term prepaid rents were according to the “BOT Agreement” due to the land-use rights
obtained by ECOVE Wujih Energy Corp., and ECOVE Miaoli Energy Corp. and transferred to
right-of-use assets in applying IFRS 16 from January 1, 2019.
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C. Information about the restricted bank deposits and refundable deposits that were pledged to
others as collateral is provided in Note 8.
D. The costs to fulfill a contract refer to the initial reconstruction cost of the Refuse Incineration
Plant for the contract that the subsidiary - ECOVE Environmental Services Corp. entered into
with the owner to operate the plant on its behalf, and it is amortized over the term of the contract.
E. In December 2018, the Board of Directors resolved to invest in Ever Victory Global Limited,
and the Group separately remitted payments depending on the capital requirement. Said
investment was recognized in long-term prepayments for investments under other non-current
assets as the registration has not yet been completed.
(12) Short-term borrowings
Note 1: ECOVE Solvent Recycling Corp. has committed that upon completion of the construction,
ECOVE Solvent Recycling Corp. will complete the registration of ownership on the
construction and pledge with the basement of construction in first priority to Chang Hwa
Bank.
Note 2: The borrowing facilities were 100% jointly guaranteed by the subsidiary - ECOVE
Environment Corp.
Note 3: Properties pledged by subsidiary-CTCI Development Corp. and was guaranteed and
endorsed by the Company.
Type of borrowing March 31, 2020 Interest rate range Collateral
Unsecured borrowings 5,648,849$ 0.7%~8.83% -
Secured borrowings 249,700 0.97%~1.5% Note 1 and 2
5,898,549$
Type of borrowing December 31, 2019 Interest rate range Collateral
Unsecured borrowings 5,858,306$ 0.70%~7.95% -
Secured borrowings 305,000 0.95%~1.70% Notes 1 and 2
6,163,306$
Type of borrowing March 31, 2019 Interest rate range Collateral
Unsecured borrowings 8,950,436$ 0.68%~8.05% -
Secured borrowings 1,997,150 1.09%~1.24% Notes 2 and 3
10,947,586$
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(13) Accounts payable
(14) Other payables
(15) Other current assets/liabilities
Joint venture represents an accumulated cost over (under) the accumulated capital injection and bills.
March 31, 2020 December 31, 2019 March 31, 2019
Materials payable 5,864,910$ 6,250,524$ 4,318,013$ Sub-contract costs
payable 4,168,293 4,996,203 4,972,029 Maintenance costs
payable 305,630 310,079 304,718 Incinerator equipment
usage fee payable 35,493 41,517 15,141
Others 94,996 109,967 180,623
10,469,322$ 11,708,290$ 9,790,524$
March 31, 2020 December 31, 2019 March 31, 2019
Accrued payroll 672,357$ 1,464,481$ 735,508$ Accrued employees’
compensation, directors’
and supervisors’
remuneration 152,379 123,434 197,307
Accrued insurance 82,872 71,953 75,052
Accrued pension 31,753 42,010 37,181
Accrued consultant fee 251,320 250,456 -
Others 431,264 895,687 644,046
1,621,945$ 2,848,021$ 1,689,094$
March 31, 2020 December 31, 2019 March 31, 2019
Other current assets
Joint venture 2,370,290$ -$ -$
Others - 6,817 277,399
2,370,290$ 6,817$ 277,399$
Other current liabilities
Joint venture -$ 1,734,466$ 2,730,966$ Long-term borrowings -
current portion 150,833 134,149 200,872
Receipts in advance 6,035 46,992 118,954
Others 77,764 76,334 86,975
234,632$ 1,991,941$ 3,137,767$
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(16) Bonds payable
The terms of the domestic unsecured bonds issued by the Company are as follows:
The Company issued $6,000,000, annual fixed interest rate of 0.9%, first domestic unsecured bonds,
as approved by the regulatory authority. The bonds mature 5 years from the issue date (December
25, 2019 ~ December 25, 2024) and will be redeemed at the maturity date. The bonds were listed
on the Taipei Exchange on December 16, 2019.
(17) Long-term borrowings
A. ECOVE Miaoli Energy Corp. committed to maintain the following financial ratios and criteria
during the period of the contract:
(a) Current ratio [(current assets + restricted assets provided as a compensation for the credit
loan)/current liabilities] : More than 100%.
(b) Liability ratio (total liabilities/ net equity): Less than 190%.
(c) Interest coverage ratio [(income before tax + interest expense) / interest expense] : At least
150%.
B. As of December 31, 2019, ECOVE Miaoli Energy Corp. had no long-term borrowings (including
current portion).
C. Information about the assets that were pledged for bank borrowings as collateral is provided in
Note 8.
D. The promissory note made by the subsidiary - ECOVE Environment Corp. as of March 31, 2020,
December 31, 2019 and March 31, 2019 were $1,658,475, $1,664,080 and $1,792,501,
respectively.
March 31, 2020 December 31, 2019
Bonds payable 6,000,000$ 6,000,000$
Less: Discount on bonds payable 10,089)( 10,471)(
5,989,911$ 5,989,529$
Type of borrowings March 31, 2020 December 31, 2019 March 31, 2019
Secured borrowings 5,721,354$ 5,524,822$ 3,608,616$
Less: Current portion 150,833)( 134,149)( 200,872)(
5,570,521$ 5,390,673$ 3,407,744$
Financing amount 8,152,647$ 7,733,525$ 6,637,861$
Interest rate range 1.20%~3.11963% 1.25%~4.38513% 1.395%~4.9%
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(18) Other non-current liabilities
Deferred revenue is a cash grant received from New Jersey government in United States in 2017
since Lumberton builds and operates a solar power station in New Jersey. The construction period
of the solar power station is 15 years.
(19) Pensions
A. Defined benefit pension plan
(a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance
with the Labor Standards Law, covering all regular employees’ service years prior to the
enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of
employees who chose to continue to be subject to the pension mechanism under the Law.
Under the defined benefit pension plan, two units are accrued for each year of service for the
first 15 years and one unit for each additional year thereafter, subject to a maximum of 45
units. Pension benefits are based on the number of units accrued and the average monthly
salaries and wages of the last 6 months prior to retirement. The Company contributes monthly
an amount equal to 6.5% of the employees’ monthly salaries and wages to the retirement fund
deposited with Bank of Taiwan, the trustee, under the name of the independent retirement
fund committee. Also, the Company would assess the balance in the aforementioned labor
pension reserve account by the end of December 31, every year. If the account balance is
insufficient to pay the pension calculated by the aforementioned method to the employees
expected to qualify for retirement in the following year, the Company will make contributions
to cover the deficit by next March.
(b) For the aforementioned pension plan, the Group recognized pension costs of $7,830 and
$10,839 for the three-month periods ended March 31, 2020 and 2019, respectively.
(c) Expected contributions to the defined benefit pension plans of the Group for the year ending
December 31, 2021 amount to $86,581.
March 31, 2020 December 31, 2019 March 31, 2019
Net defined benefit
liabilities
1,171,431$ 1,409,863$ 1,518,647$
Deposits received 342,168 326,007 370,062
Accrued recovery costs 110,694 109,623 97,356
Deferred revenue 154,032 157,648 166,545
Others 89,281 81,899 79,597
1,867,606$ 2,085,040$ 2,232,207$
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B. Defined contribution pension plan
(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined
contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”),
covering all regular employees with R.O.C. nationality. Under the New Plan, the Company
and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’
monthly salaries and wages to the employees’ individual pension accounts at the Bureau of
Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of
employment.
(b) The pension costs under the defined contribution pension plans of the Group for the three-
month periods ended March 31, 2020 and 2019 were $51,336 and $51,848, respectively.
(c) Some overseas subsidiaries adopted a defined contribution pension plan, covering all regular
employees. Appropriation of pension cost for the three-month periods ended March 31, 2020
and 2019 were $20,590 and $31,954, respectively.
(20) Share-based payment - employee compensation
A. The Company
(a) For the three-month periods ended March 31, 2020 and 2019, the Company’s share-based
payment arrangements were as follows:
Type of arrangement Grant date
Quantity
granted
Contract
period
Vesting
conditions
Fifth plan of employee
stock options
2017.04.11 20,000 units 6 years Service of 2 to
4 years
Sixth plan of employee
stock options
2018.03.09 20,000 units 6 years Service of 2 to
4 years
Seventh plan of employee
stock options
2019.03.08 20,000 units 6 years Service of 2 to
4 years
Eighth plan of employee
stock options
2020.01.08 20,000 units 6 years Service of 2 to
4 years
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(b) The above employee stock options are set forth below:
i. Details of the fifth plan of employee stock options outstanding are set forth below:
ii. Details of the sixth plan of employee stock options outstanding are set forth below:
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousands) (in dollars) thousands) (in dollars)
Options outstanding
at beginning of period 17,264.94 NT$44.10 18,328.55 NT$49.60
Options granted - - - -
Options waived 254.66)( - 154.88)( -
Options exercised 1.31)( NT$44.10 - -
Options outstanding
at end of period 17,008.97 NT$44.10 18,173.67 NT$49.60
Options exercisable
at end of period 7,336.13 NT$44.10 - -
For the three-month periods ended March 31,
2020 2019
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousands) (in dollars) thousands) (in dollars)
Options outstanding
at beginning of period 18,167.07 NT$40.80 19,294.54 NT$45.90
Options waived 344.98)( - 188.34)( -
Options exercised 1.74)( NT$40.80 - -
Options outstanding
at end of period 17,820.35 NT$40.80 19,106.20 NT$45.90
Options exercisable
at end of period 7,230.37 NT$40.80 - -
For the three-month periods ended March 31,
2020 2019
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iii. Details of the seventh plan of employee stock options outstanding are set forth below:
iv. Details of the eighth plan of employee stock options outstanding are set forth below:
(c) The weighted-average stock price of stock options at exercise dates for the three-month
periods ended March 31, 2020 and 2019 were NT$35.18 and NT$47.64, respectively.
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousands) (in dollars) thousands) (in dollars)
Options outstanding
at beginning of period 18,886.10 NT$46.50 - -
Options g