Stock Code: 9933
Taiwan Stock Exchange Market
Observation Post System:
http://mops.twse.com.tw
2018 Annual Report
Printed on March 31, 2019
Notice to readers
This English version annual report is a summary translation of the Chinese version and is not an
official document of the shareholders’ meeting. If there is any discrepancy between the English
version and Chinese version, the Chinese version shall prevail. Spokesperson Name: Ming-Cheng Hsiao Title: Executive Vice President Tel: 886-2-2833-9999 ext. 10099 E-mail: [email protected] Deputy Spokesperson Name: Patrick Lin Title: Chief Financial Officer Tel: 886-2-2833-9999 ext. 16011 E-mail: [email protected] Headquarters and Branches Headquarters Address: 89, Sec. 6, Zhongshan North Rd., Taipei, Taiwan Tel: 886-2-2833-9999 Branch CTCI CORPORATION ABU DHABI BRANCH Address: Shaikh Sultan Bin Srour Al Dhaheri Building, Al Salam Street, Abu Dhabi Tel:971-2671-1572 CTCI CORPORATION QATAR BRANCH Address: Office No.6, 1st Floor, Al-Emadi Business Centre, C-Ring Road, Doha City, State of Qatar P.O. Box: 30261 Tel: 974-4451-7383 CTCI CORPORATION JAPAN BRANCH Address: NO.806, Ark Hills Front Tower RoP, 2-23-1 Akasaka, Minato-ku, Tokyo, Japan Stock Transfer Agent KGI Securities Co. Ltd. Address: 5th Fl., No.2, Sec. 1, Chung Ching South Rd., Taipei, Taiwan Website: http://www.kgieworld.com.tw Tel: 886-2-2389-2999 Auditors PriceWaterHouseCoopers Auditors: Yi-Fan Lin, Shu-Chiung Chang Address: 27th Fl., No.333, Sec. 1, Keelung Rd., Taipei, Taiwan Website: http://www.pwc.tw Tel.: 886-2-2729-6666 Overseas Trade Places for Listed Negotiable Securities None. Corporate Website http://www.ctci.com
Contents I. Letter from the Group Chairman ......................................................................................... 1
II. Company Profile 2.1 Date of Incorporation .................................................................................................................. 4 2.2 Company History .......................................................................................................................... 4
III. Corporate Governance Report 3.1 Organization ................................................................................................................................. 5 3.2 Directors and Management Team ............................................................................................... 9 3.3 Remuneration of Directors and Management Team ................................................................. 22 3.4 Implementation of Corporate Governance ............................................................................... 28 3.5 Information on CPA’s Fees ......................................................................................................... 88 3.6 Alternation of CPA ...................................................................................................................... 88 3.7 The Company's Chairman, President and any Managerial Officer in charge of Finance or
Accounting matters has held a position within CTCI’s CPA firm or its affiliated enterprise in the most recent year. ............................................................................................................. 88
3.8 Changes in Shareholding of Directors, Managers and Major Shareholders .............................. 89 3.9 Relationship among the Top Ten Shareholders ......................................................................... 91 3.10 Ownership of Shares in Affiliated Enterprises ........................................................................... 92 IV. Capital Overview 4.1 Capital and Shares ...................................................................................................................... 93 4.2 Corporate Bonds ........................................................................................................................ 97 4.3 Preferred Shares ........................................................................................................................ 97 4.4 Global Depository Receipts ........................................................................................................ 97 4.5 Employee Stock Options ............................................................................................................ 98 4.6 Employee Restricted Stock ...................................................................................................... 100 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions ....................... 100 4.8 Financing Plans and Implementation ....................................................................................... 100 V. Operational Highlights 5.1 Business Activities .................................................................................................................... 101 5.2 Market and Sales Overview ..................................................................................................... 108 5.3 Human Resources .................................................................................................................... 113 5.4 Environmental Protection Expenditure ................................................................................... 117 5.5 Labor Relations......................................................................................................................... 117 5.6 Important Contracts ................................................................................................................. 125 VI. Financial Information 6.1 Five-Year Financial Summary ................................................................................................... 128 6.2 Five-Year Financial Analysis ..................................................................................................... 132 6.3 Audit Committee’s Review Report in the Most Recent Year ................................................... 135 6.4 Annual Consolidated Financial Report in the Most Recent Year ............................................. 136 6.5 Annual Parent Company only Financial Report in the Most Recent Year ............................... 136 6.6 Impact of the Financial Distress Occurred to the Company and Affiliates in the Recent
Years until the Annual Report being published ....................................................................... 136
VII. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status ...................................................................................................... 137 7.2 Analysis of Financial Performance ........................................................................................... 138 7.3 Analysis of Cash Flow ............................................................................................................... 138 7.4 Major Capital Expenditure Items ............................................................................................. 139 7.5 Investment Policy in the Most Recent Year, Main Causes for Profits or Losses,
Improvement Plans and the Investment Plans for the Coming Year ...................................... 139 7.6 Analysis of Risk Management .................................................................................................. 139 7.7 Other Important Information .................................................................................................. 147 VIII. Special Disclosure 8.1 Summary of Affiliated Companies ........................................................................................... 148 8.2 Private Placement Securities in the Most Recent Year ........................................................... 172 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year .... 172 8.4 Other Supplementary Information .......................................................................................... 176 Appendices 1. Annual Consolidated Financial Report in the Most Recent Year ............................................. 177 2. Annual Parent Company only Financial Report in the Most Recent Year ............................... 330
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I. Letter from the Group Chairman Dear Shareholders, CTCI is moving toward the 40th anniversary in 2019 and, firmly pursuing its long term prosperity for the time being. I would hereby like to report the 2018 business review, the business plan of 2019 and the blueprint for CTCI as follows:
A. 2018 Business Review
a) Operation performance The consolidated sales revenue for 2018 amounted to NTD64.1 billion, decreased by NTD7.54 billion, or a 10.53% slowdown compared to that of 2017. The consolidated operating expenses were NTD1.88 billion, while the consolidated non-operating income was NTD349.49 million. The consolidated net income was reported at NTD2.30 billion with earnings per share (EPS) of NTD2.40. The decreased consolidated sales revenue is mainly due to the comparatively less new contracts awarded in 2017; having new contract awarded over NTD100 billion in 2018, sales revenue is expected to rebound in 2019 accordingly.
b) Business Achievement
We have a record-high year both of new contract awarded and backlog in 2018, totaled NTD101.7 billion and NTD207.9 billion respectively. Major new contracts signed in 2018 consist of Taiwan CPC No. 3 LNG Receiving Terminal Tank, Taipei MCT Wanda Line System E&M Phase 1, Taichung Power Plant Coal Handling System Improvement, Taoyuan City Biomass Energy Center BOT Project, Taiwan KCG 33,000 CMD Linhai WWRU BTO Project, Taiwan CGTD Tank Farm, GSPC Gulei EVA BEPC Project, Thailand PTTLNG Nong Fab LNG Receiving Terminal, and India DLTPL Dhamra LNG Receiving Terminal.
c) Innovation and R&D
In 2018, Research and Innovation Center launched iEPC (intelligent EPC) digital initiatives with the goal of intelligent EPC; besides we continuously delivered smart solutions based on the requirements from all EPC departments to increase efficiency and quality. Currently, we are studying the applications of Cloud, VR/AR, Big Data, IoT, Robotic, and 5G related to our EPC operation. At the same time, we are reviewing the feasibility of EPC aided by AI and Machine Learning, by which we intend to differentiate ourselves from competitor with enhancement of competitiveness. Digitalization is the key factor in the development of iEPC. We studied how to transform design information into structured data via Machine Learning through industry-academia cooperation. Engineering Data Centers are set up across different departments in associated with their professional characteristics. Rules of design data exchange are established, along with Tag Platform as a multi-discipline design collaboration platform for data exchange. As for engineering design, software packages for automation of design analysis, calculation and plotting, have being developed, such as process analysis and calculation, steel connection design, structure design for cryogenic tank, static equipment skeleton drawing generator, 3D material take-off for Instrument & Electrical disciplines, automatic modeling of typical piping around unit equipment, plot plan layout optimization…etc. With improved design automation, we achieved better quality and accuracy. As for procurement, standardized information exchange mechanism and SOP with vendors are established to maintain transparency of information, speeding up the acquirement of design data and construction progress. In regard to construction, mobile devices have been continuously promoted at job site. New commercial software packages are implemented to increase job site efficiency as well. In order to counter the shortage of welding workers and reduce rework, and improve welding quality at the same time, automatic welding machines are surveyed. Through industry-academia cooperation, we studied the application of unmanned
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aerial vehicles and how GPS technologies could be applied to construction equipment control and storage management at job site. By combining commercial program and customized plug-in, tools for construction dynamic simulation are developed to solidify our capabilities of construction planning and management, making construction automation a possibility. In order to improve our professional techniques, the following researches were performed: design guidelines and evaluation templates for demineralized water treatment, dynamic simulation model of LNG terminal, behavior of track/bridge interaction and expansion joint arrangement, system design and configuration of pneumatic conveying package equipment, criteria for the selection of laboratory analyzer type, simulation and study of insulation coordination, advanced development for corrosion mechanism identification system…,etc. We also improved our design skills and design quality, and EPC project execution capabilities, by reinforcing our internal design guidelines and existing engineering software, updating and consolidating design specification of every kind, with the help of industry-academia cooperation as well as in-house development.
B. Highlights of Business Plan for 2019
Having successfully excavated shale gas, the United States is a key focus for our future development. CTCI is actively entering the US market and has successfully executed projects including Formosa Plastics USA production facility as well as the front-end engineering design of the petrochemical joint venture project of Exxon Mobil and Saudi Basic Industry Corporation. We foresee the booming US petrochemical market in the coming years. To differentiate CTCI from competitors and to successfully cultivate the market, we adopt a unique strategic team of "Taipei + USA" and solidify our blueprints in the US market. On the other hand, Middle East still remains a highly competitive market for international engineering companies. CTCI has built numerous track records in the Gulf Cooperation Council (GCC) countries including Saudi Arabia, Qatar, and Oman. Currently, we are also participating in bids for large-scale petroleum refinery plant projects in Kuwait and Abu Dhabi based on our strengths and reputation. CTCI will be continuously involved in all six nations of the GCC actively. Besides we plan to expand toward new potential territory e.g. North Africa by strategic alliance with partner. Given our qualification and globalization base, we are capable to bid project with amount up to USD 2 billion in the international EPC market. Constrained by the limited domestic market, we definitely intend to expand overseas business incessantly for our business growth in the future. We have devoted to optimize manpower allocations and accelerated global talent cultivation. Additionally, we have also fostered the interdisciplinary and multinational management competencies in our staff as well as expanding their global perspective through job rotations and expatriate experience.
C. Future Development Strategy Under our business expansion efforts, CTCI has grown to be an international engineering group that owns over 40 affiliated companies in 15 countries throughout the world. To integrate the resources of each subsidiary globally for a group-wide synergy against the competition, CTCI's group organization internally has placed the Executive Committee as the decision-making center unit since 2016. All domestic and foreign companies are re-positioned in three business groups, there are Group Engineering Business (GEB), Group Resource Cycling Business (GRCB), or Group Intelligent Solutions Business (GISB) based on the nature of their business; and the Group Shared Services (GSS) will provide overall back-end management and services. CTCI continues to further differentiate itself from competitors by focusing on professionalism, innovative mindsets, and new technologies. Currently, the three business groups have endeavored to performing successfully with profitable results and enlarging market shares. In particular, GEB division has polished the CTCI brand throughout the world through stellar performance, making CTCI equal to our international partners and becoming a global enterprise on par with world-class engineering companies from Europe, the
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US, Japan, and Korea. For GRCB, since we launched the "ECOVE" brand in 2017, it has become the second renowned CTCI brand in the global market. It is also the best brand in Taiwan for incineration (Energy-from-Waste), waste management and resource cycling with its earnings per share exceeding NTD10 for consecutive years. On the other hand, the GISB division pioneers the Taiwanese market in smart solutions. We have demonstrated fruitful results in fields such as smart manufacturing, smart transportation, smart buildings, and smart cities. This highly promising business continues to show endless possibilities and is likely to become the Group's third-largest brand. To encourage all CTCI colleagues to realize their influence and to be proud of how much their work has contributed to the planet and to their countries, we foster a Total Participation CSR Excellence Practice program in carrying out our major core professional engineering techniques: iEPC, smart plants, circular economy, and green engineering. Highly effective and economical measures are implemented from a project life cycle perspective throughout the site-building process, starting from engineering design, procurement, construction and commissioning, to selection of materials and equipment, and even operations and maintenance from clients upon project completion. At the same time, we collaborate with business partners to fulfill green and environmental-friendly measures in the hopes of realizing the greatest influence and exerting our corporate social responsibility in practice.
Owning over forty years of dedicated effort, CTCI has grown from a small-medium size local engineering company to the No. 1 in Taiwan, as well as taking its place among the top 100 international EPC contractors in the world. This achievement is contributed by our in-depth rooted corporate culture of "Professionalism, Integrity, Teamwork, and Innovation," and the implementation of our brand spirit of being "the Most Reliable." With such philosophies, CTCI can continuously be recognized by renowned clients and partners "the Most Reliable Global Engineering Services Provider".
Sincerely,
John T. Yu Group Chairman
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II. Company Profile 2.1 Date of Incorporation: April 6, 1979 2.2 Company History
Year Milestones
2018.03 CTCI Group won the REBRAND 100® “2018 Global Awards for Successful Brand Transformation”, the most authority in global brand reengineering.
2018.04 CTCI is one of the leading corporations certified to ISO 45001:2018 in Global Engineering Industry.
2018.05 CTCI Advanced Systems and ECOVE Environment Evaluated as Top 5% in the “2017 Corporate Governance Evaluation System”.
2018.05 In terms of the overall ranking in the Top 650 Service Enterprises by Common Wealth Magazine in 2018, CTCI ranked as 25th retained Top 1 spot in the contractor sector for years in a row. It also ranked as 22nd in Top 50 Most Profitable Companies (net profit after tax).
2018.07 CTCI and ECOVE Environment are both on the list of top 40 listed components in Taiwan Sustainability Index (TWSI). CTCI even ranks top 1/3 on this list.
2018.08 CTCI ranked the 24th in the large enterprise category, ECOVE Environment and CTCI Advanced Systems ranked the 3rd and 9th in the mid-size enterprise categories respectively in Corporate Social Responsibility” by Common Wealth Magazine in 2018.
2018.08 CTCI group ranked the 75th among “The International Design Firms”, the 76th among “The International Contractors”, the 146th among “The Global Design Firms”, and the 126th among “The Global Contractors” in the 2018 Engineering News-Record(ENR) Rankings.
2018.09 CTCI selected as a member of the Dow Jones Sustainability Index (DJSI) component for 4 years in a row, CTCI improves itself to the 4th place in the Engineering & Construction category, and retained the top place in the Economic Dimension, sustains its position as an industry leader in Taiwan.
2018.11 CTCI Group won the most prestigious award continuously, "The Most Prestigious Sustainability Awards - Top Ten Domestic Corporate" award in the 2018 Taiwan Corporate Sustainability Awards (TCSA).
2018.12 CTCI Resources Engineering received two special awards for excellent quality of project management and supervision execution performance in the Facilities category by the 18th annual Public Construction Golden Quality Award, issued by the Public Construction Commission.
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III. Corporate Governance Report 3.1 Organization 3.1.1 Organization Chart
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3.1.2 Operations and functions of the various departments
Department Operations & Functions
Immediate Board of Directors
Secretariat of The Board
Responsible for furnishing information required for business execution by directors, assisting directors with legal compliance, and handling matters relating to functional committees meetings, board meetings and shareholders meetings according to laws.
Audit Dept.
Responsible for inspecting and reviewing defects in the internal control systems for the Company and its subsidiaries’ business continuity, providing timely recommendations for improvements to reasonably ensure the sustained operating effectiveness of the systems.
Immediate President
HSE Management Dept.
Responsible for the effectiveness of establishing and maintaining the Company's HSE management system, handling HSE audit operations of various permanent departments and projects, researching and continuously improving the HSE management operation mechanism, and supervising the HSE management operations of the group.
Quality Management Dept.
Responsible for the effectiveness of establishing and maintaining the Company's Quality management system, handling Quality audit operations of various permanent departments and projects, researching and continuously improving the Quality management operation mechanism, and supervising the Quality management operations of the group.
Research and Innovation Center
Responsible for applying innovative technology, developing intelligent platform and researching new operating technology.
Executive Management Operations (EMO)
IT Division Responsible for defining the Company’s information policy, planning and promoting the information systems, supervising the information dept. affairs of various affiliates.
Legal Dept. Responsible for handling disputes, litigation, arbitration, non-litigation.
Contract Management Dept.
Responsible for contract reviewing.
Investment Relation Office
Responsible for liaising with shareholders, corporate investors and the media, and providing investors with timely and correct information about the Company’s operation.
Corporate Administration Dept.
Responsible for auditing the project cost, releasing commodity price information and helping the cost-related system development.
Finance Dept.
Responsible for supporting the project’s achievement of financial objectives, planning and executing important financial tasks and controlling the project risk to increase the Company’s earnings.
Accounting Dept. Responsible for verifying the Company’s income, providing the actual accounting information in a timely manner, and well-founding various financial management systems.
Human Resources Dept.
Responsible for human resource’s strategies and management, providing the talents corporate needs to meet corporate’s mission.
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Department Operations & Functions
Secretary Dept. Responsible for the optimization of the manpower of the secretary.
AGS & PR Dept.
Responsible for managing the general affairs, administration, and external public relations to ensure corporate administration running well and keep good relations with external customers and medias.
Project Site Administration Dept.
Responsible for the administrative general affairs of overseas and domestic construction project sites to ensure the operation of administrative management at the site.
Brand Management Dept.
Responsible for establishing brand structure of the group, promoting brand strategies and planning external brand marketing campaigns.
Hydrocarbon Business Operations (HBO)
Marketing & Sales Division
Responsible for developing the market, collecting business information, establishing cooperative relations, striving for bidding and winning opportunities, analyzing competitors’ status, planning strategic alliances, preparing qualification proposals and reviewing & suggesting tender documentation, participating in tender opening, negotiating for contracts and maintaining after-sales service.
Project Division I Responsible for executing various projects in Taiwan and Mainland China.
Project Division II Responsible for executing various projects in South East Asia and India.
Project Division III Responsible for executing various projects in the Middle East.
LNG Project Division
Responsible for executing LNG projects and proposal related business.
Project Service Division
Responsible for controlling the various information about refining and petro-chemical projects, and achieving the objectives together with the projects.
Proposal & Estimating Division
Responsible for defining the quotation strategies and work plans, organizing the quotation taskforce, drafting the project execution strategies and development execution plan, executing the project risk assessment, preparing technical and business tender documentation, clarifying and negotiating after tender submission, and preparing case closure report of the quotation.
Infrastructure, Environment & Power Business Operations (IEPBO)
Marketing & Sales Division
Responsible for developing the market, collecting business information, establishing cooperative relations, striving for bidding and winning opportunities, analyzing competitors’ status, planning strategic alliances, preparing qualification proposals and reviewing & suggesting tender documentation, participating in tender opening, negotiating for contracts and maintaining after-sale service.
Infrastructure Division
Responsible for executing the projects about MRT, HSR, light rail, steel plant, and air separation plant.
Power & Energy Division
Responsible for executing the projects about gas power plants, cogeneration plants, coal-fired power plants, incinerators, sewage and pure water treatment plants, water recycling and seawater desalination plants.
Environment Resources Division
Responsible for executing the projects about coal-fired power plants, desulfuration and De-NOx.
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Department Operations & Functions
EPC Operations
Engineering Management Division
Responsible for executing quality, HSE and cost control of project engineering management.
Engineering Division
Responsible for coordinating and integrating the human resources, quotation, execution of projects, and multi-departmental technology of various design departments and Hydrocarbon projects’ commissioning, also planning and executing the training programs for various projects.
Procurement Division
Responsible for the procurement, inspection and transportation business, and supervising and confirming the quality/SHE requirements about all of the procurement documents.
Construction Division
Responsible for supporting interaction of various business divisions and subsidiaries, and supervising the compliance of various quotations and project site operations with the Company’s requirement.
Plant Maintenance Business Operations
Responsible for power plants and hydrocarbon plants maintenance business.
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3.2 Directors and Management Team 3.2.1 Directors
March 31st, 2019
Title Nationality Name Gender Date
Elected Term
(Years)
Date First Elected (Rep. of juridical person)
Shareholding when Elected
Current Shareholding
(Rep. of juridical person)
Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience (Education)
Other Position
Executives, Directors or Supervisors who
are spouses or within two degrees of kinship
Shares % Shares % Shares % Shares % Title Name Relation
Chairman R.O.C.
John T. Yu (Rep. of CTCI Development Corporation)
Male Jun. 28,
2017 3
Feb. 8, 2002
(Feb. 9, 1999)
912,170 0.12 912,170
(1,103,471) 0.12
(0.14) 2,020,000 0.26 0 0
-PMD 61, Harvard Business School, USA -B.S., Electrical Engineering, National Taiwan University -Senior Vice President / Executive Vice President / President, CTCI Corporation
Note 1 - - -
Vice Chairman
R.O.C.
Michael Yang (Rep. of CTCI Development Corporation)
Male Jun. 28,
2017 3
Feb. 8, 2002
(Mar. 7, 2016)
912,170 0.12 912,170
(0) 0.12
(0) 407,097 0.05 0 0
-EMBA, Business Administration, National Taiwan University of Science and Technology -M.S., Mechanical Engineering, National Taiwan University -B.S., Mechanical engineering, Tatung University - Senior Vice President/ Executive Vice President, CTCI Corporation
Note 2 - - -
Independent Director and Managing Director
R.O.C. Jack Huang Male Jun. 28,
2017 3
Jun. 26, 2014
0 0 0 0 0 0 0 0 S.J.D., Harvard University Note 3 - - -
Independent Director
R.O.C. Yen-Shiang
Shih Male
Jun. 28, 2017
3 Jun. 28,
2017 0 0 0 0 0 0 0 0 Note 4 Note 5 - - -
Independent Director
R.O.C. Frank Fan Male Jun. 28,
2017 3
Jun. 26, 2014
0 0 0 0 0 0 0 0
-M.S., Institute of traffic and Transportation, National Chiao Tung University -Minister without Portfolio & Chairperson of Public Construction Commission, Executive Yuan
None - - -
Director R.O.C.
Hsien-Cheng Yang
(Rep. of CTCI Foundation)
(Note 6)
Male Jun. 28,
2017 3
Apr. 6, 1979
(Mar. 1, 2019)
60,862,051 7.97 60,862,051
(0) 7.97
(0.00) 0 0 0 0
-Ph.D., Chemical Engineering, NTUST, Taiwan -Manager, Taiwan Green Productivity Foundation
-Director, CTCI Foundation
- - -
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Title Nationality Name Gender Date
Elected Term
(Years)
Date First Elected (Rep. of juridical person)
Shareholding when Elected
Current Shareholding
(Rep. of juridical person)
Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience (Education)
Other Position
Executives, Directors or Supervisors who
are spouses or within two degrees of kinship
Shares % Shares % Shares % Shares % Title Name Relation
Director R.O.C. Quintin Wu Male Jun. 28,
2017 3
Jun. 23, 2006
0 0 0 0 0 0 0 0 -Chairman, USI Corporation Note 7 - - -
Director R.O.C. Bing Shen Male Jun. 28,
2017 3
Mar. 26, 1999
(Note 8)
0 0 0 0 0 0 0 0
-MBA, Harvard Business School -Executive Director, Morgan Stanley Group -Executive Vice President, China Development Industrial Bank -President, CDIB & Partners Investment Holding Corp.
-Independent Director, Far Eastern International Bank -Independent Director, Far Eastern New Century Corporation -Independent Director, ELITE Material Co., Ltd.
- - -
Director R.O.C. Johnny Shih Male Jun. 28,
2017 3
Feb. 8, 2002
(Note 9)
0 0 0 0 0 0 0 0
-Master in Computer Science and Business Administration, Columbia University, USA -Vice Chairman, Far eastern International Bank
Note 10 - - -
Director R.O.C. Yancey Hai Male Jun. 28,
2017 3
Feb. 8, 2002
0 0 0 0 0 0 0 0
-MA, the University of Texas at Dallas -Country Manager, G.E. Capital -Vice President, J.P. Morgan -CEO, Delta Electronics Foundation
-Chairman, Delta Electronics Inc. - Independent Director, USI Corporation
- - -
Director R.O.C. An-Ping Chang
Male Jun. 28,
2017 3
Jun. 28, 2017
0 0 0 0 0 0 0 0
-MBA, New York University, U.S.A -Vice Chairman, Taiwan Cement Corporation -Chairman, Chia Hsin Cement Corporation
Note 11 - - -
Director R.O.C. Wenent Pan Male Jun. 28,
2017 3
Apr. 1, 2012
(Note 12) 0 0 0 0 0 0 0 0
-M.S. & Ph.D., Chemical Engineering, University of Wyoming, USA -President & Chairman, CPC Corporation -Chairman & CEO, Kuo Kuang Power Co.
Note 13 - - -
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Note 1: Chairman, CTCI Corporation / Chairman, CTCI Development Corporation /Director, CTCI Overseas Corporation Limited / Director, CTCI Education Foundation / Managing Director, CTCI Foundation / Supervisor, China Steel Chemical Corporation / Director, Taiwan Cement Co., Ltd. / Director, TSRC Corporation
Note 2: Vice Chairman & President, CTCI Corporation / Chairman, CTCI Overseas Corporation Limited / Chairman, Crown Asia 2 Investment Limited / Director, CTCI Education Foundation / Director, CTCI Americas, Inc. / Director, MIE Industrial Sdn. Bhd.
Note 3: Attorney-at-Law, Jones Day Taipei Office / Independent director, Taiwan Mobile Co., Ltd. / Independent director, WPG Holdings Limited / Independent director, Systex Corporation / Director, Yulon Motor Co., Ltd. / Director of the Board, Taiwania Capital Management Corporation / Director of the Board, Taiwania Capital Buffalo Fund Co., Ltd. / Director of the Board, Taiwania Capital Biotechnology Corporation
Note 4: Ph.D., Chemistry, Massachusetts Institute of Technology, U.S.A. / Professor and Chief of Chemical Engineering, National Taiwan University of Science and Technology / Director General, Small and Medium Enterprise Administration, Ministry of Economic Affairs (MOEA) / Director General, Industrial Development Bureau, MOEA / Minister & Vice Minister & Deputy Minister, MOEA / Director General, Taiwan Tobacco & Wine Bureau / Chairman, Sinotech Engineering Consultants, Inc.
Note 5: Chair Professor, Chung Yuan Christian University / Policy Advisor, Taiwan Electrical and Electronic Manufacturers’ Association / Council Minister and the Convener of the Group of Energy, Petroleum & Chemical, and Accouterments, Cross-Strait CEO Summit / Chairman, Sustainable Circulation Economy Development Association / Independent Director, AU Optronics Corp. / Director, Taiwan Institute of Economic Research / Independent Director, Formosa Plastics Corporation
Note 6: CTCI Foundation reassigned Mr. Leon Tzou to replace Mr. Teng-Yaw Yu as a director of the Company since Dec. 1, 2018, and reassigned Mr. Hsien-Cheng Yang to replace Mr. Leon Tzou as a director of the Company since Mar. 1, 2019.
Note 7: Chairman, USI Corporation / Chairman, China General Plastics Corporation / Chairman, Asia Polymer Corporation / Chairman, Taita Chemical Company, Limited / Chairman, Acme Electronics Corporation
Note 8: Mr. Bing Shen is not the director or supervisor of the Company during these periods: Nov. 28, 2001 ~ Jun. 13, 2005 / May 16, 2006 ~ Jun. 22, 2006 / May 11, 2011 ~ Jun. 21, 2011.
Note 9: Mr. Johnny Shih is not the director or supervisor of the Company during the period from Jun. 15, 2005 to Jun. 25, 2014.
Note 10: Vice Chairman, Far Eastern New Century Corporation / Vice Chairman, Oriental Union Chemical Corporation / Chairman, Everest Textile Company Limited / Director, Asia Cement Corporation
Note 11: Chairman, Taiwan Cement Corporation(TCC) /Chairman, TCC International Holdings Ltd. / Chairman, Hong Kong Cement Manufacturing Co., Ltd. / Independent Director, Synnex Technology International Corporation / Managing Director, O-Bank Co., Ltd. / Director, Taiwan Stock Exchange Corporation
Note 12: Mr. Wenent Pan is not the director or supervisor of the Company during the period from Aug. 1, 2012 to Jun. 25, 2014.
Note 13: Chairman, CTCI Foundation / Independent Director, UPC Technology Corporation / Independent Director, China Petrochemical Development Corporation
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Major shareholders of the institutional shareholders March 31st, 2019
Name of institutional shareholders Major shareholders of the institutional shareholders
CTCI Development Corporation CTCI Corporation (100%)
CTCI Foundation None
Major shareholders of the major shareholders that are juridical persons
March 31st, 2019
Name of juridical persons Major shareholders of the juridical persons
CTCI Corporation
CTCI Foundation (7.97%), CTBC Bank Co., Ltd. (CTCI Corporation Employee Stock Ownership Trust)(7.28%), Fubon Life Insurance Co., Ltd.(6.06%), Blackrock Global Funds-Asian Growth Leaders(4.35%), CTBC Bank Co., Ltd. (Sustainability Employee Stock Ownership Trust)(3.86%), Chunghwa Post Co., Ltd.(3.00%), American Funds Developing World Growth and Income Fund(2.77%), KGI Bank(2.07%), USI Corporation(1.99%), Asia Polymer Corporation(1.90%).
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Professional qualifications and independence analysis of directors
Criteria Name
Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience
Independence Criteria(Note) Number of
Other Public Companies in
Which the Individual is
Concurrently Serving as an Independent
Director
An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other
Academic Department Related to the Business Needs of the Company in a Public or Private Junior College,
College or University
A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other
Professional or Technical Specialist Who has Passed a National Examination and
been Awarded a Certificate in a Profession Necessary for the Business of
the Company
Have Work Experience in the Areas of Commerce,
Law, Finance, or Accounting, or Otherwise Necessary for
the Business of the Company
1 2 3 4 5 6 7 8 9 10
John T. Yu - - V V V V V V 0 Michael Yang - - V V V V V V V 0
Jack Huang V V V V V V V V V V V V V 3
Yen-Shiang Shih V - V V V V V V V V V V V 2
Frank Fan - - V V V V V V V V V V V 0
Hsien-Cheng Yang - - V V V V V V V V V 0
Quintin Wu - - V V V V V V V V V V V 0
Bing Shen - - V V V V V V V V V V V 3
Johnny Shih - - V V V V V V V V V V V 0
Yancey Hai - - V V V V V V V V V V V 1
An-Ping Chang - - V V V V V V V V V V V 1
Wenent Pan - - V V V V V V V V V 2
1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company’s affiliates. The same does not apply, however, in cases where the person is an independent director of the Company, its parent company,
or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares. 3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount
of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings. 4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs. 5. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking
in the top five in holdings. 6. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company. 7. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal,
financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof, provided that this restriction does not apply to any member of the remuneration committee who exercises powers pursuant to Article 7 of the Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies Whose Stock is Listed on the TWSE or Traded on the GTSM.
8. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. 9. Not been a person of any conditions defined in Article 30 of the Company Law. 10. Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.
14
3.2.2 Management Team March 31st, 2019
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Vice Chairperson
of Management
Strategy Committee
R.O.C. Andy Sheu Male Jun. 23,
2009 1,031,281 0.14 1,966 0.00 0 0
-MBA, EMBA Program in International Business Management, National Taiwan University -B.S., Power Mechanical Engineering, National Tsing-Hua University -Managing Director, CTCI (Thailand) Co., Ltd. - Senior Vice President / Executive Vice President / President, CTCI Corporation
-Chairman, CTCI Overseas (BVI) Corporation -Director, CTCI Overseas Corporation Limited -Chairman, CTCI Americas, Inc.
- - -
President R.O.C. Michael
Yang Male
Jun. 28, 2017
0 0 407,097 0.05 0 0
-EMBA, Business Administration, National Taiwan University of Science and Technology -M.S., Mechanical Engineering, National Taiwan University -B.S., Mechanical engineering, Tatung University -Vice President/ Senior Vice President/ Executive Vice President, CTCI Corporation
-Chairman, CTCI Overseas Corporation Limited -Chairman, Crown Asia 2 Investment Limited -Director, CTCI Education Foundation -Director, CTCI Americas, Inc. -Director, MIE Industrial Sdn. Bhd.
- - -
Executive Vice
President R.O.C.
M. H. Wang
Male Jan. 1, 2013
0 0 283,212 0.04 0 0
-MBA, Chulalongkorn University, Thailand -B.S., Civil Engineering, Feng-Chia University -Vice President/ Senior Vice President, CTCI Corporation -Deputy Managing Director/ Managing Director, CTCI (Thailand) Co., Ltd.
-Chairman, CTCI Arabia Ltd. -Director, CTCI Chemicals Corporation -Director, CTCI Machinery Corporation -Director, CTCI Americas, Inc. -Director, CCJV P1 Engineering & Construction Sdn. Bhd.
- - -
15
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Executive Vice
President R.O.C.
Pao-Yao Pan
(Note 1) Male
Jan. 1, 2016
12,628 0.00 326,000 0.04 0 0
-M.S., Management, National Sun Yat-sen University -B.S., Mechanical Engineering, Tatung University -Vice President/ Senior Vice President, CTCI Corporation
None - - -
Executive Vice
President R.O.C.
Ming-Cheng Hsiao
Male Jan. 1, 2016
2,000 0.00 130,000 0.02 0 0
-Ph.D., Chemical Engineering, National Tsin Hua University -MBA, EMBA Program in Accounting, National Taiwan University -M.S., Chemical Engineering, National Tsin Hua University -B.S., Chemical Engineering Tamkang University -Postdoctoral position, University of California, Davis -President, Unisurpass Technology Co., Ltd. -President, Uniplus Electronics Co., Ltd. -Senior Vice President, CTCI Corporation
-Chairman, CTCI Engineering & Construction Sdn. Bhd. -Director, CTCI Americas, Inc. -Chairman, Universal Engineering (BVI) Corporation -Chairman, CIPEC Construction Inc. -Chairman, Accuracy International Inc. -Director, ECOVE Solar Energy Corporation -Director, Powertec Energy Corporation -Director, Unisurpass Technology Co., Ltd. -Director, Unimighty Co., Ltd. -Director, Crown Asia 2 Investment Limited
- - -
Executive Vice
President R.O.C. Todd Chen Male
Jan. 1, 2018
0 0 137,099 0.02 0 0
-M.S., Mechanical Engineering, National Chiao Tung University -B.S., Mechanical Engineering, National Chiao Tung University -Senior General Manager/ Vice President/ Senior Vice President, CTCI Corporation
-Chairman, CTCI Investment Corporation -Director, CTCI Beijing Co., Ltd. -Director, CTCI Americas, Inc. -Chairman, CINDA Engineering & Construction Private Limited
- - -
16
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Senior Vice
President R.O.C.
Jung-Yu Han
(Note 2) Male
Jan. 1, 2016
11,604 0.00 240,000 0.03 0 0
-B.S., National Taipei University of Technology -Senior General Manager/ Vice President, CTCI Corporation
None - - -
Senior Vice
President & CFO
R.O.C. Patrick Lin Male Jan. 1, 2017
53,280 0.01 248,000 0.03 0 0
-MBA, EMBA Program in Finance, National Taiwan University -MBA, University of Massachusetts-Boston, USA -B.S., Business Administration, Tamkang University -Director, Financial Division, Coretronic Corporation -Manager, Financial Division, Powerchip Technology Corporation -Director, Societe Generale Corporate & Investment Banking -Vice President, CTCI Corporation
-Director and President, CTCI Investment Corporation -Director, SINOGAL - Waste Services Co., Ltd. -Supervisor, ECOVE Environment Consulting Corporation -Supervisor, Yuan Ding Resources Corp. -President, CTCI Development Corporation -Director, CTCI Overseas (BVI) Corporation -Supervisor, EVER ECOVE Corporation -Chairman, CTCI Singapore Pte. Ltd.
- - -
Senior Vice
President R.O.C. T. C. Huang Male
Mar. 17, 2017
270,273 0.04 0 0 0 0
-Executive Master of Business Administration, National Sun Yat-Sen University -B.S., Mechanical engineering, Chinese Culture University -President/Chairman, CTCI Machinery Corporation
None - - -
17
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Senior Vice
President R.O.C. Casey Yeh Male
Nov. 2, 2017
16,000 0.00 0 0 0 0
-M.S., Industrial Engineering and Management, University of Iowa, U.S.A. -B.S., Aeronautical Engineering, National Cheng Kung University, Taiwan -Senior Program Manager, Autodesk -Senior Program Manager, Kaspick & Company -Senior Engineering Manager, Intuit, Mountain View -Director , VISA
None - - -
Vice President
R.O.C. Ting-Kuo Li Male Jan. 1, 2017
116,751 0.02 0 0 0 0
-B.S., Mechanical engineering, Tatung University -Senior General Manager, CTCI Corporation
-Chairman, CTCI (Thailand) Co., Ltd. -Chairman, CIMAS Engineering Company Limited -Director, CTCI Americas, Inc. -Director, Superiority (Thailand) Co., Ltd. -Chairman, CTCI&HEC Water Business Corporation -Director, Metro Consulting Service Corporation -Director, CTCI Machinery Corporation -Director, EVER ECOVE Corporation -Director, HDEC-CTCI (Linhai) Corporation
- - -
18
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Vice President
R.O.C. Teh-Ming
Tao (Note 3)
Male Jan. 1, 2006
316,064 0.04 0 0 0 0
-Ph.D., Chemical Engineering, TAMU, USA -M.S., Chemical Engineering, TAMU, USA -B.S., Chemistry, National Tsing-Hua University, Taiwan -Senior Research Engineer, Dowell Schlumberger (USA) SR-RE -CEO, CTCI Foundation -Project Manager, CTCI Foundation -Director, Industrial Safety and Health, CPC Corporation
None - - -
Vice President
R.O.C. Steve Jean Male Jan. 1, 2011
1,668 0.00 196,000 0.03 0 0
-EMBA, Executive Master of Business Administration of National Cheng Chi University -M.S., Mechanical Engineering, National Central University -B.S., Civil Engineering, National Taipei Institute of Technology -General Director, CIMAS Engineering Company Limited
None - - -
Vice President
R.O.C. M. G. Lee Male Jan. 1, 2013
0 0 153,029 0.02 0 0
-M.S., Management, National Taiwan University of Science and Technology -B.S., Ming Chi University of Technology -Senior General Manager, CTCI Corporation
None - - -
Vice President
R.O.C. Po-Chien
Wang (Note 4)
Male Jan. 1, 2013
155,144 0.02 0 0 0 0
-LL.M., Legal Studies, University of Illinois Springfield -LL.B., Department of Law, Soochow University -Senior General Manager, CTCI Corporation
None - - -
19
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Vice President
R.O.C. Tsai-Ming
Wang Male
Apr. 1, 2014
0 0 316,767 0.04 0 0
-B.S., Mechanical Engineering, Tamkang University -Chemical Engineering, National Taipei Institute of Technology -Senior General Manager, CTCI Corporation
-Director, CINDA Engineering & Construction Private Limited
- - -
Vice President
R.O.C. Min-Li Lee Male Apr. 1, 2014
95,156 0.01 33,000 0.00 0 0
-M.S., Chemical Engineering, National Central University -B.S., Chemical Engineering, Chung-Yuan Christian University -Senior General Manager, CTCI Corporation
-Director, CTCI Chemicals Corporation
- - -
Vice President
R.O.C. Jing-Shing
Wu Male
Apr. 1, 2014
260,000 0.03 0 0 0 0
-Executive Master of Business Administration, National Sun Yat-Sen University -Chemical Engineering, National Taipei University of Technology -Senior General Manager, CTCI Corporation
None - - -
Vice President
R.O.C. Y. S. Liao Male Mar. 12,
2015 0 0 98,000 0.01 0 0
-B.S. in Nuclear Engineering, National Tsing-Hua University -President, CTCI Smart Engineering Corporation
-Director, CTCI Beijing Co., Ltd. -Director, CTCI&HEC Water Business Corporation
- - -
Vice President
R.O.C. S.H. Lin Male Jan. 1, 2017
9,000 0.00 190,649 0.02 0 0
-EMBA, National Chengchi University -B.S., Accounting, Soochow University -Senior General Manager, CTCI Corporation
- Director, Pan Asia Corporation -Supervisor, CDIB Partners Investment Holding Corp. -Supervisor, ECOVE Solar Energy Corporation -Director, CTCI Overseas (BVI) Corporation
- - -
20
Title Nationality Name Gender Date
Effective
Shareholding Spouse & Minor
Shareholding
Shareholding by Nominee
Arrangement Experience(Education) Other Position
Managers who are spouses or within two
degrees of kinship
Shares % Shares % Shares % Title Name Relation
Vice President
R.O.C. Connie Lin Female May 12,
2017 26,000 0.00 0 0 0 0
-MBA, EMBA of National Central University, Taiwan -B.S., International Business and Trade, Chinese Culture University, Taiwan -HR Consultant, Delta Research Institute Delta Electronics, Inc. -Senior HR Manager, Corp. HR, Delta Electronics, Inc.
-Supervisor, CTCI Smart Engineering Corporation
- - -
Vice President
R.O.C. Vincent Liu
(Note 5) Male
Jun. 28, 2017
23,575 0.00 0 0 0 0
-M.S., Chemical Engineering, National Taiwan University, Taiwan -B.S., Chemical Engineering, National Central University, Taiwan -Executive Vice President/ President, CTCI Advanced Systems Inc.
None - - -
Vice President
R.O.C. Ho-Chuang
Lee Male
Jan. 1, 2018
0 0 219,076 0.03 0 0
-MBA, EMBA Program in Industrial Management, National Taiwan University of Science and Technology, Taiwan -B.S., Marine Engineering, National Taiwan Ocean University, Taiwan -Senior Manager, CTCI Corporation
-Director and President, CTCI Beijing Co., Ltd. -Director and President, CTCI Shanghai Co., Ltd. -Director and President, CTCI Trading Shanghai Co., Ltd.
- - -
Vice President
R.O.C. Shih-Wei
Chung Male
Jan. 1, 2018
36,033 0.00 38,000 0.00 0 0
-Mechanical Engineering, National Kaohsiung Industrial of Institute -Senior General Manager, CTCI Corporation
-Director, CTCI Development Corporation
- - -
Accounting Officer
R.O.C. Ai-Cheng
Ho Male
Mar. 18, 2017
58,225 0.01 11,000 0.00 0 0
-MBA, EMBA Program in Finance, National Taiwan University -MBA in Finance, West Coast University, California, USA -General Manager, CTCI Corporation
-Supervisor, CTCI Beijing Co., Ltd. -Director, Century Ahead Ltd. -Supervisor, CTCI Advanced Systems Shanghai Inc. -Supervisor, CTCI Trading Shanghai Co., Ltd.
- - -
21
Note 1: EVP Pao-Yao Pan is dismissed on Jun. 26, 2018, and disclose the information during his tenure of office only. Note 2: SVP Jung-Yu Han is dismissed on Sep. 15, 2018, and disclose the information during his tenure of office only. Note 3: VP Teh-Ming Tao is dismissed on Jan. 24, 2019, and disclose the information during his tenure of office only. Note 4: VP Po-Chien Wang is dismissed on Mar. 4, 2019, and disclose the information during his tenure of office only. Note 5: VP Vincent Liu is dismissed on Sep. 1, 2018, and disclose the information during his tenure of office only.
22
3.3 Remuneration of Directors and Management Team 3.3.1 Remuneration of Directors
December 31st, 2018; Unit: NT$ thousands; thousand shares
Title Name
Compensation Ratio of total remuneration
(A+B+C+D) to net income (%)
Relevant remuneration received by directors who are also employees Ratio of total compensation
(A+B+C+D+E+F+G) to net income(%)
Compensation paid to directors from an invested company other than
the Company’s subsidiary
Base Remuneration (A) Pension Fund(B) Directors’
Remuneration (C) Allowances(D) Salary, Bonuses, and Allowances (E)
Pension Fund(F) (Note 3)
Employees’ Compensation (G)
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities
CTCI All
Consolidated Entities CTCI
All Consolidated
Entities Cash Stock Cash Stock
Chairman John T. Yu (Note1) 700 988 0 0 0 0 15,133 16,716 0.87 0.97 0 0 0 0 0 0 0 0 0.87 0.97 0
Juristic- person
Director
CTCI Development Corporation
11,881 11,881 0 0 13,250 13,250 2,740 3,100 1.53 1.54 13,109 14,549 257 257 114 0 114 0 2.26 2.36 0
CTCI Foundation
Vice Chairman
Michael Yang (Note1)
Director
Quintin Wu
Bing Shen
Wenent Pan
Yancey Hai
Teng-Yaw Yu (Note 2)
Leon Tzou (Note 2)
Johnny Shih
An-Ping Chang
Independent Director
Jack Huang
Frank Fan
Yen-Shiang Shih
* Other than disclosure in above table, Directors remunerations earned by providing services (e.g. providing consulting services as a non-employee) to CTCI and all consolidated entities in the 2018 financial statements: None.
Note 1: Mr. John T. Yu and Mr. Michael Yang are representative of CTCI Development Corporation. Note 2: Mr. Teng-Yaw Yu and Mr. Leon Tzou are representative of CTCI Foundation. Mr. Teng-Yaw Yu be dismissed on November 30th 2018; Mr. Leon Tzou be newly appointed on December 1st 2018. The above-mentioned directors disclose
the Remuneration during their tenure of office only. Note 3: NT$ 257 thousand are allocated to the pension plan in 2018.
23
Bracket
Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
CTCI All Consolidated
Entities CTCI
All Consolidated Entities
Under NT$ 2,000,000 CTCI Foundation /
Michael Yang /Teng-Yaw Yu / Leon Tzou
CTCI Foundation / Michael Yang /Teng-Yaw Yu
/ Leon Tzou
CTCI Foundation / Teng-Yaw Yu/ Leon Tzou
CTCI Foundation / Teng-Yaw Yu/ Leon Tzou
NT$2,000,000 ~ NT$5,000,000
CTCI Development Corporation / Quintin Wu / Bing Shen / Wenent Pan/
Yancey Hai / Johnny Shih / An-Ping Chang / Jack Huang / Frank Fan / Yen-Shiang Shih
CTCI Development Corporation / Quintin Wu / Bing Shen / Wenent Pan/
Yancey Hai / Johnny Shih / An-Ping Chang / Jack Huang / Frank Fan / Yen-Shiang Shih
CTCI Development Corporation / Quintin Wu / Bing Shen / Wenent Pan/
Yancey Hai / Johnny Shih / An-Ping Chang / Jack Huang / Frank Fan / Yen-Shiang Shih
CTCI Development Corporation / Quintin Wu / Bing Shen / Wenent Pan/
Yancey Hai / Johnny Shih / An-Ping Chang / Jack Huang / Frank Fan / Yen-Shiang Shih
NT$5,000,000 ~ NT$10,000,000 - - - -
NT$10,000,000 ~ NT$15,000,000 - - Michael Yang -
NT$15,000,000 ~ NT$30,000,000 John T. Yu John T. Yu John T. Yu John T. Yu / Michael Yang
NT$30,000,000 ~ NT$50,000,000 - - - -
NT$50,000,000 ~ NT$100,000,000 - - - -
Over NT$100,000,000 - - - -
Total - - - -
24
3.3.2 Compensation of President and Executive Vice President December 31st, 2018; Unit: NT$ thousands; thousand shares
Title Name
Salary(A) Pension Fund (B)
(Note1) Bonuses and Allowances
(C) Employees’ Compensation (D)
Ratio of total compensation (A+B+C+D)
to net income (%)
Compensation paid to the
president and executive vice
president from an invested company
other than the Company’s subsidiary
CTCI All Consolidated
Entities CTCI
All Consolidated Entities
CTCI All Consolidated
Entities
CTCI All Consolidated
Entities CTCI All Consolidated
Entities Cash Stock Cash Stock
Vice Chairperson of Management
Strategy Committee
Andy Sheu
19,531 24,915 749 749 43,018 43,018 453 0 453 0 3.49 3.78 0
President Michael Yang
Executive Vice President
M. H. Wang
Pao-Yao Pan (Note2)
Ming-Cheng Hsiao
Todd Chen
Note1: Pension contributed according to actuaries’ report and resolution of board of directors’ meeting. Note2: Mr. Pao-Yao Pan is retired on Jun. 26, 2018.
Bracket Name of President and Executive Vice President
CTCI All Consolidated Entities
Under NT$ 2,000,000 - -
NT$2,000,000 ~ NT$5,000,000 - -
NT$5,000,000 ~ NT$10,000,000 Pao-Yao Pan / Todd Chen Pao-Yao Pan / Todd Chen
NT$10,000,000 ~ NT$15,000,000 Andy Sheu / Michael Yang / M. H. Wang / Ming-Cheng Hsiao Andy Sheu / M. H. Wang / Ming-Cheng Hsiao
NT$15,000,000 ~ NT$30,000,000 - Michael Yang
NT$30,000,000 ~ NT$50,000,000 - -
NT$50,000,000 ~ NT$100,000,000 - -
Over NT$100,000,000 - -
Total - -
25
Employees’ Compensation Granted to Management Team Unit: NT$ thousands
Title Name
Employee Bonus - in Stock
(Fair Market Value)
Employee Bonus - in Cash
Total Ratio of Total
Amount to Net Income (%)
Executive Officers
Vice Chairperson of Management Strategy Committee
Andy Sheu
0 1,252 1,252 0.07
President Michael Yang
Executive Vice President M. H. Wang
Executive Vice President Ming-Cheng Hsiao
Executive Vice President Todd Chen
Senior Vice President & CFO Patrick Lin
Senior Vice President T. C. Huang
Senior Vice President Casey Yeh
Vice President Steve Jean
Vice President M. G. Lee
Vice President Tsai-Ming Wang
Vice President Min-Li Lee
Vice President Jing-Shing Wu
Vice President Y. S. Liao
Vice President S.H. Lin
Vice President Ting-Kuo Li
Vice President Connie Lin
Vice President Vincent Liu
Vice President Ho-Chuang Lee
Vice President Shih-Wei Chung
Accounting Officer Ai-Cheng Ho
Note: The distributed amount is based on the total amount (NT$54,826 thousand) approved by Board of Directors in 2019 and calculated accordingly to each executive officers’ on-job days in the previous year.
26
3.3.3 Comparison of Remuneration for Directors, Presidents and Executive Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy, for Directors, Presidents and Executive Vice Presidents
a. Analysis of total remuneration of ratio to net income in accordance with CTCI’s Directors, President and Executive Vice President by CTCI and all
consolidated entities’ financial statements in the most recent two fiscal years Unit: NT$ thousands
Year
Title
2017 2018
CTCI All Consolidated Entities CTCI All Consolidated Entities
Total remuneration
Ratio to net income (%)
Total remuneration
Ratio to net income (%)
Total remuneration
Ratio to net income (%)
Total remuneration
Ratio to net income (%)
Directors 106,750 3.81 115,194 4.11 106,578 5.83 113,833 6.23 Presidents and Executive
Vice President
b. The remuneration’s policies, standards, combinations, the procedures for determining the remuneration, and the relation to business performance and
future risks (a)CTCI’s Directors’ Compensation is categorized into Base Remuneration, Remuneration and Allowance:
Directors’ Base Remuneration: Pursuant to Article 35 of Articles of Incorporation, the remuneration of directors, chairman and vice chairman shall be determined by the Board of Directors in reference to the industry standard and their respective contribution. The base remuneration of Chairman and Independent Directors is stipulated with the Company’s performance (Consolidated Revenue, EPS, ROE)
Directors’ Remuneration: It is paid according to Article 37 of Articles of Incorporation, “when net profit occurs in the annual accounts, the Company may, after reserving a sufficient amount of the income before tax to cover the accumulated losses, with the resolution of the board of directors, distribute no more than 1.5% of the income before tax to pay to the board of directors as remuneration” and Company’s performance (Consolidated Revenue, EPS, ROE). The Directors’ remuneration will not be paid to Independent Directors.
Allowance: It includes traveling allowance and attendance fee which are stipulated with reference to the typical pay levels adopted by other public listed companies or companies within the similar industry field. The remuneration of Directors/Supervisors who hold concurrent positions in the affiliates is stipulated under the same standard.
27
(b)The structure of remuneration of the President and Executive Vice Presidents is categorized into fixed and variable ones. The fixed remuneration is salary paid monthly, while the variable one includes employee remuneration, year-end bonus and Employee Stock Options, with the standards based on individual’s annual key performance index (KPI) assessment. The aforementioned assessment includes qualitative indicators (e.g. core competencies, potential development, etc.) and quantitative indicators (e.g. the achievement of the individual's goals, the rate of achievement or the degree of achievement of the expected target value, etc.) Employee remuneration is paid based on the Company’s Articles of Incorporation. The year-end bonus is determined based on the annual operating performance of the Company, and shall be decided after suggestion of Company's personnel development committee / Remuneration Committee and approval by Board of Directors. The grant of Employee Stock Option is categorized into regular and reward. The regular number of options will be determined by corporate title, seniority and job performance. The employees who have directly contribution to the Company or outstanding performance are eligible for the grant of reward stock options which is decided after suggestion of Chairman / Remuneration Committee and approval by Board of Directors.
(c) The procedure for setting remuneration is in accordance with “Procedure for Performance Assessment and Remuneration Standard of the directors
and Management Officers “. It refers to the typical pay levels adopted by other public listed companies and companies within the similar industry field, and considered about Company’s business performance, individual performance and their respective contribution to Company in order to prescribe reasonable remuneration. Remuneration committee and Board will periodically review the reasonableness of the remuneration and make timely adjustment of the remuneration system based on the Company’s business and relevant laws. It also shall not produce an incentive for the Directors, President and Executive Vice Presidents to engage in activity to pursue remuneration exceeding the risks that the Company may tolerate in order to avoid the Company loss suffering even after the compensation payment.
28
3.4 Implementation of Corporate Governance 3.4.1 Board of Directors A total of 8 meetings of the board of directors were held in the previous period,
Directors’ attendance was as follow: (As of March 31st , 2019)
Title Name Attendance
in Person By Proxy
Attendance rate (%)
Remarks
Chairman John T. Yu
(Rep. of CTCI Development Corporation)
8 0 100
Vice Chairman
Michael Yang (Rep. of CTCI Development
Corporation) 7 1 88
Independent Director and
Managing Director
Jack Huang 8 0 100
Independent Director
Yen-Shiang Shih 8 0 100
Independent Director
Frank Fan 8 0 100
Director Teng-Yaw Yu
(Rep. of CTCI Foundation) 5 1 83
Be dismissed on Dec. 1, 2018 and
should present 6 times.
Director Leon Tzou
(Rep. of CTCI Foundation) 1 0 100
Be newly appointed on Dec. 1, 2018, be dismissed
on Mar. 1, 2019 and
should present 1 times.
Director Hsien-Cheng Yang
(Rep. of CTCI Foundation) 1 0 100
Be newly appointed on Mar. 1, 2019 and should present 1
times.
Director Quintin Wu 5 3 63
Director Bing Shen 7 1 88
Director Johnny Shih 5 3 63
Director Yancey Hai 8 0 100
Director An-Ping Chang 5 3 63
Director Wenent Pan 6 2 75
29
Independent Directors’ attendance of each meeting of board of directors was as follows: (As of March 31st, 2019)
◎:Attendance in Person; ☆:By Proxy; ●:Not present
Name
the 6th Meeting of the 14th Term
Board of Directors (2018.03.09)
the 7st Meeting of the 14th Term
Board of Directors (2018.05.04)
the 8th Meeting of the 14th Term
Board of Directors (2018.05.29)
the 9th Meeting of the 14th Term
Board of Directors (2018.08.03)
Jack Huang ◎ ◎ ◎ ◎
Yen-Shiang Shih ◎ ◎ ◎ ◎
Frank Fan ◎ ◎ ◎ ◎
Name
the 10th Meeting of the 14th Term
Board of Directors (2018.09.12)
the 11th Meeting of the 14th Term
Board of Directors (2018.11.02)
the 12th Meeting of the 14th Term
Board of Directors (2018.12.12)
the 13th Meeting of the 14th Term
Board of Directors (2019.03.08)
Jack Huang ◎ ◎ ◎ ◎
Yen-Shiang Shih ◎ ◎ ◎ ◎
Frank Fan ◎ ◎ ◎ ◎
Other mentionable items: 1. If there are the matter referred to as below in the directors’ meetings, the dates of meetings,
sessions, contents of motions, all independents’ opinion and the Company’s response to independent directors’ opinion should be specified. (1) the matters referred to in Article 14-3 of Securities and Exchange Act. (2) resolutions of the directors’ meetings objected to by Independent Directors or subject to
qualified opinion and recorded or declared in writing. The Company has already established the Audit Committee, please refer to the section 3.4.2 “The State of operations of the Audit Committee” for the matters referred to in Article 14-5 of Securities and Exchange Act. Until the annual report on printed, the resolutions of the directors’ meetings were unanimously approved by all present Board members.
2. If there is Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of
motions, causes for avoidance and voting should be specified: (1) Directors’ Names: Michael Yang
Contents of motion: The 6th meeting of the 14th term Board of Directors (2018.03.09): Approval of the subscribers and the exercisable units of the 2018 Employee Stock Options. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.
(2) Directors’ Names: John T. Yu and Wenent Pan Contents of motion: The 7th meeting of the 14th term Board of Directors (2018.05.04): Approval of selling shares of Utech Solar Corporation. Causes for avoidance and voting should be specified: Chairman John T. Yu and Director Wenent Pan recused themselves during discussion of and voting on this item because of the interested party relationship.
(3) Directors’ Names: Quintin Wu Contents of motion: The 12th meeting of the 14th term Board of Directors (2018.12.12): Approval of Increase investment in Ever Victory Global Limited (BVI), which will then invest in Dynamic Ever Investment Limited (HK), which will then invest in Fujian Gulei Petrochemical Complex. Causes for avoidance and voting should be specified: Director Quintin Wu recused themselves during discussion of and voting on this item because of the interested party relationship.
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(4) Directors’ Names: Michael Yang Contents of motion: The 12th meeting of the 14th term Board of Directors (2018.12.12): Approval of the issuance of the 2019 employee stock options plan. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.
(5) Directors’ Names: Michael Yang Contents of motion: The 12th meeting of the 14th term Board of Directors (2018.12.12): Approval of the average salary increase rate of 2019. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.
(6) Directors’ Names: Michael Yang Contents of motion: The 12th meeting of the 14th term Board of Directors (2018.12.12): Approval of the remuneration of the management officers. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.
(7) Directors’ Names: John T. Yu Contents of motion: The 12th meeting of the 14th term Board of Directors (2018.12.12): Approval of the amendment to the Chairman’s remuneration. Causes for avoidance and voting should be specified: Chairman John T. Yu recused himself during discussion of and voting on this item because of the interested party relationship.
(8) Directors’ Names: Michael Yang Contents of motion: The 13th meeting of the 14th term Board of Directors (2019.03.08): Approval of the subscribers and the exercisable units of the 2019 Employee Stock Options. Causes for avoidance and voting should be specified: Vice Chairman Michael Yang recused himself during discussion of and voting on this item because of the interested party relationship.
3. Measures taken to strengthen the functionality of the Board:
(1) CTCI has elected three independent directors and established the Audit Committee which is composed of all independent directors on Jun. 26, 2014. Please refer to the section 3.4.2 “The State of Operations of the Audit Committee”.
(2) CTCI has established the Nomination Committee under the resolution of the directors’ meeting on Dec. 13, 2016. The 2nd term Nomination Committee is composed by 3 Independent Directors and Chairman.
(3) From 2011, CTCI has disclosed the major resolutions of the Board meeting voluntarily on the Company website.
(4) In accordance with the Articles of Association, CTCI has purchased D&O insurance for directors and supervisors in order to reduce and diversify major damage risks of CTCI and the shareholders.
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3.4.2 The State of operations of the Audit Committee 1. A total of 8 meetings of the Audit Committee were held in the previous period,
Independent Directors’ attendance was as follows: (As of March 31st, 2019)
Title Name Attendance
in Person By Proxy
Attendance rate (%)
Remarks
Independent Director
Jack Huang 8 0 100
Independent Director
Yen-Shiang Shih
8 0 100
Independent Director
Frank Fan 8 0 100
2. The Audit Committee is responsible to review the following major matters: A. Review financial report. B. Adopt or amend the internal control system. C. Assessment of the effectiveness of the internal control system. D. Adopt or amend regulations for financial or operational actions of material significance, such as
acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.
E. Review a matter bearing on the personal interest of a director. F. Review a material asset or derivatives transaction. G. Review a material monetary loan, endorsement, or provision of guarantee. H. Review the offering, issuance, or private placement of any equity-type securities. I. Review the hiring or dismissal of an attesting CPA, or the compensation given thereto. Review Annual Financial Report
The Board of Directors has prepared the Company’s 2018 Business Report, Financial Statements and proposal for allocation of profits. The CPA firm of PriceWaterhouseCoopers was retained to audit CTCI’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and profit allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of CTCI Corporation.
Assess the effectiveness of the internal control system The Audit Committee assessed the effectiveness of the Company's internal control system policies and procedures (including finance, operation, risk management, information security, compliance, etc.) and reviewed periodic reports from the Company's Internal Audit Department, independent accountants and management. The Audit Committee believes that the Company's internal control system is effective and that the Company has adopted the necessary control mechanisms to monitor and correct violations.
Hire or evaluate an attesting CPA Due to the internal job adjustment within PricewaterhouseCoopers, it changes the independent auditors of the Company to Yi-Fan Lin and Shu-Chiung Chang, that being effective from the 1st quarter of 2018. This issue has been approved by the 4th meeting of the 2nd term Audit Committee and the 6th meeting of the 14th term Board of Directors on Mar. 9, 2018. In order to ensure the independence of the accounting firm, the Audit Committee has established an independent evaluation form to Assess the independence, professionalism and competence of accountants with reference to Article 47 of the Accountant law and Accountant's Code of Ethics Code No. 10.
Other mentionable items: 1. If there are the matter referred to as below in the Audit Committee, the dates of directors’
meetings, sessions, contents of motions, the Audit Committee’ resolutions and the Company’s response to the Audit Committee’s opinion should be specified.
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(1) the matters referred to in Article 14-5 of Securities and Exchange Act. (2) resolution that was not approved by the Audit Committee but be undertaken upon the
consent of two-thirds or more of all directors.
BOD Meetings Contents of Motions and the Response
In Article 14-5 of Securities
and Exchange Act
Not approved by the Audit Committee but be
undertaken upon the consent of two-thirds or more of all
directors
The 6th meeting of the 14th term Board of Directors (2018.03.09)
Approval of the distribution plan of the 2017 directors’ and employees’ remuneration.
V None
Approval of the Fiscal 2017 business report, financial reports and consolidated reports.
V None
Approval of change of independent auditors of the Company.
V None
Approval of the distribution plan of Fiscal 2017 earnings.
V None
Approval of “Statement of Internal Control System for the Year 2017”.
V None
Approval on funds lending the subsidiaries for working capital requirement by the Company.
V None
Approval of CTCI Corporation to close its Italian branch.
V None
Resolutions of the Audit Committee(2018.03.09): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 7th meeting of the 14th term Board of Directors (2018.05.04)
Approval of selling shares of Utech Solar Corporation.
V None
Resolutions of the Audit Committee(2018.05.04): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 8th meeting of the 14th term Board of Directors (2018.05.29)
Approval of the ex-dividend record date of 2018. V None
Approval of the amendment to the Company’s “Internal Control Systems”.
V None
Resolutions of the Audit Committee(2018.05.29): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 9th meeting of the 14th term Board of Directors (2018.08.03)
Report on consolidated financial reports as of June 30, 2018.
V None
Approval of investing Ever Ecove Corporation. V None
Approval on funds lending the subsidiaries for working capital requirement by the Company.
V None
Approval of the amendment to the Company’s “Internal Control Systems”.
V None
Resolutions of the Audit Committee(2018.08.03): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 10th meeting of the 14th term Board of Directors (2018.09.12)
Approval of investing HDEC-CTCI(Linhai) Corporation. V None
Resolutions of the Audit Committee(2018.09.12): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 11th meeting of the 14th term Board of Directors (2018.11.02)
Approval on funds lending the subsidiaries for working capital requirement by the Company.
V None
Approval of the amendment to the Company’s “Internal Control Systems”.
V None
Resolutions of the Audit Committee(2018.11.02): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
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BOD Meetings Contents of Motions and the Response
In Article 14-5 of Securities
and Exchange Act
Not approved by the Audit Committee but be
undertaken upon the consent of two-thirds or more of all
directors
The 12th meeting of the 14th term Board of Directors (2018.12.12)
Approval of the budget of 2019. V None
Approval of the Year 2019 Audit Plan. V None
Approval of the issuance of unsecured ordinary corporate bonds.
V None
Approval of the cash injection of CTCI Development Corporation.
V None
Approval on funds lending the subsidiaries for working capital requirement by the Company.
V None
Approval of registration of a branch in Singapore for project execution.
V None
Approval of registration of a branch in Korea for project execution.
V None
Approval of Increase investment in Ever Victory Global Limited (BVI).
V None
Approval of donation to CTCI Education Foundation. V None
Approval of the issuance of 2019 Employee Stock Options plan.
V None
Approval of the amendment to the remuneration of the Chairman of the Company.
V None
Resolutions of the Audit Committee(2018.12.12): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
The 13th meeting of the 14th term Board of Directors (2019.03.08)
Approval of the distribution plan of the 2018 directors’ and employees’ remuneration.
V None
Approval of the Fiscal 2018 business report, financial reports and consolidated reports.
V None
Approval of the distribution plan of Fiscal 2018 earnings.
V None
Approval of “Statement of Internal Control System for the Year 2018”.
V None
Approval of the amendment to the Company’s “Internal Control Systems”.
V None
Approval on funds lending the subsidiaries for working capital requirement by the Company.
V None
Resolutions of the Audit Committee(2019.03.07): unanimously approved by all present Audit Committee members.
The Company’s response to the Audit Committee’s opinion: unanimously approved by all present Board members.
2. If there is Independent Directors’ avoidance of motions in conflict of interest, the Independent
Directors’ names, contents of motions, causes for avoidance and voting should be specified: None.
3. Communications between Independent Directors and the Company's Internal Audit officer and CPA A. After having presented the audit and follow-up reports to the Chairman, the Internal Audit
officer submitted the same reports via e-mail for review by the Independent Directors on a monthly basis. The Internal Audit officer communicated with the Independent Directors in person at least quarterly in 2018. There were no objections raised by independent directors in 2018.
B. The Internal Audit officer presents the findings of audit reports in the meetings of the Audit Committee and Board of Directors. All the Independent Directors have adequate access to how audit performs. During 2018, the communication channel between Independent Directors and the Internal Audit officer functioned well.
C. The CPAs present audit reports and findings to the Independent Directors. CFO, Finance manager, Accounting manager and Internal Audit officer attend the Audit Committee meetings and reply to Independent Directors immediately if they have any questions. During 2018, the communication channel between Independent Directors and CPAs functioned well.
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3.4.3 Corporate Governance and Operation, Differences from the Corporate Governance Best Practice Principles for the TWSE/ GTSM Listed Companies and Reasons
Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
1. Does the Company establish and disclose the Corporate Governance Practice Principals in accordance with the Corporate Governance Best Practice Principles for the TWSE/ GTSM Listed Companies?
V In the 10th meeting of the 10th term board of directors, the establishment of the Corporate Governance Practice Principals was decided on Jul. 24, 2006, which had been modified in accordance with the regulations and real practice in these years. The latest revision was made in the 15th meeting of the 13th term board of directors on Aug. 5, 2016 and was published in the Market Observatory Post System (MOPS) and CTCI’s website.
None.
2. Ownership structure and shareholder’s equity (1) Does the Company set up the internal
standard operation procedure to handle issues such as shareholder’s advices, questions, disputes and accusations for implementation accordingly?
(2) Does the Company have control over the major shareholders, who control the Company and have the name list of the major shareholders who have the ultimate control over the Company?
(3) Does the Company set up and implement the risk control and firewall mechanism with the subsidiaries and affiliates?
V
(1)The Company has set up spokesman and investor relation
office as the liaison channel to handle issues like the shareholders’ advices or disputes.
(2) The Company has been submitting monthly report to the
Market Observatory Post System, assigned by the Securities and Futures Bureau about the change of the shareholding of the insiders (directors, managers and shareholders who have more than 10% of the total shares) in accordance with the 25th article of the Securities and Exchange Act.
(3) In addition to establishing the “Supervision and
Management of Subsidiaries” based on the “Regulations Governing Establishment of Internal Control System by Public Companies” set by the Financial Supervisory
None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
(4) Does the Company stipulate internal regulation, prohibiting the insiders of the Company to make use of the unpublished information for the trading of securities?
Committee, the Company also stipulated the internal basic principles for cooperation between the parent company and the subsidiaries like ”the Basic Principles for Joint- Venture contract and Cooperation between the Parent Company and Subsidiaries of the CTCI Group”, “the Common Operation Procedure to maintain the rights and interest of the CTCI Group”, etc., which are inspected by departments like the Auditing Department and QHSE Division to ensure the thorough implementation of the system and good mechanism of the risk- control for the subsidiaries and affiliates.
(4) The Company has set up the “Measures to Prevent Insider
Trading” and “CTCI Code of Ethics and Conduct”, prohibiting use of the unpublished information for the trading of securities.
3. Composition and Responsibilities of Board of Directors (1) Is there establishment of the
diversification and thorough implementation about the composition of board of directors?
V
(1)
A. The Company has established the diversification of board of directors in its “Corporate Governance Principles “. In consideration of diversity and fairness, the 14th term Board of Directors has 12 directors: Mr. John T. Yu(Chairman), Mr. Michael Yang (Vice Chairman), Mr. Quintin Wu(Director), Johnny Shih(Director), Mr. Yancey Hai(Director), Mr. An-Ping Chang(Director) and Mr. Wenent Pan(Director) are managements of various industries including Engineering Consultant, Plastics, textiles, electronics, optoelectronics and cement and so on. They are good
None.
36
Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
(2) In addition to the establishment of the Remuneration Committee and Audit Committee, does the Company have other functional committees?
V
at leadership, management and have different industrial knowledge, decision-making ability and international market view. Mr. Jack Huang (Independent Director) is an attorney at law. Mr. Yen-Shiang Shih (Independent Director) had been Minister of Ministry of Economic Affairs (MOEA); Mr. Frank Fan (Independent Director) had been Chairperson of Public Construction Commission, Executive Yuan. Mr. Bing Shen(Director) has Financial background. Mr. Hsien-Cheng Yang(Director) has worked in the foundation which implement environmental protection and energy saving for many years. The implementation about diversity policy of each Director, please refer to【Note 1】.
B. There is 1 Director (8%) of the Company who is also employee. There are 3 Independent Directors (25%): 1 Independent Director’s seniority is within 3 years and the other 2 Independent Directors’ seniority is between 4 to 6 years. 1 Director’s age is under 50; 1 Director’s age is between 50 to 60; 7 Directors’ age are between 60 to 70 years old; 3 Directors’ age are over 70 years old.
C. The implementation about diversity policy of Board members has disclosed on the Company website (www.ctci.com) and the Market Observation Post System.
(2) In addition to the establishment of the Remuneration Committee and Audit Committee regulated by law, the Company also established the Corporate Governance Committee whose major jobs include planning,
None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
(3) Is there performance appraisal of the board of directors, which is carried out annually?
V
promoting and improving the program of Corporate Social Responsibility (involved Corporate Governance, Environment Protection, Occupational Health and Safety and Social participation); revising the performance regarding the implementation of the Company governance system, etc. The committee is composed of 12 directors and has held 4 meetings during the most recent fiscal year and current fiscal year up to the date of publication of the annual report. It works strictly and plays a decisive role in the major company policy decisions. Moreover, the Company established the Nominating Committee on Dec. 13, 2016. The 2nd term Nominating Committee is composed of 3 independent directors and Chairman, whose major jobs include the programming of the composition of board of directors/ functional committees, the qualification assessment of the directors, the programming of the succession of the managing echelon, conducting performance evaluation of the board of directors, etc. The meeting was held twice during the most recent fiscal year and current fiscal year up to the date of publication of the annual report.
(3) The Company has set up the “Regulations Governing the
board Performance Evaluation“ by the resolution of the Boards on Dec. 13, 2016 and revised by law or actual situations. According to the revised version by the resolution of 11th meeting of the 14th term of the Boards on Nov. 2, 2018, CTCI adds the execution about the board performance evaluation through an external
None.
38
Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
professional independent organization or a team of external experts and scholars for every three years. The lately version is revised by the resolution of the 13th meeting of the 14th term of the Boards on Mar. 8, 2019. According to the latest regulation, the board of directors of the Company shall perform the performance evaluation of the internal board of directors each year according to the evaluation procedures and the evaluation indexes of the regulations. The performance evaluation of the board of directors of the Company shall be carried out at least once every three years by an external professional independent organization or a team of external experts and scholars. The results of the internal and external performance evaluation of the board of directors should be completed before the end of the first quarter of the following year. The Company considers the Company's situation and needs to determine the performance evaluation of the board of directors, including the following aspects: a. Participation in the operation of the Company; b. Improvement of the quality of the board of directors'
decision making; c. Composition and structure of the board of directors; d. Election and continuing education of the directors; e. Internal control; and f. Others. The criteria for performance evaluation of Board members include the following aspects: a. Alignment of the goals and missions of the Company; b. Awareness of the duties of a director;
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
(4) Is there regular assessment of the independence of the certified public accountant every year?
V
c. Participation in the operation of the Company; d. Management of internal relationship and
communication; e. The director's professionalism and continuing
education; f. Internal control; and g. Others. The 2018 board performance evaluation is in charge of execution by the Secretariat of the Board (STB) in early 2019. STB collect related information about activities of the Board of Directors and distribute “the Questionnaire of Self-Evaluation of Performance of the Board” to Board members for self-evaluation. The result has been reported to the 13th meeting of the 14th term Board of Directors on Mar. 8, 2019. The operation of CTCI’s Board of Directors is evaluated well base on the result of the 2018 board performance evaluation.
(4) To fulfill Corporate Governance, the Company has established “Evaluation of engaged Certified Public Accountant Regulation” in the 11th meeting of the 12th
term board of director on Dec. 20, 2012. According to this regulation, the Company exams and evaluates CPA’s independence and capability annually, and submit a report to the Audit Committee and Board meeting. The report was approved by the 11th meeting of the 2rd term Audit Committee on Mar. 7, 2019 and the 13th meeting of the 14th term Board of Directors on Mar. 8, 2019, the evaluation items please refer to the【Note 2】. After
assessed, CPAs Yi-Fan Lin and Shu-Chiung Chang from PricewaterhouseCoopers were qualified. Both CPAs do
None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
not have any direct or indirect interest relationship with either Board of Directors or CTCI, and believed to have more than sufficient capabilities on auditing, taxation and time cost efficiency.
4. Does the Company set up the corporate governance units or personnel responsible for matters related corporate governance?(including but not limited to providing the business-required information to the directors and supervisor, handling the matters related to the meetings of the Board and the shareholders' meeting, the registration of the Company and the minutes of the Board and the shareholders' meeting)
V The Executive Vice President of Executive Management Operations (EMO) and head of Secretariat of the Board (STB), Mr. Ming-Cheng Hsiao, has been appointed as the chief corporate governance officer who is the most senior executive for corporate governance matters. Mr. Ming-Cheng Hsiao has been in a managerial position for at least three years in a public company in handling stock affairs (STB) and corporate governance affairs. The major job of chief corporate governance officer includes as following: Handling matters relating to board meetings and shareholders’ meetings according to laws; Producing minutes of board meetings and shareholders’ meetings; Assisting in onboarding and continuous development of directors and supervisors; Furnishing information required for business execution by directors and supervisors; Assisting directors and supervisors with legal compliance The business developments in 2018 are as following: A. Handling matters relating to board meetings and
shareholders’ meetings according to laws, producing minutes of board meetings and shareholders’ meetings and assisting directors with legal compliance. a. Draw up the meeting schedule for functional
committees meetings and Board meetings; consolidate proposals from related divisions and
None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
provide the notice, agenda and related information to each director no later than 7 days prior to the scheduled meeting date; convene the said meetings and provide meeting materials; remind directors who have conflicts of interest of recusing themselves; and complete meeting minutes within 20 days after the functional committees meetings and board meetings.
b. Draw up and have prior booking for the date of Shareholders’ meeting; process the stock affairs; prepare meeting notice, handbook, annual report and minutes within statutory period; and report to MOPS and apply the certificate from Ministry of Economic Affairs after shareholders’ meeting.
c. Ensuring directors’ affair and the process of board resolution are in compliance with regulations.
B. Assist directors to carry out their duties, provide related information in need and arrange training program for them. a. Plan the 3 hours of on-site course for directors of CTCI
group’s listed company in May and August respectively and plan the training course for the directors, supervisors and management officers of the non-public company on an irregular basis.
b. In response to the substantial revision of Company Act, the Company arranged two seminars for group Directors, Supervisors and managers in August and December, 2018. The specialized lawyers explain effects about shareholders’ meetings and Board of directors in accordance with revised Company Act.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
c. Inform the related information of laws or announcements to insiders on irregular basis.
C. Renew the Directors’ and Officers’ Liability Insurance in September, and report the insured amount, coverage, premium rate, and other major contents of the liability insurance at the board meeting in November.
D. Prepare the Self-evaluation of Corporate Governance Evaluation and assist related divisions to follow up Corporate Governance Evaluation Indicators and related regulations by the Competent Authority published.
5. Does the Company establish communication channel for stakeholders which including but not limited to shareholders, employees, customers and suppliers, set up a dedicated section in its corporate website for stakeholders, and properly respond to CSR-related issues concerned by stakeholders?
V The Company establishes "CSR" and "Investor Relations" sections in its corporate website to explain to stakeholders the conducts for fulfilling CSR and may be contacted via its corporate website when needed. The Company will give proper feedback to any reasonable concerns raised by the stakeholders.
None.
6. Does the Company entrust the professional stock affair agency for the shareholder affairs?
V The Company has entrusted the department of the stock affair agency of the KGI Securities Co. Ltd. to assist us in the stock affairs.
None.
7. Information Disclosure (1) Does the Company set up a website to
disclose information regarding the Company’s finance, business and corporate governance status?
V (1)
a) The Company has set up a Chinese/English website (www.ctci.com) to disclose information regarding the Company’s finance and business status and update information regularly.
b) The Company has disclosed information regarding the organization and function of Internal Auditing Dept., “Rules Governing Procedure for Making of Endorsements or Guarantees”, “Rules Governing
None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
(2) Is there any other information disclosure
channels (e.g., maintaining an English-language website, appointing responsible people to handle information collection and disclosure, appointing spokespersons, webcasting investors conference)?
Acquisition and Disposal of Assets” and “Rules Governing Procedure for Loaning of Funds” on the Company website.
(2)
a) The Company has set up a Chinese/English website and has appointed Brand Management Dept. to handle information collection and disclosure.
b) The Company has appointed the Head of Executive Management Office as the spokesperson, CFO as deputy spokesperson and they are responsible for speaking to the public. The Company will hold investors conference presentation according to practical needs.
c) The audio-visual record of investor conference has been posted on the Company website. The Company has disclosed finance and business information revealed in inventor conference on the Company website and the Market Observation Post System pursuant to regulations of Taiwan Stock Exchange.
8. Is there other important information, which helps to understand the governance and operation of the Company, which includes but not limited to the rights and interest of the staff, cares for the employees, investor relations, relation with the suppliers, rights of the stakeholders, trainings received by the directors and supervisors, the implementation of the risk management policy and risk assessment criteria, the
V Please refer to the【Note 3】. None.
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Evaluation Item
Operation Status Deviations from “Corporate Governance Best-Practice
Principles for TWSE/GTSM Listed Companies” and reasons
Yes No Summary Statement
liability insurance policies taken out for the directors and supervisors, etc.?
9. According to the last Corporate Governance Evaluation by TWSE, please indicate the situation has been improved and the priority and measures for the non-improved ones.
V The result of the 5th Corporate Governance Evaluation System was announced. Please refer to the 【Note 4】for
the specific improvements.
None.
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【Note 1】The implementation about diversity policy of each Director
Diversity Name
Gender Operation
Management Industry
knowledge Law
Financial Accounting Economics
international market
perspective
Ability to lead
Ability to make policy
decisions
John T. Yu Male V V V V V
Michael Yang Male V V V V V
Jack Huang Male V V V V V
Yen-Shiang Shih Male V V V V V V
Frank Fan Male V V V V
Hsien-Cheng Yang Male V V V V
Quintin Wu Male V V V V V
Bing Shen Male V V V V V V
Johnny Shih Male V V V V V V
Yancey Hai Male V V V V V V
An-Ping Chang Male V V V V V V
Wenent Pan Male V V V V V
【Note 2】Assessment of the CPA’s independence
No. Evaluation Item Result Qualify for
Independence
1 The engaged auditors should not accept the engagement when they may have involved in any direct or material indirect interests which may impair their impartiality and independence.
Yes Yes
2
An audit or review of financial statements delivers high or medium (but not absolute) assurance to potential users of financial statements. In addition to the maintenance of independence in appearance, the maintenance of independence in mind is more important for an independent auditor. Therefore, the members of audit engagement team, the partners of the accounting firm, and accounting firm and its affiliates must be independent to us.
Yes Yes
3
If the engaged auditor fulfills any of the below requirements:
Yes Yes
(1) Integrity: an independent auditor shall be straightforward and honest during his/her provision of professional services.
(2) Objectivity: During his/her provision of professional services, an independent auditor shall be objective and avoid any conflict of interests to override his/her independence.
(3) Independence: an independent auditor shall have independence in mind and in appearance on an audit or review of financial statements.
4 Independence is related to the integrity and objectivity. During the engagement, if an independent auditor isn’t in the lack/impairment of independence and thus affects his/her integrity and objectivity.
Yes Yes
5 If the independence of an auditor isn’t impaired by self-interest, self-review advocacy, familiarity, and intimidation.
Yes Yes
6
Self-interest could impair an auditor’s independence. Self-interest means acquiring a financial interest in an audit client (i.e. CTCI Corporation) or having another conflict of interests created by other interests or relationships with us. If our engaged independent auditor isn’t in any of the below situations:
Yes Yes
(1) Having a direct or material indirect financial interest from us.
46
No. Evaluation Item Result Qualify for
Independence
(2) Having financing or guarantee relationship with us or our directors.
(3) Concerned about the possibility of losing CTCI Corporation as a client.
(4) Having a significant and close business relationship with us.
(5) Entering into a potential employment negotiations with us.
(6) Entering into a contingent fee arrangement relating to our audit engagement.
7
Independence influenced by self-review means an independent auditor uses a report or judgment resulting from a non-audit service as an important factor to conclude the result in an audit or review of financial information, or a member of the audit engagement team is our former director, or is in our key position with significant influence over the subject matter of the audit engagement. If the engaged auditor isn’t in any of the below situations:
Yes Yes (1) A member of the audit engagement team is/was our director,
supervisor, manager, or employed by us in a position with significant influence over the subject matter of the audit engagement within last two years.
(2) The accounting firm of the audit engagement team provides us non-audit services which would directly affect a material item of the audit engagement.
8
Independence influenced by advocacy means that a member of the audit team acting as an advocate of our position so the objectivity of the independent auditor could be challenged. If the engaged auditor isn’t in any of the below situations: Yes Yes
(1) Promoting or brokering shares or other securities issued by us.
(2) Acting as an advocate on behalf of us in litigation or disputes with third parties.
9
The effects of familiarity to independence means a close relationship with our directors, supervisors, and/or managers will cause an independent auditor to excessively concern or sympathize about our interest. If the engaged auditor isn’t in any of the below situations:
Yes Yes
(1) Having a family relationship with our directors, supervisors, managers, or employees in a position with significant influence over the subject matter of the audit engagement.
(2) A former partner, who was disassociated with the engaged accounting firm within a year, joins us as a director, supervisor, manager, or employee in a key position with significant influence over the subject matter of the audit engagement.
(3) Accepting gifts or preferential treatment from our directors, managers, or us.
10
Independence influenced by intimidation means an independent auditor is deterred from being objective due to actual or perceived pressures, including the attempts to exercise undue influences. if engaged auditor isn’t in any of the below situations:
Yes Yes (1) Requesting an independent auditor to agree with our inappropriate
accounting treatments and disclosures.
(2) Compelling an independent auditor to reduce the extent of work performed in order to lower the audit fee.
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【Note 3】
1. The system about employee rights and interests and the care for the employees adopted by the Company is implemented in accordance with the related regulations and specified clearly in the working regulations of the employee manual, which include the gender equality at work, sexual harassment prevention and treatment, the compensation and pension for the disaster, injury and disease, subsidy principals the for weddings /funerals, etc. The labor management meeting is held as well to communicate with each other for issues concerned by the labor regularly each quarter. There are other measurements like the mail box for the employee opinion and special line against the sexual harassment to give trust to the employees thoroughly and to carry out the self- governance of the employee.
2. The first principle for the sound corporate administration is to protect the shareholder rights and interests and to treat all shareholders fairly. To encourage the investors to participate in the corporate governance and to implement the shareholder activism, the Company has uploaded the minute of the shareholder meeting on the website and released the major information in English and Chinese simultaneously to protect the rights and interests of the domestic and international investors. Moreover, the Company holds the corporate conference regularly and uploads the video of the conference to the website to increase the understanding of the corporation about the Company to maintain the shareholder rights and interests accordingly.
3. The Company offers the relevant laws and regulations requiring attention and seminar information for further study to directors and make presentation about the business regularly in the meeting of board of directors. (For detailed information, please refer to the important information concerning the corporate governance and operation.)
4. All directors will attend the meeting of board of directors except for special situation and their attendance of the meeting will be reported in the Market Observatory Post System.
5. The Directors of the Company will recuse themselves to avoid conflicts of interests in the Board Meeting.
6. The Company purchased D&O insurance for its directors and supervisors. 7. We strictly conduct supplier management. Only those qualified and registered in the CTCI Group
PSSCM (Project Service Supply Chain Management) System have the chance for quote and to be contracted for plant construction. Issues regarding the scope of the integration work, the work regulation, the project schedule, the quality inspection, QHSE Management are well- explained to the contractors during the inquiry and quote for them to understand completely the content of work, responsibilities and obligations in the contract. The total amount of the contract, the payment term, the responsibilities, obligations and penalties for the mutual parties are specified in the contract as base for the implementation of the contract of the corporative contractor. Upon the delivered equipment, materials or services, project team will evaluate vendor performance, including quality, HSE and schedule. The performance evaluation will be referred to future vendor selection for inquiry. In case of any inappropriate-issue caused by vendor during on-going contraction, project team also could propose the request to negotiate with the vendor by official hierarchy. With the sound finance of the Company, all contractors get paid in due course and according to the payment term. Besides, the function to check the payment is established for the contractors to know the review procedure of the invoice. The Company treats all contracted contractors fairly and honestly and negotiates with them for cooperation, mutual harmony and prosperity.
8. “Implementation of risk management policies and risk measuring criteria” Risk management policies: Declarations: All kinds of risks will affect the achievement of objective of the Company. The understanding and management of risk can assist the Company to prepare countermeasure and improve performance, so as to achieve stable growth and pursue the sustainable operation. Descriptions: Through constructing proper risk management procedure, the risk management of the Company will integrate into the daily operating activities to manage the operating risks effectively. For this purpose, the Company will:
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Establish enterprise risk management system consistent with company strategy; Define the roles and responsibilities of all employees in enterprise risk management, and
communicate with all employees; Prepare systematized enterprise risk assessment method to ensure that risks significantly
affecting the Company can be identified effectively; Ensure that information related to enterprise risk can be passed through explicit and effective
channel; Integrate enterprise risk management mechanism into daily operating activities. Enterprise risk management is a continuous activity; all employees of the Company are responsible for understanding and carrying out risk management system of the Company. All colleagues shall properly perform the duty of risk management; each management level shall also comply with relevant requirements of this risk management system. CTCI follows the “Risk Management Regulations” which defines the risk management process and risk measuring criteria to perform the risk management tasks. Each risk management unit regularly performs risk identification and risk evaluation and proposes the improvement plan. The report is submitted to the Risk Management Executive Committee to control and to reduce the risks.
9. “To Satisfy Our Customers with Optimized Engineering Services” is CTCI’s corporate mission, and we stress customers’ feedback highly. For years, we have been collecting customers’ feedback based on “Customer Service Enhancement Regulations” in a timely fashion and proactively conducting customer satisfaction survey twice a year. Besides, a cross-departmental “Customers Services Feedback Group” coordinated by the President was established. The Group would review the customer feedback raised in the questionnaire survey, proposed correction actions, and instructed the departments concerned to fulfill their tasks accordingly to make sure our customers’ trust and expectations are met.
【Note 4】
No. Evaluation Item Specific Improvements
1.6 Was the Annual General Meeting convened before the end of May?
CTCI’s 2018 Annual General Meeting has been convened on May 29, 2018.
2.23
Has the Company’s “Regulations Governing the board Performance Evaluation” approved by the Board of the Directors according to external appraisal has determined at least once every three years and executive deadline, statues and results are disclosed on the Company’s website and annual report by the regulation?
CTCI’s “Regulations Governing the board Performance Evaluation” has been amended by the Board of Directors on November 2018. The amended regulations prescribe the performance evaluation of the board of directors of the Company shall be carried out once every three years by an external professional independent organization or a team of external experts and scholars.
49
3.4.4 The Remunerate committee’s composition, responsibilities and operation: A. Remuneration Committee members’ information
Identity (Note1)
Criteria Name
Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience
Independence Criteria(Note 2) Number of
Other Public Companies in
Which the Individual is
Concurrently Serving as a member of
Remuneration Committee
Remark
An Instructor or Higher Position in a Department of Commerce,
Law, Finance, Accounting, or Other Academic Department
Related to the Business Needs of the Company in a Public or Private Junior College, College
or University
A Judge, Public Prosecutor, Attorney, Certified Public
Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination
and been Awarded a Certificate in a Profession Necessary for the
Business of the Company
Have Work Experience in the Areas of Commerce,
Law, Finance, or Accounting, or Otherwise
Necessary for the Business of the Company
1 2 3 4 5 6 7 8
Independent Director
Frank Fan — — V V V V V V V V V 0
Independent Director
Yen-Shiang Shih
V — V V V V V V V V V 1
Independent Director
Jack Huang V V V V V V V V V V V 3
Note 1: Please fill out director, independent director, or other. Note 2: 1. Not an employee of the Company or any of its affiliates. 2. Not a director or supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an independent director of the Company, its parent
company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares. 3. Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount
of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings. 4. Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs. 5. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in
the top five in holdings. 6. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company. 7. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal,
financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof. 8. Not been a person of any conditions defined in Article 30 of the Company Law.
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B. The state of operations of the Remuneration Committee a. This committee is comprised of 3 members. b. The term of current committee members is from Jun. 28, 2017 to Jun. 27, 2020.
A total of 3 meetings of the Remuneration Committee were held during the most recent fiscal year: (As of March 31st, 2019)
Title Name Attendance in
Person By Proxy
Attendance rate (%)
Remarks
Convener Frank Fan 3 0 100
Member Yen-Shiang Shih 3 0 100
Member Jack Huang 3 0 100
Other mentionable items:
1. If board of directors declined to adopt, or modified, a recommendation of the remuneration committee, the dates of meetings, sessions, contents of motions, resolutions of the Board Meeting and the Company’s response to remuneration committee’ opinion should be specified (If the remuneration passed by board of directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None.
2. If there are objections or reservations to any discussion matters or extraordinary motions expressed by any member of the Committee, recorded or provided in written forms, the dates of meetings, sessions, contents of motions, all members’ opinion and the Company’s response to members’ opinion should be specified: None.
3. The State of operations of the Remuneration Committee in the recent fiscal year:
Remuneration Committee
Contents of Motions and the Response
Resolution The Company’s response
to the Remuneration Committee’s opinion
the 4th Meeting of the 3rd Term
Remuneration Committee
(2018.03.09)
1. The distribution plan of the 2017 directors’ and employees’ remuneration.
2. The subscribers and the exercisable units of the 2018 Employee Stock Options.
Unanimously approved by all present Remuneration Committee members.
Unanimously approved by all present Board Directors.
the 5th Meeting of the 3rd Term
Remuneration Committee
(2018.12.12)
1. The average salary increase rate of 2019.
2. The remuneration of the management officers.
3. The amendment to the Chairman’s remuneration.
4. The issuance of the 2019 employee stock options plan.
Unanimously approved by all present Remuneration Committee members.
Unanimously approved by all present Board Directors.
the 6th Meeting of the 3rd Term
Remuneration Committee
(2019.03.07)
1. The distribution plan of the 2018 directors’ and employees’ remuneration.
2. The amendment to the management officers’ remuneration.
3. The subscribers and the exercisable units of the 2019 Employee Stock Options.
Unanimously approved by all present Remuneration Committee members.
Unanimously approved by all present Board Directors.
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3.4.5 Corporate Social Responsibility (CSR)
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
1. Corporate Management Practices (1) Does the Company formulate
CSR policy or systems and review the implementation status?
(2) Does the Company arrange CSR
trainings regularly? (3) Does the Company establish
exclusively (or concurrently) dedicated units with senior management authorized by the Board to be in charge of CSR Promotion and report to the Board?
V (1) CTCI established the CSR Promotion and CSR Report Publication Procedure in November 2009
to define the organizational framework, responsibility and authority of the CSR Committee, and to specify the cautions and rules for promoting CSR within CTCI. When setting issues to be promoted within CTCI, these issues are considered in accordance with the Global Reporting Initiatives (GRI) Standard in terms of corporate governance, environmental protection and social participation as well as AA1000 International Standards, including the concern for stakeholders and impacts on CTCI; and systematic procedures for determining such have been established.
(2) The Company promotes the concept of corporate social responsibilities through various approaches, such as lectures, public announcement and activities held.
(3) To continuously strengthen corporate sustainability, the functional committee of the board—Corporate Governance Committee is established to administer CSR related activities and policies and the promotion of them. Meanwhile, to carry out every policy, a CSR Task Force was set up under the Corporate Governance Committee which shall report to the Board on a yearly basis. The President and the GSS CEO act as the Chief Officer and the Coordinator of the CSR Task Force, respectively. Alongside them are the Social Participation Group, the Environmental Protection Group and the Operation & Governance Group. Their members are, the heads of EPC Operations (EPCO), Hydrocarbon Business Operations (HBO), and Infrastructure, Environment & Power Business Operations (IEPBO), leaders of the three group, head of Brand Management Department, and other personnel designated by the President. CTCI CSR Task Force holds meetings either routinely or occasionally, and it reports to the
None.
52
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
(4)Does the Company make a reasonable remuneration policy; combine performance assessment of employees with CSR policy; and regulate an explicit and effective system of reward and punishment?
Corporate Governance Committee, a functional committee under the Board of Directors at the end of every year. The scheduled meeting is held every October, and the Coordinator is responsible for organizing the meeting. The annual budget of the subsequent year is proposed, and agendas are set and discussed. Other meetings are held as the Chief Officer sees fit. The members of the Committee and department supervisors that are relevant to the topics for discussion should either be present or appoint representatives to attend the meetings. The primary roles of the CSR Task Force are as follows:
Establish CSR Policy.
Review operations of the CSR Management System.
Review CSR targets, strategies, and action plans of the Company, and guide and track the developments, performances, and improvements of each action plan.
Supervise communication plans with each stakeholder (e.g. the writing of the CSR Report), and invite stakeholders to join in discussions with committee members or host stakeholder meetings as the need arises.
Supervise that the writing and compilation of the CSR Report is accomplished within the set timeframe.
(4) CTCI values employee welfare and care. Apart from offering a base salary higher than the minimum local wage, CTCI also appeals in internal and external fairness as well as individual fairness. In terms of external fairness, we have external professionals surveying the salary and benefit survey with fully understanding of the market rate while analyzing the employment environment as the foundation of our salary design. For internal fairness, the salary structure is designed based on the evaluation of skills and duties of employees so as to insure that the salary standard is appropriate and irrespective of gender difference. To encourage better performance of colleagues, CTCI also combines one's payment with his/her performance, especially for variable bonus, to realize individual fairness in salary with one's organizational
53
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
performance, departmental performance, and personal performance. Additionally, salary review is performed according to the market salary survey and personal performance ever year. Aside from specifying in Topic 1, Performance, Rewards and Discipline of Chapter 6 Work Rule in the Employees Manual, we also speculated CTCI Employees Reward and Punishment Regulations accordingly, so as to boost morale and strengthen disciplines with fairness, justice, openness, and rationality.
2. Sustainable Environment Development (1) Does the Company dedicate
itself to improve the efficiency of all kinds of resources and use the renewable materials that impact on the environment less?
(2) Does the Company set up an
environmental management system that suits the nature of industry?
(3) Does the Company pay
attention to the impact of
V (1) As a member of the society, CTCI shall spare no pain to save energy and reduce carbon
emissions. In terms of engineering expertise, CTCI has been making continuous innovation of engineering technologies to reduce energy consumption and reduce pollution. For routine affairs, CTCI urges employees to save energy and resources and emphasize the importance of saving paper, electricity, water and petroleum consumption.
(2) CTCI has long been dedicating to the R&D of green engineering technologies. The aims are to
provide owners with economical, feasible environmental and energy-saving solutions, to reduce pollution, to lower impacts to human health and environment risk, and to bring innovation and enhance the industry’s green competitiveness based on the core technology of CTCI, with a full life cycle perspective starting from engineering design, procurement, construction, commissioning, operation and decommissioning. Hence, we can attain a multi-win scenario among CTCI, cooperative partners, stakeholders and social environment.
(3) CTCI dedicates to working on the greenhouse gas (GHG) inventory, controlling GHG emissions,
submitting solutions to GHG reductions and implementing projects of GHG reductions in respect
None.
54
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
climate change on its operations; carry out the investigation of greenhouse gas inventory; and make strategies of energy efficiency, carbon and greenhouse gas reduction for the Company?
of GHG emissions management policies. To show the world its resolution to mitigate climate change, CTCI absorb the issues regarding greenhouse gases and climate change into the primary missions of CSR and the environmental protection group subordinate to the Board of Directors. Not only yearly routineness of GHG inventory but also promotion of energy conservation and carbon reduction projects, assessment of climate change risks and proposals of emergent strategies are the main accountability and responsibility of environmental protection task group. The environmental protection task group reports the management benefits of GHG and the results of climate change solutions to the general manager via routine work conferences. Due to the fact that supervision is exerted by the Corporate Governance Committee, an affiliation to the Board of Directors, strategic suggestions regarding climate change shall be reported to the Board of Directors regularly as the basis of long-term strategies. The Global Risks Reports published by World Economic Forum from 2017 to 2019 indicate that extreme weather events, natural disasters and failures of climate change mitigation are the top three risks for three consecutive years. With serious global climate change and the increase in energy consumption, enterprise transformation and low carbon business models became the key elements to improve competitiveness of all activities. In order to cope proactively with market needs, CTCI adopted the risk analysis of TCFD (Task Force on Climate related Financial Disclosure) to discover the risks and opportunities of business potentials in the future. In this way, we can evaluate the potential impact on finances and propose relevant methods of management. It has been more than five years that the headquarters building of CTCI conducted the ISO 14064-1 GHG Emissions Inventories and Verification each year. In 2018, the headquarters building's emissions of CO2e in the Scope 1 and Scope 2 are 126.2 and 2,909.7 tons respectively. After it has been introduced and implemented by the headquarters building since 2012 until 2015, Tunghsiao Power Plant was changed into a demonstration site in 2016, which was later
55
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
absorbed into external audit. In 2017, CTCI absorbed all domestic sites into the scope of inventory, which became an important milestone on the road towards the green engineering and management. According to the inventory results in 2018, all the domestic sites' emissions of CO2e in the Scope 1 and Scope 2 are 1437.9 and 2188.8 tons respectively. All the overseas sites' emissions of CO2e in the Scope 1 and Scope 2 are 5588.2 and 2926.3 tons respectively. Our main objective of GHG reductions each year is: the average emissions of greenhouse gases shall not surpass those of former two years. Greenhouse gas management policy: Commitment to greenhouse gas emission inventory Tracking actual greenhouse gas emissions by the Company Proposing viable plans for greenhouse gas reduction Implementing greenhouse gas reduction plans Sustainable development Energy saving measures and benefits: The headquarters building of CTCI started the green building project in mid-2017. In March 2018, the LED lamp replacement in the whole building was completed, and 12,371 T5 lamps were replaced. In July 2018, the Energy Management System was put into operation and 199 smart meters were installed to intelligently control the electricity consumption data related to air conditioning, lighting, sockets, and elevators on all floors of the building. After a year of hard work, in August 2018, the Company obtained the EEWH bronze label for improvement to the existing building, and continued to obtain the gold label from certification by the most widely used and most sustainable LEED (Leadership in Energy and Environmental Design) evaluation system developed by the U.S. Green Building Council (USGBC) in November of the same year. In our headquarters building, we regularly remind our employees to make energy saving a habit, to establish a corporate culture of energy conservation. Energy saving and carbon reduction are
56
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
a focus in our routine operations at the headquarters building. Nightly patrols are carried out to ensure no energy waste takes place, and energy consumption is well-documented. In terms of professional engineering, CTCI will continue to invest more new technologies for energy-saving and carbon reduction technology in engineering, and constantly pursue the research and development and application of new technologies to reduce energy consumption and prevent pollution during construction, so that new technologies can exert an influence on the construction sites of the engineering projects. It is recommended that construction contractors prioritize the use of energy-saving and low-pollution construction equipment and minimize the idle time of relevant equipment.
3. Social Welfare Protection (1) Does the Company formulate
management policies and procedures in accordance with relevant regulations as well as International Covenant on Human Rights?
(2) Does the Company create a
mechanism and channel for employees’ complaint and settle it properly?
V (1) In compliance with the United Nations Global Compact regarding regulations over human
rights, labor standards, environment and anti-corruption, in addition to ensuring all daily operations conforming to corporate ethics, CTCI develops basic conduct standards of compliance for all board directors, managers, employees and procurement staff. This set of standards Corporate Governance Norms, Business Ethical Behavior Norms for Board Members and Managers, Code of Employee Ethics and Behavior, and Work Ethical Behavior Rules for Procurement Staff.
(2) The Company has stipulated “Guidelines for Ethical Conduct“ and specifically defined the
guidelines and penalties in “Prohibition of Bribes Offering and Acceptance, and Blackmailing”, “Preventing Conflicts of Interest”, and “Protection of Business Confidentiality and Intellectual Property Rights”. The Company established an investigation team and complaint hotline for corruption and briberies, which accept reporting from persons inside and outside of the organization at all time. The reporting and consulting hotline is (02-2835-5936) or the email address: [email protected]. The department in charge of the complaints is the Human
None.
57
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
(3) Does the Company provide
employees with a safe and healthy working environment as well as the regular tutorials regarding the knowledge of safety and health?
(4) Does the Company create a
mechanism of regular communication for employees and notify them of any significant operational changes that might impact on them?
Resource Department. We encourage employees to notify any infringement of law, regulation or staff regulations through named reporting. The Company should by any means hold confidentiality of the identity of the person submitting this report to avoid threats. In cases that one is suspicious of corrupt practices but could not be verified of the action violating the law, the consulting hotline is available for immediate report. Colleagues can even write e-mails to the feedback box, which will be directly responded by the manager of Human Resource Department or related departments for further handling.
(3) CTCI’s HSE Policy Statement stresses “Safety First” and works on aspects including “Promote
Personal Health and Wellbeing”, “Protect the Environment and Pursue Sustainability”, “Implement Effective Risk Management”, “Comply with Legal and Contractual Requirements”, “Encourage Training and Engagement”, and “Continuously Improve Our HSE Management System” to provide employees with a safe work environment. CTCI established a health center in 2013. We advocate health promotion through inviting physicians or nutritionists as well as other experts to hold health promotion seminars and provide physician on-site services every month. The topics of health promotion seminars feature mental, physical and spiritual wellbeing. Moreover, to create a friendly workplace, we set up a breastfeeding room for female colleagues who become new moms.
(4) CTCI values the opportunities to carry out bidirectional communication with our employees.
That’s why we have been working to provide open and transparent channels for communication because only unimpeded communication between employees and the Company will create a workplace that encourage active employee participation. Our employees are provided with multiple mechanisms to make their workplace perfect, including labor-management meetings, internal service satisfaction survey, new employee lunch talks,
58
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
(5) Does the Company draw up
workable plans of vocational skills development for employees?
(6) Does the Company formulate
policies and a complaint procedure regarding consumer
talks with senior executives, and the organization climate survey. Through these channels, employees are invited to report all kinds of issues in workplace and have these issues resolved. In 2018, in order to gain a deeper understanding of the voices inside the hearts of our colleagues and promote two-way communication and interaction, a special meeting with the President was held, with more than 50 senior engineers participated in this event. After the meeting, the recommendations of the colleagues were comprehensively planned. The short-term and long-term plans would be formulated for effective communication. In the short term, different communication resources and assistance would be provided for each stage. The long-term plan would be to establish regular meetings for effective communication within the business units and implementation of the Company's policies and various institutions.
(5) To provoke the passion for work in every employee and in consideration of the need for the
organization to satisfy employees with self-realization, CTCI started promoting Individual Development Plant (IDP) for all employees since 2014. Each employee may develop different learning development plans according to the corporate development, competency required for the function and individual development intent, which urges the employees to increase their own KSA (knowledge, skill and attitude) while employees can develop training, experience, disciplines, and refinement based on their own strength and weakness through communication with the coach. Consequently the overall competitiveness in employees is enhanced to reach win-win situation between the employees and the Company, which forms an unconstrained work environment with infinite development opportunities.
(6) The Company conducts customer satisfaction survey on the projects in progress and the
projects during its closing to warrantee period annually. The Brand Management Department will send out the questionnaire to customers. Then, the “Customers Services Feedback Group”
59
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
rights protection based on the workflow of R&D, procurement, production, operation and service?
(7) Does the Company abide by
relevant regulations and international standards in the marketing and labeling of their products and services?
(8) Does the Company check if the
suppliers had any record of affecting environment and society in the past before doing business with them?
(9) Do the contracts signed
between the Company and suppliers contain the terms that the contract can be terminated or canceled at any time if the supplier violate
will make analysis on the survey results and seek effective solutions for further improvement by respective departments following acquiring approval by the President. This has ensured CTCI's quality standard can win customers' trust and meet their expectations.
(7) A commitment to quality is the key that enables CTCI to operate sustainably, it is also a promise that CTCI has kept to its clients. To do so, we established Quality Management System based on ISO 9001:2015 to make sure all vital stages of project management, engineering, procurement, construction, fabrication, commissioning and maintenance are in compliance with engineering and regulation requirements. We had been certified since 1996.
(8) All vendors have to sign "Contractor’s Commitments on Corporate Sustainable Management",
promising to be in compliance with the sustainable operation practice. For new vendors requested by the management to undergo plant visiting survey, "Self-Assessment Sheet of Contractor's Corporate Sustainable Management" will be distributed and filled in beforehand for evaluations of their social and environmental performances. As of 2016, vendors listed in Tier 1 will have to fill in "Self-Assessment Sheet of Contractor's Corporate Sustainable Management" to evaluate the possible environmental and social impacts.
(9) Since 2011, we began to incorporate "Corporate Social Responsibilities" with vendor
evaluations; while beginning with 2014, we add more items including "Environmental Management", "Labor Conditions", "Human Rights" and "Social Impact" to the list to ensure the vendor is qualified with ISO14001/OHSAS 18001certification, and comply with requirements for quality, price, delivery period, safety, health, environmental management, labor conditions, health management, and employee welfare. Disqualified vendors will be
60
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
against its policy of CSR and has significant impact on environment and society?
suspended for cooperation following such stringent review process.
4. Information Disclosure Enhancement (1) Does the Company disclose any
relevant and reliable information regarding CSR on its official website and Market Observatory Post System?
V (1) (a) Being one of the leading transparent companies, we participated in the “Information Disclosure
and Transparency Ranking System” launched by TWSE and Taipei Exchange since 2004, and were ranked as a listed company with rather transparent information disclosure. From 2009, CTCI has been ranked as an A++ company for 6 consecutive years, the top ranking a company can ever receive. Since the year 2014, TWSE and Taipei Exchange (formerly Gre Tai Securities Market) has been holding “Corporate Governance Evaluation”, and CTCI has been upholding the highly transparent principle for corporate governance and been listed as Top 5% for 3 consecutive years. The fact proved our rigor in corporate governance and effort to maintain information transparency.
(b) CTCI has been providing correct, open and transparent important operational information for
investors to make the correct choice. We also assign a spokesperson, organize conference calls, publish periodic reports, and make important announcements over the CTCI website to make active communication with investors. In addition to the corporate website, we also disclose relevant information over the Market Information Post System of the Taiwan Stock Exchange. Since March 2010, the English version of important announcements has been made available. We also organize overseas investor conferences for foreign investors or participate in the investor conferences organized by securities companies, in order to improve and increase communication and exchange with overseas corporate investors.
None.
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
(c) In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI CSR Report in 2008 to disclose the information concerning our materiality issues according to the GRI Standard. We also regularly submit the report to a neutral third party for verification. In fact, we are the first private business in Taiwan to have our CSR report verified by a neutral third party. For more details, Please refer to the item 7 “If the corporate social responsibility reports have received assurance from external institutions, they should state so below“ of this table.
5. If the Company has established corporate social responsibility principles based on “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies,” please describe any discrepancy between the principles and their implementation: verified by a third party, CTCI CSR Report is in compliance with the three major principles of AA1000 Assurance Standard, which are Inclusivity, Materiality and Responsiveness.
6. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices: (1) CSR Policy Statement:
To fulfill corporate social responsibilities with due faith has been a target of operation for our company; aside from pursuing the largest profits for our shareholders, we aim to attend at the same time the rights of the stakeholders, conform to the ethical codes considered the social norms, and promote energy saving and carbon reduction to slow the pace of climate change. It is hoped that with such actions we can construct a society of justice and fairness jointly with the stakeholders while creating a sustainable living environment. Thereby, the implementation directives of CSR promoted by CTCI Corporation include the three aspects, "Operation and Governance," "Environmental Protection," and "Social Participation," committing to developing a robust organizational structure, realizing the vision of green engineering with due diligence, and performing CSR with due faith.
Developing a Robust Organizational Structure Steady growth and sustainable development are the basic requirements for performing CSR. Without them, no enterprise is capable of promoting social welfare and environmental protection. For this reason, besides legal compliance, we will continue to develop an effective internal control system, maintain information security, carry out risk management, ensure accessibility and transparency in disclosure, uphold business self-discipline, and optimize organizational structure, while at the same time provide employees with steady career development, shareholders with stable long-term profits, and clients with satisfactory project service quality.
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Performing CSR with Due Faith "Cultivating engineering talent for the enhancement of engineering service quality" has been the corporate mission of CTCI since its inception, and it is the most straightforward method to requite society. The Company has been in full compliance with the labor laws, dedicated to protecting and respecting the principles of globally recognized basic labor rights, ensured such rights applied for all without discrimination, and provide diversified communication channels as well as a healthy and safe workplace for employees. Also, we maintain good neighbor relationship with citizens in local communities and promote social welfare in the best way possible.
Realizing the Vision of Green Engineering with Due Diligence CTCI has long been emphasizing the technological development for green engineering, and dedicating efforts to minimize pollution, and lower the impacts made to human health and the environment during the whole life cycle of project executions, including engineering (E), procurement (P), construction (C), commissioning (K), operation and maintenance after plant turnover to the owners. All the procedures are taken with approaches that are economical and viable with an aim to bring innovation and enhance the green competitiveness of the industry to create a multi-win scenario among CTCI, cooperative partners, stakeholders, and the social environments, and to contribute its share to the creation of a sustainable eco environment.
(2) Methods of communication, frequency, and key responses:
Stakeholders Communication method
and frequency Major issues Reply of CTCI Communication effectiveness
Employees Labor-management meeting, senior supervisors' seminar, Occupational Safety and Health Committee/quarterly;
Safe and healthy work environment
Recruitment and retention
Career development and educational training
Set target values for various work safety indicators, and make continuous improvement
Utilize the mentoring system/OJT and the annual training program,
4 labor-management meetings were held in 2018
6 senior executives symposiums
4 meetings of the Occupational Safety and Health Committee
63
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Employees' suggestion platform, hotline, e-mail box, Employee Welfare Committee/any time
Labor rights and human rights
so that the professional ability
attainment rate can reach ≧
92% and the completion rate the annual training program can
reach ≧ 95%
Formulate and promulgate the human rights policy
Provide Employee Assistance Programs (EAPs) to achieve balance of body and mind and facilitate a positive cycle of health at the workplace
Shareholders/investors Shareholders' meeting/annually;Investor conference/semi-annually; Overseas investor conference, investor roadshow/occasionally Investor visit/occasionally
Profitability
Business outlook
Horizontal competition
Operational risk
Sustainable development
EPS is NT$2.40 in 2018
Governments continues to promote infrastructure, bringing an optimistic business outlook to CTCI
CTCI is the largest turnkey engineering company in Taiwan and ranks among Engineering News-Record's (ENR) top 100 engineering companies in the world, and therefore the Company has considerable competitive advantages
1 shareholder meeting was held in 2018
2 investor conference of the Group were held in 2018
CTCI participated in 7 overseas investor conference in 2018
In 2010, a total of 99 foreign judicial persons and 40 domestic judicial persons visited the CTCI
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Operational risks are diversified through diversification of business and globalization of operational landscape
CTCI have been included in the DJSI for four consecutive years
Community Hosting a large cultural event/annually Charity sale event/every other week Public welfare activities/occasionally
Social involvement The road surface repair work of the parking lot of the headquarters building was completed to reduce noise and maintain community peace
Connect with the international community and head towards sustainable development
Improve education standards
Provide care and assistance for the vulnerable and promote social harmony
Promote industrial exchanges
Improve the level of the engineering industry chain
In 2018, the CTCI Education Foundation handled 17 projects and 92 events with 8,087 participants and 102 participating units
CTCI offered 2,813 hours of volunteer service in 2018
CTCI and its employees have participated in a total of 49 academic/professional associations as a group and individual members
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Suppliers/downstream contractors
Visit vendors or factories/occasionally
Supply chain sustainability management
Safe and healthy working environment
Pollution prevention
In the future, before an order is placed, we will request a vendor to sign “Vendor’s Commitments on Corporate Sustainable Management”
After convening its supplier meeting, CTCI takes advices for improvement from vendors in terms of topics covered and the way the meeting is conducted, and make adjustments for meeting held the next year accordingly
As of 2018, 2,291 suppliers have signed Vendor's Commitment on Corporate Sustainable Management with CTCI
In 2018, CTCI developed six domestic suppliers to become selected suppliers for overseas projects
CTCI organized suppliers' conventions, where we shared CSR execution results with our vendors, and at the same time requested our suppliers to comply with CTCI's sustainable supply chain policy
Customers Conduct the customer satisfaction survey/annually
Set the annual quality objectives of the project, conduct measurement, and hold a review meeting/quarterly
Customer service and management
Safe and healthy working environment
Supply chain sustainability management
Implement CRM systems, build customer relationships, and provide good services.
Develop corrective actions and track improvements in implementation outcomes for projects that are not up to standard and deviate from the target.
Score of 2018 Customer Satisfaction Survey: 8.2 (out of 10)
3 reports on project quality measurement results and 1 annual company-level quality management review meeting were held to review the quality objectives of 25 projects as implemented
66
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Media Important information press release/any time
Information disclosure
Brand image
CTCI will issue reports on CTCI and sustainability issues through various media platforms
On the social media, CTCI will publicize the activities of CTCI and sustainability issues in various languages to increase the browsing rate of its official websites
CTCI appropriately responds to the media's questions and concerns about CTCI to establish the most reliable brand image. In 2018, there were 150 media reports (exposure)
CTCI Education Foundation has totally 351 media reports (exposure) published.
(3)Corporate social responsibility implementation planning and effectiveness
CTCI will continue to invest in social charity. To review the benefits from the investment, we adopt the London Benchmark Group (LBG) as our evaluation mechanism. Each category of investment is divided by activity goals and cost. We evaluate the positive benefits generated from the investment, measure the impact of social participation to assist with the corporation in reasonable resource distribution, and review the benefits of the resource input, so as to effectively integrate financial and non-financial information, while at the same time meet the expectation of multiple stakeholders and create shared values.
Item Cost (TWD) Proportion (%) Item Amount (TWD) Proportion (%)
Charity activity 5,279,842 19% Cash donation 24,337,873 89.01%
Community investment 12,524,617 46% Goods donation 20,500 0.07%
Commercial activities 9,539,408 35% Volunteering 2,953,650 10.08%
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Participation in Nonprofit Organizations Since its establishment, CTCI has hoped to become the leader of the industry. It hopes to contribute its engineering knowledge and serve the public construction projects through its world-class professional core competence, and actively communicate with other players in the industry by participating in the academic/professional associations. CTCI has served as the important role of director and supervisor in various major associations. CTCI is committed to promoting the development of conferences and improving the level of the industry chain. CTCI is playing a leading role in the engineering community, and encouraging employees to improve their skills by participating in professional groups. In 2018, CTCI and its employees participated in a total of 49 academic/professional associations as a group and individual members. In order to encourage colleagues to participate in industry exchanges, there is also a mechanism to subsidize their participation. In 2018, the group subsidized 568 people to participate in such events as individuals, and the total amount of subsidies was NT$400,186. The total cost of its devotion to the academic/professional associations for the whole year is NT$2,480,686.
Identity of participant
Non-profit organizations in which CTCI participated in 2018
Director
Chinese Institute of Engineers (Main Chapter), Chinese Institute of Engineers (Kaohsiung Chapter), Chinese Petroleum Institute, Taiwan Institute of Chemical Engineers, Sino-Arabian Cultural& Economic Association, Middle East Business Association, Chinese Arbitration Association, Chung-Hwa Railway Industry Development Association, Intelligent Transportation Society of Taiwan, Taiwan Safety Council, Cross-Strait CEO Summit, Taiwan Carbon Capture Storage and Utilization Association, Board of Directors, Taiwan Institute for Sustainable Energy, Taiwan Welding Society, The Chinese Association of Engineering Consultants, The Taipei Federation of Engineering Consultants, Taiwan Electric Power Association, Sino-Indonesia Cultural and Economic Association, Chinese Society of Mechanical Engineers, Chinese Society of Structural Engineering, Pressure Vessel Association, Nuclear Science & Technology Association, Taiwan Energy Service Association, Taiwan Road Association, Chinese Environmental, Safety and Health Association
Supervisor The Chinese Association of Engineering Consultants, The Taipei Federation of Engineering Consultants, Taiwan Association of Energy Companies, Taiwan Institute of Steel Construction, Taiwan Offshore Wind Turbine Foundation and Marine Engineering Association
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Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Talent fostering an industry-academia cooperation CTCI not only provides its employees with a variety of educational training resources to enhance their professional competency, but also capitalizes the knowledge power of its senior engineers and senior managers, who deliver lectures in engineering departments of universities, sharing practical experience with the academia. Moreover, it offers students of engineering-associated departments and those interested in engineering opportunities with internship, so as to minimize the gap between the industry and the academia. Since 2011, CTCI has organized scholarship programs for outstanding university students. In 2016, it established the CTCI Education Foundation to lay the groundwork for education to nurture and reward the excellent youth. In addition to traditional methods of evaluation on academic performance and teachers' endorsement, we have also formulated the "project research related to CTCI engineering practices". In this program, with industry-academia interaction through academic engineering project research or school-based R&D project commissioned by CTCI, the students will learn the industry practices at an early stage. Through the corporate power, we hope we can play a role in nurturing domestic engineering talents, supporting excellent students to fulfill their potential in their respective field, and make contributions to the society and the country. In 2018, we also ran six industry-academia cooperation projects with ten universities, spending NTD59.86 million. Through these projects, with research and innovation, we offer students opportunities to study and conduct research.
(4) Education Foundation: CTCI Education Foundation was established in the end of 2016. The vision of the Foundation is "to cooperate with 2030 Sustainable Development Goals (SDGs) of United Nations by promoting construction of sustainable engineering and helping the country walk toward sustainable development" and to dedicate itself to three core values. Currently, five main committees subordinate to the Foundation (including University Cooperation Committee, Sustainable Engineering Committee, Cross-Strait Exchange Committee, International Exchange Committee and Social Care Committee) cooperate with Taiwan Sustainable Engineering Union in collaboration with the operational directions of the Foundation. In addition, the Secretariat Office was founded with the missions to implement relevant projects and integrate all resources; in this way, the level of Taiwanese engineering industry and engineering industry chains can be elevated, heading toward the new world of sustainable development. The objectives of CTCI Education Foundation are to improve the engineering education and technologies, cultivate outstanding engineering talents, reward and encourage academic research, build up a lifelong learning environment and improve national competitiveness. Since its establishment, it has handled 12 projects and 92 activities, 24 sponsored events with in total 8,087 participants and 102 participating units from the industry, government agencies and academies. Relevant results and impacts include:
69
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
(1) Cultivate sustainable talents and expand their global horizons: Held the "Youth Sustainability Leadership Camp", involving 36 participants from 20 schools (including 1 overseas university). Hosted 4 sessions of the "Corporate Social Responsibility Pilot Project" twice, involving 24 teams and 96 participants from 14 schools in 26 countries
(including the 15 undergraduate and graduate students that did not enter the final selection stage in the 2nd "Corporate Social Responsibility Pilot Project" but participate in the workshop activities; the total number of participants is 111 students), 237 people, 11 units and enterprises. Held 10 sessions of the "Enterprise Elite Perseverance and Training Course" across 5 counties/cities in 5 universities, with approximately 641
participants, hoping that they could practice the sustainable development goals and learn to judge a company’s ability to maintain its performance.
(2) Deepen sustainable competence and promote international exchange: Promoted the "120h - Taiwan in My Eyes" project twice in 11 sessions. There were 24 teams and 96 participants from 17 schools and 31 countries,
involving 902 people, 8 units and enterprises in total. Co-organized the "CSR University Lecture Hall" with the CCS, where a total of 23 seminars on sustainable development issues were held, with 1,657
undergraduate and graduate students as participants, to help integration of industry and education, and spread the concept of sustainability. Held the "International Seminar on the Circular Economy Integration and Innovation Program" in 1 session and invited international scholars to
publish relevant research papers. Domestic and foreign experts and scholars from various fields attended the conference to discuss the international trend of circular economy application. About 140 participants joined the seminar.
The Global Corporate Sustainability Forum(GCSF) was held in 1 session with approximately 2,100 participants. (3) Support sustainable development of universities and industry-university cooperation and exchanges:
The "2018 University Professors Corporate Sustainability Visiting Group" held in 2 sessions. 23 professors from 19 departments of 14 universities participated in this visit tour. CTCI has continued to construct a sustainable education platform and engaged in industry-university-institute cooperation and exchange.
"University Sustainable Development Goals and Industry Exchange Seminar - National Taiwan Normal University" was held in 1 session, with about 54 participants, bringing together university professors from 18 schools and 10 supervisors from companies and research institutes to analyze the business model of cooperation between the academic community and the business community and work together to promote sustainable development in Taiwan.
70
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
The "2018 Workshop of Communication on Creating a Sustainable Future Together - National University of Kaohsiung" was held with about 67 participants to encourage university teachers to combine their professions with SDGs and university organizations to integrate SDGs into their school operations development goals. The workshop brought together 28 faculty members, as well as supervisors from 18 companies, 6 government units, and 6 NGOs, so that they could conduct research and development and create a sustainable future together.
Initiated the scholarship programs to provide four scholarships, including the CTCI International Exchange Scholarship, the CTCI Youth Sustainable Leadership Scholarship, the CTCI CSR Scholarship, and the CTCI CSR Academic Scholarship. This year, 140 scholars will be awarded scholarships in an amount of NT$3,486,000. CTCI has abundant resources to take root in long-term education for the society, cultivate and reward outstanding professional talents, promote enterprises to fulfill their corporate social responsibilities, and exert social influence by implementing deep-rooted and sustainable education to shape the most reliable brand image.
Sponsored the activities of 18 academic/professional associations to link the influence of engineering companies, scholars and experts, to demonstrate the value chain thinking and sustainable engineering concepts, and to further expand the core value of industrial symbiosis network for environment protection in the international market, where CTCI has handled a total of 21 such cases.
(4) Promote sustainable development and implement local practice: Sponsored activities in a total of 12 sessions to promote social integration, including donations of environmental education books for care of
students in rural areas to benefit 14 primary school students and 1,792 people; for 3 consecutive years, CTCI have co-organized the "Banquet 30 Year-End Party" campaign with the Zenan Homeless Social Welfare Foundation, the Genesis Social Welfare Foundation and the Huashan Social Welfare Foundation and continued to encourage colleagues to actually engage in volunteer services. This year, about 80 people responded to such activities in 1 session.
Sponsored its employees as volunteers in beach cleaning activities. This year, one such event was held. A total of 50 colleagues participated in this event to jointly respond to the UN's marine sustainable goals.
Sponsored the CTCI concert for Shilin Cultural Festival in Zhishan Cultural and Ecological Garden, with more than 200 people and 8 enterprises as the participants.
Conducted an activity on the project of "Taiwan Electricity Use and Energy Transformation Poll" for 1 time, where an effective sample of 1,077 public opinion surveys on Taiwan's electricity use were obtained to study on the use of electricity and awareness of energy transition, providing the industry, government and academy with a complete and neutral analysis so that they can develop relevant policies and strategies.
71
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Invited 18 top experts and scholars in the field of sustainable development to write and publish a book on sustainable development goals. CTCI published Volume 2: "The United Nations’ Sustainable Development Goals - Sustainable Industry Concept and Practice".
7. If the corporate social responsibility reports have received assurance from external institutions, they should state so below: In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI Corporate Sustainability Report in 2008 to disclose the information concerning our materiality issues and according to the GRI standards. We also regularly submit the report to a neutral third party for verification. In fact, we are the first private business in Taiwan to have our CSR report pass verification by an external neutral third party. In the G4.0 Guidelines proclaimed in 2014, the GRI advised organizations that they should disclose information more comprehensively and more transparently. Upholding the attitude of being responsible and the spirit of information accessibility and transparency, we disclosed corporate information using the G4.0 Guidelines. Also, we passed the AA1000:2008 High Level accreditation from external verification unit and the GRI G4.0 Guidelines. All these point to one thing: We were a pioneer reporter using the GRI G4.0 Guidelines. In addition, to ensure that stakeholders at home and abroad can better understand the actual CSR activities at CTCI and to connect with the world, contents of this report also correspond to the Ten Principles of the UN Global Compact, the Seven Core Subjects in ISO2600:2010, and the Determination Items of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies domestically. All these show that the CSR activities and information disclosed in this report are complete and transparent. With the concerted effort of Company’s managers and all employees, we won numerous awards and credits in 2018 to prove our achievements in promoting CSR.
Awards Description
Emerging Markets Index Membership for Dow Jones Sustainability Indices (DJSI)
CTCI has been continuously selected for Emerging Markets Index Membership for DJSI with excellent performance and is a pioneer enterprise in the field of Engineering & Construction Industry in Taiwan.
Recognized by the Taiwan Institute for Sustainable Energy (TAISE) with the Honor of Taiwan Corporate Sustainability Awards (TCSA)
CTCI is recognized by TAISE and honored with “The Most Prestigious Sustainability Awards - Top Ten Domestic Corporate”, ”Sustainable Corporate Award”, Top 50 Platinum Report Award, "English Reportage Award" , "Supply Chain Management Award", “Growth through Innovation Awards,” “Transparency and Integrity Awards” as well as “Social Inclusion Award”.
72
Evaluation Item
Implementation Status Deviations from
“Corporate Governance Best-Practice
Principles for
TWSE/GTSM Listed
Companies” and reasons
Yes No Summary Statement
Excellence in Corporate Social Responsibility Award by CommonWealth Magazine
CTCI’s accomplishment of CSR activities was recognized by the CommonWealth Magazine, listed 24th among Excellence in Corporate Social Responsibility Award this year for the category of large enterprises (with annual turnover exceeding NT$10 billion). With good performance in the aspects of corporate governance, corporate commitment, social participation, and environmental protection, CTCI was able to stand out from various large enterprises and well-recognized with its achievement in corporate sustainability.
Listed among the Top 2000 Enterprises by CommonWealth Magazine and retains Top 1 in the contractor sector
The ranking of Taiwan's Top 2000 Enterprises was based on the consolidated revenues and profits of the companies for the previous year, a result of the survey conducted by CommonWealth Magazine. In terms of the overall ranking in the Top 650 Service Enterprises, CTCI Corporation ranked as the 22nd this year, retained Top 1 in the contractor sector for years in a row.
ISO Plus Award for Social Responsibility and Sustainable Business Performance
CTCI is honored with ISO Plus Award for Social Responsibility and Sustainable Business Performance by SGS.
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3.4.6 The Ethical Corporate Management
Evaluation Item
Implementation Status Deviations from “Ethical
Corporate Management Best Practice Principles for TWSE/GTSM-
Listed Companies” and reasons
Yes No Summary Statement
1. Establishment of ethical corporate management policies and programs
(1) Does the Company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies?
(2) Does the Company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies?
(3) Does the Company establish appropriate precautions against high-potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies?
V The Company established “Corporate Governance Principles”, “Ethical Corporate Management Principles “, “Codes of Ethical Conduct”, and “Procurement Personnel Code of Conduct”. Directors, and managers should obey the “Codes of Ethical Conduct”, when they execute their function. Meanwhile, all employees are requested to follow the laws and ethics standard and behavior principles clearly defined in “Codes of Ethical Conduct”.
None.
2. Fulfill operations integrity policy (1) Does the Company evaluate business partners’
ethical records and include ethics-related clauses in business contracts?
(2) Does the Company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity?
V a. The Company concluded the commerce contracts based on mutual trust and good faith management principles.
b. The Company assigned Human Resources Department to be in charge of corporate integrity related matter and report to the board meeting at least once a year.
c. It is forbidden to have preferential affairs between employee and party. All employees can’t pay or ask for present, entertainment, commission or bribe
None.
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Evaluation Item
Implementation Status Deviations from “Ethical
Corporate Management Best Practice Principles for TWSE/GTSM-
Listed Companies” and reasons
Yes No Summary Statement
(3) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?
(4) Has the Company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited by either internal auditors or CPAs on a regular basis?
(5) Does the Company regularly hold internal and external educational trainings on operational integrity?
for the advantage of themselves or third party, when they conduct their work.
d. The Company set up effective and faultless accounting system and internal control program to manage out of ordinary affairs. The Company also set up a specialized independent audit unit to execute yearly auditing plans and report the audit results to supervisors every month. The audit unit also has to attend the Audit Committee and Board of Directors to report the faults and extraordinary affairs in their internal control inspection, and push related units to take modified measures and trace the results quarterly until they are fully- modified.
e. The principles of the Company are professionalism, integrity, teamwork and innovation. We delivered the related training coursed to train our employees and posted the poster at office and site to remind our employees as well.
3. Operation of the integrity channel (1) Does the Company establish both a
reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up?
(2) Does the Company establish standard operating procedures for confidential reporting on investigating accusation cases?
(3) Does the Company provide proper whistleblower protection?
V a. The Company has the Accusation management regulation with a special telephone line and an investigation team to deal with the graft and bribe events.
b. The Company has the regulation of Reward and Punishment to deal with the above cases.
None.
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Evaluation Item
Implementation Status Deviations from “Ethical
Corporate Management Best Practice Principles for TWSE/GTSM-
Listed Companies” and reasons
Yes No Summary Statement
4. Strengthening information disclosure (1) Does the Company disclose its ethical corporate
management policies and the results of its implementation on the Company’s website and MOPS?
V The Company has disclosed the “Ethical Corporate Management Best Practice Principles” on its website and MOPS.
None.
5. If the Company has established its own ethical corporate principles based on “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, please describe the difference between operation practice and the ethical corporate principles: According to the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, the Company has obtained the approval of the “Ethical Corporate Management Best Practice Principles” (the “Principle”) in the 5th meeting of the 13th Term Board of Directors in Dec. 17, 2014. The all employees, officers and board members should comply with the Principle. Furthermore, the Principle was amended and renamed to the “Ethical Corporate Management Principles” for the expansion of applicable scope to whole CTCI Group.
6. Other important information to facilitate understanding of the Company’s good faith management implementation.(e.g. To announce the Company’s determination to implement good faith management to business vendors, to invite vendors to participate in related education, and to review and revise the Company’s ethical corporate management best practice principles) The Company strictly observed “Company Act”,” Securities and Exchange Act”, related rules for TWSE/GTSM-Listed Companies and other commerce ordinances to implement the good faith management. Review and revise the Company’s internal management principles including “Corporate Governance Principles”,
“Ethical Corporate Management Principles “, “Codes of Ethical Conduct”, and “Procurement Personnel Code of Conduct” based on the development of ethical corporate management principles.
3.4.7 Corporate Governance Guidelines and Regulations
Please refer to the Company’s website at www.ctci.com.
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3.4.8 Other Important Information Regarding Corporate Governance A. Training program for directors
Title Name Study period
Sponsoring Organization Course Training
hours From To
Chairman John T. Yu
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/07/26 2018/07/26 Center for Corporate Sustainability
The thirteenth CEO lecture and special speech 2.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
Vice Chairman
Michael Yang 2018/08/03 2018/08/03
Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry.
3.0
Independent Director and
Managing Director
Jack Huang
2018/11/21 2018/11/21 Taiwan Corporate Governance Association
AI, Internet of Things Development Trends and Operational Strategies and Risks
6.0
2018/05/03 2018/05/03 Taiwan Corporate Governance Association
Exploring the trend of international information exchange from Foreign Account Tax Compliance Act(FATCA) and CRS
3.0
2018/03/06 2018/03/06 Taiwan Corporate Governance Association
Board Performance Evaluation 3.0
Independent Director
Yen-Shiang Shih
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
Independent Director
Frank Fan
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
77
Title Name Study period
Sponsoring Organization Course Training
hours From To
Director Teng-Yaw Yu
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
Director Leon Tzou
2018/12/13 2018/12/13 Securities and Futures Institute
Enterprise Financial Crisis Early Warning and Type Analysis
3.0
2018/11/29 2018/11/29 Securities and Futures Institute
How do Directors and Supervisors supervise managements of company's risk and crisis for strengthening corporate governance?
3.0
Director Quintin Wu
2018/10/16 2018/10/16 Securities and Futures Institute
Enterprise Environmental Protection and Sustainable Development
3.0
2018/03/21 2018/03/21 Securities and Futures Institute
Corporate Social Responsibility keeps pace with time
3.0
Director Bing Shen
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
Director Johnny Shih
2018/12/24 2018/12/24 Taiwan Academy of Banking and Finance
Trade war and its impact between China and USA
3.0
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
Director Yancey Hai
2018/08/03 2018/08/03 Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3.0
2018/03/08 2018/03/08 Taiwan Corporate Governance Association
The impact of tax reform on Delta 3.0
78
Title Name Study period
Sponsoring Organization Course Training
hours From To
Director Wenent Pan
2018/05/14 2018/05/14 Securities and Futures Institute
Money laundering, combatting information security attack and legal compliance
3.0
2018/05/04 2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3.0
Director An-Ping Chang
2018/10/25 2018/10/25 Taiwan Corporate Governance Association
How to detect and prevent corporate fraud and big data analysis application
6.0
2018/08/24 2018/08/24 Taiwan Corporate Governance Association
Analysis and practice about money laundering control and combatting information security attack
3.0
2018/05/28 2018/05/28 Taiwan Corporate Governance Association
Artificial intelligence came and the generation of anti-business(C2B)
3.0
2018/01/25 2018/01/25 Taiwan Institute for Sustainable Energy
International Economic Trends and Financial System in 2018
2.0
B. Internal Material Information Disclosure Procedure
According to the letter of Financial Supervisory Commission dated Mar. 16, 2009 and consulting with “Internal Material Information Disclosure Procedure” which is announced by Taiwan Stock Exchange Corporation (TWSE), the Company has obtained the approval of the “Regulations Governing Prevention of Insider Trading” (the “Regulation”) in the 9th meeting of the 11th Term Board of Directors on Aug. 28, 2009. The Regulation is the code of conduct for Directors, Supervisors, Managerial personnel, and the persons regulated under the Regulation and it includes the scope of Internal Material Information, and the laws, regulations, orders that people forenamed should comply with. The Company has provided the Regulation to all Directors and Supervisors, and also disseminates all employees.
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C. Code of Business Conduct and Ethics for Board of Directors and Managers
CTCI CORPORATION
Code of Business Conduct and Ethics for Board of Directors and Managers Amended on December 19th, 2007
Amended on August 8th, 2014 Amended on June 22nd, 2016
Article 1 (Purpose of and basis for adoption) Pursuant to Article 6 of CTCI’s Corporate Governance Principles, CTCI’s Codes of Ethical Conduct are established to pursue the greatest interest of CTCI and devote in continuous business development. And for stakeholders to understand the content of ethical standards and code of conduct that have been complied by directors, managers and all employees in the execution of their duties. CTCI’s Codes of Ethical Conduct shall be approved by a resolution of Board of Directors.
Article 2 (Scope) The Codes of Ethical Conduct are applicable to CTCI’s subsidiaries, and other institutions or juridical persons which are substantially controlled by CTCI ("business group"). The term “CTCI employees” in this Codes of Ethical Conduct refers to directors, supervisors, and managerial officers (including deputy assistant general managers or their equivalents, chief financial and chief accounting officers), and employees.
Article 3 (Compliance of ethical conduct) CTCI directors and managers shall comply with all regulations and the Codes of Ethical Conduct. They shall set as examples to CTCI employees, promoting the practice of this Codes of Ethical Conduct, pursuing high-level compliance of this Codes. CTCI directors and managers shall fulfill the duty of care of a good custodian, and as their objective the pursuit of CTCI’s overall benefit. Moreover, CTCI employees may not damage CTCI’s rights and interests for the benefit of a specific individual or specific group, and shall treat all shareholders fairly. In the execution of their duties, CTCI employees shall focus on teamwork, abandon sectionalism, diligently comply with the principle of honesty and credibility, be proactive, responsible and prudent.
Article 4 (Fair hiring and anti-discrimination policy) No form of preferential treatment or discrimination should take place in any form based on race, sex, religious beliefs, political party affiliation, sexual orientation, position, nationality, or age.
Article 5 (Safe and healthy working environment) CTCI employees should work to maintain a safe and healthy environment, and there should be no instances of harassment, or violent and threatening behavior.
Article 6 (Prevention of conflicts of interest) When a proposal at a given board of directors meeting concerns the interest of CTCI, the concerned person shall not participate in discussion of or voting on the proposal and shall recuse himself or herself from the discussion or the voting, and may not exercise voting rights as proxy for another director. Where a director or manager, for himself/herself or on behalf of others, enters into a sale/purchase or loan transaction, or conducts any legal act with CTCI, he/she shall disclose detail information of the above situation to the audit committee.
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Article 7 (Prevention of conflicts of interest) If a director engages in conduct involving competition with CTCI, pursuant to the Company Law, he or she shall report the matter in advance to a general meeting of shareholders and obtain approval. If a manager engages in conduct involving competition with CTCI, in accordance with the Company Law, he or she shall report the matter in advance to board of directors and obtain approval.
Article 8 (Minimizing incentives to pursue personal gain) CTCI employees shall faithfully execute their duties in the interests of all shareholders. As regards procurement and supply arrangements related to CTCI’s operations, cooperation arrangements, strategic alliances or other commercial opportunities or opportunities from which profit may be gained with which CTCI employees become familiar as the result of executing their functional duties, CTCI employees shall give priority to providing such opportunities to CTCI or to preserving the interests of the Company, and must not take advantage of such opportunities to seek personal gains for themselves or third parties. CTCI employees shall prevent the following activities: 1.Seeking an opportunity to pursue personal gain by using company property or information or taking
advantage of their positions. 2.Competing with CTCI or damage CTCI’s interest through any methods.
Article 9 (Fair trade) CTCI employees shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices.
Article 10 (Insider trading) Work-related knowledge and any information that could affect the share price of CTCI stock, before it has been disclosed as public information, all information shall be kept confidential pursuant to The Securities and Exchange Act regulations, and shall not to be used to engage in insider trading.
Article 11 (Confidentiality) Company employees’ work-related knowledge, confidential information or customer data is to be carefully managed, and except for that required for company disclosure or publicized as required by law, data should not be leaked to other persons, or used for any non-work related matter. This Article also to employees who have left the Company. CTCI employees are obliged to keep the Company and its clients’ information confidential. Information shall not be disclosed prior to Company’s authorization or as required by law, and leaked to other persons or used for any non-work related matter. The confidential information includes, but is not limited to, any undisclosed information that may be utilized or divulged by competitors and consequently cause damage or loss to the Company or its clients, as well as information regarding the investments, inventions, business secrets, technical data, product design, professional manufacturing knowledge, finance, accounting and intellectual property rights of CTCI.
Article 12 (Safeguarding and proper use of company assets) CTCI employees have the responsibility to safeguard company assets and to ensure that they can be effectively and lawfully used for official business purposes; any theft, negligence in care, or waste of the assets will all directly impact CTCI's profitability.
Article 13(Legal compliance) CTCI employees shall comply all regulations and company’s policies and procedures.
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Article 14 (Encouraging reporting on illegal or unethical activities) CTCI shall raise awareness of ethics internally and encourage employees to report with defined identity or anonymously upon suspicion or discovery of any activity in violation of a law or regulation or the Codes of Ethical Conduct. The Company shall use its best efforts to ensure the safety of informants and protect them from reprisals.
Article 15 (Procedures for penalizing) CTCI employees in violation of the Codes of Ethical Conduct shall be penalized according to the Company’s Rewards and Punishment related policy. Employees who are in significant violation of this Conduct shall be reported to Board of Directors.
Article 16 (Procedures for exemption) In the event that a director or supervisor wishes to be exempted from the applicability of the Codes of Ethical Conduct, he or she should explain said opportunity, information or the specific details of the competition with CTCI to Board of Directors, and the reasons why there is no conflict with CTCI’s interests; this shall then be approved by a resolution of Board of Directors. Upon approval by a resolution of Board of Directors of an exemption of applicability as provided in the preceding paragraph, CTCI shall immediately disclose information including the titles and names of the personnel exempted, the date of board approval of the exemption, the period of the exemption, the reasons for exemption, and the standard(s) has been exempted on the Market Observation Post System (MOPS).
Article 17 (Enforcement and method of disclosure) CTCI's Codes of Ethical Conduct, and any amendments to it, shall enter into force after it has been adopted by board of directors, and shall disclose in CTCI annual reports on its website.
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D. Accusation Management Regulations
CTCI CORPORATION
Accusation Management Regulations
1.0 Purpose This regulation is specially formulated in order to effectively control the accusation case of the Company and establish smooth accusation channel and fair investigation procedure, so as to prevent blackmail and correct possible undue behavior.
2.0 Scope
2.1 Accuser Including official, contracted and dispatched in-service employee of the Company, however, if external personnel of the Company finds any significant malpractice, such personnel can be included as accuser.
2.2 Scope of accusation Accusation may be proposed if the accused object violates laws and decrees, rules and regulations of the Company, or has other undue behaviors affecting the rights and interests of the Company.
3.0 Definition
3.1 Individual accusation A employee proposes real-name accusation independently in his/her own name.
3.2 Joint accusation Two (inclusive) or more employees propose real-name accusation jointly.
3.3 Blackmail The accusation letter proposed anonymously.
4.0 Responsibility
4.1 Human Resources Department Responsible for accepting accusation case and proposing suggestion on preliminary examination, sending the case for Rewards and Punishment Committee for hearing, and handing subsequent matters thereof according to hearing result.
4.2 Investigation group The trans-department group formed by the members as approved by Rewards and Punishment Committee, which will be responsible for investigating whether the accusation contents are true and proposing investigation report.
4.3 Rewards and Punishment Committee Responsible for hearing the accusation case preliminary examination proposal and accusation case investigation report, and proposing suggestions on punishment.
4.4 Each Department Relevant personnel of each department shall coordinate to assist investigation group to execute relevant investigation works.
5.0 Activity
5.1 Operation procedure Subject to Attachment 1 - Flow Chart of this Regulation.
5.2 Accusation The accuser shall fill in "Accusation Letter" (Attachment 2), the accusation matter must conform to the scope as prescribed in Article 2.2 hereof, besides, accuser shall provide specific descriptions and relevant evidences on the concerned person, matter, time, place and object etc., and submit the such letter to the special accusation e-mail box of Human Resources Department or send it in confidential paper copy. Employee may use accusation special line to report the
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accusation case, provided such employee shall still provide relevant accusation documents and evidences as mentioned above. When accepting joint accusation, it will be handled as single case, and representative shall be elected upon accusation for the convenience of contact. When the accusation case comes from outside the Company, the unit or employee that receiving the accusation materials shall submit the complete accusation materials to Human Resources Department at first time for subsequent handling, if the affiliated department of accused object has any concealment or delay that causing impact on the handling time and affecting the rights and interests of the Company, it shall be punished according to relevant regulations of the Company.
5.3 Case acceptance After Human Resources Department has accepted the accusation case, if necessary, it may ask the accuser to supplement relevant descriptions or evidences, conduct preliminary examination according to relevant contents of accusation materials, propose suggestions on whether or not to establish trans-department investigation group for investigation, fill in "Accusation Preliminary Examination Proposal" (Attachment 3) ans submit it to CTCI Rewards and Punishment Committee together with other case materials for review and approve whether or not to open a case for investigation. If it is not belong to the scope of accusation or the evidences proposed by accuser are not detailed and true, Human Resources Department shall ask the accuser for supplement. If the accusation case is blackmail, Human Resources Department may not handle it.
5.4 Investigation If the CTCI Rewards and Punishment Committee decides to open a case for investigation, it shall designate relevant unit representatives to form investigation group and assign group convenor to start investigation according to the situation of accusation case. In the course of investigation, Human Resources Department shall inform relevant units that shall cooperate to assist in investigation according to the investigation plan of the investigation group. When necessary, investigation group may interview relevant personnel or ask relevant personnel to provide relevant materials to assist in investigation. After the completion of investigation, investigation group shall submit investigation report to Human Resources Department.
5.5 Punishment After Human Resources Department has received the investigation report, it shall convene the meeting of Rewards and Punishment Committee pursuant to "CTCI Employees Reward and Punishment Regulations" to hear the accusation case, and propose punishment suggestions according to the preceding Regulation. Then Human Resources Department will submit the complete report contents to the Chairman for review and decision.
5.6 Response For any accusation case, Human Resources Department shall respond to the accuser in writing on the handling result thereof. For false accusation or fling abuses, the responding content shall include the reminder on relevant legal responsibility.
5.7 Confidentiality obligation Responsible employee of Human Resources Department and all members of Rewards and Punishment Committee and investigation group shall bear confidentiality obligation for the materials of accuser.
6.0 Reference document
CP-319-B CTCI Employees Reward and Punishment Regulations 7.0 Attachment
Attachment 1 Work Flow Chart Attachment 2 Accusation Letter Attachment 3 Accusation Preliminary Examination Proposal
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3.4.9 Internal Control System A. Statement of Internal Control System
85
B. Where a CPA has been hired to carry out a special audit of the internal control system, furnish the
CPA audit report: None. 3.4.10 In Recent Years until the Annual Report being Published, Violation of Internal Control Policies
by Employees:None.
3.4.11 Major Resolutions of Shareholders’ Meeting and Board Meetings A. Major resolutions of Shareholders’ Meeting of Year 2018(2018.05.29):
Date Resolutions of Shareholders’ Meeting Action Arisen
2018.05.29
1. Adoption of the Company’s 2017 Business Report, Financial Statements and Consolidated Financial Statements.
The resolution has been made and implemented.
2. Adoption of the Company’s distribution plan of 2017 earnings.(Each common share holder will be entitled to receive a cash dividend of TWD 3.23 per share, unappropriated retained earnings is TWD 315,072,874.)
The ex-dividend record date was on Aug. 1, 2018, and cash dividend was paid on Aug. 24, 2018.
B. Major resolutions of the Board Meeting in recent years until the annual report being published: 2018.03.09 2017 Review Report of Functional Committees.
Evaluation Report for the Independence and Capability of Independent Auditor. Assessment Report for Adoption of International Financial Reporting Standards IFRS 16 Leases. Report for Board of Directors Performance Assessments.
Approval of the distribution plan of the 2017 directors’ and employees’ remuneration. Approval of the Fiscal 2017 business report, financial reports and consolidated reports. Approval of the distribution plan of Fiscal 2017 earnings. Approval of “Statement of Internal Control System for the Year 2017”. Approval of the convening of the 2018 Annual General Meeting. Approval of the place and the period of time for shareholders to submit proposals of the 2018 Annual General Meeting. Approval of change of independent auditors of the Company. Approval on funds lending the subsidiaries for working capital requirement granted by the Company. Approval of CTCI Corporation to close its Italian branch.
Approval of appointment of additional assistant of the “Corporate Governance Committee”. Approval of list of subscribers and the number of shares they are allowed to subscribe for of 2018 Employee Stock Options Program.
2018.05.04 Report on Consolidated financial reports as of Mar. 31, 2018. Approval of selling shares of Utech Solar Corporation.
2018.05.29 Approval of the ex-dividend record date of 2018. Approval of the amendment to the Company’s “Internal Control Systems”.
2018.08.03 Report on Consolidated financial reports as of Jun. 30, 2018. Approval of investing Ever ECOVE Corporation. Approval on funds lending the subsidiaries for working capital requirement granted by the Company.
Approval of the amendment to the Company’s “Internal Control Systems”. Approval of the amendment to the Company’s “Constitution of Corporate Governance
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Committee”. Approval of the adjustment of the Corporate Governance Committee’s assistant.
2018.09.12 Approval of investing HDEC-CTCI(Linhai) Corporation. 2018.11.02 Report on Consolidated financial reports as of Sep. 30, 2018.
Status Report of Directors’ and Officers’ Liability Insurance. Approval on funds lending the subsidiaries for working capital requirement granted by the Company. Approval of the amendment to the Company’s “Internal Control Systems”. Approval of the amendment to the Company’s “Organizational Charter of Nominating Committee”. Approval of the amendment to the Company’s “Regulations Governing the board Performance Evaluation”.
2018.12.12 Report on the implementation of ethical corporate management in 2018. Approval of the budget of 2019.
Approval of the Year 2019 Audit Plan. Approval of the issuance of unsecured ordinary corporate bonds. Approval of the cash injection of CTCI Development Corporation. Approval on funds lending the subsidiaries for working capital requirement granted by the Company. Approval of registration of a branch in Singapore for project execution. Approval of registration of a branch in Korea for project execution. Approval of Increase investment in Ever Victory Global Limited (BVI), which will then invest in Dynamic Ever Investment Limited (HK), which will then invest in Fujian Gulei Petrochemical Complex. Approval of donation to CTCI Education Foundation. Approval of the appointment of the Corporate Governance Committee’s member.
Approval of the issuance of the 2019 employee stock options plan. Approval of the average salary increase rate of 2019. Approval of the remuneration of the management officers of the Company. Approval of the amendment to the remuneration of the Chairman of the Company.
2019.03.08 2018 Review Report of Functional Committees. Evaluation Report for the Independence and Capability of Independent Auditor. Report for Board of Directors Performance Assessments. Acknowledgment of amendment to “Regulations Governing Issuance and Subscription of Employee Stock Option”. Approval of the distribution plan of the 2018 directors’ and employees’ remuneration. Approval of the Fiscal 2018 business report, financial reports and consolidated reports.
Approval of the distribution plan of Fiscal 2018 earnings. Approval of “Statement of Internal Control System for the Year 2018”. Approval of the amendment to the Company’s “Regulations Governing the Acquisition and Disposal of Assets”, “Regulations Governing Making of Endorsements/ Guarantees” and “Regulations Governing Loaning of Funds”. Approval of the amendment to the Company’s “Shareholder Services Management Regulations”. Approval of the amendment to the Company’s “Internal Audit Systems”. Approval of the convening of the 2019 Annual General Meeting. Approval of the place and the period of time for shareholders to submit proposals of the 2019 Annual General Meeting. Approval on funds lending the subsidiaries for working capital requirement granted by
the Company. Approval of the amendment to the Company’s “Regulations Governing the board
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Performance Evaluation”. Approval of appointment of additional members of the “Corporate Governance
Committee”. Approval of the adjustment of managerial officers of the Company. Approval of the removing the non-competition restrictions on new managerial officers. Approval of the amendment to the remuneration of the management officers of the Company. Approval of list of subscribers and the number of shares they are allowed to subscribe for of 2019 Employee Stock Options Program.
3.4.12 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by Board of Directors None.
3.4.13 Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, President,
and Heads of Accounting, Finance, Internal Audit and R&D None.
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3.5 Information on CPA’s Fees 3.5.1 Information of CPA
Accounting Firm Name of CPA Audit Period Note
PriceWaterHouseCoopers Yi-Fan Lin Shu-Chiung Chang 2018.01.01-2018.12.31 -
3.5.2 Scale of information on CPA’s Fees Unit: NT$ thousands
Item Amount (NTD)
Audit Fee Non-audit Fee Total
1 Less than 2,000
2 2,000 ~ 4,000 (inclusive of 2,000) 3,508 3,508
3 4,000 ~ 6,000 (inclusive of 4,000)
4 6,000 ~ 8,000 (inclusive of 6,000) 6,350
6,350 5 8,000 ~ 10,000 (inclusive of 8,000)
6 More than 10,000 (inclusive of 10,000)
Unit: NT$ thousands
Accounting Firm Name of CPA Audit Fee
Non-audit Fee
Audit Period Note System Design
Registration Human
Resource Other
(Note1) Total
PriceWaterHouseCoopers Yi-Fan Lin
6,350 2,652 26 0 830 3,508 2018.01.01~2018.12.31
Note 1 Shu-Chiung Chang 2018.01.01~2018.12.31
Note 1: The (other) professional fees except audit fee include: transfer-pricing report NT$680 thousand, opinion of review employee stock options NT$150 thousand.
Note 2: In the event that the CPA firm is changed and the audit fees paid by the Company in the concurrent year are lower than the preceding year: None. Note 3: In the event that the audit fees paid by the Company are reduced by 15% compared to the preceding year: None. 3.6 Alternation of CPA: None. 3.7 The Company's Chairman, President and Managerial Officer in charge of Finance or Accounting matters has held a position within CTCI’s CPA firm
or its affiliated enterprise in the most recent year: None.
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3.8 Changes in Shareholding of Directors, Managers and Major Shareholders Unit: Share
Title Name
2018 As of March 31st, 2019
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Chairman
CTCI Development Corporation
0 0 0 0
Representative: John T. Yu
0 0 0 0
Vice Chairman
CTCI Development Corporation
0 0 0 0
Representative: Michael Yang
0 0 0 0
Independent Director and
Managing Director Jack Huang 0 0 0 0
Independent Director
Yen-Shiang Shih 0 0 0 0
Independent Director
Frank Fan 0 0 0 0
Director
CTCI Foundation 0 0 0 0
Representative: Teng-Yaw Yu
(Note 1) 0 0 0 0
Representative: Leon Tzou (Note 1)
0 0 0 0
Representative: Hsien-Cheng Yang
(Note 1) 0 0 0 0
Director Quintin Wu 0 0 0 0
Director Bing Shen 0 0 0 0
Director Johnny Shih 0 0 0 0
Director Yancey Hai 0 0 0 0
Director An-Ping Chang 0 0 0 0
Director Wenent Pan 0 0 0 0
Managerial Officers John T. Yu 0 0 0 0
Managerial Officers Andy Sheu 0 0 0 0
Managerial Officers Michael Yang 0 0 0 0
Managerial Officers M. H. Wang 0 0 0 0
Managerial Officers Pao-Yao Pan
(Note 2) 0 0 0 0
Managerial Officers Ming-Cheng Hsiao 0 0 0 0
Managerial Officers Todd Chen 0 0 0 0
Managerial Officers T. C. Huang 12,000 0 0 0
Managerial Officers Jung-Yu Han
(Note 3) 9,000 0 0 0
Managerial Officers Patrick Lin 10,000 0 0 0
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Title Name
2018 As of March 31st, 2019
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
Holding Increase
(Decrease)
Pledged Holding Increase
(Decrease)
& CFO
Managerial Officers Casey Yeh 16,000 0 0 0
Managerial Officers Teh-Ming Tao
(Note 4) 0 0 0 0
Managerial Officers Steve Jean 0 0 0 0
Managerial Officers M. G. Lee 0 0 0 0
Managerial Officers Po-Chien Wang
(Note 5) 6,000 0 0 0
Managerial Officers Tsai-Ming Wang 0 0 0 0
Managerial Officers Min-Li Lee 0 0 0 0
Managerial Officers Jing-Shing Wu 10,000 0 0 0
Managerial Officers Y. S. Liao 0 0 0 0
Managerial Officers S. H. Lin 4,000 0 0 0
Managerial Officers Ting-Kuo Li 15,000 0 0 0
Managerial Officers Connie Lin 26,000 0 0 0
Managerial Officers Vincent Liu
(Note6) 16,000 0 0 0
Managerial Officers Ho-Chuang Lee 0 0 0 0
Managerial Officers Shih-Wei Chung 29,033 0 0 0
Accounting Officer Ai-Cheng Ho 0 0 0 0
Note1: Mr. Teng-Yaw Yu be dismissed on Dec. 1, 2018; Mr. Leon Tzou be newly appointed on Dec. 1, 2018 and be dismissed on Mar. 1, 2019; Mr. Hsien-Cheng Yang be newly appointed on Mar. 1, 2019. The above-mentioned directors disclose the changes in Shareholding during their tenure of office only.
Note2: Be Dismissed on Jun. 26, 2018. Note3: Be Dismissed on Sep. 15, 2018. Note4: Be Dismissed on Jan. 24, 2019. Note5: Be Dismissed on Mar. 4, 2019. Note6: Be Dismissed on Sep. 1, 2018. 3.8.1 Shares Trading with Related Parties
Unit: Share
3.8.2 Shares Pledge with Related Parties
None.
Name Reason
for Transfer
Date of Transaction
Transferee
Relationship between Transferee and
Directors, Supervisors,
Managers and Major Shareholders
Shares Transaction Price (NT$)
Ho-Chuang Lee Donation 2018.07.11 Su-Fang Chen Spouse 199,076 NA
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3.9 Relationship among the Top Ten Shareholders As of March 31st, 2019
Name Shareholding
Spouse & Minor
Shareholding by Nominee
Arrangement
The relationship between any of the Company’s Top Ten Shareholders
Remarks
Shares % Shares % Shares % Name Relation
CTCI Foundation 60,862,051 7.97 0 0 0 0 None None
CTBC BANK CO., LTD.(CTCI Corporation Employee Stock Ownership Trust)
55,586,731 7.28 0 0 0 0 None None
Fubon Life Insurance Co., Ltd.
46,292,000 6.06 0 0 0 0 None None
Representative: Richard M. Tsai
0 0 0 0 0 0 None None
Blackrock Global Funds-Asian Growth Leaders
33,220,000 4.35 0 0 0 0 None None
CTBC BANK CO., LTD. (Sustainability Employee Stock Ownership Trust)
29,467,937 3.86 0 0 0 0 None None
Chunghwa Post Co., Ltd.
22,879,000 3.00 0 0 0 0 None None
Representative: Chien-Hung, Wei
0 0 0 0 0 0 None None
American Funds Developing World Growth and Income Fund
21,127,000 2.77 0 0 0 0 None None
KGI Bank 15,812,000 2.07 0 0 0 0 None None
Representative: Mark Wei
0 0 0 0 0 0 None None
USI Corporation 15,180,656 1.99 0 0 0 0 Asia
Polymer Corporation
Subordinate company of
USI Corporation’s
subsidiary
Representative: Quintin Wu
0 0 0 0 0 0 Asia
Polymer Corporation
Chairman of Asia Polymer Corporation
Asia Polymer Corporation
14,496,107 1.90 0 0 0 0 USI
Corporation
Parent company of
Asia Polymer Corporation’s shareholder
Representative: Quintin Wu
0 0 0 0 0 0 USI
Corporation
Chairman of USI
Corporation
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3.10 Ownership of Shares in Affiliated Enterprises As of March 31st, 2019
Affiliated Company
Investment of the Company
Directors, Supervisors,
Managements Direct and Indirect
Investment of the Company
Total Investment
Share % Share % Share %
CTCI Smart Engineering Corporation
59,098,624 97.09 27,288 0.04 59,125,912 97.13
CTCI Resources Engineering Inc. 24,762,252 99.05 1,388 0.01 24,763,640 99.05
CTCI Advanced Systems Inc. 11,444,842 48.72 331,766 1.41 11,776,608 50.13
CTCI Development Corporation 187,000,000 100.00 0 0.00 187,000,000 100.00
CTCI Investment Corporation 207,200,000 100.00 0 0.00 207,200,000 100.00
ECOVE Environment Corporation 38,457,105 57.31 290,034 0.43 38,747,139 57.74
CTCI (Thailand) Co., Ltd. 1,249,500 49.00 1,300,500 51.00 2,550,000 100.00
CTCI Overseas (BVI) Corporation 6,740,000 100.00 0 0.00 6,740,000 100.00
CTCI Engineering & Construction Sdn. Bhd.
450,000 60.00 300,000 40.00 750,000 100.00
CTCI Arabia Ltd. 500 50.00 500 50.00 1,000 100.00
CTCI Machinery Corporation 20,000,000 100.00 0 0.00 20,000,000 100.00
SINOGAL - Waste Services Co., Ltd. *0 30.00 *0 30.00 0 60.00
CTCI Americas, Inc. 100,000 100.00 0 0.00 100,000 100.00
CTCI Singapore Pte. Ltd. 5,100,000 100.00 0 0.00 5,100,000 100.00
CCJV P1 Engineering & Construction Sdn. Bhd.
247,500 99.00 0 0 247,500 99.00
CTCI CMCE JV SDN. BHD. 382,500 51.00 0 0 382,500 51.00
CTCI&HEC Water Business Corporation
25,500,000 51.00 0 0 25,500,000 51.00
*SINOGAL - Waste Services Co., Ltd. doesn’t issue any stock related certificates.
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IV. Capital Overview 4.1 Capital and Shares 4.1.1 Source of Capital A. Issued Shares
As of March 31st, 2019
Year /Month
Par Value (NT$)
Authorized Capital Paid-in Capital Remark
Shares Amount
(NT$) Shares
Amount (NT$)
Sources of Capital
Capital Increased
by Assets Other
than Cash
Other
1997.07 10 300,000,000 3,000,000,000 288,417,000 2,884,170,000 Retained Earnings
None
1998.07~
2000.06 10 520,000,000 5,200,000,000 476,000,000 4,760,000,000
Retained Earnings
None
2001.06 10 720,000,000 7,200,000,000 547,600,000 5,476,000,000 Retained Earnings
None
2003.12~
2004.03 23.38 720,000,000 7,200,000,000 571,620,484 5,716,204,840 ECB None
2004.08~
2006.08 10 720,000,000 7,200,000,000 598,000,000 5,980,000,000
Retained Earnings
None
2007.09~
2008.08 10 900,000,000 9,000,000,000 631,438,000 6,314,380,000
Retained Earnings
None
2010.01~
2011.04 10 900,000,000 9,000,000,000 698,666,648 6,986,666,480 CB & ESOP None
2011.07~
2015.12 10 900,000,000 9,000,000,000 760,508,848 7,605,088,480 ESOP None
2016.04 10 900,000,000 9,000,000,000 761,107,598 7,611,075,980 ESOP None Note 1
2016.05 10 900,000,000 9,000,000,000 762,514,598 7,611,075,980 ESOP None Note 2
2016.07 10 900,000,000 9,000,000,000 763,273,848 7,632,738,480 ESOP None Note 3
Note 1: 2016.04.13 MOEA Ruling Ref.No. 10501068390. Note 2: 2016.05.24 MOEA Ruling Ref.No. 10501109180. Note 3: 2016.07.19 MOEA Ruling Ref.No. 10501164430.
B. Type of Stock
Share Type Authorized Capital
Remarks Issued Shares Un-issued Shares Total Shares
Common Share 763,273,848 136,726,152 900,000,000 Listed stock
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4.1.2 Status of Shareholders As of March 31st, 2019
Item Government
Agencies Financial
Institutions
Other Juridical Person
Domestic Natural Persons
Foreign Institutions & Natural Persons
Total
Number of Shareholders
1 55 91 22,485 282 22,914
Shareholding (shares)
757 203,627,001 171,802,555 124,669,032 263,174,503 763,273,848
Percentage (%) 0.00 26.68 22.51 16.33 34.48 100 4.1.3 Shareholding Distribution Status
Common Shares (The par value for each share is NT$10) As of March 31st, 2019
Class of Shareholding (Unit : Share)
Number of Shareholders
Shareholding (Shares) Percentage (%)
1 ~ 999 8,250 1,865,936 0.24
1,000 ~ 5,000 10,463 22,410,659 2.94
5,001 ~ 10,000 1,920 14,501,762 1.90
10,001 ~ 15,000 609 7,570,015 0.99
15,001 ~ 20,000 375 6,746,556 0.88
20,001 ~ 30,000 379 9,446,818 1.24
30,001 ~ 40,000 177 6,263,417 0.82
40,001 ~ 50,000 126 5,682,787 0.74
50,001 ~ 100,000 255 18,124,543 2.37
100,001 ~ 200,000 140 19,369,502 2.54
200,001 ~ 400,000 79 21,950,517 2.88
400,001 ~ 600,000 30 14,122,344 1.85
600,001 ~ 800,000 18 12,172,800 1.59
800,001 ~ 1,000,000 11 9,772,447 1.28
1,000,001 or over 82 593,273,745 77.74
Total 22,914 763,273,848 100.00 4.1.4 List of Major Shareholders
As of March 31st, 2019
Shareholder's Name Shareholding
Shares Percentage (%)
CTCI Foundation 60,862,051 7.97
CTBC BANK CO., LTD. (CTCI Corporation Employee Stock Ownership Trust)
55,586,731 7.28
Fubon Life Insurance Co., Ltd. 46,292,000 6.06
Blackrock Global Funds-Asian Growth Leaders 33,220,000 4.35
CTBC BANK CO., LTD. (Sustainability Employee Stock Ownership Trust)
29,467,937 3.86
Chunghwa Post Co., Ltd. 22,879,000 3.00
American Funds Developing World Growth and Income Fund 21,127,000 2.77
KGI Bank 15,812,000 2.07
USI Corporation 15,180,656 1.99
Asia Polymer Corporation 14,496,107 1.90
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4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share
Item 2017 2018 As of March 31st, 2019
Market Price per Share
Highest Market Price 54.50 54.90 49.00
Lowest Market Price 43.00 42.60 44.00
Average Market Price 49.07 46.92 48.40
Net Worth per Share
Before Distribution 23.52 22.91 N/A
After Distribution 20.29 20.65 N/A
Earnings per Share
Weighted Average Shares 763,274 762,016 N/A
Diluted Earnings Per Share 3.68 2.40 N/A
Dividends per Share
Cash Dividends 3.23 2.25 N/A
Stock Dividends
Dividends from Retained Earnings 0 0 N/A
Dividends from Capital Surplus 0 0 N/A
Accumulated Undistributed Dividends 0 0 N/A
Return on Investment
Price / Earnings Ratio 13.33 19.55 N/A
Price / Dividend Ratio 15.19 20.85 N/A
Cash Dividend Yield Rate 0.07 0.05 N/A
Note: Board of Directors has approved the 2018 earnings distribution and has not been resolved by the Annual General Meeting of Shareholders in 2019.
4.1.6 Dividend Policy and Implementation Status A. Dividend Policies under Articles of Incorporation
When net profit occurs in the annual accounts, the Company shall first pay the profit-seeking enterprise income taxes and offset its losses in previous years and set aside a legal capital reserve at 10% of the profits left over, until the accumulated legal capital reserve has equaled the total capital of the Company; then set aside a special capital reserve in the amount equivalent to the balance of shareholders’ equity deficit of the current fiscal year. After having paid the corporate taxes and off-set past losses, 10% of the profit earned by the Company of each fiscal year shall be set aside as statutory reserve, except where such reserve has reached the total authorized capital of the Company. Furthermore, a special reserve shall be set aside. If there is recovery of the balance of shareholders’ equity deficit, the recovered amount shall be included in the distribution of the profit for the current year. The allocable profit for the current year, which is the balance after the profit distribution and covering losses aforementioned, together with the cumulative undistributed profit of the previous year shall be referred to as cumulative allocable profit, which shall be distributed according to shareholders’ resolutions. In order to meet the requirements in business expansion and industry growth, fulfilling future operating needs and stabilizing financial structure is the priority of the Company's dividend policy. Thus, the distribution of the cumulative allocable profit according to the shareholders’ resolutions Besides, the amount of shareholders’ bonus shall not be less than 50% of cumulative allocable profit of the Company, in particular cash dividend shall not be less than 20%.
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B. Proposed Distribution of Dividend: Cash dividend: NT$2.255 per share. C. The Company adopts a dividend policy of high earnings appropriation rate, and stipulates that at
least 80% of total attributable earnings should be appropriated as dividends. In recent years, the Company distributes all of its dividends in the form of cash. Historical information about dividends distribution is available on the Company’s website.
4.1.7 Impact of Stock Dividend Distribution on Business Performance, EPS and Return on
Investment: Not Applicable. 4.1.8 Employee and Directors' Remuneration A. Information Relating to Employee and Directors’ Remuneration in the Articles of Incorporation
When net profit occurs in the annual accounts, the Company may, after reserving a sufficient amount of the income before tax to cover the accumulated losses, with the resolution of board of directors, distribute 1.5% ~ 5% of the income before tax to pay to the employees as remuneration, and distribute no more than 1.5% of the income before tax to pay to board of directors as remuneration. The remuneration could be stock or cash, and the employee remuneration could be distributed to the employees of subsidiaries of the Company under certain conditions. A report of the distribution of employee remuneration or board of directors’ remuneration shall be submitted to the shareholders’ meeting.
B. The estimation basis on remuneration to Employees and Directors, the calculating basis on the
number of shares for share bonus and accounting treatment for the differences between the actual distributing amounts and estimations: Estimation of employee and Directors’ remuneration is based on prior experience and is recognized as current expenses. In case of a significant change (per Article 6 of Securities and Exchange Act Enforcement Rules, the amount is over NT$10,000 thousand while reaching 1% of audited net operating revenue or 5% of paid-in capital), the expense shall be adjusted accordingly in the year where the employee bonus was recorded. When the change is not significant, it shall be recorded in the following year as change in accounting estimation. If the amount remains variable at the date of Shareholders’ meeting in the following year, it shall be recorded in the following year as change in accounting estimation.
C. Profit Distribution of Year 2018 Approved in Board of Directors Meeting for Employee and Directors’
Remuneration a. Recommended Distribution of Directors’ Remuneration is NT$ 13.250 million, and Employees’
Remuneration in cash is NT$54.826 million. b. Ratio of Recommended Employee Stock Bonus to Capitalization of Earnings: None.
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D. Information of 2017 Earnings Set Aside to Employee Bonus and Directors’ and Supervisors’ Remuneration:
Unit: NT$
Actual Distribution A
Recognized Estimated Amount B
Variance C=A-B
Bonuses for Employees (Cash) 84,160,434 84,160,434 0
Remuneration for Directors (Cash)
16,536,989 16,536,989 0
The Estimation for 2017 Employee Bonus and Directors’ Remuneration is based on the percentage of earnings after tax and legal reserve consideration in the Articles of Incorporation. There is no difference between the actual 2017 Employee Bonus and Directors’ Remuneration distributed according to the resolution of the stockholders’ meeting and the Estimated Amount.
E. The Information of Top Ten Recipients of Employee Bonuses in 2017:
Name Title Amount(NT$)
Andy Sheu Vice Chairperson of
Management Strategy Committee
1,206,909
Michael Yang President
M. H. Wang Executive Vice President
Ming-Cheng Hsiao Executive Vice President
Patrick Lin Senior Vice President and CFO
Jung-Yu Han Senior Vice President
Teh-Ming Tao Vice President
Tsai-Ming Wang Vice President
S.H. Lin Vice President
Y. S. Liao Vice President
4.1.9 Buyback of Treasury Stock None. 4.2 Corporate Bonds None. 4.3 Preferred Shares None. 4.4 Global Depository Receipts None.
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4.5 Employee Stock Options 4.5.1 Issuance of Employee Stock Options
As of March 31st, 2019
Type of Stock Option 2017 ESOP 2018 ESOP 2019 ESOP
Effective Date by Regulatory Agency
2017/04/05 2018/01/09 2019/01/09
Issue date 2017/04/11 2018/03/09 2019/03/08
Units issued 20,000 units 20,000 units 20,000 units
Option shares to be issued as a percentage of
outstanding shares (%) 2.62 2.62 2.62
Duration
The duration for options is 6 years, during which employees may not transfer, pledge, or gift their options except to heirs. Upon the expiration of the grant period, unexercised options are deemed forfeited and the subscribers may no longer claim right to exercise the option and purchase those shares.
Conversion measures Issue new common share.
Conditional conversion periods and percentages
Subscribers may exercise their options by the following schedule and proportion: The availability period The ceiling of option exercisable
(accumulate)
Regular Reward Less than 2 years 0% 0% In 2 years after the grant 50% 25% In 3 years after the grant 75% 50% In 4 years after the grant 100% 100%
Converted shares 0 Shares 0 Shares 0 Shares
Exercised amount NT$0 NT$0 NT$0
Number of shares yet to be converted
20,000,000 Shares 20,000,000 Shares 20,000,000 Shares
Adjusted exercise price for those who have yet to exercise their rights
NT$46.4 NT$42.9 NT$48.9
Unexercised shares as a percentage of total issued shares (%)
2.62 2.62 2.62
Impact on possible dilution of shareholdings
Dilution to Shareholders’ Equity is limited.
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4.5.2 List of Executives Receiving Employee Stock Options and the Top 10 Employees As of March 31st, 2019
Title Name
No. of Option Shares
(thousand shares)
Option Shares as a Percentage of Shares issued (%)
Exercised Unexercised Note1 No. of Shares
Converted (thousand
shares)
Strike Price (NT$)
Amount (NT$
thousands)
Converted Shares as a Percentage of Shares issued (%)
No. of Shares
Converted (thousand
shares)
Strike Price (NT$)
Amount (NT$
thousands)
Converted Shares as a Percentage of Shares issued (%)
Man
agerial officers
Vice Chairperson of Management Strategy
Committee Andy Sheu
8,543 1.12 0 N/A 0 0 8,543
2017 ESOP:
NT$46.4; 2018 ESOP:
NT$42.9;2019 ESOP:
NT$48.9.
393,697 1.12
President Michael Yang
Executive Vice President M. H. Wang
Executive Vice President Ming-Cheng Hsiao
Executive Vice President Todd Chen
Senior Vice President Patrick Lin
Senior Vice President T. C. Huang
Senior Vice President Casey Yeh
Vice President Steve Jean
Vice President M. G. Lee
Vice President Tsai-Ming Wang
Vice President Min-Li Lee
Vice President Jing-Shing Wu
Vice President Y. S. Liao
Vice President S. H. Lin
Vice President Ting-Kuo Li
Vice President Connie Lin
Vice President Ho-Chuang Lee
Vice President Shih-Wei Chung
Accounting Officer Ai-Cheng Ho
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Title Name
No. of Option Shares
(thousand shares)
Option Shares as a Percentage of Shares issued (%)
Exercised Unexercised Note1 No. of Shares
Converted (thousand
shares)
Strike Price (NT$)
Amount (NT$
thousands)
Converted Shares as a Percentage of Shares issued (%)
No. of Shares
Converted (thousand
shares)
Strike Price (NT$)
Amount (NT$
thousands)
Converted Shares as a Percentage of Shares issued (%)
Emp
loyees
Chief Engineer Wen-Pin Lo
1,650 0.22 0 N/A 0 0 1,650
2017 ESOP:
NT$46.4; 2018 ESOP:
NT$42.9;2019 ESOP:
NT$48.9.
76,057 0.22
Chief Engineer Hope Sun
Chief Engineer Cheng-Shen Wang
Chief Information Officer Gino Tsai
Senior General Manager Chun-Jung Hung
Senior General Manager Jin-Wen Chang
Senior General Manager Michael Shih
Senior General Manager Jenq-Shyong Chung
Senior General Manager Michael C. Chang
Senior General Manager C.L. Yen
Note1: The Effective Date and Issue date of the 2017 ESOP is Apr. 5 and Apr. 11 2017, and the subscribers may not request for exercising the stock option within 2 years after the date of issued; the Effective Date and Issue date of the 2018 ESOP is Jan. 9 and Mar. 9 2018, and the subscribers may not request for exercising the stock option within 2 years after the date of issued; the Effective Date and Issue date of the 2019 ESOP is Jan. 9 and Mar. 8 2019, and the subscribers may not request for exercising the stock option within 2 years after the date of issued.
4.6 Employee Restricted Stock
None. 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions
None. 4.8 Financing Plans and Implementation
None.
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V. Operational Highlights 5.1 Business Activities 5.1.1 Business Scope A. Main areas of business operations
a. Markets: Hydrocarbon, Power, Environmental, Transportation and Industrial.
b. Services: Project Management, FS/FEED, Engineering, Procurement, Fabrication, Construction, Commissioning, Intelligent Solutions, Automation & Control, Clean Room & MEP, Structure Jacking & Movement, Ground Freezing and Operation & Maintenance.
c. Products: Stationary Equipment, Chemical Additives and Energy Management Software.
B. Revenue distribution
Unit;NT$ thousands
Major Divisions Total Sales in Year 2018 (%) of total sales
Engineering 57,122,560 89.16
Environment 4,819,569 7.52
General Trade 1,276,827 1.99
Others 850,586 1.33
Total 64,069,542 100.00
C. Main Services
The main services of the Company include feasibility study & planning, project management, engineering, procurement, fabrication, construction, plant commissioning, QA & HSE, operation & maintenance, and information technology.
D. New products development: Not Applicable. 5.1.2 Industry Overview A. Outlook of Macro Economy:
According to the latest International Monetary Fund (IMF) report, the global economy continues to expand, but the expansion has weakened since the second half of 2018, mainly resulting from some Idiosyncratic factors (new fuel emission standards in Germany, natural disasters in Japan) which weighed on activity in large economies. Overall, the global growth for 2018 is estimated at 3.7 percent. Looking forward, the global growth is projected to decline to 3.5 percent in 2019, not only because of the negative effects of tariff increases enacted in the United States and China earlier last year, but also weakening financial market sentiment and a contraction in Turkey now projected to be deeper than anticipated. Specifically, growth in advanced economies is projected to slow from an estimated 2.3 percent in 2018 to 2.0 percent in 2019, and the growth in emerging market and developing economy group is also projected to reduce from 4.6 percent in 2018 to 4.5 percent in 2019. The revision downward for the advanced economies mostly come from the revision of euro area, notably Germany (due to weak industrial production following the introduction of revised auto emission standards); Italy (due to weak domestic demand); France (due to the negative impact of street protests and industrial action); and United Kingdom (due to the substantial uncertainty about the Brexit outcome). And the revision downward for the emerging market and developing economy group majorly reflects that the weaker near-term oil price outlook may drag on the oil output countries.
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Forecast of Economic Growth Rate
Country 2018 2019
Global 3.7% 3.5%
Taiwan 2.7% 2.4%
China 6.6% 6.2%
Singapore 2.9% 2.5%
Indonesia 5.1% 5.1%
Malaysia 4.7% 4.6%
Thailand 4.6% 3.9%
Vietnam 6.6% 6.5%
India 7.3% 7.4%
Philippines 6.5% 6.6%
United States 2.9% 2.5%
Saudi Arabia 2.2% 2.4%
United Arab Emirates 2.9% 3.7%
Qatar 2.7% 2.8%
Kuwait 2.3% 4.1%
Oman 1.9% 5.0%
Russia 1.7% 1.8% Sources: International Monetary Fund (IMF) - Data and Statistics.
B. Market Overview: The Company is mainly engaged in the field of engineering design, procurement and construction (“EPC”). As a professional EPC lump sum turn-key provider, enjoying a leading position out of more than 530 companies registered with the Chinese Association of Engineering Consultants. Basically, most of local EPC companies target domestic market which is limited and competitive. In addition, those large-projects are under the tendency of lump sum turn-key for international bidding. Therefore, there is few local EPC companies are capable to team up with international bidders. Having a solid track record in the international EPC market for years, the Company has become a designated partner of many well-known international companies for various large projects globally. Currently, the Company is capable to bid project with single contract amount over US$ 1 billion.
C. The EPC Industry: Major clients of the Company cover in areas of refinery, petrochemical, general chemical, LNG, power, transportation, steel manufacturing, environmental protection, and etc. The main service of the Company is to provide the EPC works in accordance to clients’ requirements. The EPC project is a professional-based integration, which requires an intensive engineers’ capability in completion timely and efficiently as required by the clients. For this reason, the entry barrier to enter this industry is high. More specifically, the Company’s services include feasibility study, engineering, procurement services, equipment supply, construction management, and commissioning services. The upstream of this industry is the clients with plant construction demands. The midstream is the EPC turnkey companies. (The Company is at this section) The downstream is the third-party vendors, such as materials, equipment suppliers and construction firms.
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D. Market Trend and Competition:
a. The Trend (1) Large EPC Projects
Given a trend of incessant businesses expansion overtime, requirements from client are getting more complicated. In order to minimize the risks associated with large projects and reduce the costs, clients turn to be reluctant to award specific sub-projects to different contractors and prefer single EPC contractors instead.
(2) Turnkey Solution Clients’ requirements today request not only engineering design, procurement and construction, but advance planning, project financing, operation management, etc. To complete the project with low cost, high quality and timely are preferred by the clients. It’s undoubtedly a challenge to EPC contractors.
(3) Potential BOT projects in public sector In the public sector, the governments tend to boost economic growth by investing infrastructure projects. In order to reduce the government fiscal burden and encourage private sector to get involve with government’s projects, it’s becoming popular to announce BOT (Build-Operate-Transfer) projects for public sector projects. In the future, we will also introduce BOT model to emerging markets’ clients. After Taiwan joined the World Trade Organization and signed government purchase agreements with other countries, the domestic market in is now available to foreign construction companies on an equal basis. Taiwanese engineering companies aim business potentials in global markets via collaboration with other engineering firms worldwide, and strengthening the capability in finance and legal resources to cope with the ever-changing environment.
(4) Technical Innovation Technical innovation becomes increasingly important to viability of EPC contractors. Generating value-added solutions to satisfy clients’ demands is a key challenge to engineering firms worldwide for maintaining competiveness on the market.
b. Competition The Company doesn’t have its own technology, but the key to be awarded a project usually comes from the Company’s track records on the product and the ability to control executing cost. The Company has around 40 affiliates spanning across more than 15 countries worldwide, and has accumulated abundant experiences in local markets, which becomes its competitive advantage. There are about 16 EPC competitors globally, who are mainly from South Korea, Japan and Europe. Take the major petrochemical market in Middle East for example, rigid competition from South Korea companies remains unchanged; besides several European companies turn to be aggressive in recent years. In domestic market, there are only few local competitors in terms of operation scale, so the Company still has the geographically advantages in Taiwan.
Suppliers(Materials、
Equipments and
Construction)
Downstream
CTCI
Midstream
Client
(Owner)
Upstream
Engineering
diagrams,
Construction
procedures and
standards,
Construction
management
Requirement and
Specification
Completion of
construction or
installation
Completion
Certificate
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5.1.3 Research and Development Overview A. Research and Development Expenses in Past Three Years
Unit;NT$ thousands
Item/Year 2016 2017 2018
Operating Revenue 42,764,443 48,591,380 35,684,680
R&D Expense 101,816 113,993 120,849
R&D Expense as percentage of Operating Revenue (%)
0.24 0.23 0.34
Note: Independent Financial Statements were under IFRS.
B. Research and Development Projects Completed in Recent Years and Successful Technology or
Products Developed in Past Two Years
a. RD Projects Completed in Recent Years:
Item 2017 Projects 2018 Projects
1 The front operation, system setting and report online of implementing existing Innovation RD product to new project
Research on Engineering Object-oriented Information Integration Platform
2 The research and development of intelligent application platform (Tag Platform)
Application and Research of Intelligent Technology in EPC Project
3 The research of virtual and physical plant hand over
Construction Site Mobile App
4 The research of intelligent sensing technology applied to site management
Research and Development for Smart Device Application in Construction Site Management
5 The integrated research of Intergraph SPE and Tag Platform
Develop program for intelligence plot plan of tank area
6 Material management system’s maintenance, mobilization application and group affiliates implementation
Research and Development for Application of Image Recognition Technology in Engineering Design
7 AP Service Development of Intelligent Solution Platform(iSP)
8 The development and application of Engineering information integration by using SmartPlant Suite
Implement, Maintain and Update
9 The development of Auto-Identification and Inspection Planning System for Corrosion and Deterioration Mechanisms
iEPC Intelligent Design System Development of Process Department
10 The development of HAZOP Review Comment Control System
Water Treatment System Research and Development
11 The development and research of process design information automation
Dynamic Simulation of LNG Terminal
12 The P&ID template establishment of raw water, pure water treatment system
iEPC Intelligent Design System Development of Civil & Building Department
13 The basic design creation of systemic reclaimed water treatment technology
Research of Civil & Building New Technology
14 The dynamic simulation research of flare / steam network
Analysis of Track-Bridge Interaction and Study of Rail Expansion Joints Layout Assessment
15 The development of iEPC common information operation systems in Civil & Building Engineering
iEPC Intelligent Design System Development of Equipment Department
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Item 2017 Projects 2018 Projects
16 Research & development on innovation of science and technology for Civil and Building Engineering
Project Equipment Design Apps Development/ Maintenance and Information Exchange
17 The research and development of technology for railway track engineering
Packaged Equipment- Pneumatic Conveying System Research
18 The improvement of equipment operation workflow
iEPC intelligent design system development of Instrument Department
19 Project equipment database system Instrument operating system upgrade and maintenance, and customized develop for project
20 The development and maintenance of equipment application system
Research for Laboratory Equipment
21 CFD analysis for evaluating hot-air recirculation affection in air-cooled heat exchanger
A case study for Value Engineering to improve the performance
22 The automatic integrated research of instrumentation inter-discipline data
iEPC Intelligent Design System Development of Piping Department
23 The research and development of instrumentation 3D/2D design operation
Research and develop new technology and techniques of piping engineering
24 The development of intelligent program for plot plan design
iEPC Intelligent Design System Development of Electrical Engineering
25 The technology development of VR applied to 3D model review
Update and Develop the Professional Software of Electrical Engineering
26 The integrated development of piping digital information
Simulation and Study of Insulation Coordination
27 The extending application of power information integrated data
Vendor Information Exchange
28 Applying electrical information to 3D/2D with automatic generation
The optimizations of mobile system applied to construction job site
29 Analysis of Fast-Bus Transfer (FBT) scheme for its impact on power system and protective relay co-ordination
The study of application requirements of construction R&D works
30 Vendor information exchange Piping field auto-welding robot
31 The establishment of Implementing SPC system to optimize construction management platform
Customization program development and system maintenance of Material Management System
32 The research of scaffolding operation optimization and establishing modular skill
SPF related modules development, maintenance and promotion system
33 The application and development of robot installation at construction site
Integration and application and handover of engineering data for SmartPlant Enterprise
34 Mobile system optimization at construction site
AP Service
35 Developing system mark-up 3D model in S3D Advanced Development ,Maintenance and Application for Corrosion Mechanism Identification System
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b. Successful Technology or Products Developed in Past Two Years Only the most important technology or products are listed below due to approximate 30 projects in a year.
Year RD Achievements
2017 1. The research and development of intelligent application platform (Tag Platform)
2. The research of virtual and physical plant hand over 3. The research of intelligent sensing technology applied to site management 4. The development of Auto-Identification and Inspection Planning System for
Corrosion and Deterioration Mechanisms 5. The development of HAZOP Review Comment Control System 6. The research and development of technology for railway track engineering 7. CFD analysis for evaluating hot-air recirculation affection in air-cooled heat
exchanger 8. The research and development of instrumentation 3D/2D design operation 9. The development of intelligent program for plot plan design 10. The technology development of VR applied to 3D model review 11. Analysis of Fast-Bus Transfer (FBT) scheme for its impact on power system and
protective relay co-ordination 12. Vendor information exchange 13. The research of scaffolding operation optimization and establishing modular skill 14. The application and development of robot installation at construction site 15. Developing system mark-up 3D model in S3D
2018 1. Research on Engineering Object-oriented Information Integration Platform 2. Application and Research of Intelligent Technology in EPC Project 3. Construction Site Mobile App 4. Research and Development for Smart Device Application in Construction Site
Management 5. Develop program for intelligence plot plan of tank area 6. Research and Development for Application of Image Recognition Technology in
Engineering Design 7. Development of Intelligent Solution Platform(iSP) 8. Water Treatment System Research and Development 9. Dynamic Simulation of LNG Terminal 10. Analysis of Track-Bridge Interaction and Study of Rail Expansion Joints Layout
Assessment 11. Packaged Equipment- Pneumatic Conveying System Research 12. Research for Laboratory Equipment 13. Simulation and Study of Insulation Coordination 14. Vendor Information Exchange 15. Piping field auto-welding robot
C. 2019 RD Direction and Major Technology Development
a. 2019 RD Direction is to (1) Develop iEPC digital initiatives to enhance the intelligentized of EPC project operation (2) Develop the application of expertise technology to strengthen engineering core competence (3) Establish a cloud-based intelligent platform to provide the service for smart building and
smart factory
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b. Major Technology developments are as follows: (1) Develop iEPC digital initiatives
- Research and Development for Unified Project Information applied to the plant entire life cycle
- Develop iEPC Intelligent Design System for all Engineering departments - Design Data Transferring Rule Research - Development of Engineering Digital Information Acquisition Technology - Development of intelligent program for plot plan - i-Procurement Applications - Research and Development of Intelligent Technology Applied to the Construction Site
Management - Welding Robot Applied to Piping Erection Work
(2) Develop expertise technology - Wastewater Treatment System Research and Development - Dynamic Simulation of LNG Tank - Research of Cryogenic Tank - Development of Design Tool for Floating Slab Track - Research of Packaged Equipment-Pneumatic Conveying Systems - Analysis of Influence from Creep on High Temperature Pipelines - Main Steam System of
Power Plant - Material management system (Smart Materials) maintenance and customization - Document management system (Smart plant Foundation) maintenance and customization
(3) Establish a cloud intelligent platform - Development of iSP cloud platform
D. Current Project or New Product Being in process
Refer to Section 7.6.3 for current RD project list. 5.1.4 Short & Long Term Development Plans A. Short Term Goals:
a. Cultivating Global Landscape with Enhancement of Cross-Border Management Capability The Company has been well-positioned in the international EPC markets such as Middle East, Southeast Asia and the US, and will explore further to those new territories including East Europe, North Africa and South America. Having such active global development in the future, the Company will endeavor to facilitate comprehensive cross-border management synergy by means of a barrier-free platform in language, culture, talents and internal operations. Importantly, a global mindset has to be implanted in-depth to all of employees around the world.
b. Participating in Global Power Plant and LNG receiving terminal Projects Aggressively According to the nuclear-free government policy in Taiwan, Taipower has planned several gas-fired power plant projects in next couple years. And the demand for LNG also lead to several LNG receiving terminal projects. In addition, contributed by a promising economy in Southeast Asian region, strong power demand has been predicted, which draws attention for new power plant projects in the coming few years as well. The Company will be involved actively in Taiwan and overseas market consistently.
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B. Long Term Goals a. Targeting New Business
In addition to existing business lines, the Company has developed new fields recently such as liquid natural gas, green energy, recycling resources, etc. These new businesses are expected to contribute a good and stable profit in the long run, particularly in emerging markets.
b. Innovating Service Patterns to differentiate competitiveness against rivals By integrating of EPC service vertically and horizontally for an incessant expansion, the Company consistently devotes to an improvement in various aspects such as engineering technology, procurement, research and development, quality/HSE, etc. Through an active introduction of intelligent technology, the Company aims to create an intelligent technology platform - “iEPC” for its turnkey service and build big data bank for an intelligent turnkey service to a variety of customers. Through iEPC, the Company will be able to optimize the efficiency of project execution and originate a synergy for future business development aggressively. In all, the Company aims to become one of the top 30 engineering companies in the world, and to create an esteemed brand name for the Taiwanese engineering consulting service industry.
5.2 Market and Sales Overview 5.2.1 Market Analysis The Company signed contracts amounted NT$ 65 billion, while CTCI Group signed of NT$101.7 billion totally in 2018. The sales revenues of the Company amounted NT$ 35.7 billion, while the CTCI Group consolidated sales revenues amounted NT$ 64.1 billion totally in 2018. A. Sales Analysis by Major Services:
a. By Area
Area Group New Contracts Consolidated Sales Revenues
Taiwan 55% 33%
South East Asia 12% 30%
United States 12% 4%
India 6% 1%
China 13% 7%
Middle East 2% 25%
Total 100% 100%
b. By Industry
Industry Group New Contracts Consolidated Sales Revenues
Refinery/Petrochemical 54% 52%
Industrial 20% 8%
Transportation 7% 5%
Environmental 15% 10%
Power 2% 21%
Others 2% 4%
Total 100.00% 100%
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B. Market Share The Company has ranked No.1 in the domestic EPC market in Taiwan for years. The Common Wealth Magazine has placed the Company as No.1 in the top 650 service company survey within the engineering service provider category since 2005. On the global scene, the Company is well recognized by the U.S. Magazine Engineering News-Record in its annual rankings. For the year 2018, the Company is ranked No.75 in The Top 225 International Design Firms Rankings, No.76 in The Top 250 International Contractors Rankings, No.146 in The Top 150 Global Design Firms Rankings, and No.126 in The Top 250 Global Contractors Rankings.
C. Industry Trend Overview a. Short Term Market Trend
Based on the latest International Monetary Fund (IMF) report, the global economic will keep growing, but the expansion is expected to slow down in 2019. Most of the Company’s target markets have still maintained the GDP growth rate higher than the global average (e.g. China, Asian 5, United Arab Emirates, Oman), so the Company expected the investment momentum would extend to 2019. Our views on the global market are briefed as following: (1) Taiwan
The Company expects the government to maintain its policy on expanding domestic consumption, from which the Company targets local projects as one of priorities in the coming years. The demand for electricity has been increasing given the expanding economic. Moreover, based on the government policy, all of the domestic nuclear power plants will be decommissioned and some of the mega thermal power plants will be expired in recent years. In order to provide sufficient electricity, Taiwan Power Company begins to execute renewal and expansion plans for many gas-fired power plants, along with the LNG receiving terminals, which are the Company’s major potential opportunities. In addition, the projects for mass rapid transportation (MRT) system, General Industry, solid waste burning, air pollution control, and sewerage projects are also the bidding targets for The Company.
(2) South East Asia and India With the benefit of demographic dividend area in Southeast Asia and India, the demand for petrochemical products and LNG remains strong, bringing in more investments in LNG receiving terminals, refinery plants, and petrochemical plants. For example, CPC Corporation plans to build petrochemical complex in India or Indonesia; Indonesia state-owned company, Pertamina, plans to build several refinery plants; Thailand will increase the capacity for values-added products while the hydrocarbon industry is well developed; In Malaysia, we still focus on Petronas petrochemical projects; India, to respond to the government’s policy ”made in India”, the private and state-owned companies will keep increasing the investments on refinery and petrochemical plants to replace the import. Besides, under the increasing environmental awareness and decreasing demand for carbon, gas-fired power plants have become the major energy policy in Southeast Asia and India, pushing more opportunities from gas-fired power and LNG receiving terminals. In addition, the plans of MRT projects still continues in Southeast Asia.
(3) China Under the circumstance of US-China Trade War, huge domestic demand and the release of FDI constraint, major international players such as ExxonMobil, BASF, SABIC, and Taiwanese investors are planning for huge refinery and petrochemical complex in China. It is expected the wave of ethylene and downstream investment will be completed by 2030. The other environmental protection opportunities include waste water treatment, waste to energy projects and steel mill plant flue gas denitration(De-NOx).
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(4) Middle East and North Africa Since OPEC production targets were reduced and the economic sanctions against Iran were imposed by the United States, the oil price is expected to be more stable in 2019, making the owners in the Middle East restart the investments on new capacities of downstream sector and value-added products. Besides, to meet the International Maritime Organization’s new regulation of Low-Sulphur Fuel Oil (LSFO) in 2020, owners in the Middle East shall upgrade their refinery facilities to produce LSFO for marine usage, which is also the source of bidding opportunities for the Company. Major bidding projects majorly come from the national tactical plan. Saudi Aramco plans to invest US$334 billion across the oil and gas value chain by 2025, and to triple its chemical production to 34 million metric tons per year by 2030. The Qatar government announced to expand gas production 30%; Kuwait will focus on new and revamping refinery plants and gas investments; Oman Government concentrates on the development of Duqm area and expect the Refinery would stimulate overall development; In North Africa area, Egypt plans to introduce US$10 billion FDI by 2019 to inject more domestic oil and gas facilities, and Algeria plans to build refinery plants in five years and invest US$70 billion on shale gas projects by 2030.
(5) USA Driven by low cost of feedstock in past years, the first wave of ethylene plants were already completed. Major international players such as ExxonMobil, LyondellBasell, Dow DuPont, and Formosa Group are proceeding on second wave investment of ethylene and downstream projects. The Company will actively strive for the bidding opportunities.
(6) Commonwealth of Independent States There are abundant gas and petroleum resources in Russia, Kazakhstan and Uzbekistan, but the hydrocarbon business usually need financing support. CTCI Beijing will cooperate with China Export & Credit Insurance Corporation (SINOSURE) to follow up the projects in “One Belt One Road” Initiative.
b. Long Term Market Trend Looking into the future, although the economy uncertainty still exists because of the fluctuated oil price and new policy leaded by U.S. government, the emerging market such as China, Indonesia, Vietnam, India will still remain the economy growth which is stronger than global average; the advanced countries, take USA for example, is expected to benefit from the cheap shale gas, downstream petrochemical market shall remain booming. As the notion of conserving energy is gaining momentum around the world, industries related to alternative energy and environmental protection are set to become mainstream in the years to come. Accordingly, the Company is trying to be more involved into new techniques and new areas such as LNG, alternative energy and other energy conservation items.
D. Competitive Advantage
The Company has been engaged in the industry for 40 years and recognized as tier one international EPC company with solid track records worldwide. To overcome competition around the world, the Company tries to leverage resources on a global basis. By setting up 56 subsidiaries and branches in 20 countries, the Company develops engineering talents at competitive costs. Besides, the Company seeks strategic partners, on project basis, not only with other EPC companies but also critical vendors (e.g. producer of generator) to jointly bid project for enhancement of competitiveness. The Company is constantly trying to reinforce capability of project execution by soliciting a global logistics for cost down, and strengthening project risk management as well.
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E. Advantages and Disadvantages for Long-Term Development & Corresponding Strategies
a. Advantages (1) Domestic market is recovering
Taiwan government continues to push ahead for a new national development plan. CPC Corporation and Taiwan Power Company continue to execute their plans for renewal and expansion plans. Besides, the contraction relation between Taiwan and China stimulates Taiwanese companies to invest in Taiwan and Southeast Asia as well. Given the better control ability of resources and good track records in domestic market, the Company stands in a better position to bid the potential opportunities. Moreover, Taiwanese petrochemical companies keep investing in new capacity expansion in China, India, Southeast Asia and USA, which is also the potential business for the Company.
(2) Bidding for mega projects with professional capabilities The Company is now the tier one engineering Company in Taiwan to be able to carry out projects with amount over US$ 1 billion alone. The Company has valuable experience in teamed up with foreign partners for project both in domestic and overseas markets. Also, by collaborating with these international firms, the Company has established itself in the global market place for future opportunities overseas.
(3) Entering into Overseas Markets with Strategic Partners With the successful strategic alliances, the Company now has world-class patented processes and techniques at its disposal. These advantages will not only serve existing projects, but can also be utilized globally such as China, Thailand, Vietnam, Malaysia, India, Singapore and the Middle East. The Company will integrate all the available resources to expand globally.
(4) Strengthening Competiveness through Global Resources Management The Company’s subsidiaries in China, Thailand, India, and Vietnam, Malaysia and Singapore have contributed significantly to the projects carried out in domestic and overseas markets. The ability of theses engineers in these subsidiaries have raised significantly throughout the execution process. These subsidiaries will continue to serve the Company favorably in the years to come with low cost and work efficiency advantages.
b. Disadvantages & Corresponding Strategies
Item Corresponding Strategies
Severe competition from other EPC companies
The Company plans to do the following to increase its chances of winning projects: Strengthen cost control and project management capabilities. Technical Improvement: Continuous process re-engineering and
innovation through the R&D center. Human Resources Development: Global expansion by integrating
local talents.
Fluctuations in commodity prices
The Company has adopted the following internal control mechanisms to deal with risk of commodity price: Shortening design timeframe, better control of procurement supply
quantities and shipment schedule. Multiple hedging mechanisms to reduce the associated risks to the
minimum. Purchasing commodity swaps to lock-in the prices of basic materials required such as copper and nickel.
Arranging long-term supply contracts with suppliers. Enhancing relationships with major equipment manufacturers.
To reduce the procurement costs of the projects, actively seeking for low cost regional suppliers with stable quality.
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Item Corresponding Strategies
Difficulties in executing overseas projects
The Company has established a risk management committee to monitor and control all the relevant risks at both the project and the corporate levels.
Better integration of local resources and cost control for higher efficiency.
5.2.2 The Company’s Main Services Purposes and Service Sequences
The Company’s main services are EPC and consulting-oriented, including all sorts of professional services such as feasibility study, design, equipment supply, equipment fabrication, construction services, construction management, commissioning, and maintenance. A. Main Services and Purposes
a. Refinery/Petrochemical: For the manufacturing of oil-related and petrochemical products. b. Utilities: Nuclear power plant, natural-gas power plant, coal-fired power plant, and combined-
cycle power plant. c. Infrastructure: MRT system, high speed railway, etc. d. Environmental: Incinerators operation and maintenance, waste management, water
treatment, air pollution processing, etc. e. General Industry: Steel manufacturing plant, storage and docking facilities. f. High tech and bio-related: electronic plant, pharmaceutical plant, etc.
B. Service Sequences: Feasibility study and initial design → Engineering → Procurement → Construction →
Construction Management → Commissioning → Service and Maintenance 5.2.3 Major Materials Used and Supply Status:
A. Commodities: specially-formed steel, steel plates, steel rods, cement, various pipes and accessories, electricity cables, and special paints. These materials are sourced by qualified suppliers in the region close to the project job sites.
B. Equipments: reactor, storage tank, heat exchanger, heat boiler…etc. These major equipments are supplied by specialized companies throughout the world.
5.2.4 Major Suppliers and Clients A. Major Clients (each commanding 10%-plus share of annual order volume) Information for the Last Two
Calendar Years Unit:NT$ thousands
Item
2017 2018
Company Name
Amount % Relation with
Issuer Company
Name Amount %
Relation with Issuer
1 TPC 11,893,499 17 None Orpic 13,847,797 22 None
2 Orpic 15,413,235 22 None Prpc 8,592,370 13 None
3 Others 44,299,870 61 None Others 41,629,475 65 None
Total 71,606,604 100 Total 64,069,642 100
B. Major Suppliers Information for the Last Two Calendar Years N/A.
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5.2.5 Production over the Last Two Years Unit: NT$ thousands
2017 2018
Engineering 62,906,736 54,198,529
Environment 3,220,331 3,511,930
General Trade 136,152 1,116,335
Others 231,885 642,995
Total 66,495,104 59,469,789 5.2.6 Shipments and Sales over the Last Two Years
Unit: NT$ thousands
2017 2018
Local Export Local Export
Engineering 54,965,443 11,645,549 41,053,978 16,068,582
Environment 3,538,665 940,922 3,889,678 929,891
General Trade 184,704 0 1,276,827 0
Others 331,321 0 850,586 0
Total 59,020,133 12,586,471 47,071,069 16,998,473
5.3 Human Resources 5.3.1 The information about employees employed for the most recent two fiscal years and up to
the date of printing of the annual report
Year 2017 2018 As of March 31st, 2019
Number of Employees
Permanent employee 2,571 2,547 2,531
Contract employee 127 94 92
Total 2,698 2,641 2,623
Average Age 41.9 41.9 41.9
Average service seniority 12.9 13.5 13.5
Number of employees at each level of
educational degree
Doctor 15 18 17
Master 1,255 1,268 1,261
Bachelor 1,322 1,284 1,275
Senior High School 72 53 52
Senior High School below
34 18 18
Certification details of employees whose Jobs are related to the Release of the Company’s Financial Information:
Certification Number of Employees
Certified Internal Auditor(CIA) 4
Test of the Enterprise Internal Control Basic Ability 4
Test of the Bank Internal Control Basic Ability 1
Certified Securities Investment Analyst(CSIA) 2
Certified Public Accountant (ROC) 3
Certified Public Accountant (USA) 1
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5.3.2 Work Environment and Occupational Safety and Health
A. HSE Policy Statement Our approach is captured by the following values, principles and mission statements, which drive the way our staff and subcontractors act and operate. This policy statement is also communicated to our suppliers and JV partners. ‧ Insist on Safety as the First Priority ‧ Promote Personal Health and Wellbeing ‧ Protect the Environment and Pursue Sustainability ‧ Implement Effective Risk Management ‧ Comply with Legal and Contractual Requirements ‧ Encourage Training and Engagement ‧ Continuously Improve Our HSE Management System Creating a safe, comfortable and environmentally friendly workplace has always been the CTCI's philosophy. All activities are given priority in providing a safe and secure workplace, and actively promote self-management of workplace health, create a healthy working environment, and promote physical and mental activity. Moreover, we provide professional services that meet environmental protection requirements, promote energy conservation, carbon reduction, and pollution prevention. Implement risk management mechanisms to prevent occupational injuries and environmental protection, and continuously improve the performance and goals of safety, health and environmental protection. We are committed to the design, procurement, construction and commissioning of CTCI in line with the government's regulations and customer requirements for occupational safety, health and environmental protection. In order to enhance the safety, health and environmental awareness of all employees and vendors, CTCI regularly organizes and sponsors various HSE training activities or seminars to encourage colleagues and vendors to participate actively. In addition, CTCI continues to review and optimize the activities of safety, health and environmental protection, ensuring that the safety, health and environmental protection management system is sound and feasible, thereby enhancing the effectiveness of the HSE management system.
B. HSE Organization setting CTCI set up the department of HSE as a first-class unit to provide a safe workplace for our colleagues and achieve the goal of zero incidents. Therefore, the HSE Management Department is responsible for drafting, planning, promoting and supervising the safety, health and environmental management matters of CTCI and guides the implementation of various departments, projects and related group alliances, and regularly measures the performance of various HSE management, and supervises and ensures the effectiveness of the implementation of the HSE management of each project unit, so as to prevent the reduction of occupational injuries and ensure the goals of safety and health of workers and maintaining environmental resources.
C. HSE Management System Driven by the mission of providing quality engineering services forever and adhering to the needs of customers in the era, CTCI adheres to the well-established HSE management mechanism in response to the development trend of international HSE management. CTCI obtained certificates of the ISO 14001 Environmental Management System and OHSAS 18001 Occupational Health and Safety Management System Certificate in 2006. In order to continue to improve, CTCI obtained the OHSAS 18001:2007 certification. At the same time, CTCI also voluntarily undertook the Taiwan Occupational Safety and Health Management System (TOSHMS) certification. Moreover, CTCI transferred to and obtained the CNS 15506 certification in 2012, we also continued to contribute to the TOSHMS promotion meeting, and the experience are shared to the domestic industry, and spared no effort to improve domestic safety and health management capabilities. In addition, CTCI obtained ISO 14001: 2015 certification in 2017. CTCI's long-term development of the HSE management system
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demonstrated its value in April 2018. CTCI takes the lead in being certified to ISO Occupational Health and Safety Standard in global engineering industry. This is not only the result of team efforts, but also show CTCI's determination of taking the initiative and surpass ourselves on the improvement of HSE management.
D. HSE Management Operation CTCI HSE management system is a management method and strategy. It solves the problems related to safety, health and environmental protection with order, objectives and methods. It adopts the logic of Deming management mode: planning, do, check and action (PDCA) which covers design, procurement, construction, commissioning, emergency response and headquarters office buildings. In addition, CTCI has formed the “Occupational Safety and Health Committee”, and the Committee has 15 members, with the EMO president serving as the chairman of the committee. 6 are representatives from the labor side. Routine meetings are held every three months. Prior to each meeting, we would distribute the BBS (Behavior Based Safety) survey to understand the levels of employee awareness in HSE-related information. In the survey, the employees can make suggestions to the Company on HSE matters. Furthermore, to the spirit of continuous improvement of the HSE management system, the president take charge of the “HSE Top Management Review Meeting” which not only reviews the annual achievement of the HSE target and performance indicators, but also proposes the specific and feasible improvement plans to various defects and problems as well as requires to be implemented by relevant units to reduce potential safety, health and environmental risks, and provides the best working environment for all workers.
E. HSE Training To decrease the occurrence of occupational hazards, all relevant personnel need to receive educational training for work-related hazard prevention and regulations from local government. The training courses must be completed prior to being stationed at a project site. In addition, Employees in CTCI HQ Building also need to receive routine safety, health, and environmental protection training courses according to the law, including those in fire drill, new employee training, general on-the-job safety and health training, first-aid training and high-risk emergency training for special topics.
F. HSE Risk Assessment CTCI 's HSE risk assessment procedure was established according to ISO 45001, ISO 14001 management systems and as per the principles of ISO 31000. The Administration & PR Division and HSE contact personnel of respective departments would participate in the HSE risk assessment at the Company HQ building on an annual basis. Improvements or regulatory measures are proposed for risks and opportunities. Risk evaluation during project execution is carried out at the start of the project and re-evaluated on an annual basis till its end. When there are changes in construction methods, equipment, or procedures, major worker-safety related incidents or abnormal improvements to HSE, then the corrective measures would be proposed and hazard and risk need to be identified and assessed again. The HSE assessment and improvement results of HSE were included in the enterprise risk management issues, and the president presided over the review of the “Organization Risk Management Meeting”.
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G. Statistical analysis of occupational injury CTCI is an international engineering company. According to the requirements of customers of international engineering projects, the statistics of occupational injury mainly adopts the recordable accident frequency (TRCR)1, Days Away, Restricted or Transferred incidents (DARTR)2 which published by the Occupational Safety and Health Administration (OHSA) of the US Department of Labor is the statistical basis. The causes of occupational injuries are analyzed and the implementation improvement plan is proposed, including cross-unit or systemic issues which are the focus of management.
H. HSE Specific Effectiveness In 2018, CTCI continued to work hard in safety, health and environmental protection. The outstanding results are summarized as follows: a. Domestic and foreign projects that more than one million hours without any work-related injury in
2018 rebuilding project, as detailed in the following table:
b. The CTCI HQ building has received a certificate of record on August 10, 2018 for operating for 43,212,706 hours without any work-related injury from the Occupational Safety and Health Administration, Ministry of Labor.
c. P1 Project achieved 23 million safe man-hours without any work-related injury and commended by PETRONAS in November 2018.
d. Dahej LNG Project awarded 10th CIDC Vishwakarma Awards 2018 by Construction Industry Development Council, India.
e. Dahej LNG Project awarded 1M safe work hour without Lost Time Accident by ENGINEERS INDIA LIMITED.
f. Talin Power Plant Project received an Appreciation of Zone Defense from Labor Standards Inspection Office Labor, Affairs Bureau, Kaohsiung City.
g. Tung Hsiao Power Plant Project awarded the first prize of TPC green environment site evaluation by Taipower in the year of 2018.
Note 1: Total recordable case rate, TRCR =Total recordable cases
Total hours worked× 200,000
Note 2: Days away from work, days of restricted work activity or job transfer
incidence rate, DARTR =Days away,Restricted or Transfer incidents
Total hours worked× 200,000
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h. Singapore Thomson Line Project awarded Annual Safety Award Convention 2018 Accident Free Recognition Award-Category 3.
i. Singapore Thomson Line Project awarded Annual Safety Award Convention 2018 Category C-Excellent Award.
5.4 Environmental Protection Expenditure
As the Company belongs construction and engineering technology service industry, CTCI’s workplace divides into a headquarters building and a project site, as detailed below: 1. Headquarters building: mainly for office operations, no pollution has occurred. In response to
environmental protection and energy conservation, the green building project was launched in 2015. In March of 2018, the Company completed the replacement of the LED lamp in the headquarters building and the online work of the energy management system in July. From July to December, through the analysis of the energy management system, the total energy efficiency of the headquarters building has reached 332,172 degrees (compared to the energy baseline), with an average energy saving of 10.13%.
2. Project site: Most of the operations are carried out in the industrial zone. During the construction process, all the cooperating vendors are required to implement the relevant environmental protection measures such as air, water, waste and soil to comply with environmental protection regulations. The most important goal is not to affect the residents and the environment around, and there is no unreasonable situation at present.
5.5 Labor Relations 5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of
their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests
A. Employees’ benefits
a. Labor insurance (1) The Company’s employees are enrolled in the labor insurance program pursuant to laws. (2) The labor insurance premium includes the premium of the insurance against ordinary incident
and occupational disaster. 70% of the insurance premium for ordinary incident will be borne by the Company, 20% thereof borne by the insured, 10% thereof borne by the government. The insurance premium for occupational disaster will be borne by the Company in full.
b. National health insurance (1) The Company’s employees and their dependents are enrolled in the national health insurance
program pursuant to laws. (2) The payable national health insurance premium shall be subject to the government’s relevant
requirements.
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c. Group insurance (1) The Company’s employees are entitled to the additional group insurance purchased by the
Company from the life insurance company externally. (2) The Company’s employees will be enrolled in the group insurance program immediately on the
hiring date. The group insurance covers life insurance and accidental injury insurance, which will be borne by the Company in full.
(3) The Company’s employees and their dependents may select the medical care insurance programs at their sole discretion, and 60% of the insurance premium will be borne by the Company.
d. Annual bonus The Company will allocate the incentive bonus subject to the annual operation overview, and will grant the bonus with respect to individual performance, attendance record and seniority in accordance with the relevant operating procedure.
e. Workers’ Welfare Commission The Company establishes the Workers’ Welfare Commission pursuant to laws, and allocates the welfare fund periodically. The colleagues may elect the commission members openly, and organize tours and club activities and give birthday coupons and festival gifts, subsidies and consolation money periodically.
f. Incentive payment for shareholding trust To support the employees’ shareholding committee incorporated by employees and encourage employees to save funds and hold the Company’s shares permanently, the Company specially agrees that the colleagues who have served more than one year and been enrolled in the employees’ shareholding committee may be granted the incentive payment on a pro rata basis subject to the fund allocated on a monthly basis.
g. Employee health care and promotion In order to create a healthy workplace environment, the Company has a health center and deploys full-time medical staff (nurse and psychologist), provided Employee Assistance Program system and doctors' clinic services, health training course, and has an electronic platform to assist associates in linking health resources to implement employee health care and promotion.
B. Top Management advanced studies:
a. EMBA:
Title Name Course Name Status
President Michael Yang EMBA, National Taiwan University of Science and Technology, Taiwan
Graduated in 2008
Executive Vice President
M. H. Wang EMBA, Chulalongkorn University, Thailand Graduated
in 2009
Senior Vice President & CFO
Patrick Lin EMBA, National Taiwan University, Taiwan Graduated
in 2013
Vice President Steve Jean EMBA, National Chengchi University, Taiwan Graduated
in 2013
Vice President M. G. Lee EMBA, National Taiwan University of Science and Technology, Taiwan
Graduated in 2008
Vice President S. H. Lin EMBA, National Chengchi University, Taiwan Graduated
in 2008
Accounting Officer
Ai-Chen Ho EMBA Program in Finance, National Taiwan University, Taiwan
Graduated in 2010
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b. Top Management program:
Title Name Course Name Status
Executive Vice President
Ming-Cheng Hsiao
Executive Management Training Program, National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
Senior Vice President & CFO
Patrick Lin
Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan
During the period of Feb. to Jul. 2009
Top Management Training Course by National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
Vice President Steve Jean
Participated in Advanced Executive Program for Senior Manager of National Taiwan University, Taiwan
During the period of Dec. 2008 to Aug. 2009
Top Management Training Course by National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan
During the period of Sep. 2009 to Mar. 2010
Vice President Teh-Ming Tao
Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan
During the period of Feb. to Jul. 2009
Top Management Training Course by National Taiwan University, Taiwan
During the period of Mar. to Jun. 2013
Vice President M. G. Lee Top Management Training Course by National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
Vice President S. H. Lin
Participated in Advanced Seminar on General Management of National Taiwan University, Taiwan
During the period of Feb. to Jul. 2009
Top Management Training Course by National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
Accounting Officer
Ai-Chen Ho Top Management Training Course by National Taiwan University, Taiwan
During the period of Apr. to Jul. 2013
c. Training program about Corporate Governance:
Name Date Sponsoring
Organization Course Hours
Ming-Cheng Hsiao / Todd Chen / T. C. Huang / Patrick Lin / Casey Yeh / M. G. Lee / Po-Chien Wang / Tsai-Ming Wang / Jing-Shing Wu / S. H. Lin / Connie Lin / Shih-Wei Chung / Ai-Cheng Ho / Ai-ling Hsu
2018/05/04 Center for Corporate Sustainability
Sustainable development and strategy of engineering service industry
3
Ming-Cheng Hsiao / Todd Chen / Patrick Lin / Po-Chien Wang / M. G. Lee / Tsai-Ming Wang / Jing-Shing Wu / S. H. Lin / Connie Lin / Shih-Wei Chung / Vincent Liu / Ai-Cheng Ho / Ai-ling Hsu
2018/08/03
Taiwan Corporate Governance Association
Talking about enterprise's anti-corruption and information security promotion from the evolution of bitcoin
3
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C. Employees’ training:
The Company establishes the workers’ training system in accordance with the Company’s view, mission and long-term business objectives, and plans the training development blueprint for various professional areas and job ranks. In addition to enhancing the workers’ professional ability, the Company also works hard to train their multi-departmental integration professional ability. The training programs include traditional lecturing courses, and also OJT, Lesson & Learnt, e-Learning and knowledge database in order to upgrade the employees’ knowledge about the know-how and skill, language, computer, management and leadership. As of June 2010, the Company started to perform the Mentor & Mentee (M&M) plan with respect to new employees in order to assist new employees to adapt to the enterprise culture and rapidly acquire the professional attitude and ability required by independent operation through structured (professional guidance) and non-structured (environmental adaption) one-on-one instruction. The training management applies the omnibus training management system, GTS (Global Training System), to enhance the e-Learning function and enable colleagues around the world to learn the expertise synchronously, and hopes to fulfill the workers’ training systems and development blueprint effectively through the strong control mechanism. The Company’s personnel committee will recommend excellent colleagues to take on-the-job advanced studies in domestic and foreign colleges/universities on a yearly basis, and will offer them the chance to co-work with staff of foreign engineering companies on a non-scheduled basis, so as to upgrade their expertise and solidify their international competitive ability. The employees’ training costs will be NT$16.30 million approximately per year. The average training hours will be more than 93.05 hours per person/year (245,770hours/2,641 persons). The various training hours and costs are specified as following:
Type Number of class Total number of
attendees Total hours (hour) Total costs (NT$)
Orientation training 69 467 67,680 90,940
Competence training 1,371 26,981 135,420 8,067,952
Management training 36 1,278 33,025 6,531,506
General knowledge training 57 2,578 7,210 622,163
Self-development training 5 5 2,435 987,710
Total 1,538 31,309 245,770 16,300,271
a. Orientation training: Including the introduction to the overview, work rules and QHSE management
regulations of the Company, Orientation, and Mentor & Mentee (M&M) plan; b. Competence training: The various departments conduct the specialty training programs by
instructing the employees and offering the employees with the chance to practice subject to the nature of work, the Company’s business needs or requirements under contracts and laws, and have employees participate in the actual operation adequately to upgrade their competence;
c. Management training: HR Dept. arranges the management programs subject to the Company’s status and development needs, and makes the programs available to the various departments’ management.
d. General knowledge training: The employees’ specialty training committee plans general knowledge training programs together with relevant units in accordance with the employees’ training policy, objective and strategy, and make the programs available to the whole employees;
e. Self-development training: Including English comprehension training arranged in order to upgrade the colleagues’ international language ability, and on-the-job advanced studies in domestic and foreign colleges/universities to advance employees’ competence; The operations related to the employees’ training programs shall be conducted in accordance with the “CTCI Employee Training Management Procedure” and “CTCI Employee's Professional Competency Assessment and Management Procedure”.
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D. Retirement system and implementation thereof:
The Company enforces the workers' retirement rules pursuant to the Labor Standard Law and allocates the pension reserve on a monthly basis. The rules are outlined as following: a. All of the Company’s employees shall comply with the rights and obligations defined in the workers’
retirement rules. b. The Company allocated the pension reserve equivalent to 5% of the total salary on a monthly basis
before the end of September 2002, and 6.5% thereof after October 2002. The pension reserve will be deposited to the exclusive account maintained at the Bank of Taiwan. As of July 2005, the Company has executed the new system according to the employees’ will and choice, and allocated the pension fund according to the Labor Pension Act.
c. Payment of pension fund: The Company paid the pension fund pursuant to the Labor Standard Act or Labor Pension Act pursuant to laws subject to the employees’ choice as of Jul. 1, 2005.
d. The Company has the supervisory committee of workers' retirement reserve fund that meets quarterly.
E. Other important agreements:
a. The Company is engaged in the engineering service and possesses qualified personnel, a definite management philosophy, and a well-founded management system. In addition to the ordinary organization and system, the communication channels also include employees’ forums and labor and employer meetings held on a scheduled or non-scheduled basis, and installation of a suggestions box, so as to establish common consensus and a harmonious relationship between the employees and employer through the various channels.
b. The Company is engaged in the business where the Labor Standard Law may apply and, therefore, it shall operate in accordance with the Labor Standard Law.
c. Written undertaking for non-disclosure, non-competition and intellectual property right to secure the going concern, protect the group members’ interest and complete the corporate governance, the Company amends the “written undertaking for non-disclosure and copyright & patent right” to the “written undertaking for non-disclosure, non-competition and intellectual property right” and hopes that all employees may comply with the undertaking. All employees of CTCI and its domestic affiliates and overseas companies have already signed the undertaking.
5.5.2 Loss suffered by the Company due to dispute between labor and employer in the most recent
fiscal years The Company is used to valuing the employees’ benefits and calling a labor and employer meeting and welfare committee meeting on a quarterly basis, and also installs the suggestions box to make a two-way communication channel available to employees. Therefore, the relationship between labor and employer is harmonious and no dispute over labor has arisen in the past. No material loss or punishment has been suffered by the Company due to dispute between labor and employer in the past three years. In the future, the Company will continue to adhere to the same principle and solidify the relationship between labor and employer further.
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5.5.3 Guidelines for ethical conduct 1.0 Purpose
Guidelines for ethical conduct (“the Guidelines”) are adopted to assist CTCI to foster a corporate culture of ethical management, preventing employees taking advantage of their positions in exchange for improper benefits.
2.0 Scope These Guidelines are applicable to CTCI employees, subsidiaries, and other institutions or juridical persons which are substantially controlled by CTCI ("business group").
3.0 Definition 3.1 Vendor: Including suppliers, third parties and subcontractors. 3.2 Family: Employee and their spouse and relatives within three degrees of consanguinity. 3.3 Confidential information: Including all CTCI methods, techniques, processes, programs, or
other information that can be used for production, sale or business operation. 3.4 Intellectual property: Including all CTCI patents, trademarks, copyrights and trade secrets.
4.0 Responsibility 4.1 Human Resource Department: Establish guidelines of ethical conduct and accept
accusations. 5.0 Operation Procedure
5.1 Gift receiving norm 5.1.1 If CTCI is the Party A in contract:
A. Shall not ask for, expect or receive any money and goods gifted by the downstream vendor (Party B in contract) having existing contractual relationship or might establish cooperation relationship with CTCI, including but not limited to: cash, coupon, present, entertainment ticket, fruit, food, liquor, tea, stationery, travel hospitality, commodity discount coupon, membership card, painting and other properties or preference in personal shopping.
B. But under general social etiquette and custom circumstances below, the gift may be received when not affecting the specific rights and obligations: a. The gift is the souvenir distributed extensively and with the Logo of gifting
company, such as calendar, notebook, pen drive, card case, tie, tie clip etc. or other management or inspirational books.
b. When being invited to dinner party or other communicative activities, CTCI employee has reported to the supervisor (*Notes) and been approved in advance.
* Notes: the supervisor of CTCI is the head of BU, the supervisor of subordinate unit is the President, so is the other companies under the Group.
5.1.2 If CTCI is the Party B in contract: For the present gifted to our company by Party A’s customer (landlord) and partner of our company, dinner party or other communicative activities, it may be accepted with prior report to the supervisor (*Notes).
5.2 Preventing conflicts of interest CTCI employees are allowed to conduct personal investments and other business activities under the limitation of following requirements, in order to avoid conflicts of interest between employee and CTCI, which may further affect the loyalty of such employee: 5.2.1 Avoid personal gain during business operations:
A. CTCI employees shall not participate in business operations if business relationship appears between CTCI and their family.
B. CTCI employees shall not directly or indirectly accept any improper benefits when conducting business operation.
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5.2.2 Avoid part-time job and/or competing with CTCI: A. CTCI employees shall not accept other company’s employment during tenure. B. Direct or indirect relationship with competitors shall be avoid, including part-
time/full-time employment and contractor of companies in the same business, CTCI’s clients or vendors, CTCI’s competitors and its supplier.
C. Effects on CTCI clients and/or vendors lead to disadvantage of CTCI shall not occur. 5.2.3 The measures of relatives’ employment of related industries:
A. To avoid disadvantaging CTCI and conflicting with interests of CTCI, CTCI employees shall not sharing confidential information with their relatives who is employed by a company in the related industries, and their companies as well.
B. CTCI employees shall proactively submit to Human Resource Department in written form if his/her relatives hold a business relationship with CTCI.
5.2.4 CTCI employees shall submit to Executive Management Office in advance if he/she is a director of the board, supervisor or consultant of a company in the related industries, excluding those of CTCI affiliates.
5.3 Protection of business confidentiality and intellectual property rights 5.3.1 All types of documents and information shall not be altered or modified by CTCI
employees. 5.3.2 CTCI employees shall not discuss their work with non-CTCI employees and leak
confidential information which has not been revealed by CTCI to others. The article above is still valid after resigning or retiring.
5.3.3 Before CTCI patent or confidential information is revealed, CTCI employees shall not disclose it in any ways, including disclosing it in CTCI. The disclosure in CTCI should be authorized or assigned, and the disclosure out of CTCI should be done after subscribing the contract of confidentiality.
5.4 Fair trade with vendors 5.4.1 Vendor selection
A. Vendors shall be fairly selected based on the technical specification, quality, duration and business requirements with the most competitive price. CTCI employees shall not choose vendors with preference and ignore CTCI’s interests.
B. Employees participating in vendor selection shall avoid doing any activity that might be seen as the cause for vendor selection result.
C. Employees participating in vendor selection shall not provide any information relating to the contract or proposal to irrelevant third parties.
D. CTCI’s goals in procurement are “Best price, suitable quality, and prompt delivery”. CTCI employees should assist our vendors to accomplish the quality and quantity of their products or services.
5.4.2 Dealing with vendors A. CTCI employees should treat all vendors in positivity, fairness, and politeness. B. CTCI employees shall not disclose confidential information to vendors. C. CTCI employees should avoid contacting vendors due to non-business-related
affairs
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5.5 Steps to determine the ethicalness of behavior 5.5.1 Ethical Decision Making
When CTCI employees have concerns about their own acts, or find anyone has suspected unethical behavior within CTCI, employees should take the following steps:
A. Assess that if there is any adverse effect to CTCI, other people, and yourself, due to the behaviors, according to the section 5.2 in Guideline.
B. Taking action after assessing the above statement, and should be noted the following principles:
a. The action plan shall comply with laws and regulations. b. The action plan shall meet CTCI’s policies. c. CTCI’s employees may consult ethic-responsible department before deciding to
take the action. 5.5.2 Questions to consider
When CTCI employees are faced with a situation not stated in this Guideline, the following questions may help them decide the right course of action: A. Am I personally uncomfortable about the course of action? B. Would I be unwilling or embarrassed to tell my family, friends, or coworkers? C. Could someone’s life, health, safety, or reputation be endangered by my action? D. Would such action damage CTCI’s reputation if it appears on the news? E. Would I be regret of such action?
5.6 Reporting and disciplinary procedures for violation 5.6.1 Disciplinary system
A. CTCI employees shall acknowledge the rules and their obligations. Employee violates the Codes of Ethical Conduct shall be reviewed by the Rewards and Punishment Committee, and penalized according to “CTCI Employees Reward and Punishment Regulations”. Employees who are in significant violation of this Conduct may be subject to disciplinary action up to and including termination of the labor contract.
B. Apart from being penalized according to the CTCI internal rewards and punishment related policies, CTCI may conduct civil or criminal lawsuit based on the severity of violation.
5.6.2 Reporting system A. CTCI employees who discover any violation of this Conduct or other unethical
activities shall report under their real name or anonymously according to “Accusation Management Regulations”.
B. Reporter shall provide specific descriptions and relevant evidences on the concerned person, matter, time, place and object for further investigation. Reporting channels including: Online rep6.1orting (https://www.reportnow.com.tw/ctci) and email ([email protected]).
C. The reporting channel stated above is run by an independent third-party service provider to ensure the unethical activities being reported is conveyed truthfully. CTCI promise to keep the confidentiality of reporters’ identity, protecting reporters from inappropriate disciplinary actions due to their whistle-blowing.
D. CTCI may not conduct investigation or further action if reporters could not provide descriptions and relevant evidences on the concerned person involved. Such reporters may be penalized for malicious complaints.
125
5.6 Important Contracts
Agreement Counterparty Period Major Contents Restrictions
EPC CPC Corporation 2018/11/21 2024/08/30
Taiwan CPC Third LNG Receiving Terminal Tank EPC
Project
According to contract
content stipulation
BTO Kaohsiung City Government 2018/10/31 2021/10/30
Taiwan KCG 33,000 CMD Linhai WWRU BTO Project
According to contract
content stipulation
EPC Fujian Gulei Petrochemical
Company Limited 2018/09/15 2020/08/22
GSPC Gulei EVA Project, BEPC
According to contract
content stipulation
Engineering and
Purchasing
China Synthetic Rubber Corporation
2018/09/07 2019/06/28
India CSRC/CCIL Carbon Black Plant EPs Project
According to contract
content stipulation
EPC China General Terminal & Distribution Corporation
2018/09/06 2020/12/31
Taiwan CGTD Tank Farm EPC Project
According to contract
content stipulation
BOT Taoyuan City Government 2018/08/13 2021/12/31
Taoyuan City Biomass Energy Center BOT Project
According to contract
content stipulation
Engineering Saudi Basic Industry
Corporation 2018/07/31 2019/03/30
Singapore SABIC Sasffron B Polyetherimide Project, FEED
According to contract
content stipulation
EPC Taiwan Power Company 2018/07/09 2023/01/15
Taichung Power Plant Coal Handling System
Improvement Project (EPCC)
According to contract
content stipulation
EPC PTT LNG Company Limited 2018/07/01 2022/02/28
Thailand PTTLNG Nong Fab LNG Receiving Terminal
Project, EPCC
According to contract
content stipulation
EPC
Department of Rapid Transit Systems Taipei City
Government, SEMPO
2018/06/12 2027/06/30
Taipei MCT Wanda Line System E&M Phase 1 Project
(EPCC)
According to contract
content stipulation
EPC Adani Dhamra LNG
Terminal Private Limited 2018/05/09 2021/02/08
India DLTPL Dhamra LNG Receiving Terminal EPC
Project
According to contract
content stipulation
EPC Department of Rapid Transit
Systems Taipei City Government, SEMPO
2018/04/20 2023/03/31
Taipei MRT Xinyi Eastern Extension and Xinzhuang
Depot Power Supply System and Depot Equipment Project,
EPC
According to contract
content stipulation
126
Agreement Counterparty Period Major Contents Restrictions
EPC CPC Corporation 2018/03/26 2018/09/30
Taiwan CPC Taoyuan Refinery Emergency Restoration
Project
According to contract
content stipulation
Engineering ExxonMobil Chemical
Company 2018/02/01 2019/01/31
Singapore ExxonMobil CRISP Project, FEED
According to contract
content stipulation
EPC JG Summit Petrochemical
Corporation 2017/12/11 2019/07/21
Philippines, JG Summit Aromatics and Butadiene
Extraction Units, EPC
According to contract
content stipulation
EPC Global Power Synergy
Company Limited 2017/10/27 2019/07/27
Thailand GPSC CUP 4 Co-generation Project, EPC
According to contract
content stipulation
EPC Chimei Corporation 2017/10/01 2018/12/31
Taiwan Chimei 240 CMH EDR WWRU EPC Project
According to contract
content stipulation
EPC MAXIHUB Company Limited 2017/10/01 2019/09/30
Vietnam Maxihub Lube Oil Blending and Tank Farm Terminal Project, EPCC
According to contract
content stipulation
EPC PRPC Refinery and Cracker
SDN. BHD. 2017/09/01 2020/02/29
Malaysia RAPID P28B Euro 5 Project, EPCC
According to contract
content stipulation
Engineering Jupiter MLP 2017/08/28 2018/01/28
Jupiter-Light Condensate Project, FEED
According to contract
content stipulation
EPC Prasarana Malaysia
Berhad 2017/06/16 2021/02/27
Malaysia Kuala Lumpur KLLRT Line 3 Power Supply
System Project, EPC
According to contract
content stipulation
EPC Southern Power
Generation SDN. BHD. 2017/03/01 2020/01/01
SPG 1,440MW Track 4A IPP Project, EPC
According to contract
content stipulation
EPC Formosa Plastics
Corporation, Texas 2017/01/09 2018/02/06
FPC-Tx Offsite Pipe Rack Modularization & Erection
Project, EPC
According to contract
content stipulation
EPC Taiwan Power Company 2016/12/07 2018/02/11
Dah-Tarn 600MW Emergency GTG Project,
EPCK
According to contract
content stipulation
127
Agreement Counterparty Period Major Contents Restrictions
BOT Taoyuan City Government 2016/08/19 2054/08/18
TYCG 156,000CMD Chungli Sewerage System BOT
Project
According to contract
content stipulation
BTO Kaohsiung City Government
2016/08/15 2019/08/14
KCG 45,000 CMD Fengshan WWRU BTO Project
According to contract
content stipulation
EPC Petronet LNG Limited 2016/07/01 2019/06/30
Petronet Dahej LNG IIIB-1 Expansion Project
According to contract
content stipulation
EPC Taiwan Power Co., Ltd.
Taichung Power Plant
2015/12/31
2020/12/31
TPC Taichung Power Plant 550MWX4 Existing Unit
1~4 AQCS Retrofit Project, EPC
According to contract
content stipulation
EPC
Oman Oil Refineries and
Petroleum Industries
Company SAOC (ORPIC)
2015/12/17
2019/12/17
Oman ORPIC PKG-1 Steam Cracker and U&O, EPC
According to contract
content stipulation
EPC Land Transport Authority 2015/04/08
2019/11/30
Singapore Gali Batu Depot Stabling Trackworks, EPC
According to contract
content stipulation
EP Land Transport Authority 2014/07/25
2020/12/30
Singapore Thomson Line Trackwork Project
According to contract
content stipulation
EPC PRPC Refinery and
Cracker SDN. BHD.
2014/08/01
2019/05/31
Malaysia Petronas RAPID Package 1 RFCC, EPC
According to contract
content stipulation
EPC Taiwan Power Company 2013/09/03
2020/12/31
Tunghsiao Combined Cycle Power Plant Project
According to contract
content stipulation
EPC Taiwan Power Company 2012/04/30 2018/04/30
TPC Talin Power Plant Renewal Project
According to contract
content stipulation
EPC Taiwan Power Company 2011/08/02 2021/04/17
800 MW x 3 Lin Kou Power Plant Renewal Project, EPC,
Taiwan
According to contract
content stipulation
EPC Taichung City Government
2011/05/08 2019/04/23
DORTS, Taichung MCT Power Supply EPC, Taiwan
According to contract
content stipulation
128
VI. Financial Information
6.1 Five-Year Financial Summary
6.1.1 Condensed Consolidated Balance Sheet - International Financial Reporting Standards
Unit: NT$ thousands
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Current Assets 42,090,608 45,298,807 51,394,621 54,762,209 56,534,559
Property, Plant and Equipment
7,026,878 7,001,676 6,876,224 6,660,116 10,432,036
Intangible Assets 118,638 121,469 127,686 97,201 191,198
Other Assets 7,647,224 7,808,634 7,826,358 8,548,463 9,339,540
Total Assets 56,883,348 60,230,586 66,224,889 70,067,989 76,497,333
Current Liabilities
Before distribution
31,033,931 34,389,605 40,297,705 43,960,316 51,420,086
After distribution
32,732,020 36,218,420 42,282,217 46,428,518 Note2
Non-current Liabilities 6,365,262 6,112,898 5,737,135 5,067,516 4,451,088
Total Liabilities
Before distribution
37,399,193 40,502,503 46,034,840 49,027,832 55,871,174
After distribution
39,097,282 42,331,318 48,019,352 51,496,034 Note2
Equity Attributable to Shareholders of The Parent
16,918,949 17,019,448 17,098,343 17,952,032 17,458,729
Capital Stock 7,575,303 7,611,076 7,632,738 7,632,738 7,632,738
Capital Surplus 3,230,033 3,297,703 3,322,098 3,395,620 3,545,053
Retained Earnings
Before distribution
5,874,885 6,097,988 6,343,847 7,105,963 6,540,307
After distribution
4,176,796 4,269,173 4,359,335 4,637,761 Note2
Other Equities 250,563 24,516 (188,505) (170,454) (247,534)
Treasury Stocks (11,835) (11,835) (11,835) (11,835) (11,835)
Non-controlling Interests
2,565,206 2,708,635 3,091,706 3,088,125 3,167,430
Total Equity
Before distribution
19,484,155 19,728,083 20,190,049 21,040,157 20,626,159
After distribution
17,786,066 17,899,268 18,205,537 18,571,955 Note2
Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year.
Note2: The 2018 earnings distribution has not been resolved by the Shareholder’s Meeting, hence not applicable.
129
Condensed Balance Sheet - International Financial Reporting Standards
Unit: NT$ thousands
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Current Assets 27,948,158 27,683,068 30,226,145 31,969,258 36,642,462
Property, Plant and Equipment
354,847 344,367 320,512 301,716 300,724
Intangible Assets 108,317 112,131 121,127 90,863 40,343
Other Assets 12,721,418 12,983,703 13,650,508 13,851,788 13,919,371
Total Assets 41,132,740 41,123,269 44,318,292 46,213,625 50,902,900
Current Liabilities
Before distribution
20,713,133 20,493,816 23,623,778 24,616,947 30,146,321
After distribution
22,411,222 22,322,631 25,608,290 27,085,149 Note 2
Non-current Liabilities 3,500,658 3,610,005 3,596,171 3,644,646 3,297,850
Total Liabilities
Before distribution
24,213,791 24,103,821 27,219,949 28,261,593 33,444,171
After distribution
25,911,880 25,932,636 29,204,461 30,729,795 Note 2
Equity Attributable to Shareholders of The Parent
16,918,949 17,019,448 17,098,343 17,952,032 17,458,729
Capital Stock 7,575,303 7,611,076 7,632,738 7,632,738 7,632,738
Capital Surplus 3,230,033 3,297,703 3,322,098 3,395,620 3,545,053
Retained Earnings
Before distribution
5,874,885 6,097,988 6,343,847 7,105,963 6,540,307
After distribution
4,176,796 4,269,173 4,359,335 4,637,761 Note 2
Other Equities 250,563 24,516 (188,505) (170,454) (247,534)
Treasury Stocks (11,835) (11,835) (11,835) (11,835) (11,835)
Non-controlling Interests
0 0 0 0 0
Total Equity
Before distribution
16,918,949 17,019,448 17,098,343 17,952,032 17,458,729
After distribution
15,220,860 15,193,633 15,113,831 15,483,830 Note 2
Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year.
Note2: The 2018 earnings distribution has not been resolved by the Shareholder’s Meeting, hence not applicable.
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Condensed Consolidated Income Statement - International Financial Reporting Standards
Unit: NT$ thousands; EPS: NT$
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Operating Revenues 57,691,937 67,057,640 70,509,675 71,606,604 64,069,542
Gross Profit 4,374,365 5,436,078 6,185,829 5,111,500 4,599,753
Operating Income 2,702,331 3,001,912 4,162,523 3,015,026 2,715,778
Non-Operating Income & Expenses
462,501 318,740 (184,055) 976,327 349,495
Income Before Income Tax
3,164,832 3,320,652 3,978,468 3,991,353 3,065,273
Net Income from continuing operations
2,536,396 2,570,143 3,013,715 3,290,098 2,300,063
Net Income(Loss) 2,536,396 2,570,143 3,013,715 3,290,098 2,300,063
Other Comprehensive Income (Income after tax)
114,414 (393,515) (379,303) (47,446) (51,170)
Total Comprehensive Income
2,650,810 2,176,628 2,634,412 3,242,652 2,248,893
Net Income Attributable to Shareholders of The Parent
2,092,199 2,040,610 2,222,888 2,805,348 1,827,537
Net Income Attributable to Non-controlling Interests
444,197 529,533 790,827 484,750 472,526
Total Comprehensive Income (Loss) Attributable to Shareholders of the Parent
2,205,850 1,695,145 1,861,653 2,764,679 1,762,037
Total Comprehensive Income (Loss) Attributable to Non-controlling Interests
444,960 481,483 772,759 477,973 486,856
Earnings Per Share (NT$)
2.79 2.69 2.92 3.68 2.40
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Condensed Income Statement - International Financial Reporting Standards
Unit: NT$ thousands; EPS: NT$
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Operating Revenues 38,060,203 42,049,227 42,764,443 48,591,380 35,684,680
Gross Profit 2,068,143 2,827,102 2,594,191 3,876,582 3,203,459
Operating Income 1,282,847 1,193,000 1,419,547 2,865,455 2,154,906
Non-Operating Income & Expenses
1,084,562 1,271,157 1,175,111 337,642 20,226
Income Before Income Tax
2,367,409 2,464,157 2,594,658 3,203,097 2,175,132
Net Income from continuing operations
2,092,199 2,040,610 2,222,888 2,805,348 1,827,537
Net Income(Loss) 2,092,199 2,040,610 2,222,888 2,805,348 1,827,537
Other Comprehensive Income (Income after tax)
113,651 (345,465) (361,235) (40,669) (65,500)
Total Comprehensive Income
2,205,850 1,695,145 1,861,653 2,764,679 1,762,037
Net Income Attributable to Shareholders of The Parent
- - - - -
Net Income Attributable to Non-controlling Interests
- - - - -
Total Comprehensive Income (Loss) Attributable to Shareholders of the Parent
- - - - -
Total Comprehensive Income (Loss) Attributable to Non-controlling Interests
- - - - -
Earnings Per Share (NT$) 2.79 2.69 2.92 3.68 2.40
6.1.2 Auditors’ Opinions in Past Five Years:
CPA Firm/Year 2014 2015 2016 2017 2018
PriceWaterhouseCoopers
Shih-Jung Weng
Shih-Jung Weng
Shih-Jung Weng
Shu-Chiung Chang
Yi-Fan Lin
Huei-Shyang Wang
Huei-Shyang Wang
Shu-Chiung Chang
Shih-Jung Weng
Shu-Chiung Chang
Auditing Opinion modified
unqualified opinion
modified unqualified
opinion
unqualified opinion
unqualified opinion
unqualified opinion
132
6.2 Five-Year Financial Analysis
1. Consolidated Financial Ratio Analysis -International Financial Reporting Standards
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Financial Structure
(%)
Debt to Asset Ratio 65.75 67.25 69.51 69.97 73.04
Long-term Funds to Properties, Plants and Equipment Ratio
367.86 369.07 377.06 392.00 240.39
Liquidity (%)
Current ratio 135.63 131.72 127.54 124.57 109.95
Quick ratio 122.90 121.46 116.56 114.70 101.35
Interest Coverage Ratio 3,655.79 3,811.55 5,051.79 3,932.68 2041.18
Operating Performance
Accounts Receivable Turnover (times)
8.24 9.85 11.75 14.07 8.26
Average Collection Period (days)
44.29 37.05 31.06 25.94 44.18
Inventory Turnover (times)
N/A N/A N/A N/A N/A
Accounts Payable Turnover (times)
3.67 3.88 3.97 4.56 4.92
Average Inventory Turnover Period (Days)
N/A N/A N/A N/A N/A
Properties, Plant and Equipment Turnover (times)
8.14 9.56 10.16 10.58 7.50
Total Assets Turnover (times)
1.09 1.15 1.12 1.05 0.87
Profitability
Return on Assets (%) 4.09 3.61 3.62 4.24 2.67
Return on Equity (%) 12.73 12.03 13.03 16.01 10.32
Income before tax to Capital Ratio (%)
41.78 43.63 52.12 52.29 40.16
Net Margin (%) 3.63 3.04 3.15 3.91 2.85
Earnings per share (NT$) 2.79 2.69 2.92 3.68 2.40
Cash flow
Cash flow Ratio (%) 16.27 (17.51) 37.57 10.96 (8.61)
Cash flow adequacy Ratio (%)
126.58 11.49 99.23 122.60 103.49
Cash reinvestment Ratio (%)
12.15 (30.64) 47.21 8.48 (27.66)
Leverage Operating leverage 4.60 4.48 3.54 4.49 4.84
Financial leverage 1.03 1.03 1.02 1.04 1.06
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2. Financial Ratio Analysis -International Financial Reporting Standards
Year Item
Five-Year Financial Summary
2014 2015 2016 2017 2018
Financial Structure (%)
Debt to Asset Ratio 58.87 58.61 61.42 61.15 65.70
Long-term Funds to Properties, Plants and Equipment Ratio
5,754.48 5,990.54 6,456.70 7,157.95 6,902.20
Liquidity (%)
Current ratio 134.93 135.08 127.95 129.87 121.55
Quick ratio 122.37 124.86 118.09 123.03 114.88
Interest Coverage Ratio
1,797,032.20 49,225.94 57,707.86 27,801.26 5096.63
Operating Performance
Accounts Receivable Turnover (times)
9.40 11.67 16.48 39.84 11.69
Average Collection Period (days)
38.82 31.27 22.15 9.16 31.22
Inventory Turnover (times)
N/A N/A N/A N/A N/A
Accounts Payable Turnover (times)
3.27 3.54 4.02 5.33 5.25
Average Inventory Turnover Period (Days)
N/A N/A N/A N/A N/A
Properties, Plant and Equipment Turnover (times)
104.12 120.28 128.64 156.19 118.47
Total Assets Turnover (times)
1.02 1.02 1.00 1.07 0.73
Profitability
Return on Assets (%)
5.59 4.97 5.21 6.22 3.84
Return on Equity (%)
12.73 12.03 13.03 16.01 10.32
Income before tax to Capital Ratio (%)
31.25 32.38 33.99 41.97 28.50
Net Margin (%) 5.50 4.85 5.20 5.77 5.12
Earnings per share (NT$)
2.79 2.69 2.92 3.68 2.40
Cash flow
Cash flow Ratio (%) 6.66 (18.21) 32.45 21.45 (2.77)
Cash flow adequacy Ratio (%)
75.28 (33.08) 14.15 79.86 92.49
Cash reinvestment Ratio (%)
(0.61) (27.28) 29.18 14.09 (21.04)
Leverage Operating leverage 4.50 5.15 4.78 2.88 3.33
Financial leverage 1.00 1.00 1.00 1.00 1.02
134
The formulas for the above table:
1. Financial Structure
(1) Debts to Assets Ratio = Total Liabilities / Total Assets
(2) Long-term Funds to Properties, Plants and Equipment Ratio = (Total Shareholders' Equity plus Noncurrent Liabilities) / Net of Properties, Plants and Equipment
2. Liquidity
(1) Current Ratio = Current Assets / Current Liabilities
(2) Quick Ratio = (Current Assets - inventory - Prepaid Expense) / Current Liabilities
(3) Interest Coverage Ratio = (Net Income before Income Tax and Interest Expenses) / Interest Expense
3. Operating Performance
(1) Account Receivable Turnover = Net Sales / Average Accounts Receivable
(2) Average Collection Period = 365/ Accounts Receivable Turnover
(3) Inventory Turnover = Costs of Goods Sold / Average Inventory
(4) Accounts Payable Turnover = Costs of Goods Sold / Average Accounts Payable
(5) Average Inventory Turnover Period = 365 / Inventory Turnover
(6) Properties, Plant and Equipment Turnover = Net Sales / Average of Net Properties, Plants and Equipment
(7) Total Assets Turnover Ratio = Net Sales / Average of Total Assets
4. Profitability Analysis
(1) Return on Assets =[Net Income +Interest Expense×(1-Tax Rate)] / Average Total Assets
(2) Return on Equity =Net Income / Average Shareholders' Equity
(3) Net Margin = Net Income / Net Sales
(4) Earnings per Share = (Net Income Attribute to Controlling Interest - Preferred Stock Dividend) / Weighed-average Number of Outstanding Shares
5. Cash Flow
(1) Cash Flow Ratio = Cash Flows from Operating Activities / Current Liabilities
(2) Cash Flow adequacy Ratio = Net Cash Flow from Operating Activities for the past 5 years / (Capital Expenditure + Increase in Inventory + Cash Dividends) for the past 5 years
(3) Cash Reinvestment Ratio = (Net Cash Flow from Operating Activities - Cash Dividends) / (Gross Properties, Plants and Equipment + Long-term Investment + Other Noncurrent Assets + Working Capital)
6. Leverage Ratio
(1) Operating Leverage = (Net Sales - Variable Operating Costs and Expenses) / Operating Income
(2) Financial Leverage = Operating Income / (Operating Income-Interest Expenses)
135
6.3 Audit Committee’s Review Report in the Most Recent Year
136
6.4 Annual Consolidated Financial Report in the Most Recent Year Please refer to the Appendix 1.
6.5 Annual Parent Company only Financial Report in the Most Recent Year Please refer to the Appendix 2.
6.6 Impact of the Financial Distress Occurred to the Company and Affiliates in the Recent Years until the Annual Report being published None.
137
VII. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status 7.1.1 Analysis of Financial Status Unit: NT$ thousands
Year Item
2018 2017 Difference
Remark Amount %
Current Assets 56,534,559 54,762,209 1,772,350 3.24
Properties, Plants and Equipment 10,432,036 6,660,116 3,771,920 56.63 Note 1
Intangible Assets 191,198 97,201 93,997 96.70 Note 2
Other Assets 9,339,540 8,548,463 791,077 9.25
Total Assets 76,497,333 70,067,989 6,429,344 9.18
Current Liabilities 51,420,086 43,960,316 7,459,770 16.97
Non-current Liabilities 4,451,088 5,067,516 (616,428) (12.16)
Total Liabilities 55,871,174 49,027,832 6,843,342 13.96
Equity attributable to owners of the parent
17,458,729 17,952,032 (493,303) (2.75)
Capital stock 7,632,738 7,632,738 0 0.00
Capital surplus 3,545,053 3,395,620 149,433 4.40
Retained Earnings 6,540,307 7,105,963 (565,656) (7.96)
Other equity interest (247,534) (170,454) (77,080) 45.22
Treasury stocks (11,835) (11,835) 0 0.00
Non-controlling interest 3,167,430 3,088,125 79,305 2.57
Total Equity 20,626,159 21,040,157 (413,998) (1.97)
Note1: Properties, Plants and Equipment increased, due to acquisition of land for second headquarters building and business acquisitions.
Note2: Intangible assets increased, due to goodwill generate from by business acquisition.
7.1.2 The evaluation basis of the balance sheet valuation items
Item B/S valuation item Evaluation reference Evaluation basis 1 Monetary assets
denominated in foreign currency
Spot rate on balance sheet date
Compute exchange gain or loss based on the spot rate
2 Financial instruments carried at fair value, available for sales and derivatives
Fair market value on balance sheet date
Evaluate based on the fair market value
3 Allowances for doubtful accounts
Historical records and credit references
The recognition and valuation of allowance-for-bad-debts are based on the controlling credit risks of our clients which are categorized such as excellent customers, general customers, individual assessment customers. etc. A certain percentage of allowances for bad debts are determined according to the valuation of aging of accounts receivable in each category. Note: The accounts receivables from related
parties are not subject for allowances-for-bad-debts. However if special credit risk prevails, the allowance for bad debts will be evaluated according to the risk.
4 Allowances for inventory valuation and obsolescence losses
Not applicable to the Company
Not applicable to the Company
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7.2 Analysis of Financial Performance 1. Analysis of Financial Performance
Unit: NT$ thousands
Year Item
2018 2017 Difference
Remark Amount %
Operating Revenue 64,069,542 71,606,604 (7,537,062) (10.53)
Operating Costs (59,469,789) (66,495,104) 7,025,315 (10.57)
Gross Profit 4,599,753 5,111,500 (511,747) (10.01)
Operating Expenses (1,883,975) (2,096,474) 212,499 (10.14)
Operating Income 2,715,778 3,015,026 (299,248) (9.93)
Non-operating Income and expenses 349,495 976,327 (626,832) (64.20) Explanation 2
Profit before Income Tax 3,065,273 3,991,353 (926,080) (23.20) Explanation 3
Income Tax Expense (765,210) (701,255) (63,955) 9.12
Non-controlling Interest (472,526) (484,750) 12,224 (2.52)
Income attributable to owners of the parent
1,827,537 2,805,348 (977,811) (34.86) Explanation 3
2. The analysis of the differences:
Compared to 2017, the consolidated non-operating income and expense for 2018 decreased is mainly due to gains on bad debt recoveries in 2017.
3. Analysis of gross profit: Compared to 2017, the consolidated revenue for 2018 decrease, this is mainly because new signing amount in 2017 is lower than previous year, and non-operating income and expenses decreased compared to the same period of last year. Therefore, the pre-tax net profit and the current period's net profit are lower than last year.
4. The explanation of occurred or expected operational, policy, market status, economic environment and other internal and external: None.
5. The drivers of the following year that affect company expected operating revenue: The operating revenue of the following year is expected to be flat compared to 2018 accounting to the backlog.
7.3 Analysis of Cash Flow 7.3.1 Cash Flow Analysis for the Past 2 Year
Unit: NT$ thousands
Year Item
2018/12/31 2017/12/31 Difference ratio (%)
Cash Flow Ratio (%) (8.61) 10.96 (178.56)
Fund Flow Adequacy Ratio (%) 103.49 122.60 (15.59)
Cash Re-investment Ratio (%) (27.66) 8.48 (426.18)
Explanation to changes: 1. Cash flow ratio decreased due to cash inflow from operating activities reduced. 2. Fund flow adequacy ratio decreased due to cash outflow from operating activities. 3. Cash re-investment ratio decreased due to cash inflow from operating activities reduced.
7.3.2 Analysis of Cash Liquidity
The cash inflow of Year 2018 is NT$4,283.888 million. The cash balance in the end of the year is NT$15,070.992 million. Cash liquidity is fine.
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7.3.3 Analysis of Cash Liquidity for the Coming Year Unit: NT$ thousands
Cash Balance at Beginning for the Year
Expected Net Cash Flow from
Operating Activities
Expected Cash Inflow
(Outflow)
Expected Cash Surplus (Deficit)
Leverage of Expected Cash Deficit
Investment Plans Investment Plans
15,070,992 3,865,259 (5,191,775) 9,879,217 - -
1. Analysis of change in cash flow in Year 2019: (1) Operating activities: The sufficient backlog of CTCI Group and cost down policy will create net
cash inflow. (2) Investing activities: The expected cash outflow is mainly due to new business investment. (3) Financing activities: The expected cash outflow is mainly due to cash dividends distribution and
repayment of bank loans. 2. Liquidity analysis and remedial measures against cash deficit: None.
7.4 Major Capital Expenditure Items: None. 7.5 Investment Policy in the Most Recent Year, Main Causes for Profits or Losses, Improvement Plans
and the Investment Plans for the Coming Year The Company has established subsidiaries in China, Thailand, Malaysia, Vietnam, India, the Middle East, the United States, Singapore and the Netherlands; branches in United Arab Emirates, Japan and Qatar; CTCI Indonesia representative office. In accordance with strategy of development of U.S.A, the possibility of enlargement investment in US market is under evaluation recently. To strengthen global market position, CTCI would keep assessing overseas markets and future growth, and expand its global footprints timely to enhance the international competitiveness.
7.6 Analysis of Risk Management 7.6.1 Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance,
and Future Response Measures
A. Interest rate Unit:NT$ Thousands
Item 2018 2017
Interest Income 216,808 131,658
Interest Expense 157,908 104,140
Investment gain on money market fund 2,184 1,684
Sales 64,069,542 71,606,604
Net Income before Tax 3,065,273 3,991,353
Besides equity products and deposits, the Company invests inactive money mainly in money market funds, which highly correlate with market interest rates. However, the investment gain on money market fund is not credited to interest income but to gain on disposal of investment. Therefore, to analyze the effects of changes in interest rates should consolidate interest income/expense and gain on disposal of money market fund. The inactive money was increased in this year, while interest income increased by NT$ 85,150 thousand over 2018. As FED raise the USD interest rates four times in 2018, resulted in financing costs was increased, while interest expense increased by NT$ 53,768 thousand over 2017. For inactive money, the Company will continue to look for higher-yield financial products with safety and proper liquidity to achieve the purpose of earning stable investment profits.
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B. Foreign exchange rates Unit:NT$ Thousands
Item 2018 2017
Net Foreign Exchange Gain/Loss(A) 59,774 (151,026)
Sales (B) 64,069,542 71,606,604
Net Income before Tax (C) 3,065,273 3,991,353
A/B(%) 0.09 (0.21)
A/C(%) 1.95 (3.78)
The business line of CTCI includes engineering design, procurement, fabrication, construction, supervision, project management, test & commissioning and environmental protection. All business work can be separated into two parts as domestic projects and overseas projects according to its location. For cash-in side, domestic projects are usually signed in New Taiwan dollar, and sometimes in other foreign currencies; overseas projects are usually signed in US dollar and local currency. For cash-out side, the currencies of payment are usually decided by service location or procurement region. Therefore, the Company must keep appropriate foreign assets and liabilities to operate general activities. Thus the appreciation or depreciation of major currencies, like US dollar, Japanese Yen, and Euro, will influence foreign exchange profit/loss of the Company. To lower the influence on changes in foreign exchange rates, the Company adopts natural hedge strategy, including contracts in different currencies or asking multiple-currency contracts to cover major payment in different currencies. For other FX exposure, the Company also has concrete methods to hedge the risks. Thus, the changes in foreign exchange rates little affect the income of the Company. According to above table, the ratios of foreign exchange profit/loss to sales and net income before tax are slight. That means the changes in foreign exchange rates have limited influence on the sales and net income before tax. The concrete methods to hedge FX risks are as below, a. To know well update trends of major currencies, and adjust FX position timely. b. To create internal hedge effect by netting foreign receivables and payables. c. For payment in foreign currencies, to forecast the direction of payment currencies and analyze the
potential profit and loss of foreign exchange, and then choose leads or lags strategy to hedge FX risks and achieve the goal of saving costs.
d. In order to allocate optimal capital position, to open foreign currency deposit accounts to collect foreign income and convert it into New Taiwan dollar or other strong currencies based on actual cash flow demand or FX tendency.
e. To use forward contracts or other tools to hedge FX risks. C. Inflation
Item 2018 2017
CPI 101.98 100.62
Annual Change of CPI(%) 1.35 0.62
Construction Cost Indices 105.84 102.40
Annual Change of Construction Cost Indices(%) 3.36 2.4
profit margin(%) 7.18 7.14 Source:Directorate General of Budget, Accounting and Statistics, Executive Yuan (DGBAS)/ Base year 2016.
Due to the industry nature of the Company, the analysis of inflation should be referred to not only CPI but also Construction Cost Indices.
In 2018, the consumer price index was 101.98 with an annual growth rate of 1.35%, which rose mainly by the rising cigarette tax effect and the base effect of 2017. DGBAS estimates that the annual growth rate of the consumer price index for 2019 will be 0.73%. Taiwan Institute of Economic Research stated that the Taiwan economy grew by 2.63% in 2018, as global economic expansion continued, and that the domestic prices of 2019 will hardly rise sharply as the cigarette tax effect subsided and the international raw material prices are expected to remain stable.
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In 2018, the total Construction Cost Indices rose by 3.36% mainly because firstly the metal products category indices rose by 10.61% with rising international metal prices and steel prices, secondly the cement & related products category indices and electrical equipment & apparatus category indices rose respectively by 3.11% and 2.98% with the rising shipping fees and international copper prices, and thirdly timber & related product category indices rose by 6.20% with rising imported timber prices.
The Company will do the best to take potential inflation and raw material prices into account during whole project period in bidding stage. However, the profits will still be eroded once the price increase is more than expected. The Company will continue to watch price changes closely and reflect them to project contract quotation simultaneously; furthermore the Company also executes derivatives to hedge operational risks from potential inflation.
7.6.2 Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions The Company is devoted to develop EPC service business and does not engage in high-risk and high-leveraged investment. As for lending to others, guarantees and derivatives transactions all are executed according to the Company’s “Rules Governing Procedure for Loaning of Funds”, ”Rules Governing Procedure for Making of Endorsements or Guarantees” and “The Procedure for Acquisition and Disposition of Assets”.
7.6.3 Future Research & Development Projects and Corresponding Budget A. Current Project Progress (as of end of March, 2019), Budget and Estimated Time to Finish
Item Project Name Current Progress
(%) Budget
Estimated Time
to Finish
1 Research and Development for Unified Project Information applied to the plant entire life cycle
21 11,297,500 2019.12.31
2 Development of Engineering Digital Information Acquisition Technology
25 7,591,500 2019.12.31
3 Development of Intelligent Program for Plot Plan (process area)
30 2,629,200 2019.12.31
4 Research and Development of Intelligent Technology Applied to the Construction Site Management
28 9,933,400 2019.12.31
5 Development of iSP cloud platform 16 19,619,000 2019.12.31
6 Implementation, Maintenance and Upgrade of Process Operation Systems
25 660,000 2019.12.31
7 Develop Process iEPC Intelligent Design System 17 5,280,000 2019.12.31
8 Wastewater Treatment System Research and Development 35 1,320,000 2019.12.31
9 Webpage and Log in System Module Development 10 528,000 2019.12.31
10 Dynamic Simulation of LNG Tank 20 716,000 2019.12.31
11 Develop Civil & Building iEPC Intelligent Design System 25 7,016,000 2019.12.31
12 Design Data Transferring Rule Research 62 10,112,520 2019.12.31
13 Implementation, Maintenance and Upgrade of Civil & Building Operation Systems
25 1,980,000 2019.12.31
14 Research of Cryogenic Tank 15 5,667,600 2019.12.31
15 Development of Design Tool for Floating Slab Track 14 1,700,000 2019.12.31
16 Develop Equipment iEPC Intelligent Design System 25 2,310,000 2019.12.31
17 Implementation, Maintenance and Upgrade of Equipment Operation Systems
24 1,940,400 2019.12.31
18 Research of Packaged Equipment-Pneumatic Conveying Systems
20 5,093,000 2019.12.31
19 Develop Instrumentation iEPC Intelligent Design System 24 3,168,000 2019.12.31
20 Implementation, Maintenance and Upgrade of Instrumentation Operation Systems
24 2,851,200 2019.12.31
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Item Project Name Current Progress
(%) Budget
Estimated Time
to Finish
21 Implementation, Maintenance and Upgrade of Piping Operation Systems
25 2,640,000 2019.12.31
22 Develop Piping iEPC Intelligent Design System 25 10,890,000 2019.12.31
23 Analysis of Influence from Creep on High Temperature Pipelines - Main Steam System of Power Plant
40 1,710,000 2019.12.31
24 Implementation of E3D/MDS/Clash Manager 25 4,090,000 2019.12.31
25 Develop Electrical iEPC Intelligent Design System 23 5,346,000 2019.12.31
26 Implementation, Maintenance and Upgrade of Electrical Operation Systems
24 2,772,000 2019.12.31
27 Power Plant & High Voltage Substation Grounding System Analysis
24 1,995,000 2019.12.31
28 i-Procurement Applications 2019 31 4,263,600 2019.12.31
29 Welding Robot Applied to Piping Erection Work 22 5,368,000 2019.12.31
30 The Study of Function Requirements for i-Construction Development
28 3,198,000 2019.12.31
31 Material management system (Smart Materials) maintenance and customization
25 5,940,000 2019.12.31
32 Document management system (Smart plant Foundation) maintenance and customization
24 8,700,000 2019.12.31
33 AP Service 25 660,000 2019.12.31
B. Major Factor to Influence Future RD Success
a. Right RD strategy and definition of key performance Index. b. Good communication with users to make sure production meet market requirement. c. Stable RD resource to accomplish development task effectively. d. Accurate progress control to ensure the timeliness of RD results.
7.6.4 Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales None.
7.6.5 Effects of and Response to Changes in Technology and in Industry Relating to Corporate Finance
and Sales None.
7.6.6 The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s
Response Measures None.
7.6.7 Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans
None. 7.6.8 Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans
Not Applicable. 7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive
Customer Concentration None.
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7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, or Shareholders with Shareholdings of over 10% The fluctuated security price and the possibility of changing directors are the effect and risk, and strengthening company’s information transparency is the countermeasure. The Company has established functional committees beneath Board of Directors, such as Corporate Governance Committee, Audit Committee, Remuneration Committee and Nomination Committee to strengthen Board of Directors functions, furthermore, to promote the corporate governance.
7.6.11 Effects of, Risks Relating to and Response to Changes in Control over the Company None.
7.6.12 Litigation or Non-litigation Matters A. CTCI Corporation and Mitsubishi Heavy Industries, Ltd. were joint venture in the Kaohsiung
Country Ren-Wu Resource Recovery Plant Project. The project completed on Feb. 19, 2000 and accepted by Environmental Protection Administration on May 16, 2000. CTCI claimed for release of the guarantee bond in the amount of NTD 141,690 thousands, Environmental Protection Administration, however, declined the request due to one unsolved dispute between Kaohsiung City Government and O&M Contractor. After CTCI remitted in NTD 73,253 thousands to bank for exempting from the execution of the guarantee bond and filed a lawsuit to Taiwan Taipei District Court, Environmental Protection Administration returned the amount of NTD 9,299 thousands to CTCI. As a result, CTCI reduced the claim amount to NTD 63,954 thousands, with the interest in the amount of NTD 117 thousands and the liquated damages in the amount of NTD 2,421 thousands. CTCI was then awarded a winning adjudication except for the damages in the amount of NTD 1,708 thousands has been rejected. Afterwards, the Environmental Protection Administration appealed to the Taiwan High Court but failed. Further, the Environmental Protection Administration continued to appeal to the Taiwan Supreme Court, but the judgment of Taiwan High Court was not in favor of the assertion of Environmental Protection Administration. The Environmental Protection Administration then appealed to Taiwan Supreme Court for the third time, and the judgment of Taiwan Supreme Court remanded this case to Taiwan High Court. Taiwan High Court then made a judgment in November 2018, finding CTCI’s liability in guarantee was no more than the amount of NTD 2,346,500, and the Environment Protection Administration shall pay CTCI NTD 61,706,518 and the interest. CTCI, Mitsubishi Heavy Industries, Ltd. and the Environmental Protection Administration all appealed to the Taiwan Supreme Court, and this lawsuit is now under the trial. There is no material impact to CTCI’s finance as well as business development so far.
B. CTCI Corporation, Ishikawajima-Harima Heavy Industries Co., Ltd., Resource Engineering
Services Inc. and East Construction Industry Co., Ltd were joint venture in the CPC Northern LNG Receiving Terminal Project and entered into a contract on Jul. 23, 2004. CPC Corporation alleged it has limited budget and cannot pay the compensation of price escalation, so CTCI claimed for compensation of price escalation in the amount of USD 7,983 thousands and NTD 384,159 thousands and filed a lawsuit to Taipei District Court on Mar. 5, 2010. The judgment of Taipei District Court is not awarded to CTCI. CTCI appealed to Taiwan High Court but was overruled. CTCI appealed to Taiwan Supreme Court and Taiwan Supreme Court remanded this case to Taiwan High Court to re-decide. Taiwan High Court then made a judgment in January 2019, finding that CPC shall pay CTCI USD 5,943,199, NTD 149,782,305 and interest. CPC and the joint-venture parties (CTCI, Ishikawajima-Harima Heavy Industries Co., Ltd., Resource Engineering Services Inc. and East Construction Industry Co., Ltd) all petitioned for an appeal, and this lawsuit is currently under the trial at Taiwan Supreme Court. There is no material impact to CTCI’s finance as well as business development so far.
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C. During 2015, Sinopec Engineering Group Saudi Co., Ltd. (formerly known as “Sinopec E&C Middle Ease co., Ltd.”, hereafter referred to as "Sinopec Co., Ltd."), previously a subcontractor of the Company’s subsidiary-CTCI Arabia Ltd.’s for IBN RUSHD-II Aromatic Project, filed a claim against CTCI Arabia Ltd. at International Chamber of Commerce(“ICC”) for NTD 721.039 thousands (SAR 84,000 thousands) for costs suffered due to termination of the sub-contract agreement. And after ICC made a partial arbitration award in March 2018, CTCI Arabia Ltd. and Sinopec Co., Ltd. reached a settlement agreement in June 2018 over the partial arbitration award and together with all other issues previously submitted to ICC. This arbitration has no material impact to the accompanying financial statements.
D. Jun-wei LLC., one of CTCI’s subcontractors since 2013, was responsible for scaffold lapping and
removal work in Lin-Kou power plant, Da-Lin power plant, Tong-Xiao power plant renewal and expansion construction. Jun-wei took advantage of its works and overstated the scaffold amount to get undue payment. CTCI stopped paying Jun-wei and filed a criminal complaint for Jun-wei’s offense in August 2016. Basing on the testimony by the accountant who is selected as an expert witness, the public prosecutor considered that CTCI had suffered a loss of NTD 387,498 thousand-671,005 thousand from overpaying. Despite of the abovementioned fact, Jun-wei still claimed that CTCI shall pay it NTD244,636 thousand more and applied to the court for issuance of a payment order against CTCI in March 2017. CTCI then filed an objection to the payment order, and the payment order was consequently deemed the initiation of the action and the lawsuit is now under the trial of Taipei district court. Since the amount claimed by Jun-wei is still overstated, and CTCI will be able to offset the reasonable amount with the overpayment, the lawsuit is no material impact to CTCI’s finance as well as business development so far.
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7.6.13 Information Security Risk
Modern enterprises use IT systems extensively. In order to maintain corporate governance and reduce operational risks, companies must develop complete information security measures to protect the Company's important information assets in order to pursue sustainable business. Faced with the challenges of new-type technology and business model transformation, the Company will adhere to the protection of customers' important intellectual assets and strengthen the reliability and quality of project execution to enhance customer trust. And in line with the owner's requirements or laws and regulations, such as the Business Secrets Act, the Personal Data Protection Act, and the Information and Communication Security Management Act.
The main possible potential security threats include: Fraudulent groups use Business Email Compromise (BEC) to trick employees into remittances
or transactions. Commercial spy or competitors use hacking technology to continuously infiltrate internal
hosts and steal internal corporate data. Criminal groups combined with hackers to distribute maliciously linked content through
emails, newsletters, social media app, and communications software, so that victim computer data is encrypted and abducted, requiring high ransom.
Hackers use the Internet to launch a large number of connection requests to block the Company's normal network operations.
Internal employees use illegal software or copy company confidential information to their portable storage devices, resulting in the loss of data.
Natural disasters and man-made disasters cause information hardware and software or damage, resulting in service interruption or data loss.
For these security threats, CTCI officially began risk management by introducing ISO 27001:2013 standards in 2014. Committed to reducing the probability and impact of risk occurrence and enhancing the Company's ability to continue operations. At the same time, various security measures are introduced to carry out risk management and control in response to the above-mentioned major security threats, including items as below. Continue to conduct social engineering attack simulation exercises and provide training on
security education to enhance employees' awareness of email security. The client installs anti-virus and supervision agent, blocks the connection of the USB storage
device as well as the permission to install the software by user. Provide personal cloud service to backup user’s important information.
For the network layer, CTCI introduces Chunghwa Telecom's information security cloud service, combined with a firewall, to control the traffic and applications of the network. Development of intranet protection and database access monitoring and management mechanism.
Protect file confidentiality through a sensitive file management system and disk encryption technology.
Centralized management of the host, establishment of the server room control and environment monitor mechanism. Perform data backups on a regular basis and perform disaster recovery drills each year.
Regular internal and external audits to improve the operation of the information security system.
CTCI understands that in the management of security risks, it is necessary to continue to improve with the practice of PDCA. The promotion and implementation of the security management to support the sustainable operation and development of various businesses within the Group is also an important cornerstone for the CTCI IT in the new century.
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7.6.14 Risk management organization framework A. Organization chart
Note: The dashed line indicates the communication mechanism between Risk Management Executive Committee
and Audit department rather than the reporting relationship.
B. Responsibility a. Risk Management Executive Committee
The Risk Management Executive Committee is the major monitoring mechanism for risk management of the Company, its members mainly include President and Head of Executive Management Office, Business Operations and Supporting Operations, President is the Chairman of committee, and the convener is Head of Executive Management Office. Major responsibilities are as follows: -Approve risk management policy and rules of the Company; -Examine risk management report and strategy of the Company, and improvement plan; -Supervise execution of risk control measure and improvement plan, communicate and deliver risk management affairs with and to all employees;
-Examine and assess the effectiveness of risk management measure and ask relevant unit to propose improvement plan.
b. Risk Management Secretary Service The convener of Risk Management Executive Committee will designate dedicated personnel (or unit) to be responsible for overall risk management secretary service to ensure continuous effectiveness of risk management mechanism. Major responsibilities are as follows: -Contact window of risk management mechanism of the Company; -Summarize and submit the risk management report, real time report and other works related to risk management;
-Issue relevant procedures; -Convene risk management review meeting.
c. Audit Department Audit Department can make and execute annual audit plan in accordance with the result of risk evaluation.
風險管理執行委員會
Risk Management Executive Committee 稽核室
Audit Department
Risk management representative of Risk Management Unit
全 體 員 工 All Employees
秘書業務 Secretary Service
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d. Risk Management Representative Company sets several risk management units in accordance with the functions and each unit designates risk management representative to undertake relevant affairs and contact windows. Roles and responsibilities of risk management representative are as follows: -Promote the supervision, identification and management of significant risks on behalf of risk management units;
-Summarize and prepare risk registers and improvement plan of the risk management unit; -Collect and monitor significant risk event and evaluate the impact; -Report significant risk and relevant improvement plan to Head of Business Operations and provide a copy to the unit of risk management secretary service;
-Deliver the notice of risk management to members of the unit.
e. All employees Comply with company policy, perform duty in accordance with the R&R, implement relevant operations of risk management, and report to the supervisor immediately in case of a risk.
7.6.15 Other Major Risks Competiveness is enhanced with CTCI tracking international business and economic conditions and assessing the impact on corporate finance, sales and business implementation which is responded to through various means including the control of cash flows to facilitate capital turnover; development of new markets for added business; and strengthened core technology which including project management and quality control. 7.7 Other Important Information: None.
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VIII. Special Disclosure 8.1 Summary of Affiliated Companies 8.1.1 Consolidated Business Report of Affiliates
(1) Organizational chart of the affiliates
149
150
(2) General information of the affiliates: March 31st, 2019 ; Unit : $Thousands
Company Date of
Incorporation Address
Paid-up Capital
Major Business Activities
CTCI Smart Engineering Corporation
1980.05.27 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 608,720 Planning and design of construction projects
CTCI Resources Engineering Inc. 1984.05.29 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 250,000 Planning, design and supervision of mechanical and electrical engineering projects
CTCI Advanced Systems Inc. 1987.08.03 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 234,915 Design and installation of software
ECOVE Environmental Service Corporation
1994.05.24 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 151,000 Environmental engineering
CTCI Development Corporation 1999.02.24 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 1,870,000 Real estate and leasing business
CTCI Investment Corporation 1999.02.05 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 2,072,000 Investments
ECOVE Environment Corporation
1999.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 671,051 Investments
CTCI Chemicals Corporation 1999.08.04 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 71,000 Manufacturing of chemical products
ECOVE Wujih Energy Corporation
2000.05.19 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 300,000 Environmental engineering
ECOVE Waste Management Corporation
2001.06.01 No.69, Ln. 373, Changchun St., Wuri Dist., Taichung City, Taiwan
NTD 20,000 Environmental engineering
ECOVE Miaoli Energy Corporation
2002.11.07 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 750,000 Environmental engineering
CTCI Machinery Corporation 2007.04.02 5, Xinggong Rd., Dashe Dist., Kaohsiung City, Taiwan
NTD 200,000 Planning and design of construction projects
CTCI (Thailand) Co., Ltd. 1987.08.15 19th Floor, Phairojkijja Tower 825, Bangna-Trad K.M.4, Bangna Bangkok 10260 Thailand
THB 255,000 Planning and design of construction projects
CTCI Overseas (BVI) Corporation
1997.04.30 P.O.Box 662, Road Town, Tortola British Virgin Islands
HKD 67,400 Investment, planning and design of construction
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March 31st, 2019 ; Unit : $Thousands
Company Date of
Incorporation Address
Paid-up Capital
Major Business Activities
CTCI Beijing Co., Ltd. 1993.02.17 10F Royal City International Centre B, No. 138, Andingmenwai Street, Dongcheng District, Beijing, China
USD 13,930 Planning and design of construction projects
CTCI Shanghai Co., Ltd. 2003.09.24 Room.12, Floor.8, No.441, He Nang Bai Road, Zhabei District, Shanghai, China
CNY 123,413 Consulting services for construction projects
CTCI Overseas Corporation Limited
1993.06.01 Suite 1801-5,18/F.,Tower 2,China Hong Kong City, 33 Canton Road,Tsim Sha Tsui, Kowloon Hong Kong
HKD 67,400 Planning and design of construction projects
CTCI Engineering & Construction Sdn. Bhd.
1983.09.21 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
MYR 750 Planning and design of construction projects
CTCI Arabia Ltd. 2002.10.27 P.O.Box 1962 Al Khobar 31952 Kindom of Saudi Arabia
SAR 5,000 Design and construction of chemical factories
CIMAS Engineering Company Limited
2001.03.28 6th Floor, Charmvit Building 117Tran Duy HungCau Giay District Hanoi, Vietnam
USD 3,800 Planning and design of construction projects
Century Ahead Ltd. 2000.10.12 Offshore Chambers, P.O.Box 217, Apia, Samoa
USD 750 Investments, planning and design of construction projects
Superiority (Thailand) Co., Ltd. 2006.01.01 19th Floor, Phairojkijja Tower 825, Bangna-Trad Road, K.M.4, Bangna, Bangkok 10260 Thailand
THB 350 Investments
CTCI Advanced Systems Shanghai Inc.
2001.09.11 Room 704, 7Fl, 26, Lane 168, Daduhe Road, Putuo District, Shanghai, China
USD 750 Computer skills services
CTCI Malaysia Sdn. Bhd. 2002.06.04 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
MYR 750 Planning and design of construction projects
SUMBER MAMPU Sdn. Bhd. 2003.06.04 SUITE 22-03B, 22nd Fl., Menara Tan & Tan 207 Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
MYR 100 Investments
CIPEC Construction Inc. 2003.07.03 Unit 402 SEDCCO 1 Building Roda St. Legaspi Village Makati City, Philippines.
PHP 2,500 Planning and design of construction projects
152
March 31st, 2019 ; Unit : $Thousands
Company Date of
Incorporation Address
Paid-up Capital
Major Business Activities
SINOGAL - Waste Services Co., Ltd.
2009.06.25 Rua Dr. Pedro Jose Lobo, ns 1-3, Edificio Banco Luso Internacional,15 andar, salas 1501 e 1510, em Macau
MOP 4,000 Environmental engineering
CINDA Engineering & Construction Pvt. Ltd.
2008.08.08 B-92, 9th Floor, Himalaya House, 23 Kasturba Gandhi Marg, New Delhi – 110001, India
INR 80,000 Planning and design of construction projects
CTCI Trading Shanghai Co., Ltd. 2009.07.17 Room 701, 7Fl, 26, Lane 168, Daduhe Road, Putuo District, Shanghai, China
CNY 5,000 General trade.
CTCI Americas, Inc. 2009.10.02 9555 West Sam Houston Pkwy South, Suite 420 Houston, Texas 77099, USA
USD 100 Business development and related engineering services and planning
Universal Engineering(BVI) Corporation
2003.03.06 Akara Bldg.,24 De Castro Street, Wickhams Cay I, Road Town, Tortola, British Virgin Islands.
USD 50 Planning and design of construction projects
CTCI Singapore Pte. Ltd. 2011.01.10 80 Robinson Road #02-00 Singapore(068896)
USD 5,100 Planning and design of construction projects
Yuan Ding Resources Corporation
2013.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 45,000 Environmental engineering
ECOVE Environment Consulting Corporation
2013.07.26 Room 2206-G,NO.89,East Yunling Rd., Putuo District, Shanghai, China
USD 140 Environmental engineering
CCJV P1 Engineering & Construction Sdn. Bhd.
2014.05.20 SUITE D23, 2nd Floor, Plaza Pekeliling, No.2, Jalan Tun Razak, 50400 Kuala Lumpur, Malaysia
MYR 250 Planning of construction projects
CTCI Netherlands B.V. 2016.01.04 Jan Pietersz. Coenstraat 7, 2595WP's-Gravenhage, Netherlands
EUR 300 Engineers and other technical design and consultancy
Crown Asia 2 Investment Limited
2011.04.21 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei City, Taiwan
NTD 250 Investments
CTCI&HEC Water Business Corporation
2016.08.15 16Fl., No.65, Sec. 2, Daxing W. Rd., Taoyuan Dist., Taoyuan City, Taiwan
NTD 500,000 Environmental engineering with BOT
153
March 31st, 2019 ; Unit : $Thousands
Company Date of
Incorporation Address
Paid-up Capital
Major Business Activities
CTCI CMCE JV Sdn. Bhd. 2017.07.10
7th Floor, Wisma MIE, No 2, Jalan Industri PBP 2, Taman Industri Pusat Bandar Puchong, 47100 Puchong, Selangor Darul Ehsan, Malaysia
MYR 750 Planning of construction projects
ECOVE Solar Energy Corporation 2011.6.2 13F., No. 366, Bo’ai 1st Rd., Sanmin Dist.,
Kaohsiung City 807, Taiwan (R.O.C.) NTD 632,455 Energy technology service
ECOVE Solar Power Corporation 2013.8.9 13F., No. 366, Bo’ai 1st Rd., Sanmin Dist.,
Kaohsiung City 807, Taiwan (R.O.C.) NTD 180,000 Energy technology service
ECOVE Central Corporation Ltd. 2013.2.6 10F., No. 89, Sec. 6, Zhongshan N. Rd., Shilin Dist., Taipei City 111, Taiwan (R.O.C.)
NTD 7,500 Energy technology service
ECOVE South Corporation Ltd. 2013.2.6 13F., No. 366, Bo’ai 1st Rd., Sanmin Dist.,
Kaohsiung City 807, Taiwan (R.O.C.) NTD 16,500 Energy technology service
G.D. International, LLC 2011.12.12 251 Little Falls Drive, Wilmington, DE 19808, U.S.A.
USD 11,053 Energy technology service
LUMBERTON SOLAR W2-090, LLC
2011.10.28 Wilentz,Goldman&Spitzer,P.A.,90 Woodbridge Center Drive ,Woodbridge, New Jersey 07095
USD 10,942 Energy technology service
ECOVE Solvent Recycling Corporation
2013.7.15 No. 7-1, Guojian 3rd Rd., Guanyin Dist., Taoyuan City 328, Taiwan (R.O.C.)
NTD 90,000 Operating basic chemical industry and manufacture of other chemical products
154
(3) Common Shareholders of the Company and Its Subsidiaries or Its Affiliates with Actual of Deemed Control: Not Applicable.
(4) Industries covered by the business operated by all affiliates:
The business of the Company and its subsidiaries and affiliates provide include engineering, environmental, chemical and investment.
(5) Directors, supervisors, and general managers of the Company and affiliates
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
CTCI Smart Engineering Corporation
Chairman CTCI Corporation Representative: S. C. Chun
59,098,624 97.09
Vice Chairman
CTCI Corporation Representative: Simon Liao
Director
CTCI Corporation Representative: Hwei-Nan Yih Shuh-Gong Lou Yang-Ting Chen
Supervisor CTCI Investment Corporation Representative: Connie Lin
1,000 0.00
President Simon Liao 0 0
CTCI Resources Engineering Inc.
Chairman CTCI Corporation Representative: Kuo-Ann Wu
24,762,252 99.05
Director
CTCI Corporation Representative: DingGo Ku Hwei-Nan Yih Michael Chung Benjamin C. N. Tsai
Supervisor CTCI Development Corporation Representative: Gino Tsai
1,388 0.01
President Ding-Go Ku 0 0
CTCI Advanced Systems Inc.
Chairman CTCI Corporation Representative: Teng-Yaw Yu
11,444,842 48.72
Director
CTCI Corporation Representative: Chen-Chin Chen
Shyue-Ching Lu 0 0
Bao-Lang Chen 0 0
Hou-Sheng Chan 0 0
Hung-I Chen 416,000 1.77
Independent Director
Ray Chang 0 0
Victor Tsan 0 0
Amy Lee 0 0
President Chen-Chin Chen 0 0
155
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
ECOVE Environment Services Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
14,065,936 93.15 Director
ECOVE Environment Corporation Representative: J.J. Liao Eric Tiao Mike Chiou Daniel Hsin-I Ting
Supervisor ECOVE Waste Management Corporation Representative: Chien-Lung Yen
1,000 0.01
President Eric Tiao 0 0
CTCI Development Corporation
Chairman CTCI Corporation Representative: John T. Yu
187,000,000 100.00 Director CTCI Corporation Representative: Shih-Wei Chung Jim D. Chen
Supervisor CTCI Corporation Representative: Jeff Hsu
President Patrick Lin 0 0
CTCI Investment Corporation
Chairman CTCI Corporation Representative: Todd Chen
207,200,000 100.00 Director CTCI Corporation Representative: Patrick Lin James Liu
Supervisor CTCI Corporation Representative: Hope Sun
President Patrick Lin 0 0
ECOVE Environment Corporation
Chairman CTCI Corporation Representative: J.J. Liao
38,457,105 57.31
Director
CTCI Corporation Representative: Yun-Peng Shih
Eugene Chien 0 0
Wen-Whe Pan 0 0
Yang-Min Liu 0 0
Parkwell Investment Limited Representative: Kuan-Shen Wang
1,060,000 1.58
Independent Director
Shuh-Woei Yu 0 0
Shean-Bii Chiu 0 0
James Tsai 0 0
President Yun-Peng Shih 4,000 0.00
156
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
CTCI Chemicals Corporation
Chairman CTCI Investment Corporation Representative: Kevin S.P. Jen
1,657,207 23.34
Director
CTCI Investment Corporation Representative: M.H. Wang M.L. Lee Yeu-Wen Chen
Shirley Chou 576,910 8.13
Supervisor CTCI Development Corporation Representative: Henderson Ko
480,661 6.77
President Sam Kuo 13,186 0.19
ECOVE Wujih Energy Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
29,400,000 98.00 Director
ECOVE Environment Corporation Representative: J.J. Liao Pei-Feng Chu
Supervisor ECOVE Environment Services Corporation Representative: Nicole Ku
600,000 2.00
President Pei-Feng Chu 0 0
ECOVE Waste Management Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
2,000,000 100.00 Director
ECOVE Environment Corporation Representative: J.J. Liao
Hsiu-Yu Mike Kuo Eric Tiao Alex Chen
Supervisor ECOVE Environment Corporation Representative: Jig-Wen Chang
President Hsiu-Yu Mike Kuo 0 0
ECOVE Miaoli Energy Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
56,249,000 75.00
Director
ECOVE Environment Corporation Representative: J.J. Liao
Topco Scientific Co., Ltd. Representative: Fa-Siang Tan
18,700,000 24.93
Supervisor
ECOVE Environment Services Corporation Representative: Ping-Kun Lin
1,000 0.00
Topco International Investment Co., Ltd. Representative: Su-Qing Lu
50,000 0.07
President Pei-Feng Chu 0 0
157
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
CTCI Machinery Corporation
Chairman CTCI Corporation Representative: Chen-San Hu
20,000,000 100.00 Director
CTCI Corporation Representative: M.H. Wang Ting-Kuo Li M.C. Wu Y.W. Cheng
Supervisor CTCI Corporation Representative: Yuan-Shuang Kuan
President M.C. Wu 0 0
CTCI (Thailand) Co., Ltd.
Chairman Ting-Kuo Li 0 0
Director Alex I-Kang Ho 0 0
Rungthip Chin 0 0
Managing Director
Chun-Jung Hung 0 0
CTCI Overseas (BVI) Corporation
Director
Andy Sheu 0 0
Patrick Lin 0 0
S. H. Lin 0 0
CTCI Beijing Co., Ltd.
Chairman CTCI Overseas Corporation Limited Representative: Tieh-Shih Chang
USD 13,930,443
100.00 Director
CTCI Overseas Corporation Limited Representative: Todd Chen Ho-Chuang Lee Y. S. Liao Jeff C. F. Wu
Supervisor CTCI Overseas Corporation Limited Representative: Ai-Cheng Ho
President Ho-Chuang Lee 0 0
CTCI Shanghai Co., Ltd.
Chairman CTCI Beijing Co., Ltd. Representative: Tieh-Shih Chang
CNY 123,412,513
100.00 Director
CTCI Beijing Co., Ltd. Representative: Ho-Chuang Lee Paul Wu John Hsu
Supervisor CTCI Beijing Co., Ltd. Representative: Sharon Chiang
President Ho-Chuang Lee 0 0
CTCI Overseas Corporation Limited
Director
John T. Yu 0 0
Andy Sheu 0 0
Michael Yang 0 0
CTCI Engineering & Construction Sdn. Bhd.
Chairman Ming-Cheng Hsiao 0 0
Director Jenq-Shyong Chung 0 0
T.C. Li 0 0
Managing Director
Eric Chiu 0 0
158
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
CTCI Arabia Ltd.
Chairman CTCI Corporation Representative: M. H. Wang
500 50.00
Director
CTCI Corporation Representative: Paul Yang
CTCI Overseas Corporation Limited Representative: Edward Yuan
500 50.00 Managing Director
CTCI Overseas Corporation Limited Representative: Scott Chen
CIMAS Engineering Company Limited
Chairman CTCI Overseas Corporation Limited Representative: Ting-Kuo Li
USD 3,154,000 83.00
BOM Member
CTCI Overseas Corporation Limited Representative: James Y.H. Wang Neil Chen
Sincerity Engineering Co., Ltd. Representative: Yi-Chung Yang
USD 646,000 17.00
General Director
Neil Chen 0 0
Century Ahead Ltd.
Director
Chen-Chin Chen 0 0
Benjamin C. N. Tsai 0 0
Ai-Cheng Ho 0 0
Superiority (Thailand) Co., Ltd.
Director
Ting-Kuo Li 0 0
Chun-Jung Hung 0 0
Rungthip Chin 0 0
CTCI Advanced Systems Shanghai Inc.
Chairman Century Ahead Ltd. Representative: Chen-Chin Chen
USD 750,000 100.00 Director Century Ahead Ltd. Representative: Benjamin C. N. Tsai Ming-Hsiung Fann
Supervisor Century Ahead Ltd. Representative: Ai-Cheng Ho
President Ming-Hsiung Fann 0 0
CTCI Malaysia Sdn. Bhd.
Chairman Mohamed Nor Bin Abu Bakar 0 0
Director
Kamaruddin Bin Anuar 0 0
Muhammad Anas Bin Marjunit 0 0
Jenq-Shyong Chung 0 0
Eric Chiu 0 0
159
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
SINOGAL- Waste Services Co., Ltd.
Chairman Helder Jose Moura Dos Santos 0 0
Director
Pereira Taveira Pinto, Carlos Manuel 0 0
Yun-Peng Shih 0 0
Eric Tiao 0 0
Patrick Lin 0 0
President Peter Wang 0 0
CIPEC Construction Inc.
Chairman Ming-Cheng Hsiao 1 0.00
Director
Wen-Pin Lo 1 0.00
Romuel Consunji 1 0.00
Randolph Ang 1 0.00
Grace Fernandez 1 0.00
President Romuel Consunji 1 0.00
CINDA Engineering & Construction Pvt. Ltd.
Chairman Todd Chen 0 0
Director Ming-Shyan Lee 0 0
T.M. Wang 0 0
Managing Director
C. S. Kao 0 0
CTCI Trading Shanghai Co., Ltd.
Chairman CTCI Shanghai Co., Ltd. Representative: Tieh-Shih Chang
CNY 5,000,000 100.00 Director CTCI Shanghai Co., Ltd. Representative: Ho-Chuang Lee Qiang Chai
Supervisor CTCI Shanghai Co., Ltd. Representative: Ai-Cheng Ho
President Ho-Chuang Lee 0 0
CTCI Americas, Inc.
Chairman Andy Sheu 0 0
Director
Michael Yang 0 0
M. H. Wang 0 0
Ming-Cheng Hsiao 0 0
Ting-Kuo Li 0 0
Todd Chen 0 0
Ebrahim Fatemizadeh 0 0
President Hal Ankrum 0 0 Universal Engineering (BVI) Corporation
Chairman Ming-Cheng Hsiao 0 0
CTCI Singapore Pte. Ltd.
Chairman Patrick Lin 0 0
Director Mike Chi-Min Chien 0 0
Lu Kee Hong 0 0 Managing Director Eric Chiu 0 0
Yuan Ding Resources Corporation
Chairman ECOVE Environment Corporation Representative: J.J. Liao
2,700,000 60.00 Director
ECOVE Environment Corporation Representative: Yun-Peng Shih Eric Tiao
Supervisor ECOVE Waste Management Corporation Representative: Patrick Lin
1,800,000 40.00
President Yun-Peng Shih 0 0
160
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
ECVOE Environment Consulting Corporation
Executive Director
ECOVE Environment Services Corporation Representative: Yun-Peng Shih
USD 140,000 100.00
Supervisor ECOVE Environment Services Corporation Representative: Patrick Lin
President Eric Wang 0 0
CCJV P1 Engineering & Construction Sdn. Bhd.
Director
M. H. Wang 0 0
Eric Chiu 0 0
Rick Wu 0 0
Takahashi Akemi 0 0
CTCI Netherlands B.V.
Director David Wang 0 0
Crown Asia 2 Investment Limited
Chairman CTCI Development Corporation Representative: Michael Yang
TWD 250,000 100.00 Director
CTCI Development Corporation Representative: Ming-Cheng Hsiao
CTCI&HEC Water Business Corporation
Chairman CTCI Corporation Representative: Ting-Kuo Li
25,500,000 51.00
Director
CTCI Corporation Representative: Y. S. Liao
Jeff Hsu
HSIN DAR Environment Corporation Representative: Sheng-Le Chen
Li-Ming Zhou 24,500,000 49.00
Supervisor Shu-Mei Sie 0 0
President William Chung 0 0
Sumber Mampu Sdn. Bhd.
Director
Frank Wu 0 0
Eric Chiu 0 0
Mohamed nor bin abu bakar 30,000 30.00
Kamaruddin Bin Anuer 30,000 30.00
Muhammad Anas Bin Marjunit 30,000 30.00
CTCI CMCE JV Sdn. Bhd.
Director
Mike Chi-Min Chien 0 0
Ming-Shyan Lee 0 0
Hazwan Alif Bin Abdul Rahman 0 0
Nazatul Najla Binti Abdul Rahman 0 0
ECOVE Solvent Recycling Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
8,099,000 89.99 Director
ECOVE Environment Corporation Representative: J. J. Liao
Chao-Tsung Chiang
Supervisor ECOVE Environment Services Corporation Representative: Helen Hsu
1,000 0.01
President Cheng-Lung Su 0 0
161
March 31st, 2019
Company Title Name of Representative Shareholding
Shares %
ECOVE Solar Energy Corporation
Chairman ECOVE Environment Corporation Representative: Yun-Peng Shih
63,245,452 100 Director ECOVE Environment Corporation Representative: J. J. Liao
Ming-Cheng Hsiao
Supervisor ECOVE Environment Corporation Representative: S. H. Lin
President Yun-Peng Shih 0 0
ECOVE Solar Power Corporation
Chairman ECOVE Solar Energy Corporation Representative: Yun-Peng Shih
18,000,000 100
President Yun-Peng Shih 0 0
ECOVE Central Corporation Ltd.
Director ECOVE Solar Energy Corporation Representative: Yun-Peng Shih
TWD7,500,000 100
ECOVE South Corporation Ltd.
Director ECOVE Solar Energy Corporation Representative: Yun-Peng Shih
TWD16,500,000 100
G.D. International, LLC
Chairman Yun-Peng Shih USD 11,052,826 100 Managing
Director J. J. Liao
Lumberton Solar W2-090, LLC
Chairman Yun-Peng Shih USD 10,941,907 100 Managing
Director J. J. Liao
162
8.1.2 Operation overview of the Company and affiliates
December 31st, 2018; Unit: NT$ Thousands
Company Paid-up Capital
Total Assets Total
Liabilities
Total Stockholders’
Equity
Total Operating Revenue
Operating Income (Loss)
Net Income (Loss)
Earnings Per Share (NT$)
CTCI Smart Engineering Corporation $ 608,720 $ 2,673,689 $ 2,519,617 $ 154,073 $ 2,513,743 $ (353,914) $ (325,492) $ (5.35)
CTCI Resources Engineering Inc. 250,000 910,936 621,768 289,168 1,086,273 24,161 33,446 1.34
CTCI Advanced Systems Inc. 234,915 1,367,521 823,004 544,517 1,351,630 74,129 76,235 3.25
ECOVE Environmental Service Corporation 151,000 2,086,583 1,120,249 966,334 3,405,140 352,833 366,557 24.28
CTCI Development Corporation 1,870,000 6,941,776 4,212,509 2,729,267 328,792 167,832 125,829 0.67
CTCI Investment Corporation 2,072,000 1,759,070 24,506 1,734,564 (184,030) (184,776) (192,058) (0.93)
ECOVE Environment Corporation 671,051 4,909,044 30,806 4,878,238 788,260 737,985 806,912 12.04
ECOVE Wujih Energy Corporation 300,000 1,568,795 301,387 1,267,408 705,067 364,789 275,512 9.18
ECOVE Miaoli Energy Corporation 750,000 1,512,633 174,007 1,338,626 347,786 176,683 129,055 1.72
CTCI Chemicals Corporation 71,000 356,863 118,193 238,670 504,072 69,985 58,813 8.28
ECOVE Waste Management Corporation 20,000 472,228 359,058 113,170 1,203,941 62,292 58,382 29.19
CTCI (Thailand) Co., Ltd. 242,021 1,032,723 912,855 119,868 1,417,917 (76,465) 111,154 43.59
CTCI Overseas (BVI) Corporation 265,803 1,745,574 72 1,745,501 0 (642) 169,270 25.12
CTCI Overseas Company Limited 265,803 3,393,819 1,671,815 1,722,004 2,691,929 (76,795) 169,394 25.13
CTCI Beijing Co., Ltd. 437,124 2,486,380 704,132 1,782,248 1,828,647 159,568 266,912 -
CTCI Engineering & Construction Sdn. Bhd. 5,545 1,733,242 1,718,979 14,264 2,842,347 (159,520) (88,105) (139.27)
CIMAS Engineering Company Limited 88,353 121,608 29,424 92,184 122,705 324 (283) 0.00
Century Ahead Ltd. 23,678 32,732 0 32,732 0 (41) 7,609 -
CTCI Arabia Ltd. 40,961 571,883 1,694,686 (1,122,803) 1,382,033 244,683 161,861 334.19
CTCI Shanghai Co., Ltd. 552,172 1,966,272 1,467,630 498,642 1,779,332 11,869 82,025 -
CTCI Advanced Systems Shanghai Inc. 23,822 44,422 11,279 33,143 66,569 9,016 6,771 -
163
Company Paid-up Capital
Total Assets Total
Liabilities
Total Stockholders’
Equity
Total Operating Revenue
Operating Income (Loss)
Net Income (Loss)
Earnings Per Share (NT$)
CTCI Machinery Corporation 200,000 2,241,131 1,760,696 480,435 2,619,476 94,228 67,207 3.36
Superiority (Thailand) Co., Ltd. 332 (16,861) 67,031 (83,893) 0 0 54,804 -
Universal Engineering(BVI) Co., 1,537 116,652 84,034 32,618 0 (147) 57,182 -
CIPEC Construction Inc. 1,463 238,439 264,257 25,817 142,243 (26,495) (26,413) (104.52)
CINDA Engineering & Construction Pvt. Ltd. 35,056 8,604,568 8,217,488 387,079 550,397 (210,369) (190,669) (23.84)
Sumber Mampu Sdn. Bhd. 754 178,094 5,026 173,069 0 (145) 65,264 (1.42)
CTCI Malaysia Sdn. Bhd. 5,545 297,651 24,364 273,287 11,100 261 48,785 67.68
SINOGAL-Waste Services Co., Ltd. 15,217 407,614 213,837 193,776 649,134 158,805 167,716 -
CTCI Trading Shanghai Co., Ltd. 22,371 119,402 55,589 63,813 258,031 27,085 20,309 -
CTCI Americas, Inc. 634,428 630,474 3,954 434,141 (4,676) (3,974) 634,428 (39.74)
CTCI Singapore Pte. Ltd. 145,287 843,420 1,495,951 (652,532) 1,011,015 62,233) (79,338) (15.64)
Yuan Ding Resources Corporation 45,000 39,318 80 39,238 0 (157) 78 0.02
ECOVE Environment Consulting Corporation 3,847 0 0 0 0 0 7,629 -
CCJV P1 Engineering and Construction Sdn. Bhd.
1,848 1,235,782 1,316,096 (80,313) 4,526,457 (769,393) (705,433) (2,821.73)
CTCI Netherlands B.V. 10,570 68,114 20,668 47,447 21,351 2,967 5,738 -
Crown Asia 2 Investment Limited 250 1,202 91 1,111 761 625 504 -
CTCI & HEC Water Business Corporation 500,000 550,994 71,551 479,443 231,122 (11,565) (10,044) (0.20)
CTCI CMCE JV Sdn. Bhd. 5,545 175,013 157,286 17,727 201,264 12,790 3,132 13.26
ECOVE Solar Energy Corporation 632,455 1,462,539 731,442 731,097 83,711 8,258 43,423 0.69
ECOVE Solar Power Corporation 180,000 811,794 607,733 204,061 67,492 26,975 18,678 1.04
ECOVE Central Corporation Ltd. 7,500 26,382 17,645 8,737 3,712 1,174 719 -
ECOVE South Corporation Ltd. 16,500 32,463 14,494 17,969 3,648 1,367 918 -
164
Company Paid-up Capital
Total Assets Total
Liabilities
Total Stockholders’
Equity
Total Operating Revenue
Operating Income (Loss)
Net Income (Loss)
Earnings Per Share (NT$)
G.D. International ,LLC 339,764 368,956 245 368,710 0 (137) 27,685 -
LUMBERTON SOLAR W2-090, LLC 336,354 914,609 546,921 367,688 109,681 32,731 27,817 -
ECOVE Solvent Recycling Corporation 90,000 155,801 80,563 75,238 1,485 (7,346) (7,957) (0.88)
165
8.1.3 The related information on the endorsements or guarantees for others, lending to others and derivative financial instruments of affiliates: A. Endorsements or guarantees for others: (as of March 31st, 2019) Unit: NT$ thousands
No. (Note 1)
Guarantor
Guarantee
The Ceiling on guarantee for single
enterprise
The highest balance
during the period
(Note 4)
Ending balance
as of March
31st,2019
Assets pledged
for guarantee
Ratio of the accumulated
guarantee to the net asset value of the Company as of
December 31st,2018
Ceiling on total guarantee amount (Note 3)
Name
Relationship with the Company (Note 2)
1 CTCI Advanced
Systems Inc. Century Ahead
Ltd. 2
100% of the net worth from the latest audited financial statements of CTCI Advanced Systems Inc.
18,534 18,498 - 3.40%
The ceiling for total guarantee is $1,089,036, 200% of the net worth from the latest audited financial statements of CTCI Advanced Systems Inc.
2 CTCI
Machinery Corporation
CTCI Smart Engineering Corporation
5
300% of the net worth from the latest audited financial statements of CTCI Machinery Corporation
560,000 560,000 - 116.56%
The ceiling for total guarantee is $2,882,607, 600% of the net worth from the latest audited financial statements of CTCI Machinery Corporation
3 CTCI
Chemicals Corporation
CTCI Corporation 3
300% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation
18,817 18,817 - 7.88%
The ceiling for total guarantee is $1,432,019, 600% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation
3 CTCI
Chemicals Corporation
CTCI Machinery Corporation
5
300% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation
532,830 532,830 - 223.25%
The ceiling for total guarantee is $1,432,019, 600% of the net worth from the latest audited financial statements of CTCI Chemicals Corporation
4 CTCI Shanghai
Co., Ltd. CTCI Trading
Shanghai Co., Ltd. 2
300% of the net worth from the latest audited financial statements of CTCI Shanghai Co., Ltd.
68,981 68,657 - 13.46%
The ceiling for total guarantee is $3,060,661, 600% of the net worth from the latest audited financial statements of CTCI Shanghai Co., Ltd.
166
No. (Note 1)
Guarantor
Guarantee
The Ceiling on guarantee for single
enterprise
The highest balance
during the period
(Note 4)
Ending balance
as of March
31st,2019
Assets pledged
for guarantee
Ratio of the accumulated
guarantee to the net asset value of the Company as of
December 31st,2018
Ceiling on total guarantee amount (Note 3)
Name
Relationship with the Company (Note 2)
5
CTCI Resources
Engineering Inc.
CTCI Smart Engineering Corporation
5
300% of the net worth from the latest audited financial statements of CTCI Resources Engineering Inc.
267,102 267,102 - 92.37%
The ceiling for total guarantee is $1,735,011, 600% of the net worth from the latest audited financial statements of CTCI Resources Engineering Inc.
6 ECOVE
Environment Corporation
ECOVE Solar Energy
Corporation 2
200% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
1,345,376 1,344,661 - 27.56%
The ceiling for total guarantee is $14,634,714, 300% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
6 ECOVE
Environment Corporation
ECOVE Solar Power
Corporation 2
200% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
217,000 217,000 - 4.45%
The ceiling for total guarantee is $14,634,714, 300% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
6 ECOVE
Environment Corporation
EVER ECOVE Corporation
6
200% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
17,500 17,500 - 0.36%
The ceiling for total guarantee is $14,634,714, 300% of the net worth from the latest audited financial statements of ECOVE Environment Corporation
7 ECOVE Solar
Energy Corporation
ECOVE Central Corporation Ltd.
2
400% of the net worth from the latest audited financial statements of
ECOVE Solar Energy Corporation
16,790 16,790 - 2.30%
The ceiling for total guarantee is $4,386,581,
600% of the net worth from the latest audited financial statements of ECOVE Solar
Energy Corporation
167
No. (Note 1)
Guarantor
Guarantee
The Ceiling on guarantee for single
enterprise
The highest balance
during the period
(Note 4)
Ending balance
as of March
31st,2019
Assets pledged
for guarantee
Ratio of the accumulated
guarantee to the net asset value of the Company as of
December 31st,2018
Ceiling on total guarantee amount (Note 3)
Name
Relationship with the Company (Note 2)
7 ECOVE Solar
Energy Corporation
ECOVE South Corporation Ltd.
2
400% of the net worth from the latest audited financial statements of
ECOVE Solar Energy Corporation
14,000 14,000 - 1.91%
The ceiling for total guarantee is $4,386,581,
600% of the net worth from the latest audited financial statements of ECOVE Solar
Energy Corporation
7 ECOVE Solar
Energy Corporation
ECOVE Solar Power
Corporation 2
400% of the net worth from the latest audited financial statements of
ECOVE Solar Energy Corporation
708,699 708,699 - 96.94%
The ceiling for total guarantee is $4,386,581,
600% of the net worth from the latest audited financial statements of ECOVE Solar
Energy Corporation
8 ECOVE Solar
Power Corporation
ECOVE Solar Energy
Corporation 3
400% of the net worth from the latest audited financial statements of
ECOVE Solar Power Corporation
12,420 12,420 - 6.09%
The ceiling for total guarantee is $1,224,369,
600% of the net worth from the latest audited financial statements of ECOVE Solar
Power Corporation
Note 1: 1. Company:0.
2. Subsidiaries:Please fill in the number with a sequence from 1 to 10.
Note 2: Eligibility of endorsements or Guarantees:
1. A company with which it does business. 2. A company in which the company directly or indirectly holds more than 50% of the voting shares. 3. A company directly and indirectly holds more than 50% of the voting shares in the company. 4. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares 5. Contract required. 6. The relationship of Joint venture. 7. The performance guarantees for the sale of pre-sales contracts under the Consumer Protection Law.
Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote.
Note 4: Fill in the maximum outstanding balance of endorsements/guarantees provided during the year ended March 31st, 2018.
168
B. Lending to others: (as of March 31st, 2019)
No. (Note1)
Lender Borrower Account item
(Note2)
The highest balance during period (Note3)
Ending balance as of
March 31st,2019 (Note8)
Interest rate
Nature of Lending (Note4)
Amount for operation (Note5)
Reason of short-term financing (Note6)
Allowance for bad debts
Collateral
Limit on lending for
single enterprise (Note7)
Ceiling for total
amount (Note7) Name Value
1 CTCI Advanced
Systems Inc. CTCI
Corporation
Accounts receivable-related
parties 45,000 45,000 - 2 0
For operational
needs 0 NA 0 54,452 217,807
2 CTCI Overseas Corporation
Limited
Superiority (Thailand) Co.,
Ltd.
Accounts receivable-related
parties 67,865 67,038 2.830% 2 0
For operational
needs 0 NA 0 690,818 690,818
2 CTCI Overseas Corporation
Limited
CCJV P1 Engineering & Construction
Sdn. Bhd.
Accounts receivable-related
parties 308,300 308,300 2.644% 2 0
For operational
needs 0 NA 0 690,818 690,818
2 CTCI Overseas Corporation
Limited
CTCI Americas Inc.
Accounts receivable-related
parties 126,403 126,403 2.595% 2 0
For operational
needs 0 NA 0 690,818 690,818
2 CTCI Overseas Corporation
Limited
CIPEC Construction
Inc.
Accounts receivable-related
parties 312,344 21,334 2.625% 2 0
For operational
needs 0 NA 0 690,818 690,818
2 CTCI Overseas Corporation
Limited
CTCI CMCE JV Sdn. Bhd.
Accounts receivable-related
parties 21,581 21,581 3.751% 2 0
For operational
needs 0 NA 0 690,818 690,818
3 ECOVE
Environment Corporation
ECOVE Solar Energy
Corporation
Accounts receivable-related
parties 200,000 200,000 1.010% 2 0
For operational
needs 0 NA 0 487,824 1,951,295
4
ECOVE Environment
Services corporation
ECOVE Solvent Recycling
Corporation
Accounts receivable-related
parties 70,000 70,000 1.570% 2 0
For operational
needs 0 NA 0 96,633 386,534
4
ECOVE Environment
Services corporation
ECOVE Miaoli Energy
Corporation
Accounts receivable-related
parties 70,000 70,000 - 2 0
For operational
needs 0 NA 0 96,633 386,534
169
No. (Note1)
Lender Borrower Account item
(Note2)
The highest balance during period (Note3)
Ending balance as of
March 31st,2019 (Note8)
Interest rate
Nature of Lending (Note4)
Amount for operation (Note5)
Reason of short-term financing (Note6)
Allowance for bad debts
Collateral Limit on
lending for single
enterprise (Note7)
Ceiling for total
amount (Note7) Name Value
4
ECOVE Environment
Services corporation
CTCI Corporation
Accounts receivable-related
parties 70,000 30,000 - 2 0
For operational
needs 0 NA 0 96,633 386,534
4
ECOVE Environment
Services corporation
CTCI Machinery
Corporation
Accounts receivable-related
parties 35,000 30,000 - 2 0
For operational
needs 0 NA 0 96,633 386,534
4
ECOVE Environment
Services corporation
CTCI Smart Engineering Corporation
Accounts receivable-related
parties 70,000 30,000 - 2 0
For operational
needs 0 NA 0 96,633 386,534
5 ECOVE Solar
Energy Corporation
ECOVE Central Corporation
Ltd.
Accounts receivable-related
parties 17,000 17,000 - 2 0
For operational
needs 0 NA 0 292,439 292,439
5 ECOVE Solar
Energy Corporation
ECOVE South Corporation
Ltd.
Accounts receivable-related
parties 14,000 14,000 1.710% 2 0
For operational
needs 0 NA 0 292,439 292,439
5 ECOVE Solar
Energy Corporation
ECOVE Solar Power
Corporation
Accounts receivable-related
parties 200,000 156,000 - 2 0
For operational
needs 0 NA 0 292,439 292,439
6 CTCI Beijing
Co. Ltd. CTCI Shanghai
Co. Ltd.
Accounts receivable-related
parties 275,922 274,626 - 2 0
For operational
needs 0 NA 0 716,593 716,593
7 ECOVE Waste Management Corporation
CTCI Machinery
Corporation
Accounts receivable-related
parties 7,000 7,000 - 2 0
For operational
needs 0 NA 0 11,317 45,268
7 ECOVE Waste Management Corporation
CTCI Smart Engineering Corporation
Accounts receivable-related
parties 7,000 7,000 - 2 0
For operational
needs 0 NA 0 11,317 45,268
170
Note 1: Number for items explain as follows:
■ Company:0.
■ Subsidiaries:Please fill in the number with a sequence from 1 to 10.
Note 2: This item is for account receivable-related parties, owner’s equity, prepayments, temporary payments etc. If any item belongs to Lending to others needs to
be filled in this column. Note 3: The highest balance during period.
Note 4: Description for Lending to others as follows:
■1:Having business relationship.
■2:Operational needs.
Note 5: Belongs to item 1, please fill in the amount for operation.
Note 6: Belongs to item 2, please explain the reason and lending purpose of short-term financing. For example, repayment for loans, purchasing equipments, or
needs for operations and working capital, etc. Note 7: Please fill in the limit of amount on lending to single enterprise and total limit of amount on lending to others by the Company, according to the stipulation
of the Procedures of Lending to Others, and express the calculation of the aforesaid figures in the column of remarks. Note 8: The amounts of funds to be loaned to others which have been approved by board of directors of a public company in accordance with Article 14, Item 1 of
the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they have not yet been appropriated. However, this balance should exclude the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if board of directors of a public company has authorized the chairman to loan funds in installments or in revolving within certain lines and within one year in accordance with Article 14, Item 2 of the “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by board of directors, and these lines of loaning should not be excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.
171
C. Derivative Transactions Information: a. Derivatives transactions by Dec. 31, 2018
(1) Up to Dec. 31, 2018, CTCI Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 2,210,179 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid forward contracts is 45,024 thousand, listed in non-operating income.
(2) Up to Dec. 31, 2018, CTCI Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 7,821,644 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid SWAP contracts is 3,213 thousand, listed in non-operating income.
(3) Up to Dec. 31, 2018, CTCI Corporation engaged in Commodity SWAP transactions to hedge the risks from fluctuation in raw material prices. Total contract amount is 201,045 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid SWAP contracts is 4,335 thousand, listed in non-operating income.
(4) Up to Dec. 31, 2018, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 188,179 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid SWAP contracts is 541 thousand, listed in non-operating income.
(5) Up to Dec. 31, 2018, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 350,921 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 4,361 thousand, listed in non-operating income.
b. Derivatives transactions by Mar. 31, 2019 (1) Up to Mar. 31, 2019, CTCI Corporation engaged in FX forward transactions to hedge
the risks from FX commitment. Total contract amount is 958,312 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid forward contracts is 12,107 thousand, listed in non-operating income.
(2) Up to Mar. 31, 2019, CTCI Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 5,538,963 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid SWAP contracts is 6,896 thousand, listed in non-operating income.
(3) Up to Mar. 31, 2019, CTCI Corporation engaged in Commodity SWAP transactions to hedge the risks from fluctuation in raw material prices. Total contract amount is 146,205 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid SWAP contracts is 8,690 thousand, listed in non-operating income.
(4) Up to Mar. 31, 2019, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 65,197 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 1,305 thousand, listed in non-operating expense.
(5) Up to Mar. 31, 2019, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 70,970 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 1,115 thousand, listed in non-operating income.
8.1.4 Consolidated Financial Statements of Affiliated Enterprises of the Company: None.
8.1.5 Affiliation Report: None.
172
8.2 Private Placement Securities in the Most Recent Year: None. 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year:
Unit: NT$ thousands; Shares; %
Name of subsidiary
Stock capital
collected
Fund source
Shareholding ratio of the
Company (%)
Date of acquisition
or disposition
Shares and
amount acquired
Shares and
amount disposed
of
Investment gain (loss)
Shareholdings & amount in the most recent
year
Mortgage
Endorsement amount made
for the subsidiary
Amount loaned to
the subsidiary
ECOVE Environment Services Corporation
$ 151,000 own reserves
93.16 1997.08
50,000 $1,764
1,028
$61 None None None
1997.10 50,000 $2,021
$258
1997.10 50,000 $1,893
1997.12 50,000 $1,780
1997.12 100,000
$3,673 $185
1998.08 50,000 $3,092
1998.12 Stock dividend
11,500
1998.12 61,000 $3,112
$45
1999.12 971,160 $31,475
1999.12 831,560 $26,951
$721
2001.12 505,871 $13,256
2002.12 645,000
2004.08 Stock dividend
9
2005.10 9
173
Name of subsidiary
Stock capital
collected
Fund source
Shareholding ratio of the
Company (%)
Date of acquisition
or disposition
Shares and
amount acquired
Shares and
amount disposed
of
Investment gain (loss)
Shareholdings & amount in the most recent
year
Mortgage
Endorsement amount made
for the subsidiary
Amount loaned to
the subsidiary
Stock dividend
2006.10 Stock dividend
7
2007.10 Stock dividend
20
2008.09 Stock dividend
12
CTCI Development Corporation
$1,690,000 own reserves
100 1999.03 550,000 $21,878
912,170 $53,818
None None None
1999.03 200,000
$8,104 $303
1999.04 450,000 $19,056
1999.04 450,000 $18,791
$586
1999.05 350,000 $14,677
1999.05 620,000 $27,053
$831
1999.06 776,000 $28,919
1999.07 Stock dividend
168,200
1999.07 15,000
$584 $18
1999.08 100,000
$3,044
2000.02 427,000 $14,663
$1,274
174
Name of subsidiary
Stock capital
collected
Fund source
Shareholding ratio of the
Company (%)
Date of acquisition
or disposition
Shares and
amount acquired
Shares and
amount disposed
of
Investment gain (loss)
Shareholdings & amount in the most recent
year
Mortgage
Endorsement amount made
for the subsidiary
Amount loaned to
the subsidiary
2000.07 Stock dividend
68,220
2001.07 Stock dividend
108,060
2004.08 Stock dividend
8,710
2005.10 Stock dividend
8,671
2006.10 Stock dividend
6,954
2007.10 Stock dividend
18,539
2008.09 Stock dividend
10,816
CTCI Investment Corporation
$1,402,000 own reserves
100 1999.04
328,000 $14,198
344,436 $20,322
None None None
1999.04 105,000
$4,582 $108
1999.05 350,000 $14,826
1999.05 400,000 $17,881
$769
1999.06 250,000
$9,659
1999.07 Stock dividend
84,600
2000.02 308,840
$8,841 $420
2000.07 Stock dividend
84,600
175
Name of subsidiary
Stock capital
collected
Fund source
Shareholding ratio of the
Company (%)
Date of acquisition
or disposition
Shares and
amount acquired
Shares and
amount disposed
of
Investment gain (loss)
Shareholdings & amount in the most recent
year
Mortgage
Endorsement amount made
for the subsidiary
Amount loaned to
the subsidiary
2001.07 Stock dividend
40,803
2004.08 Stock dividend
3,289
2005.10 Stock dividend
3,274
2006.10 Stock dividend
2,625
2007.10 Stock dividend
7,000
2008.09 Stock dividend
4,084
Crown Asia 2 Investment Limited Note
$ 250 Donation 100 2011.04 500 $18
500 $18
None None None
Note: Acquired in March 2016, the funding source is by donation.
176
8.4 Other Supplementary Information 8.4.1 KPI by industry:
A. CTCI Group budget for conclusion of contract, operating revenue and gross profit
Unit : NT$100 million
Item Budget in 2018 Performance
New Order 907.80 1,017.06
Operating Revenue 693.38 641.00
Gross Profit 52.43 46.08
B. Social responsibility
a. Concern about safety and health environment, carry out HSE management system. b. Aggressively build positive ties throughout the community and promote local activities of
culture and education. c. Foster engineering expertise with close attention employee training and education and the
exchange of knowledge which also enhances Industry-academic cooperation d. Provide employment opportunities, assist job related activities and build long term ties with
marginally listed workers. e. Offer a friendly workplace, health promotion activities in order to improve the physical and
mental health of the employee. f. KPI for energy saving and carbon reduction and health management:
Item KPI in 2018 Performance
Water consumption in the workplace
Less than 11.145M3/person (average water consumption
over the past two years) 9.542 M3/person
Power consumption in workplace
Less than 3,332 degree/person
(average amount consumed electricity over the past two
years)
2,623 degree/person
Health management - Promotion
More than 12 seminars 1044 persons/
14 seminars
g. To enhance the urgent response ability, there are a total of 39 qualified first-aid personnel.
8.4.2 Material Event Impact on Shareholders' Equity or Share Price in Recent Years until the Annual
Report being published: None.
CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED 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.
177
178
179
180
181
182
CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
~6~
December 31, 2018 December 31, 2017 Assets Notes AMOUNT % AMOUNT %
Current assets 1100 Cash and cash equivalents 6(1) $ 15,070,992 20 $ 19,354,880 28 1110 Financial assets at fair value
through profit or loss - current
6(2)
554,638 1 581,194 1 1120 Financial assets at fair value
through other comprehensive
income - current
6(3)
500,327 1 - - 1125 Available-for-sale financial assets
- current
12(4)
- - 647,629 1 1140 Contract assets - current 6(22) 24,823,432 32 - - 1150 Notes receivable, net 6(4) 75,006 - 33,150 - 1170 Accounts receivable, net 6(4) 9,092,332 12 5,325,391 8 1180 Accounts receivable - related
parties
7
944,071 1 42,359 - 1190 Receivables from customers on
construction contracts
- - 23,759,310 34 1200 Other receivables 338,381 - 225,175 - 1210 Other receivables - related parties 7 96 - 15,309 - 1220 Current income tax assets 134,826 - 106,134 - 130X Inventories 167,345 - 193,174 - 1410 Prepayments 6(5) 4,253,895 6 4,147,122 6 1470 Other current assets 6(6) and 8 579,218 1 331,382 - 11XX Current Assets 56,534,559 74 54,762,209 78 Non-current assets 1517 Financial assets at fair value
through other comprehensive
income - non-current
6(3)
788,611 1 - - 1543 Financial assets measured at cost
- non-current
12(4)
- - 676,511 1 1550 Investments accounted for using
equity method
6(7)
3,680,933 5 3,627,018 5 1600 Property, plant and equipment,
net
6(8) and 8
10,432,036 13 6,660,116 10 1760 Investment property, net 6(9) and 8 808,129 1 812,652 1 1780 Intangible assets 191,198 - 97,201 - 1840 Deferred income tax assets 6(28) 493,335 1 513,339 1 1900 Other non-current assets 6(10) and 8 3,568,532 5 2,918,943 4 15XX Non-current assets 19,962,774 26 15,305,780 22 1XXX Total assets $ 76,497,333 100 $ 70,067,989 100
(Continued)
183
CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
The accompanying notes are an integral part of these consolidated financial statements.
~7~
December 31, 2018 December 31, 2017 Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities 2100 Short-term borrowings 6(11) $ 13,414,459 18 $ 6,539,017 9 2120 Financial liabilities at fair value
through profit or loss - current 6(2)
548 - 8,819 - 2130 Contract liabilities - current 6(22) 13,920,198 18 - - 2150 Notes payable 18,788 - 4,069 - 2170 Accounts payable 6(12) 9,991,262 13 11,878,274 17 2180 Accounts payable - related parties 7 1,359,712 2 926,710 1 2190 Payable to customers on
construction contracts
- - 13,880,106 20 2200 Other payables 6(13) 4,691,267 6 2,748,644 4 2220 Other payables - related parties 7 1,249 - 20 - 2230 Current income tax liabilities 371,943 - 420,312 1 2300 Other current liabilities 6(14)(15) 7,650,660 10 7,554,345 11 21XX Current Liabilities 51,420,086 67 43,960,316 63 Non-current liabilities 2540 Long-term borrowings 6(15) 1,423,586 2 1,921,150 3 2570 Deferred income tax liabilities 6(28) 411,810 1 429,286 - 2600 Other non-current liabilities 6(16) 2,615,692 3 2,717,080 4 25XX Non-current liabilities 4,451,088 6 5,067,516 7 2XXX Total Liabilities 55,871,174 73 49,027,832 70 Equity attributable to owners of
parent
Share capital 6(19) 3110 Common stock 7,632,738 10 7,632,738 11 Capital surplus 6(20) 3200 Capital surplus 3,545,053 4 3,395,620 5 Retained earnings 6(21) 3310 Legal reserve 3,558,894 5 3,278,360 5 3320 Special reserve 763,794 1 765,904 1 3350 Unappropriated retained earnings 2,217,619 3 3,061,699 4 Other equity interest 3400 Other equity interest ( 247,534 ) - ( 170,454 ) - 3500 Treasury stocks 6(19) ( 11,835 ) - ( 11,835 ) - 31XX Equity attributable to owners
of the parent
17,458,729 23 17,952,032 26 36XX Non-controlling interest 4(3) 3,167,430 4 3,088,125 4 3XXX Total equity 20,626,159 27 21,040,157 30 Significant contingent liabilities
and unrecognised contract
commitments
9
Significant events after the
balances sheet date 11
3X2X Total liabilities and equity $ 76,497,333 100 $ 70,067,989 100
184
CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNIINGS PER SHARE AMOUNTS)
The accompanying notes are an integral part of these consolidated financial statements.
~8~
Year ended December 31
2018 2017
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(22) and 7 $ 64,069,542 100 $ 71,606,604 100
5000 Operating costs 6(26)(27) and 7 ( 59,469,789 ) ( 93 ) ( 66,495,104 ) ( 93 )
5900 Gross Profit 4,599,753 7 5,111,500 7
Operating expenses 6(26)(27)
6200 General and administrative expenses ( 1,739,023 ) ( 3 ) ( 1,966,023 ) ( 3 )
6300 Research and development expenses ( 144,952 ) - ( 130,451 ) -
6000 Total operating expenses ( 1,883,975 ) ( 3 ) ( 2,096,474 ) ( 3 )
6900 Operating income 2,715,778 4 3,015,026 4
Non-operating income and expenses
7010 Other income 6(23) 321,605 1 1,201,897 2
7020 Other gains and losses 6(24) 219,355 - ( 220,438 ) -
7050 Finance costs 6(25) ( 157,908 ) - ( 104,140 ) -
7060 Share of profit of associates and joint
ventures accounted for under equity
method
6(7)
( 33,557 ) - 99,008 -
7000 Total non-operating income and
expenses
349,495 1 976,327 2
7900 Profit before income tax 3,065,273 5 3,991,353 6
7950 Income tax expense 6(28) ( 765,210 ) ( 1 ) ( 701,255 ) ( 1 )
8200 Profit for the year $ 2,300,063 4 $ 3,290,098 5
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(17)
$ 15,131 - ( $ 75,893 ) -
8316 Unrealized gain or loss on valuation of
financial assets at fair value through other
comprehensive income
31,159 - - -
8320 Share of other comprehensive income of
associates and joint ventures accounted
for using equity method, components of
other comprehensive income that will not
be reclassified to profit or loss
( 50,797 ) - 225 -
8349 Income tax related to components of other
comprehensive income that will not be
reclassified to profit or loss
6(28)
17,083 - 12,902 -
Components of other comprehensive
income that will be reclassified to profit or
loss
8361 Cumulative translation differences of
foreign operations
( 63,746 ) - 6,552 -
8362 Unrealized gain on valuation of available-
for-sale financial assets
- - 8,768 -
8300 Total other comprehensive loss for the year ( $ 51,170 ) - ( $ 47,446 ) -
8500 Total comprehensive income for the year $ 2,248,893 4 $ 3,242,652 5
Profit attributable to:
8610 Owners of the parent $ 1,827,537 3 $ 2,805,348 4
8620 Non-controlling interest 472,526 1 484,750 1
Total $ 2,300,063 4 $ 3,290,098 5
Comprehensive income attributable to:
8710 Owners of the parent $ 1,762,037 3 $ 2,764,679 4
8720 Non-controlling interest 486,856 1 477,973 1
Total $ 2,248,893 4 $ 3,242,652 5
9750 Basic earnings per share 6(29) $ 2.40 $ 3.68
9850 Diluted earnings per share 6(29) $ 2.39 $ 3.67
185
CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Equity attributable to owners of the parent
Retained earnings Other equity interest
Notes
Common stock
Capital surplus
Legal reserve
Special reserve
Unappropriated
earnings
Cumulative translation
differences of foreign
operations
Unrealized gains
(losses) from
financial assets
measured at fair
value through other
comprehensive
income
Unrealized gain or
loss on available-
for-sale financial
assets
Treasury stocks
Total
Non-controlling
interest
Total equity
The accompanying notes are an integral part of these consolidated financial statements.
~9~
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 $ 3,091,706 $ 20,190,049 Profit for the year - - - - 2,805,348 - - - - 2,805,348 484,750 3,290,098 Other comprehensive income - - - - ( 58,720 ) 9,184 - 8,867 - ( 40,669 ) ( 6,777 ) ( 47,446 ) Total comprehensive income - - - - 2,746,628 9,184 - 8,867 - 2,764,679 477,973 3,242,652 Appropriation of 2016 earnings 6(21) Legal reserve - - 222,289 - ( 222,289 ) - - - - - - - Special reserve - - - ( 2,217 ) 2,217 - - - - - - - Cash dividends - - - - ( 1,984,512 ) - - - - ( 1,984,512 ) ( 515,844 ) ( 2,500,356 ) Employee stock options exercised by subsidiary
6(20) - 6,590 - - - - - - - 6,590 30,822 37,412
Share-based payment transactions 6(21) - 65,027 - - - - - - - 65,027 373 65,400 Long-term investment did not change according to the proportion of shareholdings
- 1,905 - - - - - - - 1,905 ( 1,905 ) - Increase in non-controlling interests - - - - - - - - - - 5,000 5,000 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 $ 3,088,125 $ 21,040,157 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 $ 3,088,125 $ 21,040,157 Effect of retrospective application and retrospective restatement
- - - - 166,900 - ( 47,643 ) ( 55,828 ) - 63,429 - 63,429
Balance at 1 January after adjustments 12(4) 7,632,738 3,395,620 3,278,360 765,904 3,228,599 ( 226,282 ) ( 47,643 ) - ( 11,835 ) 18,015,461 3,088,125 21,103,586 Profit for the year - - - - 1,827,537 - - - - 1,827,537 472,526 2,300,063 Other comprehensive income - - - - ( 32,913 ) ( 63,746 ) 31,159 - - ( 65,500 ) 14,330 ( 51,170 ) Total comprehensive income - - - - 1,794,624 ( 63,746 ) 31,159 - - 1,762,037 486,856 2,248,893 Appropriation of 2017 earnings 6(21) Legal reserve - - 280,534 - ( 280,534 ) - - - - - - - Special reserve - - - ( 2,110 ) 2,110 - - - - - - - Cash dividends - - - - ( 2,468,202 ) - - - - ( 2,468,202 ) ( 449,992 ) ( 2,918,194 ) Employee stock options exercised by subsidiary
6(20) - 5,241 - - - - - - - 5,241 25,094 30,335
Share-based payment transactions 6(20) - 144,192 - - - - - - - 144,192 3,658 147,850 Disposal of investments in equity instruments designated at fair value through other comprehensive income
- - - - ( 58,978 ) - 58,978 - - - - - Increase in non-controlling interest - - - - - - - - - - 13,689 13,689 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 $ 3,167,430 $ 20,626,159
186
CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Years ended December 31
Notes 2018 2017
~10~
CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 3,065,273 $ 3,991,353 Adjustments Adjustments to reconcile profit (loss) (Gain) loss on valuation of financial assets 6(24) ( 38,022 ) 51,566 (Gain) loss on reduction of capital of investments 6(24) ( 94,727 ) 2,503 Adjustment on evaluation of exchange rate of available-for-sale
foreign currency bond investment
- 1,700 Gain on disposal of property, plant and equipment 6(24) ( 69,979 ) ( 2,484 ) Share of profit of associates and joint ventures accounted for under
equity method 6(7)
33,557 ( 99,008 ) Depreciation 6(26) 405,239 360,564 Amortization 6(26) 164,384 160,991 (Reversal of) allowance for doubtful accounts 12(2) 28,317 ( 873,699 ) Interest income 6(23) ( 216,808 ) ( 131,658 ) Dividends revenue 6(23) ( 32,056 ) ( 25,799 ) Interest expense 6(25) 157,908 104,140 Compensation costs for employee stock options 6(27) 147,850 65,603 Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss 165,719 120,413 Notes receivable ( 41,856 ) 28,458 Notes receivable - related parties - 959,245 Accounts receivable ( 3,795,258 ) ( 707,147 ) Accounts receivable - related parties ( 901,712 ) ( 32,363 ) Contract assets - current ( 1,064,122 ) - Receivables from customers on construction contracts - ( 443,470 ) Other receivables ( 137,216 ) 22,725 Decrease in other receivables - related parties 15,213 ( 10,659 ) Inventories 25,829 ( 3,625 ) Prepayments ( 76,945 ) 86,074 Other current assets ( 247,836 ) 2,846,580 Other non-current assets 75,206 236,456 Changes in operating liabilities Notes payable 14,719 ( 2,954 ) Accounts payable ( 1,892,257 ) ( 3,911,046 ) Accounts payable - related parties 433,002 386,974 Contracts liabilities - current 40,092 - Payables to customers on construction contracts - ( 4,363,616 ) Other payables 126,368 31,795 Other payables-related parties 1,229 4 Other current liabilities 172,843 6,862,816 Other non-current liabilities ( 325,440 ) ( 376,358 )
Cash (outflow) inflow generated from operations ( 3,861,486 ) 5,336,074 Interest received 246,327 113,365 Dividends received 6(7) 121,761 209,190 Interest paid ( 159,773 ) ( 103,127 ) Income tax paid ( 772,534 ) ( 736,101 )
Net cash flows (used in) from operating activities ( 4,425,705 ) 4,819,401
(Continued)
187
CTCI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
Years ended December 31
Notes 2018 2017
The accompanying notes are an integral part of these consolidated financial statements.
~11~
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received $ - $ 521
Decrease in other receivables - related parties - 29,000
Decrease in financial assets at fair value through other comprehensive
income - current
132,855 -
Increase in available-for-sale financial assets - ( 110,004 )
Proceeds from disposal of available-for-sale financial assets - 32,894
Increase in financial assets measured at cost - non-current 12(4) - ( 132,773 )
Decrease in financial assets measured at cost-non-current - 3,610
Increase in financial assets at fair value through profit or loss - non-current ( 159,452 ) -
Capital withdrawal from liquidation of investee f company - 30,828
Increase in investments accounted for under the equity method 6(7) ( 530,000 ) ( 943,086 )
Acquisition of property, plant and equipment 6(32) ( 982,011 ) ( 157,088 )
Proceeds from disposal of property, plant and equipment 230,905 3,669
Increase in intangible assets ( 13,357 ) ( 42,662 )
Decrease in refundable deposits 1,975 11,351
Increase in other non-current assets ( 112,387 ) ( 121,898 )
Net cash flow from acquisition of subsidiaries ( 206,659 ) -
Net cash flows used in investing activities ( 1,638,131 ) ( 1,395,638 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings 6,732,442 4,833,331
Repayment of long-term borrowings ( 2,117,746 ) ( 338,000 )
Increase (decrease) in deposits received (recognized in other non-current
liabilities)
49,012 61,439
Proceeds from employee stock options exercised 30,334 37,412
Cash dividends paid ( 2,918,194 ) ( 2,500,356 )
Increase in non-controlling interest 4,100 5,000
Net cash flows from financing activities 1,779,948 2,098,826
Net (decrease) increase in cash and cash equivalents ( 4,283,888 ) 5,522,589
Cash and cash equivalents at beginning of year 19,354,880 13,832,291
Cash and cash equivalents at end of year $ 15,070,992 $ 19,354,880
188
~12~
CTCI CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2018 AND 2017
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS,
EXCEPT AS OTHERWISE INDICATED)
1. HISTORY AND ORGANISATION
CTCI Corporation (the “Company”) was incorporated as a company limited by shares under the
provisions of the Company Law of the Republic of China on April 6, 1979 and commenced its operations
on May 1, 1979. The main business activities of the Company and its subsidiaries (collectively referred
herein as the “Group”) are the design, survey, construction and inspection of various engineering and
construction projects, plants, machinery and equipment and environmental protection projects. The
Company’s shares have been listed and traded on the Taiwan Stock Exchange since May 1993.
2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORISATION
These consolidated financial statements were authorised 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 the FSC effective from 2018 are as
follows:
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 2, ‘Classification and measurement of share-based
payment transactions’
January 1, 2018
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with
IFRS 4,
Insurance contracts’
January 1, 2018
IFRS 9, ‘Financial instruments’ January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from
contracts with customers’
January 1, 2018
Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for
unrealised
January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018
189
~13~
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment.
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 Group 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.
C. The Group has elected not to restate prior period financial statements using the modified
retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018,
please refer to Notes 12(4) B and C.
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
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
190
~14~
In adopting the new standards endorsed by the FSC effective from 2018, the Group 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 new standards as of January 1, 2018 are
summarized below:
(A)In accordance with IFRS 9, the Group reclassified available-for-sale financial assets and financial
assets measured at cost in the amounts of $647,629 and $1,169,148, 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 and loss, financial assets at fair
value through other comprehensive income-current and financial assets at fair value through other
comprehensive income-non-current by $83,692, $647,629 and $656,249, 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, $103,470 and
$492,637, respectively.
(B) Presentation of contract assets and contract liabilities
In line with IFRS 15 requirements, the Group changes 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
recognised 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
would amount to $23,759,310.
b. Under IFRS 15, liabilities in relation to contracts are recognised 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 would amount to $13,880,106.
(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by
the Group
New standards, interpretations and amendments endorsed by the FSC effective from 2018 are as
follows:
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ January 1, 2019
IFRS 16, ‘Leases’ January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ January 1, 2019
IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle January 1, 2019
191
~15~
Except for the following, the above standards and interpretations have no significant impact to the
Group’s financial condition and financial performance based on the Group’s assessment. The
quantitative impact will be disclosed when the assessment is complete.
IFRS 16, ‘Leases’
IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard
requires lessees to 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,
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 Group expects to recognise the lease contract of lessees in line with IFRS 16. However, the Group
does not intend to restate the financial statements of prior period (collectively 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 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 applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the periods presented, unless
otherwise stated.
(1) Compliance statement
The consolidated financial statements of the Group have been prepared in accordance with the
“Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International
Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC
Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between
an investor and its associate or joint venture’
To be determined by
International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
192
~16~
(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under
the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through
profit or loss.
(b) Financial assets 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.
B. The preparation of financial statements in conformity with IFRS, requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed in Note 5.
C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Group has elected to apply
modified retrospective approach whereby the cumulative impact of the adoption was recognised
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 detail of significant accounts.
(3) Basis of consolidation
A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are
all entities (including structured entities) controlled by the Group. The Group controls an entity
when the Group 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. Consolidation
of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases
when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between
companies within the Group are eliminated. Accounting policies of subsidiaries have been
adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners
of the parent and to the non-controlling interests. Total comprehensive income is attributed to
the owners of the parent and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
193
~17~
(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 recognised directly in equity.
B. Subsidiaries included in the consolidated financial statements:
Name of Investor Name of SubsidiaryMain Business
Activities
December 31,
2018
December 31,
2017Description
CTCI Corp. CTCI Advanced
Systems Inc.
Design and installation
of software
48.72 48.72 Note 1
CTCI Corp. CTCI Development
Corp.
Real estate and leasing
business
100.00 100.00 Note 2
CTCI Corp. CTCI Investment
Corp.
Investments 100.00 100.00
CTCI Corp.
CTCI Investment
Corp.
CTCI Smart
Engineering Corp.
Planning and design of
Construction projects
97.09 97.09
CTCI Corp.
CTCI Development
Corp.
CTCI Resources
Engineering Inc.
Planning, design and
supervision of
mechanical and
electrical engineering
projects
99.06 99.06
CTCI Corp. CTCI Americas, Inc. Business development
and related engineering
services and planning
100.00 100.00
CTCI Corp. CTCI Singapore Pte.
Ltd.
Planning and design of
construction projects
100.00 100.00
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
CTCI Corp.
CTCI Investment
Corp.
CTCI Development
Corp.
ECOVE
Environment Corp.
Investments 57.72 57.99
Ownership (%)
194
~18~
Name of Investor Name of SubsidiaryMain Business
Activities
December 31,
2018
December 31,
2017Description
ECOVE Environment
Corp.
ECOVE Environment
Services Corp.
ECOVE Wujih
Energy Corp.
Environmental
engineering
100.00 100.00
ECOVE Environment
Corp.
ECOVE Waste
Management Corp.
Environmental
engineering
100.00 100.00
ECOVE Environment
Corp.
ECOVE Waste
Management Corp.
ECOVE
Environment
Services Corp.
Environmental
engineering
93.16 93.16
ECOVE Environment
Corp.
ECOVE Environment
Services Corp.
ECOVE Miaoli
Energy Corp.
Environmental
engineering
75.00 75.00
ECOVE Environment
Corp.
ECOVE Waste
Management Corp.
Yuan Ding
Resources
Management Corp.
Environmental
engineering
100.00 100.00
ECOVE Environment
Services Corp.
ECOVE
Environment
Consulting Corp.
Environmental
engineering
100.00 100.00
CTCI Corp.
ECOVE Environment
Services Corp.
SINOGAL-Waste
Services CO.,Ltd
Environmental
engineering
60.00 60.00
CTCI Corp. CTCI Overseas
(BVI) Corp.
Investments 100.00 100.00
CTCI Overseas (BVI)
Corp.
CTCI Overseas Co.,
Ltd.
Planning and design of
Construction projects
100.00 100.00
CTCI Overseas Co.,
Ltd.
CTCI Beijing Co.,
Ltd.
Planning and design of
Construction projects
100.00 100.00
CTCI Overseas Co.,
Ltd.
CIMAS Engineering
Company
Planning and design of
Construction projects
50.00 50.00 Note 3
CTCI Overseas Co.,
Ltd.
Universal
Engineering (BVI)
Corp.
Planning and design of
Construction projects
100.00 100.00
CTCI Overseas Co.,
Ltd.
CIPEC Construction
Company Inc.
Planning and design of
Construction projects
39.89 39.89 Note 3,4
Ownership (%)
195
~19~
Name of Investor Name of SubsidiaryMain Business
Activities
December 31,
2018
December 31,
2017Description
CTCI Overseas Co.,
Ltd.
CINDA Engineering
& Construction
Private Limited
Planning and design of
Construction projects
100.00 100.00 Note 3
CTCI Corp.
CTCI Overseas Co.,
Ltd.
CTCI Arabia Ltd. Design and construction
of chemical factories
100.00 100.00
CTCI Smart
Engineering
Corp.
CTCI Overseas Co.,
Ltd.
CTCI Shanghai Co.,
Ltd.
Consulting services for
construction projects
- 100.00 Note 7
CTCI Beijing Co., Ltd. CTCI Shanghai Co.,
Ltd.
Consulting services for
construction projects
100.00 - Note 7
CTCI Shanghai Co.,
Ltd.
CTCI Trading
Shanghai Co., Ltd.
General trade 100.00 100.00
CTCI Corp.
CTCI Overseas Co.,
Ltd.
CTCI Engineering
& Construction
Sdn. Bhd.
Planning and design of
Construction projects
100.00 100.00 Note 3
CTCI Overseas Co.,
Ltd.
Sumber Mampu
Sdn. Bhd.
Investments 10.00 10.00 Note 1, 3
Sumber Mampu Sdn.
Bhd.
CTCI Engineering &
Construction Sdn.
Bhd.
CTCI Corp.
Superiority (Thailand)
Co., Ltd.
CTCI (Thailand) Co.,
Ltd.
Planning and design of
Construction projects
100.00 100.00
CTCI Advanced
Systems Inc.
Century Ahead Ltd. Investments 100.00 100.00
Century Ahead Ltd. CTCI Advanced
Systems Shanghai
Inc.
Computer skills services 100.00 100.00
Universal Engineering
(BVI) Corp.
Superiority
(Thailand) Co.,Ltd
Planning and design of
construction projects
100.00 100.00
CTCI Corp. CTCI Machinery
Corp.
Planning and design of
construction projects
100.00 100.00
Note 3CTCI MALAYSIA
Sdn. Bhd.
Planning and design of
Construction projects
100.00 100.00
Ownership (%)
196
~20~
Name of Investor Name of SubsidiaryMain Business
Activities
December 31,
2018
December 31,
2017Description
CTCI Corp. CCJV P1
Engineering &
Construction Sdn.
Bhd.
Planning of construction
projects
99.00 99.00 Note 3
CTCI Development
Corporation
Crown Asia-2
Investment Limited
Investments 100.00 100.00
CTCI Singapore Pte.
Ltd.
CTCI Netherlands
B.V.
Engineers and other
technical design and
consultancy
100.00 100.00
CTCI Corp. CTCI & HEC Water
Business Co., Ltd.
Waste water treatment
Sewerage System
51.00 51.00
CTCI Corp. CTCI CMCE JV
SDN. BHD.
Planning and design of
Construction projects
51.00 51.00 Note 3
ECOVE Environment
Corp.
ECOVE Environment
Services Corp.
ECOVE Solvent
Recycling
Corporation
Environmental
engineering
90.00 - Note 5
ECOVE Environment
Corp.
ECOVE Solar
Energy Corporation
Electric Power Supply 100.00 - Note 6
ECOVE Solar Energy
Corporation
ECOVE Solar Power
Corporation
Electric Power Supply 100.00 - Note 6
ECOVE Solar Energy
Corporation
ECOVE Central
Corporation Ltd.
Electric Power Supply 100.00 - Note 6
ECOVE Solar Energy
Corporation
ECOVE South
Corporation Ltd.
Electric Power Supply 100.00 - Note 6
ECOVE Solar Energy
Corporation
G.D International,
LLC.
Electric Power Supply 100.00 - Note 6
G.D International,
LLC.
Lumberton Solar
W2-090, LCC.
Electric Power Supply 100.00 - Note 6
Ownership (%)
197
~21~
Note 1: Being the Company’s controlled entities, these subsidiaries that were under 50% owned
by the Company directly or indirectly were included in the consolidated financial
statements.
Note 2: On December 12, 2018, the Company's Board of Directors decided to increase its share
in the subsidiary, CTCI Development Corp., with a total investment amount of
$1,800,000. As of December 31, 2018, the Company has invested $180,000.
Note 3: The company was audited by other independent accountants for the years ended
December 31, 2018 and 2017.
Note 4: In June 2017, the Group sold 25 equity shares (approximately 0.11%) to a non-related
party, Accuracy International Inc.
Note 5: In May 2018, the subsidiaries, ECOVE Environment Corp. and ECOVE Environment
Services Corp., acquired ECOVE Solvent Recycling Corp. by cash, which became a
subsidiary whose 90% equity was indirectly held by the Company. The acquiree was
consolidated into the financial statements effective from the date of acquisition.
Note 6: In September 2018, the subsidiary, ECOVE Environment Corp., acquired the remaining
shares of ECOVE Solar Energy Corporation by cash, which became a subsidiary whose
100% equity was indirectly held by the Group. The acquiree was consolidated into the
financial statements effective from the date of acquisition.
Note 7: In August 2018, the subsidiary, CTCI Beijing Co., Ltd, acquired a 100% equity interest
of the subsidiaries, CTCI Smart Engineering Corp. and CTCI Overseas Co., Ltd. by cash
and shares.
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 December 31, 2018 and 2017, the non-controlling interest amounted to $3,167,430 and
$3,088,125, respectively. The information of non-controlling interest and respective subsidiaries
is as follows:
Name of subsidiary
Principal place
of business Amount
Ownership
(%) Amount
Ownership
(%)
ECOVE Environment
Corp.
Taiwan 2,571,278$ 42.28% 2,451,173$ 42.01%
Non-controlling interest
December 31, 2018 December 31, 2017
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Summarized financial information of the subsidiaries:
Balance sheets
Statements of comprehensive income
Statements of cash flows
December 31, 2018 December 31, 2017
Current assets 3,574,782$ 3,695,572$
Non-current assets 5,500,925 3,361,557
Current liabilities 1,496,920)( 1,326,188)(
Non-current liabilities 2,157,428)( 500,059)(
Total net assets 5,421,359$ 5,230,882$
ECOVE Environment Corp.
2018 2017
Revenue 4,847,097$ 4,479,587$
Profit before income tax 1,235,238 1,116,343
Income tax expense 254,298)( 156,919)(
Profit for the year 980,940 959,424
Other comprehensive loss, net of tax 3,708)( 53,608)(
Total comprehensive income for the year 977,232$ 905,816$
Comprehensive income attributable
to non-controlling interest 170,709$ 184,732$
Dividends paid to non-controlling interest 183,364$ 220,219$
ECOVE Environment Corp.
For the years ended December 31,
2018 2017
Net cash provided by operating activities 1,565,883$ 1,200,009$
Net cash (used in) provided by investing
activities
643,689)( 305,025
Net cash used in financing activities 1,036,987)( 1,077,023)(
(Decrease) increase in cash and cash
equivalents 114,793)( 428,011
Cash and cash equivalents, beginning of year 1,657,955 1,229,944
Cash and cash equivalents, end of year 1,543,162$ 1,657,955$
ECOVE Environment Corp.
For the years ended December 31,
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(4) Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the “functional
currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the
Company’s functional and the Group’s presentation currency
A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of such transactions are
recognised in profit or loss in the period in which they arise.
(b) 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 recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value
through profit or loss are re-translated at the exchange rates prevailing at the balance sheet
date; their translation differences are recognised in profit or loss. Non-monetary assets and
liabilities denominated in foreign currencies held at fair value through other comprehensive
income are re-translated at the exchange rates prevailing at the balance sheet date; their
translation differences are recognised in other comprehensive income. However, non-
monetary assets and liabilities denominated in foreign currencies that are not measured at fair
value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income
within ‘other gains and losses’.
B. Translation of foreign operations
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:
(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange
rate at the date of that balance sheet;
(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
Group 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.
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(c) Income and expenses for each statement of comprehensive income are translated at average
exchange rates of that period; and
(d) All resulting exchange differences are recognised in other comprehensive income.
(5) Classification of current and non-current items
A. As the operating cycle for construction contracts usually exceeds one year, the Group 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.
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.
(6) 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.
(7) 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
amortised cost or fair value through other comprehensive income.
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B. 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.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the
transaction costs in profit or loss. The Group subsequently measures the financial assets at fair
value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future
economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably.
(8) 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 Group has made an irrevocable election at initial
recognition to recognise changes in fair value in other comprehensive income and debt instruments
which meet all of the following criteria:
(a) The objective of the Group’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 recognised and derecognised using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs.
The Group subsequently measures the financial assets at fair value:
(a) The changes in fair value of equity investments that were recognised 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 recognised as revenue when the right to
receive payment is established, future economic benefits associated with the dividend will
flow to the Group 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 recognised in profit or loss, the changes in fair value of debt instruments
are taken through other comprehensive income. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in other comprehensive income is reclassified
from equity to profit or loss.
(9) Loans and receivables
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange
for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured
at initial invoice amount as the effect of discounting is immaterial.
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(10) Impairment of financial assets
For debt instruments measured at fair value through other comprehensive income and financial
assets at amortised cost, at each reporting date, the Group recognises the impairment provision for
12 months expected credit losses if there has not been a significant increase in credit risk since initial
recognition or recognises 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 Group recognises the
impairment provision for lifetime ECLs.
(11) Derecognition of financial assets
The Group derecognises 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
Group 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 Group has not retained control of the financial asset.
(12) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the
moving average method. The item by item approach is used in applying the lower of cost and net
realizable value. Net realizable value is the estimated selling price in the ordinary course of business,
less the estimated cost of completion and applicable variable selling expenses.
(13) Investments accounted for using the equity method-associates
A. Associates are all entities over which the Group 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.
B. The Group’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 Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any other unsecured receivables, the Group does
not recognize further losses, unless it has incurred legal or constructive obligations or made
payments on behalf of the associate.
C. When changes in an associate’s equity that are not recognized in profit or loss or other
comprehensive income of the associate and such changes not affecting the Group’s ownership
percentage of the associate, the Group recognizes change in ownership interests in the associate
in ‘capital surplus’ in proportion to its ownership.
203
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D. 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 Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new
shares proportionately, which results in a change in the Group’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 Group’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.
F. When the Group disposes its investment in an associate and loses significant influence over this
associate, the amounts previously recognised in other comprehensive income in relation to the
associate, are reclassified to profit or loss, on the same basis as would be required if the relevant
assets or liabilities were disposed of. If it retains significant influence over this associate, the
amounts previously recognised in other comprehensive income in relation to the associate are
reclassified to profit or loss proportionately in accordance with the aforementioned approach.
(14) Joint operation and investment accounted for using equity method-joint ventures
Investment of joint arrangements are classified as joint operations or joint ventures based on its
contractual rights and obligations.
A. Joint operation
For the interest in a joint operation, the Group recognises direct interest in (and other shares of)
the joint operation’s assets, liabilities, revenue and expense which are included in the financial
statements.
B. Investment accounted for using equity method - joint ventures
The Group accounts for its interest in a joint venture using equity method. Unrealised profits and
losses arising from the transactions between the Group and its joint venture are eliminated to the
extent of the Group’s interest in the joint venture. However, when the transaction provides
evidence of a reduction in the net realisable value of current assets or an impairment loss, all
such losses shall be recognised immediately.When the Group’s share of losses in a joint venture
equals or exceeds its interest in the joint venture together with any other unsecured receivables,
the Group does not recognise further losses, unless it has incurred legal or constructive
obligations or made payments on behalf of the joint venture.
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(15) 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 Group 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:
(16) 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 48 years.
(17) Intangible assets
A. Computer software is stated at cost and amortized on a straight-line basis over its estimated useful
life of 3 to 5 years.
B. Goodwill arises in a business combination accounted for by applying the acquisition method.
Buildings and structures 3~60 years
Machinery 2~20 years
Transportation equipment 2~10 years
Office equipment 2~10 years
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(18) Impairment of non-financial assets
The Group 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 recognised 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, the impairment loss shall be
reversed to the extent of the loss previously recognized in profit or loss.
(19) Borrowings
Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised
initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in profit or loss over the period of the borrowings using the effective interest
method.
(20) 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.
(21) 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 categorised 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 recognised in profit or loss. The Company subsequently measures these
financial liabilities at fair value with any gain or loss recognised in profit or loss.
(22) Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability specified in the contract
is discharged or cancelled or expires.
(23) 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.
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(24) Non-hedging derivatives
Non-hedging derivatives are initially recognised 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 recognised in profit or
loss.
(25) Provisions
Provisions (decommissioning) are recognized when the Group has a present legal or constructive
obligation as a result of past events, and it is probable that an outflow of economic resources will be
required to settle the obligation and the amount of the obligation can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects
the current market assessments of the time value of money and the risks specific to the obligation.
When discounting is used, the increase in the provision due to passage of time is recognized as
interest expense. Provisions are not recognized for future operating losses.
(26) Employee benefits
A. Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected
to be paid in respect of service rendered by employees in a period and should be recognised as
expense in that period when the employees render service.
B. Pensions
(a) Defined contribution plans
For defined contribution plans, the contributions are recognized as pension expenses when
they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent
of a cash refund or a reduction in the future payments.
(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount
of pension benefits that employees will receive on retirement for their services with the
Group in current period or prior periods. The rate used to discount is determined by using
interest rates of high-quality corporate bonds that are denominated in the currency in
which the benefits will be paid, and that have terms to maturity approximating the terms
of related pension liability; when there is no deep market in high-quality corporate bonds,
the Group uses interest rates of government bonds (at the balance sheet date) instead.
ii. Remeasurement arising on defined benefit plans are recognised in other comprehensive
income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognised immediately in profit or loss.
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C. Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of
employment as a result from either the Group’s decision to terminate an employee’s employment
before the normal retirement date, or an employee’s decision to accept an offer of redundancy
benefits in exchange for the termination of employment. The Group recognizes expense as it can
no longer withdraw an offer of termination benefits or it recognizes relating restructuring costs,
whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet
date shall be discounted to their present value.
D. Employees’ compensation, directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognized as
expenses and liabilities, provided that such recognition is required under legal 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.
(27) Employee share-based payment
For the equity-settled share-based payment arrangements, the employee services received are
measured at the fair value of the equity instruments granted at the grant date, and are recognized as
compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value
of the equity instruments granted shall reflect the impact of market vesting conditions and non-
market vesting conditions. Compensation cost is subject to adjustment based on the service
conditions that are expected to be satisfied and the estimates of the number of equity instruments
that are expected to vest under the non-market vesting conditions at each balance sheet date.
Ultimately, the amount of compensation cost recognized is based on the number of equity
instruments that eventually vest.
(28) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or
loss, except to the extent that it relates to items recognized in other comprehensive income or
items recognized directly in equity, in which cases the tax is recognized in other comprehensive
income or equity.
B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the balance sheet date in the countries where the Company and its subsidiaries operate
and generate taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in accordance with applicable tax regulations. It establishes provisions
where appropriate based on the amounts expected to be paid to the tax authorities. An additional
10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense
in the year the stockholders resolve to retain the earnings.
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C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the
consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the balance sheet date and are expected to apply when the
related deferred tax asset is realized or the deferred income tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilized. At each balance sheet
date, unrecognized and recognized deferred tax assets are reassessed.
E. Current tax assets and liabilities are offset and the net amount reported in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets
and liabilities are offset on the balance sheet when the entity has the legally enforceable right to
offset current tax assets against current tax liabilities and they are levied by the same taxation
authority on either the same entity or different entities that intend to settle on a net basis or realize
the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from
research and development expenditures, to the extent that it is possible that future taxable profit
will be available against which the unused tax credits can be utilized.
(29) 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.
(30) 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.
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(31) Revenue recognition
A. The Group 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.
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.
(32) Service concession arrangements
A. The Group contracted with the government (grantor) a service concession arrangement whereby
the Group shall provide construction of the government’s infrastructure assets for public services
and operate those assets during the term of the arrangement, and when the term of the operating
period expires, the underlying infrastructure assets will be transferred to the government without
consideration. The Group allocates the fair value of the consideration received or receivable in
respect of the service concession arrangement between construction services and operating
services provided based on their relative fair values, and recognizes such allocated amounts as
revenues in accordance with IAS 15, ‘Revenue’, respectively.
B. The consideration received or receivable from the grantor in respect of the service concession
arrangement is recognized at its fair value. Such considerations are recognized as a financial
asset or an intangible asset based on how the considerations from the grantor to the operator are
made as specified in the arrangement. The Group recognizes a financial asset to the extent that
it has an unconditional contractual right to receive cash or another financial asset from or at the
direction of the grantor for the construction services.
(33) Government grants
Government grants are recognised at their fair value only when there is reasonable assurance that
the Group will comply with any conditions attached to the grants and the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which
the Group recognises expenses for the related costs for which the grants are intended to compensate.
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(34) Business combinations
A. The Group uses the acquisition method to account for business combinations. The consideration
transferred for an acquisition is measured at the fair value of the assets transferred, liabilities
incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of
any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-
related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. For each business combination, the Group measures at the acquisition date
components of non-controlling interests in the acquiree that are present ownership interests and
entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation
at either fair value or the present ownership instruments’ proportionate share in the recognised
amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be
measured at the acquisition-date fair value.
B. The excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of any previous equity interest in the acquiree over the fair value of
the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the
acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree
recognised and the fair value of previously held equity interest in the acquiree is less than the
fair value of the identifiable assets acquired and the liabilities assumed, the difference is
recognised directly in profit or loss on the acquisition date.
(35) Operating segments
The Group’s operating segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision-maker. The chief operating decision-maker, who is
responsible for allocating resources and assessing performance of the operating segments, has been
identified as the Board of Directors that makes strategic decisions.
5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF
ASSUMPTION UNCERTAINTY
The preparation of these consolidated financial statements requires management to make critical
judgements in applying the Group’s accounting policies and make critical assumptions and estimates
concerning future events. Assumptions and estimates may differ from the actual results and are
continually evaluated and adjusted based on historical experience and other factors. Such assumptions
and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year; and the related information is addressed below:
(1) Critical judgements in applying the Group’s accounting policies
None.
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(2) Critical accounting estimates and assumptions
Revenue recognition
The Group 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 Group transacts with a variety of financial institutions all with high credit quality to disperse
credit risk, so it expects that the probability of counterparty default is remote.
B. Details of the Group’s cash and cash equivalents pledged to others as collateral are provided in
Note 8.
(2) Financial assets and liabilities at fair value through profit or loss
December 31, 2018 December 31, 2017
Cash on hand and revolving funds $ 353,440 88,221$
Checking accounts and demand deposits 8,820,471 4,470,962
Time deposits 5,897,081 14,795,697
15,070,992$ 19,354,880$
Items December 31, 2018
Current items:
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates 505,965$
Derivatives 50,315
556,280
Valuation adjustment 1,642)(
554,638$
Financial liabilities mandatorily measured at fair value through profit or loss
Derivatives 548$
212
~36~
A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or
loss are listed below:
B. The Group entered into contracts relating to derivative financial assets and liabilities which were
not accounted for under hedge accounting. The information is listed below:
The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import
or export proceeds. However, these forward foreign exchange contracts are not accounted for
under hedge accounting.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided
in Note 12(2).
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.
For the year ended
December 31, 2018
Financial assets mandatorily measured at fair value through profit or loss
Beneficiary certificates 56,952$
Derivatives 309)(
Unlisted shares 49,159
105,802$
Contract Period
Foreign exchange swap contract (1 item) THB 69,250 thousand 2018.05.18~2019.05.22
Foreign exchange swap contract (5 items) USD 50,000 thousand 2018.12.05~2019.01.09
Foreign exchange contract-buy (11 items) USD 35,370 thousand 2018.05.02~2019.09.17
Merchandise exchange contract (3 items) USD 3,580 thousand 2018.10.31~2019.03.29
December 31, 2018
Contract Amount
(notional principal)
213
~37~
(3) Financial assets at fair value through other comprehensive income
A. The Group has elected to classify investments that are considered to be strategic investments or
steady dividend income as financial assets at fair value through other comprehensive income.
B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial
assets at fair value through other comprehensive income are listed below:
C. Information relating to credit risk of financial assets at fair value through other comprehensive
income is provided in Note 12(2).
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, 2018
Current items:
Debt instruments
Corporate bonds 26,953$
Valuation adjustment 175)(
26,778
Equity instruments
Listed stocks 349,894
Valuation adjustment 123,655
473,549
500,327$
Non-current items:
Equity instruments
Unlisted shares 919,414$
Valuation adjustment 130,803)(
788,611$
For the year ended
December 31, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognised in other comprehensive income 31,009$
Debt instruments at fair value through other comprehensive income
Fair value change recognised in other comprehensive income 150$
Exchange loss recognised in profit or loss 606)($
Interest income recognised in profit or loss 970$
214
~38~
(4) Notes and accounts receivable
For the long-term receivables due in one year, please refer to Note 6 (10)、12 (2) C. (b) for detailed
information.
The ageing analysis of notes receivable and accounts receivable that were past due but not impaired
is as follows:
The above analysis is calculated based on booking date.
(5) Prepayments
(6) Other current assets
Note : Other financial assets are time deposits with maturity over three months.
December 31, 2018 December 31, 2017
Notes receivable 75,006$ 33,591$
Accounts receivable 8,839,281 5,142,150
Long-term receivable due in one year 278,646 267,720
Less: Allowance for bad debts 25,595)( 84,920)(
9,167,338$ 5,358,541$
December 31, 2018
Up to 30 days 6,504,537$
31 to 90 days 1,956,758
91 to 180 days 218,242
Over 181 days 487,801
9,167,338$
December 31, 2018 December 31, 2017
Prepayment for materials 2,581,564$ 2,816,458$
Prepayment for construction in progress 480,547 114,183
Others 1,191,784 1,216,481
4,253,895$ 4,147,122$
December 31, 2018 December 31, 2017
Other financial assets (Note) 370,331$ 309,202$
Others 208,887 22,180
579,218$ 331,382$
215
~39~
(7) Investments accounted for under the equity method
A. Associates
(a) The basic information of the associates that are material to the Group is as follows:
2018 2017
At January 1 3,627,018$ 2,802,110$ Addition of investments accounted for using
equity method 530,000 943,086
Disposal of investments accounted for using
equity method - 5,309)(
Reclassified as a subsidiary 358,790)( -
Share of profit or loss of investments accounted
for using equity method 33,557)( 99,008
Earnings distribution of investments accounted
for under equity method 89,705)( 183,391)(
Changes in other equity items 5,967 28,486)(
At December 31 3,680,933$ 3,627,018$
Associates: December 31, 2018 December 31, 2017
Pan Asia Corp. 526,590$ 537,527$
Powertec Energy Corp. 1,227,090 1,484,377
Boretech Resource Recovery Engineering Co.,
Ltd. (Cayman) 438,252 440,162
MIE Industrial SDN. BHD 556,704 489,429
Blue Whale Water Technology Co., Ltd. 434,937 364,397
EVER ECOVE Corp. 295,971 -
HDEC-CTCI (Linhai) Corporation 201,389 -
Joint ventures:
ECOVE Solar Energy Corporation - 311,126
3,680,933$ 3,627,018$
Company
name
Principal
place
of business
December
31, 2018
December
31, 2017
Nature of
relationship
Methods of
measurement
Powertec
Energy Corp.
Taiwan 16.03% 18.89% Associates Equity method
Shareholding ratio
216
~40~
(b) The summarised financial information of the associates that are 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 December 31, 2018 and 2017, the carrying amount of the Group’s individually
immaterial associates amounted to $2,453,843 and $1,831,515, respectively.
(d) The associate, GranSino Environmental Technology Co., Ltd., had completed the liquidation
in September 2017, and returned the equity investments amounting to $5,127. As a result, the
Group recognised loss on disposal of investment amounting to $182.
(e) The Board of Directors had resolved to invest in Blue Whale Water Technology Co., Ltd., in
December 2017. The Group invested in Blue Whale Water Technology Co., Ltd., amounting
to $186,200.
December 31, 2018 December 31, 2017
Current assets 1,636,879$ 1,234,407$
Non-current assets 20,905,041 19,360,380
Current liabilities 707,663)( 974,559)(
Non-current liabilities 10,572,795)( 8,803,976)(
Total net assets 11,261,462$ 10,816,252$
Share in associate's net assets 1,805,212$ 2,043,190$
Carrying amount of the associate 1,227,090$ 1,484,377$
Powertec Energy Corp.
2018 2017
Revenue -$ -$
Total comprehensive loss 1,558,142)($ 589,464)($
Powertec Energy Corp.
For the years ended December 31,
2018 2017
Total comprehensive income -$ 428,838$
For the years ended December 31,
217
~41~
(f) The Board of Directors had resolved to invest in Powertec Energy Corp., in May 2017. The
Group invested in Powertec Energy Corp., amounting to $667,412.
(g) In August 2018, the Board of Directors during their meeting resolved to jointly establish Ever
Ecove Corporation with Evergreen Steel Corporation, and the investment amount is $300,000.
(h) In September 2018, the Board of Directors during their meeting resolved to jointly establish
HDEC-CTCI (Linhai) Corporation with Hsin Dar Environment Corp., and the investment
amount is $202,500.
(i) The above investments accounted for using the equity method, Pan Asia Corp., Powertec
Engergy Corp., Blue Whale Water Technology Co., Ltd. EVER ECOVE Corp., and HDEC-
CTCI (Linhai Corporation) were recognized based on the financial statements which have
been audited by other auditors as of December 31, 2018.
B. Joint venture
(a) The basic information of the joint ventures that are material to the Group is as follows:
Company
name
Principal
place
of business
December
31, 2018
December
31, 2017
Nature of
relationship
Methods of
measurement
ECOVE
Solar Energy
Corporation
Taiwan 100.00% 50.00% Joint
ventures
Equity
method
Shareholding ratio
218
~42~
(b) The summarised financial information of the joint ventures that are material to the Group is as
follows:
Balance sheet
Statement of comprehensive income
December 31, 2018 December 31, 2017
Cash and cash equivalents -$ 101,988$
Other current assets - 11,483
Current assets - 113,471
Non-current assets - 1,031,074
Total assets -$ 1,144,545$
Current financial liabilities -$ 197,049$
Other current liabilities - 51,160
Current liabilities - 248,209
Non-current liabilities - 274,084
Total liabilities -$ 522,293$
Total net assets -$ 622,252$
Share in associate's net assets -$ 311,126$
Carrying amount of the associate -$ 311,126$
ECOVE Solar Energy Corporation
2018 2017
Revenue 41,927$ 59,167$
Depreciation and amortisation 16,135)($ 24,060)($
Interest income 404$ 1,153$
Interest expense 5,910)($ 4,694)($
Profit before income tax 39,676$ 27,601$
Income tax expense 5,220)( 2,762)(
Profit for the year 34,456 24,839
Other comprehensive income (loss)-
net of tax 7,930 25,111)(
Total comprehensive income (loss) 42,386$ 272)($
ECOVE Solar Energy Corporation
For the years ended December 31,
219
~43~
C. Explanation for holding ECOVE Solar Energy Corporation shares:
(a) The Group holds 50% equity in the joint venture - ECOVE Solar Energy Corporation and its
main activity is environmental engineering.
(b) The Board of Directors had resolved to invest in ECOVE Solar Energy Corporation, in March
2018 and December, 2016. The Group invested in ECOVE Solar Energy Corporation,
amounting to $27,500 and $89,474 in March 2018 and February 2017, respectively.
(c) On September 20, 2018, the Group acquired 50% equity interest of ECOVE Solar Energy
Corporation by cash, which became a subsidiary whose 100% equity was indirectly held by
the Group. The acquiree was consolidated into financial statements from the date of acquisition.
Please refer to Note 6(30) for further information.
220
~44~
(8) Property, plant and equipment
Land
Buildings and
structures Machinery
Transportation
equipment
Office
equipment
Unfinished
construction and
prepayments
for equipment Others Total
At January 1, 2018
Cost 3,357,596$ 4,396,599$ 961,309$ 244,873$ 238,180$ 45,951$ 750,426$ 9,994,934$
Accumulated depreciation - 1,620,322)( 826,362)( 187,730)( 225,129)( - 475,275)( 3,334,818)(
3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$
2018
Opening net book amount 3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$
Additions 1,984,400 16,310 465,019 17,445 1,638 262,144 21,015 2,767,971
Acquired from business
acquisition 172,038 516 1,429,080 129 - - 288 1,602,051
Disposals - 159,364)( 1,482)( 1)( 79)( - - 160,926)(
Depreciation charge - 128,101)( 114,229)( 19,116)( 4,008)( - 135,262)( 400,716)(
Reclassifications - 505)( 60)( - 79)( 18,046)( 644 18,046)(
Net exchange differences 5,016 28,403)( 4,565 266 821)( 138 825 18,414)(
Closing net book amount 5,519,050$ 2,476,730$ 1,917,840$ 55,866$ 9,702$ 290,187$ 162,661$ 10,432,036$
At December 31, 2018
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$
221
~45~
A. The Group had no borrowing costs capitalized for the years ended December 31, 2018 and 2017.
B. Please refer to Note 8 for the details of pledged property, plant and equipment.
Land
Buildings and
structures Machinery
Transportation
equipment
Office
equipment
Unfinished
construction and
prepayments
for equipment Others Total
At January 1, 2017
Cost 3,356,619$ 4,375,537$ 936,355$ 209,633$ 235,019$ 91,977$ 684,944$ 9,890,084$
Accumulated depreciation- 1,469,092)( 809,294)( 173,780)( 215,501)( - 346,193)( 3,013,860)(
3,356,619$ 2,906,445$ 127,061$ 35,853$ 19,518$ 91,977$ 338,751$ 6,876,224$
2017
Opening net book amount 3,356,619$ 2,906,445$ 127,061$ 35,853$ 19,518$ 91,977$ 338,751$ 6,876,224$
Additions - 8,214 54,226 23,268 1,927 58,828 10,625 157,088
Disposals - - 235)( 680)( 100)( - 170)( 1,185)(
Depreciation charge - 138,151)( 63,358)( 14,381)( 10,672)( - 129,252)( 355,814)(
Reclassifications - 12,848 17,661 13,193 4,150 105,054)( 57,202 -
Net exchange differences 977 13,079)( 408)( 110)( 1,772)( 200 2,005)( 16,197)(
Closing net book amount 3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$
At December 31, 2017
Cost 3,357,596$ 4,396,599$ 961,309$ 244,873$ 238,180$ 45,951$ 750,426$ 9,994,934$
Accumulated depreciation- 1,620,322)( 826,362)( 187,730)( 225,129)( - 475,275)( 3,334,818)(
3,357,596$ 2,776,277$ 134,947$ 57,143$ 13,051$ 45,951$ 275,151$ 6,660,116$
222
~46~
(9) Investment property
Buildings and
Land structures Total
At January 1, 2018
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 32,348)( 32,348)(
718,428$ 94,224$ 812,652$
2018
Opening net book amount 718,428$ 94,224$ 812,652$
Depreciation charge - 4,523)( 4,523)(
Closing net book amount 718,428$ 89,701$ 808,129$
At December 31, 2018
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 36,871)( 36,871)(
718,428$ 89,701$ 808,129$
Buildings and
Land structures Total
At January 1, 2017
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 27,598)( 27,598)(
718,428$ 98,974$ 817,402$
2017
Opening net book amount 718,428$ 98,974$ 817,402$
Depreciation charge - 4,750)( 4,750)(
Closing net book amount 718,428$ 94,224$ 812,652$
At December 31, 2017
Cost 718,428$ 126,572$ 845,000$
Accumulated depreciation - 32,348)( 32,348)(
718,428$ 94,224$ 812,652$
223
~47~
A. Rental income from the lease of the investment property and direct operating expenses arising
from the investment property are shown below:
B. The fair value of the investment property held by the Group as at December 31, 2018 and 2017
were both $930,000, which was valued by independent valuers. Valuations were made using the
income approach with key assumptions as follows:
C. Information about the investment property that was pledged to others as collaterals is provided in
Note 8.
(10) Other non-current assets
2018 2017
Rental income from investment property 30,076$ 31,392$
Direct operating expenses arising from the
investment property that generated rental
income in the period 4,523$ 4,750$
Direct operating expenses arising from the
investment property that did not generate
rental income in the period -$ -$
For the years ended December 31,
December 31, 2018 December 31, 2017
Gross margin 2.55% 2.54%
Growth rate 1%~1.5% 1%~1.5%
Discount rate 3.30% 3.30%
December 31, 2018 December 31, 2017
Long-term receivables 2,670,985$ 2,682,643$ Less: Long-term receivables due in one year 278,646)( 267,720)(
2,392,339 2,414,923
Long-term prepaid rents 37,897 43,297
Restricted bank deposits 188,619 57,097
Refundable deposits 130,167 132,142
Prepayments for business facilities 546,344 40,500
Air pollution fee 54,267 54,267
Others 218,899 176,717
3,568,532$ 2,918,943$
224
~48~
A. Long-term receivables:
The Group contracted with the government (grantor) a service concession arrangement. The
consideration receivable from the grantor in respect of the service concession arrangement is
recognized at its fair value. Such consideration is recognized as a financial asset based on the
way of the consideration from the grantor to the operator being made as specified in the
arrangement. The consideration receivable from the grantor is recognized as accounts receivable
if it is expected to be realized within 12 months after the balance sheet date (please refer to Note
6(4)), and is recognized as long-term accounts receivable if it is expected to be realized more
than 12 months after the balance sheet date. The major terms of the arrangement are as follows:
(a) The subsidiary, ECOVE Wujih Energy Corp., obtained the operation for the construction of
Wujih Refuse Incineration Plant by build - operate - transfer (BOT) mode since April, 2000.
In September, 2000, the “Taichung City waste incineration, commission contract” between
ECOVE Wujih Energy Corp., and Taichung Government had been signed. The operating
period is for 20 years starting from September 6, 2004. However, according to the contract,
if it is expired in advance or extended during construction or operation, duration of the
operation will be deemed to be matured or extended, but not to exceed 50 years. In order to
work the “Waste Incineration Taichung City Commission Contract”, ECOVE Wujih Energy
Corp., obtained the land-use right that has continued for 20 years since the plant began
operation.
(b) The subsidiary, ECOVE Miaoli Energy Corp., obtained the operation for the construction of
Miaoli County Refuse Incineration Plant by build - operate - transfer (BOT) mode since
August, 2002. In September, 2002, the “Waste incineration commission contract” between
ECOVE Miaoli Energy Corp., and Miaoli County Government had been signed. The
operating period is for 20 years starting from February 29, 2008. However, according to the
contract, if it is expired in advance or extended during construction or operation, duration of
the operation will be deemed to be matured or extended. In order to work the “Waste
Incineration Miaoli County Commission Contract”, ECOVE Miaoli Energy Corp., obtained
the land-use right of Miaoli Refuse Incineration Plant. Therefore, duration of the land – use
right is from September 13, 2002 to March 12, 2026.
(c) ECOVE Wujih Energy Corp., and Fortune Energy Corp. need to comply with the guarantee
tonnage of waste from government according to the contract during construction or operation.
(d) Per service cost is calculated and adjusted based on the “Waste incineration commission
contract”, “Index of average regular earnings of employees-manufacturing” and “Consumer
price index”.
B. Long-term prepaid rents were due to the land-use rights obtained by ECOVE Wujih Energy Corp.,
and ECOVE Miaoli Energy Corp., according to the “BOT Agreement”.
C. Information about the restricted bank deposits and refundable deposits that were pledged to
others as collaterals is provided in Note 8.
225
~49~
D. Information about the air pollution fee is provided in Note 9(7).
(11) Short-term borrowings
Type of borrowing December 31, 2018 Interest rate range Collateral
Unsecured borrowings
Land Bank of Taiwan 1,447,000$ 0.97% -
Citibank 1,389,339 2.54%-4.50% -
Bank SinoPac 1,346,500 0.90%-0.98% -
HSBC 1,240,000 0.68% -
BBVA 900,000 0.75% -
Mizuho Bank, Ltd. 652,865 0.70%-8.05% -
United Overseas Bank 606,290 2.50% -
DBS Bank 551,546 2.20%-8.00% -
MUFG Bank Ltd. 548,000 0.81% -
Credit Agricole CIB 519,735 3.14%-8.00% -
KGI Bank 415,000 1.04%-1.24% -
Hua Nan Bank 400,000 0.87% -
Mega International
Commercial Bank 396,000 1.10%-5.50% -
Bank of Taiwan 300,000 0.92% -
Sumitomo Mitsui Banking
Corporation 251,910 3.20% -
BNP Paribas 223,124 4.30%-4.35% -
First Bank 100,000 1.07% -
Subtotal 11,287,309
Secured borrowings
KGI Bank 2,127,150 1.04%-1.24% Properties pledged by
subsidiary-CTCI
Development Corp.
and time deposits of
USD 4,560 thousand
mortgaged to banks,
and all were
guaranteed and
endorsed by the
Company
13,414,459$
226
~50~
(12) Accounts payable
(13) Other payables
Note: Payables on land purchases arise from the payment that the subsidiary, CTCI Development
Corp. purchases the land, please refer to Note 11(2) for more information.
Type of borrowing December 31, 2017 Interest rate range Collateral
Unsecured borrowings
Citibank 1,717,822$ 1.89%-4.24% -
Mizuho Bank, Ltd. 1,250,000 0.70% -
HSBC 1,241,907 0.68%-7.8% -
The Bank of Tokyo-Mitsubishi UFJ 580,000 0.72% -
Mega International Commercial Bank 503,615 1.1%-2.5741% -
First Bank 300,000 1.09% -
Bank SinoPac 269,000 0.875%-1% -
DBS Bank 228,797 1.55% -
KGI Bank 136,000 1.086%-1.286% -
Ctbcbank 93,126 7.50% -
United Overseas Bank 65,632 1.90% -
KBC Bank NV 49,007 4.60% -
E.SUN Bank 38,000 1.07% -
Sumitomo Mitsui Banking Corporation 34,924 0.75%-2.05% -
BNP Paribas 31,187 2.5%-4.5% -
6,539,017$
December 31, 2018 December 31, 2017
Materials payable 4,743,519$ 4,216,705$
Sub-contract costs payable 4,818,197 7,093,760
Maintenance costs payable 281,003 338,051
Equipment burying costs payable 36,861 40,936
Others 111,682 188,822
9,991,262$ 11,878,274$
December 31, 2018 December 31, 2017
Accrued payroll 1,664,616$ 1,635,441$ Accrued employees’ compensation, directors’
and supervisors’ remuneration 148,763 141,451
Accrued insurance 83,359 87,301
Accrued pension 33,206 31,809
Payables on land purchases (Note) 1,785,960 -
Others 975,363 852,642
4,691,267$ 2,748,644$
227
~51~
(14) Other current liabilities
As of December 31, 2018, due to the accumulated cost was greater than the accumulated capital
injection, the joint venture was recognized in “other current liabilities”.
December 31, 2018 December 31, 2017
Joint venture 7,323,938$ 6,984,781$
Long-term borrowings - current portion 128,268 344,000 Receipt in advance 161,659 170,111
Others 36,795 55,453
7,650,660$ 7,554,345$
228
~52~
(15) Long-term borrowings
Type of borrowings
Borrowing period
and repayment term
Interest
rate range Collateral
Financing
amount
Actual using
amount December 31, 2018
Subsidiary- ECOVE Miaoli
Energy Corp.
Mega International
Commercial Bank
secured borrowings (Note 1)
Borrowing period is
from November 2010
to April 2019; interest
is repayable monthly.
1.3915% Machineries and other
equipment
constructed or
acquired
523,200$ 523,200$ 4,000$
Subsidiary -ECOVE Solvent
Recycling Corp.
Chang Hwa Bank
secured borrowings (Note 3)
Borrowing period is
from September 2014
to September 2021;
interest is repayable
monthly.
2.47% Land and buildings
and structures
29,500 29,500 25,645
Subsidiary - ECOVE Solar
Energy Corporation
The Shanghai Commercial &
Savings Bank, Ltd.
secured borrowings
Borrowing period is
from June 2018 to
June 2033; Principal
and interest are
repayable monthly.
1.7% ECOVE Solar Energy
Corporation issued a
promissory note of
$302,760 thousand,
which is guaranteed
by the Company.
310,000 310,000 302,755
Subsidiary - ECOVE Solar
Energy Corporation
KGI Bank
secured borrowings
Borrowing period is
from May 2015 to
May 2021; Principal
and interest are
repayable monthly.
1.5% G.D. Development
Corp. issued a
promissory note of
$152,690 thousand,
which is guaranteed
by the Company
220,000 214,151 151,191
229
~53~
Type of borrowings
Borrowing period
and repayment term
Interest
rate range Collateral
Financing
amount
Actual using
amount December 31, 2018
Subsidiary - ECOVE Solar
Energy Corporation
Chang Hwa Bank
secured borrowings
Borrowing period is
from June 2016 to
August 2030; interest
is repayable monthly.
1.89% Guaranteed by the
Company
155,000$ 154,744$ 141,124$
Subsidiary -ECOVE Solar
Power Corporation.
First Bank
secured borrowings
Borrowing period is
from January 2014 to
December 2029;
interest is repayable
monthly.
1.7% ECOVE Solar Energy
Corporation issued a
promissory note of
$81,760 thousand, which
is guaranteed by ECOVE
Solar Energy Corporation
108,000 107,735 77,794
Subsidiary -ECOVE Solar
Power Corporation
Bank SinoPac
secured borrowings
Borrowing period is
from August 2014 to
August 2030; interest
is repayable monthly.
1.6% ECOVE Solar Energy
Corporation issued a
promissory note of
$124,830 thousand, which
is guaranteed by ECOVE
Solar Energy Corporation
149,800 129,457 118,360
230
~54~
Type of borrowings
Borrowing period
and repayment term
Interest
rate range Collateral
Financing
amount
Actual using
amount December 31, 2018
Subsidiary -ECOVE Solar
Power Corporation
Bank SinoPac
secured borrowings
Borrowing period is
from August 2018 to
August 2023; interest
is repayable monthly.
1.6% ECOVE Solar Energy
Corporation issued a
promissory note of $280
million, which is
guaranteed by ECOVE
Solar Energy Corporation
280,000$ 227,000$ 226,996$
Subsidiary -ECOVE Solar
Power Corporation
Hua Nan Bank
secured borrowings
Borrowing period is
from June 2015 to
June 2030 interest is
repayable monthly.
1.7% ECOVE Solar Energy
Corporation issued a
promissory note of
$25,650 thousand, which
is guaranteed by ECOVE
Solar Energy Corporation
38,430 26,456 24,423
Subsidiary -ECOVE Solar
Power Corporation
Far Eastern International Bank
Co., Ltd.
secured borrowings
Borrowing period is
from September 2015
to September 2020;
principal is repayable
seasonally, and
interest is repayable
monthly.
2.0% ECOVE Solar Energy
Corporation issued a
promissory note of $27
million, which is
guaranteed by ECOVE
Solar Energy Corporation
27,000 11,500 4,480
231
~55~
Type of borrowings
Borrowing period
and repayment term
Interest
rate range Collateral
Financing
amount
Actual using
amount December 31, 2018
Subsidiary - ECOVE Solar
Power Corporation
KGI Bank
secured borrowings
Borrowing period is
from November 2017
to November 2032;
interest is repayable
monthly.
2.0% ECOVE Solar Energy
Corporation issued a
promissory note of $85
million, which is
guaranteed by ECOVE
Solar Energy Corporation
100,000$ 85,000$ 81,113$
Subsidiary-ECOVE Central
Corporation Ltd.
Bank SinoPac
secured borrowings
Borrowing period is
from December 2018
to December 2023;
interest is repayable
monthly.
1.6% The Company issued a
promissory note of $16
million, which is
guaranteed by the parent
company
16,000 16,000 16,000
Subsidiary -ECOVE South
Corporation Ltd.
Bank SinoPac
secured borrowings
Borrowing period is
from December 2018
to December 2023;
interest is repayable
monthly.
1.6% The Company issued a
promissory note of $14
million, which is
guaranteed by the parent
company
14,000 14,000 14,000
Subsidiary-LUMBERTON
SOLAR
Bank SinoPac
secured borrowings
Borrowing period is
from September 2017
to August 2023;
interest is repayable
monthly.
4.9% ECOVE Solar Energy
Corporation issued a
promissory note of
USD$14,640 thousand,
which is guaranteed by
ECOVE Solar Energy
Corporation
449,931 449,931 363,973
Less: Current portion 128,268)(
1,423,586$
232
~56~
Note 1: Secured by the assets, including machineries and other equipment constructed or acquired, under the Miaoli County Government project of
“Miaoli BOT Incinerator Build-operate plan”.
Note 2: ECOVE Miaoli Energy Corp,commited to maintain the following financial ratios and criteria during the period of the contract:
a. Current ratio (current assets+ restricted assets provided as a compensation for the credit loan)/current liabilities: More than 100%
b. Liability ratio (total liabilities/ net equity): Less than 190%.
c. Interest coverage ratio ((income before tax + interest expense) / interest expense): At least 150%.
Note 3: ECOVE Solvent Recycling Corporation committed that if the construction has finished, ECOVE Solvent Recycling Corporation will complete
the registration of ownership on the construction and pledge with the basement of construction in first priority to Chang Hwa Bank.
Type of borrowings
Borrowing period
and repayment term
Interest
rate range
Financing
amount
Actual using
amount December 31, 2017
Subsidiary-ECOVE Miaoli
Energy Corp.Mega International
Commercial Bank
secured borrowings
Borrowing period is from
November, 2010 to April, 2019;
interest is repayable monthly.
1.3874% 523,200$ 523,200$ 180,000$
Subsidiary-CTCI Development Corp.
Taiwan Cooperative
Bank secured
borrowings
Borrowing period is from April
23, 2009 to April 23, 2029;
interest is repayable monthly.
1.3504% 3,600,000 3,433,150 2,085,150
Less: Current portion 344,000)(
1,921,150$
233
~57~
(16) Other non-current liabilities
Note: Deferred revenue is a cash grant received from New Jersey government since Lumberton
builds and operates a solar power station in New Jersey. The construction period of the solar
power station is 15 years.
(17) Pensions
A. Defined benefit pension plan
(a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance
with the Labor Standards Law, covering all regular employees’ service years prior to the
enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of
employees who chose to continue to be subject to the pension mechanism under the Law.
Under the defined benefit pension plan, two units are accrued for each year of service for the
first 15 years and one unit for each additional year thereafter, subject to a maximum of 45
units. Pension benefits are based on the number of units accrued and the average monthly
salaries and wages of the last 6 months prior to retirement. The Company contributes monthly
an amount equal to 6.5% of the employees’ monthly salaries and wages to the retirement fund
deposited with Bank of Taiwan, the trustee, under the name of the independent retirement
fund committee. Also, the Company would assess the balance in the aforementioned labor
pension reserve account by the end of December 31, every year. If the account balance is
insufficient to pay the pension calculated by the aforementioned method, to the employees
expected to be qualified for retirement next year, the Company will make contributions to
cover the deficit by next March.
(b) The amounts recognised in the balance sheet are as follows:
December 31, 2018 December 31, 2017
Net defined benefit liabilities 1,847,269$ 2,193,035$
Deposits received 407,649 358,637
Accrued recovery costs 98,932 92,034
Deferred revenue(Note) 169,741 -
Others 92,101 73,374
2,615,692$ 2,717,080$
December 31, 2018 December 31, 2017
Present value of defined benefit obligations 4,287,335$ 4,468,519$
Fair value of plan assets 2,440,066)( 2,275,484)(
Net defined benefit liability 1,847,269$ 2,193,035$
234
~58~
(c) Movements in net defined benefit liabilities are as follows:
Present value of
defined benefit Fair value of Net defined
obligations plan assets benefit liability
2018
At January 1 4,468,519$ 2,275,484)($ 2,193,035$
Current service cost 35,862 - 35,862
Interest expense (income) 40,662 20,886)( 19,776
4,545,043 2,296,370)( 2,248,673
Remeasurements:
Returns on plan assets - - -
Change in demographic
assumptions
- - -
Change in financial assumptions 34,964 - 34,964
Experience adjustments 21,252 71,347)( 50,095)(
56,216 71,347)( 15,131)(
Pension fund contribution - 386,036)( 386,036)(
Paid pension 313,924)( 313,687 237)(
At December 31 4,287,335$ 2,440,066)($ 1,847,269$
Present value of
defined benefit Fair value of Net defined
obligations plan assets benefit liability
2017
At January 1 4,625,309$ 2,219,385)($ 2,405,924$
Current service cost 43,210 - 43,210
Interest expense (income) 56,689 27,695)( 28,994
4,725,208 2,247,080)( 2,478,128
Remeasurements:
Actual returns on plan assets - 631 631
Change in demographic
assumptions
51,189 - 51,189
Change in financial assumptions 119,857 2,066 121,923
Experience adjustments 99,309)( 1,459 97,850)(
71,737 4,156 75,893
Pension fund contribution - 353,215)( 353,215)(
Paid pension 328,426)( 320,655 7,771)(
At December 31 4,468,519$ 2,275,484)($ 2,193,035$
235
~59~
(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic
subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment
and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and
Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund
includes deposit in domestic or foreign financial institutions, investment in domestic or
foreign listed, over-the-counter, or private placement equity securities, investment in
domestic or foreign real estate securitization products, etc.). With regard to the utilisation of
the Fund, its minimum earnings in the annual distributions on the final financial statements
shall be no less than the earnings attainable from the amounts accrued from two-year time
deposits with the interest rates offered by local banks. If the earnings is less than
aforementioned rates, government shall make payment for the deficit after being authorized
by the Regulator. The Company and domestic subsidiaries have no right to participate in
managing and operating that fund and hence the Company and domestic subsidiaries are
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 Utilisation Report announced by the
government.
(e) The principal actuarial assumptions used were as follows:
Assumptions regarding future mortality experience are set based on actuarial advice in
accordance with published statistics and experience in each territory.
Because the main actuarial assumption changed, the present value of defined benefit
obligation is affected. The analysis was as follows:
2018 2017
Discount rate 0.80%~1.00% 0.9%~1.1%
Future salary increases 1.50%~3.00% 1.5%~3%
Years ended December 31,
Increase Decrease Increase Decrease
0.25% 0.25% 0.25% 0.25%
December 31, 2018
Effect on present value of
defined benefit obligation 86,229)($ 88,924$ 76,113$ 74,329)($
Increase Decrease Increase Decrease
0.25% 0.25% 0.25% 0.25%
December 31, 2017
Effect on present value of
defined benefit obligation 94,918)($ 98,183$ 84,759$ 82,664)($
Discount rate Future salary increases
Discount rate Future salary increases
236
~60~
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 analysing 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 plans of the Group for the year ending
December 31, 2019 amount to $86,581.
B. Defined contribution pension plan
(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined
contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”),
covering all regular employees with R.O.C. nationality. Under the New Plan, the Company
and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’
monthly salaries and wages to the employees’ individual pension accounts at the Bureau of
Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of
employment.
(b) The pension costs under defined contribution pension plans of the Group for the years ended
December 31, 2018 and 2017 were $204,373 and $202,713, respectively.
(c) Some overseas subsidiaries adopted a defined benefit pension plan, covering all regular
employees. Appropriation of pension cost for the years ended December 31, 2018 and 2017
were $103,043 and $84,971, respectively.
(18) Share-based payment - employee compensation
A. The Company
(a) For the years ended December 31, 2018 and 2017, the Company’s share-based payment
arrangements were as follows:
(b) The above employee stock options are set forth below:
i. Details of the fifth plan of employee stock options outstanding as of December 31, 2018
and 2017 are set forth below:
Type of arrangement Grant date
Quantity
granted
Contract
period
Vesting
conditions
Fifth plan of employee
stock options
2017.04.11 20,000 units 6 years Service of 2 to
4 years
Sixth plan of employee
stock options
2018.03.09 20,000 units 6 years Service of 2 to
4 years
237
~61~
ii. Details of the sixth plan of employee stock options outstanding as of December 31, 2018
and 2017 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.
(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:
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (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)( - 875.00)( -
Options exercised - - - -
Options outstanding
at end of year 18,328.55 NT$49.60 19,125.00 NT$49.60
Options exercisable
at end of year - - - -
For the years ended December 31,
2018 2017
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (in dollars)
Options outstanding
at beginning of year - - - -
Options granted 20,000.00 NT$45.90 - -
Options waived 705.46)( - - -
Options revoked - - - -
Options outstanding
at end of year 19,294.54 NT$45.90 - -
Options exercisable at
end of year - - - -
For the years ended December 31,
2018 2017
Type of arrangement December 31, 2018 December 31, 2017
Fifth plan of employee stock options 4~5 years 4~5 years
Sixth plan of employee stock options 4~5 years -
238
~62~
(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 years ended December 31, 2018 and 2017, expense recognised arising from share-based
payment amounted to $108,439 and $49,853, respectively.
B. Subsidiary – CTCI Advanced Control & System Inc.
(a) For the years ended December 31, 2018 and 2017, the subsidiary’s share-based payment
transactions are set forth below:
(b) The above employee stock options are set forth below:
i. Details of the fifth plan of employee stock options outstanding as of December 31, 2018
and 2017 are set forth below: all options were exercised
Type of
arrangement
Grant
date
Stock
price
Exercise
price
Expected
price
volatility
Expected
option
life
Expected
dividends
Risk free
interest
rate
Fair value
per unit
Fifth plan of
employee stock
options
2017.4.11 NT$ 52.2 NT$ 52.2 28.06%~
29.05%
4~5
years
0% 0.80%~
0.89%
NT$ 12.19~
NT$14.17
Sixth plan of
employee stock
options
2018.3.9 NT$ 45.9 NT$ 45.9 24.96%~
26.37%
4~5
years
0% 0.63%~
0.72%
NT$ 9.56~
NT$11.29
Type of arrangement Grant date
Quantity
granted
Contract
period
Vesting
conditions
Fifth plan of employee
stock options
2011.06.22 600 units 6 years Service of
2 to 4 years
Sixth plan of employee
stock options
2018.03.23 600 units 6 years Service of
2 to 4 years
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (in dollars)
Options outstanding
at beginning of year - - 387.25 NT$44.90
Options waived - - 4.00)( -
Options revoked - - 383.25)( -
Options outstanding
at end of year - - - NT$44.90
Options exercisable
at end of year - - - -
For the years ended December 31,
2018 2017
239
~63~
ii. Details of the sixth plan of employee stock options outstanding as of December 31, 2018
and 2017 are set forth below:
(c) As of December 31, 2018 and 2017, the exercise price of stock options outstanding were
NT$46.85 and NT$44.90, respectively the weighted-average remaining contractual period
was as follows:
(d) The fair value of stock options is measured using the Black-Scholes option-pricing model or
other. Relevant information is as follows:
(e) For the years ended December 31, 2018 and 2017, the expenses incurred on share-based
payment transactions were $1,459 and $0, respectively.
C. Subsidiary – ECOVE Environment Corp.
(a) For the years ended December 31, 2018 and 2017, the subsidiary’s share-based payment
transactions are set forth below:
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (in dollars)
Options outstanding
at beginning of year - - - -
Options granted 600.00 NT$46.85 - -
Option waived - - - -
Options revoked - - - -
Options outstanding
at end of year 600.00 NT$46.85 - -
Options exercisable
at end of year - - - -
For the years ended December 31,
2018 2017
Type of arrangement December 31, 2018 December 31, 2017
Fifth plan of employee stock options - -
Sixth plan of employee stock options 5.5 years -
Type of
arrangement Grant date Stock price
Exercise
price
Expected
price
volatility
rate
Expected
option life
Expected
dividends
Risk
free
interest
rate
Fair value
per unit
Fifth plan of
employee stock
options
2011.06.22 NT$63.40 NT$ 63.40 44.41% 4.5 years - 1.07% NT$ 23.95
Sixth plan of
employee stock
options
2018.03.23 NT$46.85 NT$ 46.85 21.33%~2
2.13%
4.5 years - 0.65%~
0.72%
NT$ 27.51
240
~64~
(b) The above employee stock options are set forth below:
i. Details of the fourth plan of employee stock options outstanding as of December 31, 2018
and 2017 are set forth below: all option were exercised.
ii. Details of the fifth plan of employee stock options outstanding as of December 31, 2018
and 2017 are set forth below: all option were exercised.
Quantity Contract Vesting
Type of arrangement Grant date granted period conditions
Fourth plan of employee
stock options
2011.6.17 1,200 units 6 years Service of
2 years
Fifth plan of employee
stock options
2012.6.28 1,200 units 6 years Service of
2 years
Sixth plan of employee
stock options
2018.7.29 1,500 units 6 years Service of
2 years
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (in dollars)
Options outstanding
at beginning of year 3.00 NT$106.30 215.25 NT$106.30
Options waived 3.00)( NT$106.30 - -
Options exercised - - 212.25)( NT$106.30
Options outstanding
at end of year - - 3.00 NT$106.30
Options exercisable
at end of year - - 3.00 NT$106.30
For the years ended December 31,
2018 2017
No. of units
Weighted-
average No. of units
Weighted-
average
(shares in exercise price (shares in exercise price
Stock options thousand) (in dollars) thousand) (in dollars)
Options outstanding
at beginning of year 298.25 NT$103.00 435.25 NT$110.00
Options waived 3.75)( - - -
Options exercised 294.50)( NT$103.00 137.00)( NT$108.95
Options outstanding
at end of year - - 298.25 NT$103.00
Options exercisable
at end of year - - 298.25 NT$103.00
For the years ended December 31,
2018 2017
241
~65~
iii. 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$172.63 and NT$171.9, respectively.
(d) As of December 31, 2018, and 2017, the range of exercise prices of stock options outstanding
were NT$103.00 and NT$103.00 ~ NT$110.00, 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:
Note: Subsidiary -ECOVE Environment Corp. has been officially listed in the OTC market
on May 27, 2010 whose net value was measured at fair value before being listed in the
OTC market and measured at market value after being listed in the OTC market. The
compensation cost for employee stock options in 2008 and 2009 had been adjusted
retroactively.
No. of units
Weighted-
average
(shares in exercise price
Stock options thousand) (in dollars)
Options outstanding at beginning of year - -
Options granted 1,500.00 NT$173.50
Options waived 52.00)( -
Options exercised - -
Options outstanding at end of year 1,448.00 NT$173.50
Options exercisable at end of year 1,448.00 -
For the year ended December 31, 2018
Type of arrangement December 31, 2018 December 31, 2017
Fourth plan of employee stock options - -
Fifth plan of employee stock options - 0.5 year
Sixth plan of employee stock options 5.75 years -
Type of
arrangement Grant date
Stock price
(Note)
Exercise
price
Expected
price
volatility
Expected
option life
Expected
dividend
yield
rate
Risk
free
interest
rate
Fair value
per unit
Fourth plan of
employee stock
options
2011.6.17 NT$146.0 NT$146.0 38.65% 4.50
years
0% 1.05% NT$48.82
Fifth plan of
employee stock
options
2012.6.28 NT$145.0 NT$145.0 33.63% 4.60
years
0% 1.00% NT$42.79
Sixth plan of
employee stock
options
2018.7.9 NT$173.5 NT$173.5 11.38%~
12.71%
4~5
years
0% 0.66%~
0.71%
NT$17.88
242
~66~
(19) Share capital
A. As of December 31, 2018, 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:
(b) Pursuant to the R.O.C. Securities and Exchange Law, the number of shares bought back as
treasury share should not exceed 10% of the number of the Company’s issued and
outstanding shares and the amount bought back should not exceed the sum of retained
earnings, paid-in capital in excess of par value and realized capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should be reissued to
the employees within three years from the reacquisition date and shares not reissued within
the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating
and the stockholders’ equity should be retired within six months of acquisition.
Name of company Reason for Number of shares
holding the shares reacquisition (shares in thousand) Carrying amount
Subsidiary-ECOVE
Environmental Services
Corp.
To maintain
stockholders’ equity
1 $ 10
Subsidiary-CTCI Investment
Corp."
344 3,241
Subsidiary-CTCI Development
Corp."
912 8,584
$ 11,835
Name of company Reason for Number of shares
holding the shares reacquisition (shares in thousand) Carrying amount
Subsidiary-ECOVE
Environmental Services
Corp.
To maintain
stockholders’ equity
1 $ 10
Subsidiary-CTCI Investment
Corp.
"
344 3,241
Subsidiary-CTCI Development
Corp.
"
912 8,584
$ 11,835
December 31, 2018
December 31, 2017
243
~67~
(20) 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 (18) for details about the capital surplus - employee stock options.
Share premium
Treasury share
transactions
Difference
between
consideration and
carrying amount of
subsidiaries
acquired or
disposed
Employee stock
options Others Total
At January 1, 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
consideration and
carrying amount of
subsidiaries
acquired or
disposed
Employee 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
244
~68~
(21) Retained earnings
Note: The Company has adopted the modified retrospective approach under IFRS 9. For details of
the effect as at January 1, 2018, please refer to Note 12(4) B.
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.
2018 2017
At 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
Remeasurement on post employment benefit
obligations, net of tax 52,291)( 58,720)(
Impact of change in tax rate 19,378 -
Valueation adjustment transferred to retained
earnings 58,978)( -
At December 31 $ 2,217,619 $ 3,061,699
245
~69~
To meet the requirements in business expansion and industry growth, fulfilling future operating
needs and stabilizing financial structure is the priority of the Company's dividend policy. Thus,
the distribution of the accumulated distributable earnings is in accordance with the shareholders’
resolutions. And, the amount of shareholders’ bonus shall not be less than 50% of accumulated
distributable earnings of the Company, and in particular cash dividend shall not be less than 20%.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in
proportion to their share ownership, the legal reserve shall not be used for any other purpose.
The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their
share ownership is permitted, provided that the balance of the reserve exceeds 25% of the
Company’s paid-in capital.
D. 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 follows:
Amount
Dividends
per share
(in NT dollars) Amount
Dividends
per share
(in NT dollars)
Set aside as legal reserve 280,534$ -NT$ 222,289$ -NT$
Reversal of special reserve 2,110)( - 2,217)( -
Cash dividends 2,468,202 3.23 1,984,512 2.60
2,746,626$ 3.23$ 2,204,584$ 2.60$
2017 2016
246
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As of March 14, 2019, the appropriation of 2018 earnings has not been resolved by the
shareholders.
G. For information relating to employees’ compensation (bonuses) and directors’ remuneration,
please refer to Note 6(27).
(22) Operating revenue
A. Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in
time in the following major product lines and geographical regions:
Dividends per share
Amount (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
For the year
December 31, 2018
Revenue from contracts with customer contracts 63,261,414$
Other-service concession revenue 808,128
64,069,542$
For the year ended
December 31, 2018
Construction
Engineering
Revenue Service Revenue
Other Operating
Revenue Total
Total segment
revenue
57,122,560$ 4,819,569$ 1,319,285$ 63,261,414$
Inter-segment
revenue 3,447,220 27,527 481,556 3,956,303
60,569,780$ 4,847,096$ 1,800,841$ 67,217,717$
Revenue from
external
customer
contracts
Timing of
revenue
recognition At a point time -$ 4,819,569$ 1,319,285$ 6,138,854$
In over time 57,122,560 - - 57,122,560
57,122,560$ 4,819,569$ 1,319,285$ 63,261,414$
247
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B. Contract assets and liabilities
The Group has recognised the following revenue-related contract assets and liabilities:
(23) Other income
(24) Other gains and losses
(25) Finance costs
December 31, 2018
Contract assets-construction contract revenue 24,823,432$
Contract liabilities-construction contract revenue 13,920,198)(
10,903,234$
2018 2017
Interest income: Interest income from bank deposits 216,808$ 131,658$
Rental revenue 7,576 9,022
Dividend income 32,056 25,799
Gains on reversal of bad debt 3,894 960,795
Other income-others 61,271 74,623
321,605$ 1,201,897$
For the years ended December 31,
2018 2017
Gains on disposal of property, plant and
equipment
69,979$ 2,484$
Gains (losses) on disposal of investments 94,727 2,503)(
Foreign exchange gains (losses) 59,774 151,026)(
Gains (losses) on financial liabilities at fair value
through profit or loss38,022 51,566)(
Other gains and losses 43,147)( 17,827)(
219,355$ 220,438)($
For the years ended December 31,
2018 2017
Interest expense 157,908$ 104,140$
For the years ended December 31,
248
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(26) Expenses by nature
(27) Employee benefit expense
A. According to the Articles of Incorporation of the Company, when distributing earnings, the
Company shall distribute bonus to the employees and pay remuneration to the directors that
should be 1.5% to 5% and not be higher than 1.5%, respectively, of the total distributed amount.
B. For the 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 $16,537,
respectively. The aforementioned amounts were recognized in other expenses.
The employees’ compensation and directors’ remuneration were estimated and accrued based on
an amount of 1.5% to 5% and not higher than 1.5% of distributable profit of current period for
the year ended December 31, 2018.
Employees’ compensation and directors’ remuneration of 2017 as resolved at the meeting of
Board of Directors were in agreement with those amounts recognized in the 2017 financial
statements.
Information about employees’ compensation and directors’ remuneration of the Company as
resolved at the meeting of Board of Directors will be posted in the “Market Observation Post
System” at the website of the Taiwan Stock Exchange.
2018 2017
Subcontract costs 23,353,600$ 24,407,010$
Materials 24,463,718 30,067,520
Employee benefit expense 9,546,007 9,702,795
Amortisation charges on buried equipment 323,629 283,938
Temporary equipment 83,259 547,619 Depreciation charges on property, plant and
equipment 405,239 360,564
Amortisation on intangible assets 164,384 160,991
Others 3,013,928 3,061,141
61,353,764$ 68,591,578$
For the years ended December 31,
2018 2017
Salaries and wages 8,231,080$ 8,420,445$
Employee stock options 147,850 65,603
Labor and health insurance fees 478,550 552,775
Pension costs 363,054 359,888
Other personnel expenses 325,473 304,084
9,546,007$ 9,702,795$
For the years ended December 31,
249
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(28) Income tax
A. Income tax expense
(a) Components of income tax expense:
B. Reconciliation between income tax expense and accounting profit:
2018 2017
Current tax:
Current tax on profits for the period 739,979$ 738,533$ Prior year income tax (over) under
estimation 5,340 1,260
Total current tax 745,319 739,793
Deferred tax:
Origination and reversal of temporary
differences 3,025 38,153)(
Effect of foreign exchange 280 385)(
Impact of change in tax rate 16,586 -
Total deferred tax 19,891 38,538)(
Income tax expense 765,210$ 701,255$
For the years ended December 31,
2018 2017
Income tax calculated by applying statutory rate
to the profit before tax
610,933$ 574,463$
Effects from items adjusted in accordance with
tax regulation 164,786 56,718
Prior year income tax under estimation 5,340 1,260
Effect from investment tax credits 6,766)( 10,963)(
Taxable (loss) income not recognised as
deferred tax assets 9,083)( 79,777
Income tax expense 765,210$ 701,255$
For the years ended December 31,
250
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C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and
investment tax credits are as follows:
Recognised in
Recognised in
other
comprehensive
At January 1 profit or loss income At December 31
Deferred income tax assets:
-Temporary differences:
Unrealised loss (gain) on
financial assets
28,637$ 28,002)($ -$ 635$
Unrealised exchange loss (gain) 7,127 4,152)( - 2,975
Unrealised loss on foreign
investments 6,423 18,832 - 25,255
Unrealised loss on unfinished
construction 31,202 26,689 - 57,891
Unrealised losses on
doubtful debts 17,898 2,902 - 20,800
Unrealised compensated absences 36,879 7,437 - 44,316
Unrealised maintenance costs 8,939 2,559 - 11,498
Unrealised loss for market value
decline and obsolete and slow-
moving inventories 80 140 - 220
Unrealised golf card annual fee 918 162 - 1,080
Unrealised gain on sales of fixed
assets - 1,516 - 1,516
Reserve for retirement plan 332,194 24,366)( 17,928 325,756
Others 43,042 41,625)( 24)( 1,393
Subtotal 513,339 37,908)( 17,904 493,335
-Deferred tax liabilities:
Unrealised exchange (gain) loss 22)($ 843)($ -$ 865)($
Unrealised gain on foreign
investments 234,723)( 37,900 - 196,823)(
Unrealised pension - 1,156)( 339 817)(
Unrealised gain on concessions 156,373)( 25,018)( - 181,391)(
Investment property - 12,108)( - 12,108)(
Others 38,168)( 19,522 1,160)( 19,806)(
Subtotal 429,286)( 18,297 821)( 411,810)(
Total 84,053$ 19,611)($ 17,083$ 81,525$
2018
251
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Recognised in
Recognised in
other
comprehensive
At January 1 profit or loss income At December 31
Deferred income tax assets-
-Temporary differences:
Unrealised loss (gain) on
financial assets
37,410$ 8,773)($ -$ 28,637$
Unrealised exchange loss (gain) 5,117 2,010 - 7,127
Unrealised loss on foreign
investments
- 6,423 - 6,423
Unrealised loss on unfinished
construction
31,132 70 - 31,202
Unrealised losses on
doubtful debts
17,191 707 - 17,898
Unrealised compensated absences 38,133 1,254)( - 36,879
Unrealised maintenance costs 11,578 2,639)( - 8,939
Unrealised loss for market value
decline and obsolete and slow-
moving inventories
105 25)( - 80
Unrealised golf card annual fee 918 - - 918
Reserve for retirement plan 366,589 47,297)( 12,902 332,194
Others 25,975 17,067 - 43,042
Subtotal 534,148 33,711)( 12,902 513,339
-Deferred tax liabilities:
Unrealised exchange (gain) loss -$ 22)($ -$ 22)($
Unrealised gain on foreign
investments
325,112)( 90,389 - 234,723)(
Unrealised gain on concessions 156,790)( 417 - 156,373)(
Others 19,248)( 18,920)( - 38,168)(
Subtotal 501,150)( 71,864 - 429,286)(
Total 32,998$ 38,153$ 12,902$ 84,053$
2017
252
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D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as
follows:
E. The amounts of deductible temporary difference that are not recognised as deferred tax assets
are as follows:
F. The Company’s income tax returns through 2014 to 2016 have been assessed and approved by
the Tax Authority.
G. The Company’s subsidiary CTCI Arabia Ltd. was ordered by the local tax authorities to pay back
taxes in the amount of $134,635 (SAR 17,212) for the years 2007 through 2010. CTCI Arabia
Ltd. has appealed the decision and paid tax beforehand in the amount of $134,635 (SAR 17,212)
in order to conduct subsequent administrative litigation, therefore it is difficult to assess the
maximum possible loss that CTCI Arabia Ltd. could incur from this tax dispute.
H. Under the amendments to the Income Tax Act which was promulgated by the President of the
Republic of China in February, 2018, the Company’s applicable income tax rate was raised from
17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in
income tax rate.
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2013 154,975$ 154,975$ 154,975$ 2018
2014 98,149 98,149 98,149 2019
2016 107,330 80,556 80,556 2026
2016 427,405 64,538 64,538 2021
2017 284,663 270,340 270,340 2027
2017 597,982 597,982 597,982 2022
2018 1,030,449 1,030,449 1,030,449 2028
2,700,953$ 2,296,989$ 2,296,989$
Amount filed/ Unrecognised
Year incurred assessed Unused amount deferred tax assets Expiry year
2013 154,975$ 154,975$ 154,975$ 2018
2014 98,149 98,149 98,149 2019
2015 11,135 11,135 11,135 2025
2016 107,330 107,330 107,330 2026
2016 445,995 445,995 445,995 2021
2017 174,448 174,448 174,448 2027
2017 229,973 229,973 229,973 2022
1,222,005$ 1,222,005$ 1,222,005$
December 31, 2018
December 31, 2017
December 31, 2018 December 31, 2017
Deductible temporary differences 494,653$ 282,434$
253
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(29) Earnings per share
Amount
after tax
Weighted-average
number of ordinary
shares outstanding
(share in thousands)
Earnings per share
(in dollars)
Basic earnings per share
Profit attributable to the ordinary
shareholders of the parent1,827,537$ 762,016 2.40NT$
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 2.39NT$
Amount
after tax
Weighted-average
number of ordinary
shares outstanding
(share in thousands)
Earnings per share
(in dollars)
Basic earnings per share
Profit attributable to the ordinary
shareholders of the parent2,805,348$ 763,274 3.68NT$
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 3.67NT$
For the year ended December 31, 2018
For the year ended December 31, 2017
254
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(30) Business combinations
A. ECOVE Solvent Recycling Corporation
(a) On May 10, 2018, the Group acquired a 90% equity interest of ECOVE Solvent Recycling
Corporation in the amount of $49,590 in the form of cash, and had control over ECOVE
Solvent Recycling Corporation which is primarily engaged in operating basic chemical
industry and manufacture of other chemical products. As a result of the acquisition, the Group
is expected to increase its presence in these markets. It also expects to reduce costs through
economies of scale.
(b) The following table summarises the consideration paid for ECOVE Solvent Recycling
Corporation and the fair values of the assets acquired and liabilities assumed at the acquisition
date, as well as the non-controlling interest’s proportionate share of the recognised amounts
of acquiree’s identifiable net assets at the acquisition date:
(c) The operating revenue included in the consolidated statement of comprehensive income since
May 10, 2018 contributed by ECOVE Solvent Recycling Corporation was $0. ECOVE
Solvent Recycling Corporation also contributed loss before income tax of ($7,014) over the
same period. Had ECOVE Solvent Recycling Corporation been consolidated from January 1,
2018, the consolidated statement of comprehensive income would show operating revenue
of $1,485 and profit before income tax of ($2,834).
B. ECOVE Solar Energy Corporation
(a) On September 20, 2018, the Group acquired a 50% equity interest of ECOVE Solar Energy
Corporation in the amount of $455,384 by cash, and have control over ECOVE Solar Energy
Corporation.
May 10, 2018
Purchase consideration
Cash paid 49,590$
Non-controlling interest’s proportionate share of the recognised
amounts of acquiree’s identifiable net assets 4,126
53,716
Fair value of the identifiable assets acquired and liabilities
assumed Cash 150
Prepayments 291
Property, plant and equipment 68,492
Other non-current assets 588
Other payables 143)(
Other current liabilities 325)(
Long-term borrowings 27,800)(
Total identifiable net assets 41,253
Goodwill 12,463$
255
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(b) The following table summarises the consideration paid for ECOVE Solar Energy Corporation
and the fair values of the assets acquired and liabilities assumed at the acquisition date, as
well as the non-controlling interest’s proportionate share of the recognised amounts of
acquiree’s identifiable net assets at the acquisition date:
(c) The operating revenue included in the consolidated statement of comprehensive income since
September 20, 2018 contributed by ECOVE Solar Energy Corporation was $83,600, also
contributed profit before income tax of $12,047 over the same period. Had ECOVE Solar
Energy Corporation been consolidated from January 1, 2018, the consolidated statement of
comprehensive income would show operating revenue of $199,161and profit before income
tax of $48,845.
(d) The fair value of the identifiable property, plant and equipment obtained is tentatively set at
$1,533,559 and the assets are subject to final valuation.
September 20, 2018
Purchase consideration
Cash paid 455,384$
Fair value of equity interest in ECOVE Solar Energy
Corporation held before the business combination 388,193
843,577
Fair value of the identifiable assets acquired and liabilities
assumed Cash 298,165
Accounts receivable 13,501
Other receivables 5,509
Prepayments 29,536
Property, plant and equipment 1,533,559
Deferred income tax assets 1,516
Other non-current assets 721,902
Short-term borrowings 143,000)(
Accounts payable 5,245)(
Current income tax liabilities 8,903)(
Other payables 33,310)(
Other current liabilities 138,880)(
Long-term borrowings 1,376,650)(
Deferred income tax liabilities 2,773)(
Other non-current liabilities 175,040)(
Total identifiable net assets 719,887
Goodwill 123,690$
256
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(31) Operating leases
The Group’s future aggregate minimum lease payments under non-cancellable operating leases are
as follows:
(32) Supplemental cash flow information
Investing activities with partial cash payments
7. RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship
December 31, 2018 December 31, 2017
Not later than one year 143,352$ 265,183$
Later than one year but not later than five years 254,239 262,979
Later than five years 370,879 6,115
768,470$ 534,277$
2018 2017
Purchase of property, plant and equipment 2,767,971$ 157,088$
Add: Opening balance of payable on equipment - -
Less: Endinging balance of payable on equipment 1,785,960)( -
Cash paid during the year 982,011$ 157,088$
Names of related parties Relationship with the Group
Pan Asia Corp. Associates
Boretech Resource Recovery Associates
MIE Industrial Sdn. Bhd. Associates
ZheJiang Boretech Environmental
Engineering Co., Ltd.Associates
Blue Whale Water Technology Corp. Associates
Powertech Energy Corp. Associates
EVER ECOVE CORP. Associates
HDEL-CTCI (Linhai) Associates
ECOVE Solar Energy Corporation
The Group was a joint venture before
September 20, 2018, and became a subsidiary
starting from September 20, 2018.
Hsin Dar Environment Corp. Other related parties
Gintech Energy Corporation Other related parties
CTCI Foundation Other related parties
CTCI Education Foundation Other related parties
Gintech (Thailand) Limited Associates
ECOVE Central Corporation Ltd.
It was a related party before September 20,
2018, and became a subsidiary starting from
September 20, 2018.
ECOVE South Corporation Ltd.
It was a related party before September 20,
2018, and became a subsidiary starting from
September 20, 2018.
257
~81~
(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 $10,519,722 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. Purchases of services
The price on the construction subcontracts entered into with related parties are set through
negotiation by both parties.
C. Accounts receivable
D. Accounts payable
2018 2017
Associates 1,310,529$ 724,225$
Joint ventures 188,211 134,952
Other related parties 5,329 22,770
1,504,069$ 881,947$
For the years ended December 31,
2018 2017
Associates 3,348,151$ 1,542,634$
Other related parties 102,760 2,110
3,450,911$ 1,544,744$
For the years ended December 31,
December 31, 2018 December 31, 2017
Associates 942,076$ 18,009$
Joint ventures - 16,642
Other related parties 1,995 7,708
944,071$ 42,359$
December 31, 2018 December 31, 2017
Associates 1,359,712$ 926,710$
258
~82~
E. Other receivables
Note 1: Mainly consist of due from personnel transfer and payments on behalf of others.
Note 2: Consist of due from personnel transfer and system usage fees.
F. Loans to related parties
(a) Receivables from related parties
(b) Interest income
The loans to associates are receivable monthly and carry interest at 1.8% per annum for the
year ended December 31, 2017.
G. Other payables-related parties
It mainly arises from employee transfer expense.
H. Rental expense
December 31, 2018 December 31, 2017
Joint ventures (Note 1) -$ 7,213$
Associates (Note 2) 96 8,096
96$ 15,309$
December 31, 2018 December 31, 2017
ECOVE Solar Energy Corporation -$ -$
2018 2017
Joint ventures -$ 508$
For the years ended December 31,
December 31, 2018 December 31, 2017
Associates -$ 20$
Other related parties 1,249 -
1,249$ 20$
Lessor Leased assets Rental amount 2018 2017
Other related parties Land / Buildings $698/month/
semiannual
payment8,372$ 8,372$
For the years ended December 31,
259
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I. Acquisition of financial assets:
J. Disposal of financial assets
K. Provision for endorsements and guarantees
L. The Group donated $15,000 and $15,000 to the CTCI Education Foundation in March, 2018 and
May, 2017, respectively for personnel training and enterprise social responsibility.
(3) Key management compensation
For the year ended
December 31, 2018
Accounts No. of shares Objects Acquisition Price
Other related parties Investments
accounted for
using equity
method
31,622,726 ECOVE Solar
Energy
Corporation
455,384$
Accounts No. of shares Objects Proceeds Gain/(loss)
Other related parties Financial assets
at fair value
through profit
or loss-non
current
17,556,000 Utech Solar Corp. 132,851$ 64,277$
For the year ended
December 31, 2018
December 31, 2018 December 31, 2017
Associates 1,984,300$ 769,300$
Joint ventures - 631,253
1,984,300$ 1,400,553$
2018 2017
Salaries and other short-term employee
benefits
217,434$ 234,067$
Post-employment benefits 1,933 23,602
Other long-term benefits 9,933 6,314
Share-based payments 2,508 950
Total 231,808$ 264,933$
For the years ended December 31,
260
~84~
8. PLEDGED ASSETS
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT
COMMITMENTS
In addition to those items which have been disclosed in Notes 6(22), (28) and (31), the significant
contingent liabilities and unrecognized contract commitments of the Group as of December 31, 2018
were as follows:
A. Guarantee
(a) The Group had outstanding notes payable for security deposits under various construction
projects amounting to $6,528,590.
(b) The Group had outstanding notes payable for bank financing amounting to $96,124,411.
B. The Group had unused and outstanding letters of credit of $598,683.
C. The Group had outstanding commitments for construction subcontracts and services contracts, less
accounts payable that were already paid and accrued in the future, of $25,471,018.
D. The Group had issued contracts for acquisition of inventory amounting to $1,391,876.
E. The Company had a joint procurement project with Mitsubishi Heavy Industries, Ltd. in 1997. The
construction was completed on February 19, 2001 and accepted by the Environmental Protection
Administration (the “EPA”) on May 16, 2011. According to the contract, the Company provided
warranty deposit amounting to $141,690 on the materials of the equipment. As the Kaohsiung County
government, the user of the incineration, had a dispute with the operating manufacturer, the EPB
rejected to repay the deposit. The EPA availed of the warranty deposit on February 4, 2010. As a result,
the Company had to remit $73,253 to the procurement department of Bank of Taiwan Co., Ltd.
Consequently, the Company took action to cancel the deposit of $141,690 and filed a lawsuit requiring
EPA to repay the $73,253. The EPA indicated that it had repaid $9,299 to the Company in 2010.
Therefore, the Company reduced the lawsuit claim to $63,954 plus interest of $830 and damage loss
of $1,708. The case was reverted back to the Taiwan High Court after being taken up by the Supreme
Pledged assets December 31, 2018 December 31, 2017 Purpose
Other current assets
Guarantee for wages 5,816$ 11,383$ Guarantee for wages
Other non-current assets
Pledged time deposits 141,948 19,029 Guarantee for oil expense, litigation
deposits and short-term borrowingRefundable deposits 130,167 132,142 Guarantee for oil expense, rent,
golf certificates, tender bonds,
construction contractsLong-term prepaid rent 16,530 18,836 Guarantee for long-term borrowings
Property, plant and
equipment
5,937,741 3,781,289 Guarantee for long-term and short-
term borrowings
Investment property 808,129 812,652 Guarantee for long-term and short-
term borrowings7,040,331$ 4,775,331$
Book value
261
~85~
Court. The Taiwan High Court then reverted the case back again to the Supreme Court. The Taiwan
High Court reversed the original judgement and denied the Group’s claim, the Group then filed to the
third instance. The Supreme Court remanded the case to the Taiwan High Court. The Taiwan High
Court denied the appeal of EPA, who then filed to the third instance, and remanded the case to the
Taiwan High Court as well. The case is being taken up by the Taiwan High Court as 105-Zhong-
Shang-Geng-3-11. According to the Company’s lawyer, the outcome of the case is still uncertain and
it is difficult to estimate any potential gain or loss on the case.
F. The subsidiary, CTCI Smart Engineering Corp., has entered into an electrical and mechanical contract
with RPTI International Ltd. (RPTI) on behalf of the joint venture by RSEA Engineering Corporation
and CTCI Smart Engineering Corp. for partial permanent work of electrical and mechanical
engineering. However, as RPTI International Ltd. was behind the schedule, it agreed that CTCI
SMART ENGINEERING CORP. hire others to carry out the pending construction. In addition,
because RPTI was unable to perform the air conditioning construction as stated in the contract, CTCI
SMART ENGINEERING CORP. revoked the air conditioning construction, and re-contract out to
JEHNG LONG ENGINEERING CORP. The aforementioned construction expenses for hiring others
and for working on the terminated construction and losses were expected to be paid using RPTI’s
estimated assessment amount and retention payment. However, RPTI filed a lawsuit with the Taiwan
Taipei District Court, alleging improper deduction by CTCI SMART ENGINEERING CORP. and
requesting construction payment of $72,024 along with an interest at 5% per annum from November
28, 2007 until the date of repayment. The case was still in trial and CTCI SMART ENGINEERING
CORP. filed a counter-claim on August 8, 2008, for alleging RPTI’s estimated assessment amount
and retention amount were insufficient to cover all payables, and requesting payment of $94,569. The
amount of $22,947 of the requested payment of $94,569 shall be paid along with an interest at 5%
per annum from July 16, 2008 until the date of repayment, while the remaining request amount shall
be paid along with an interest at 5% per annum from the date when RPTI receives the transcription
of counter-complaint until the date of repayment. RPTI expanded its claim to request a payment of
$111,079 along with an interest. On April 27, 2015, Taiwan Taipei District Court rendered a
judgement (Year 2008, Zian-Zi No. 21, Civil case) that CTCI SMART ENGINEERING CORP. needs
to pay RPTI an amount of $84,305 which comprises of $72,574 along with an interest at 5% per
annum from November 28, 2007 and of the remaining $11,731 along with an interest at 5% per annum
from December 15, 2010 until the date of repayment. RPTI’s remaining appeal and CTCI SMART
ENGINEERING CORP.’s counter-claim were refuted. CTCI SMART ENGINEERING CORP.
disagreed with the verdict and filed an appeal with the Taiwan High Court in the prescribed time,
asking for rejection to RPTI’s claim and judgment of the counter-claim. The counter-claim is
requesting RPTI to pay an amount of $75,166 which comprises of $22,947 along with an interest at
5% per annum from July 16, 2008 and of remaining $52,218 along with an interest at 5% per annum
from August 9, 2008 until the date of repayment. RPTI filed an incidental appeal requesting CTCI
SMART ENGINEERING CORP. to pay another amount of $7,092 along with an interest at 5% per
annum from November 28, 2007 until the date of repayment. Taiwan High Court rendered the
judgement on August 30, 2017. Refuted the verdict above and commanded that RPTI needs to pay
CTCI SMART ENGINEERING CORP. $57,899 along with an interest at 5% per annum from August
9, 2008 until the date of repayment. RPTI appealed to the Supreme Court during the legal period
because they disagreed with the judgement. The Supreme Court rendered the judgement that the
262
~86~
verdict Taiwan High Court rendered was void and reverted the case back to the Taiwan High Court
for a retrial. According to the Company’s appointed lawyers, the case is still pending in the Taiwan
High Court, and the case number is Year 2018, Chong-Shang-Gang-Yi-Zi No. 65.
G. The Company’s subsidiary ECOVE Environment Services Corp. was ordered to pay $54,267 in air
pollution prevention fees by the Environmental Protection Department of the New Taipei City
Government on October 28, 2014, and the penalty was upheld after filing an administrative appeal.
On July 6, 2015, ECOVE Environment Services Corp. asked the Taipei High Administrative Court to
revoke both the original penalty and the subsequent decision on the administrative appeal, but the
request was denied. ECOVE Environment Services Corp. appealed the decision, and the case is still
pending in the Supreme Administrative Court.
The attorney representing ECOVE Environment Services Corp. regards the original penalty to be
illegal and invalid, therefore no provisions for the lawsuit have been recognized in the financial
statements.
10. SIGNIFICANT DISASTER LOSS
None.
11. SIGNIFICANT EVENT 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(21) E.
B. CTCI Development Corp signed a property contract with Xintianmu Development Co., Ltd., to
purchase a land located in No. 33, Xinzhoumei Section, Beitou District, Taipei City with a price of
$1,266 per square footage, a total land area of 5,180.47 square meters and 1,567.092 square footage,
for a total price of $1,984,400 on January 23, 2018. On December 20, 2018, the Group obtained the
land ownership certificate, and the transfer of the land was completed. As of December 31, 2018,
the consideration paid by the Group amounting to $198,440, remaining consideration of $1,785,960
was paid on January 3, 2019.
C. 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 $6 billion on December 12, 2018. As of March 14, 2019, the Company has not
submitted an application to the competent authority for approval for raising domestic unsecured
corporate bonds.
263
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12. OTHERS
(1) Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and to maintain an optimal capital
structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio.
This ratio is calculated as net debt divided by total capital. Total borrowings are including ‘current
and non-current borrowings’ as shown in the consolidated balance sheet. Total capital is calculated
as ‘equity’ as shown in the consolidated balance sheet.
The gearing ratios as of December 31, 2018 and 2017, were as follows:
December 31, 2018 December 31, 2017
Total borrowings 14,966,313$ 8,804,167$
Total equity 20,626,159$ 21,040,157$
Gearing ratio 72.56% 41.84%
264
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(2) Financial risk of financial instruments
A. Financial instruments by category
December 31, 2018 December 31, 2017
Financial assets
Financial assets at fair value through profit
or loss Financial assets mandatorily measured at
fair value through profit or loss 554,638$ 581,194$
Financial assets at fair value through other
comprehensive income 1,288,938$ -$
Available-for-sale financial assets
Available-for-sale financial assets - 647,629
Financial assets at cost - 676,511
-$ 1,324,140$
Financial assets at amortised cost
Cash and cash equivalents 15,070,992$ 19,354,880$
Notes receivable 75,006 33,150
Accounts receivable 9,092,332 5,325,391
Accounts receivable due from related
parties 944,071 42,359
Other receivables 338,381 225,175
Other receivables due from related
parties 96 15,309
Refundable deposits 130,167 132,142
Long-term accounts receivable 2,392,339 2,414,923
Other financial assets 558,950 366,299
28,602,334$ 27,909,628$
Financial liabilities
Financial liabilities at fair value through
profit or loss Financial liabilities mandatorily measured
at fair value through profit or loss 548$ 8,819$
Financial liabilities at amortised cost
Short-term borrowings 13,414,459$ 6,539,017$
Notes payable 18,788 4,069
Accounts payable 9,991,262 11,878,274
Accounts payable due to related parties 1,359,712 926,710
Other payables (including related parties) 4,692,516 2,748,664
Long-term borrowings (including current
portion) 1,551,854 2,265,150
Guarantee deposits received 407,649 358,637
31,436,240$ 24,720,521$
265
~89~
B. Risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign
exchange risk, interest rate risk and price risk), credit risk and liquidity risk.
(b) Risk management is carried out by a central treasury department (Group treasury) under
policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges
financial risks in close co-operation with the Group’s operating units. The Board provides
written principles for overall risk management, as well as written policies covering specific
areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of
derivative financial instruments and non-derivative financial instruments, and investment of
excess liquidity.
C. Significant financial risks and degrees of financial risks
(a) Market risk
Foreign exchange risk
i. The Group operates internationally and is exposed to exchange rate risk arising from the
transactions of the Company and its subsidiaries used in various functional currency,
primarily with respect to the USD and EUR. Exchange rate risk arises from future
commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign
exchange risk against their functional currency. The companies are required to hedge their
entire foreign exchange risk exposure with the Group treasury.
iii The Group’s businesses involve some non-functional currency operations (the Company’s
and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional
currency: USD and RMB). The information on assets and liabilities denominated in foreign
currencies whose values would be materially affected by the exchange rate fluctuations is
as follows:
266
~90~
Foreign Currency
Amount
(In Thousands) Exchange Rate Book Value
(Foreign currency: functional
currency)
Financial assets
Monetary items
USD : NTD 275,169$ 30.7400 8,458,695$
THB : NTD 817,495 0.9491 775,884
EUR : NTD 7,889 35.2327 277,951
USD : MYR 8,888 4.1575 273,217
MOP : NTD 53,270 3.8042 202,650
JPY : NTD 556,648 0.2779 154,692
RMB : NTD 23,979 4.4742 107,287
USD : THB 3,186 32.3886 97,938
SGD : NTD 4,271 22.4552 95,898
THB:USD 71,220 0.0309 67,595
RMB:USD 4,240 0.1455 18,971
USD:SAR 247 3.7523 7,593
SAR:NTD 555 8.1922 4,547
EUR:USD 80 1.1462 2,819
Financial liabilities
Monetary items
USD : SAR 32,700 3.7523 1,005,198
USD : NTD 10,733 30.7400 329,932
USD : MYR 4,298 4.1575 132,121
EUR : MYR 2,297 4.7651 80,930
EUR : NTD 1,316 35.2327 46,366
EUR:USD 1,198 1.1462 42,209
SGD : NTD 537 22.4552 12,064
MOP : NTD 2,723 3.8042 10,359
RMB:NTD 1,764 4.4742 7,892
SAR:NTD 406 8.1922 3,325
USD:SGD 95 1.3689 2,920
December 31, 2018
267
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v. The unrealized exchange gain (loss) arising from significant foreign exchange variation
on the monetary items held by the Group for the years ended December 31, 2018 and
2017 amounted to $83,512 and ($151,026), respectively.
Foreign Currency
Amount
(In Thousands) Exchange Rate Book Value
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD 382,582$ 29.8480 11,419,308$
EUR:NTD 15,185 35.6743 541,714
JPY:NTD 443,049 0.2649 117,364
GBP:NTD 42 40.2053 1,689
AUD:NTD 1,863 23.2635 43,340
MOP:NTD 13,610 3.7378 50,871
HKD:NTD 1,830 3.8190 6,989
SGD:NTD 50,193 22.3238 1,120,498
THB:NTD 3,659 0.9153 3,349
RMB:NTD 8,052 4.5789 36,869
SAR:NTD 5,230 7.9593 41,627
USD:THB 1,202 32.6101 3,587
USD:SGD 1,171 1.3370 5,979
USD:MYR 13,430 4.0545 373,676
EUR:MYR 807 4.8459 30,748
Financial liabilities
Monetary items
USD:NTD 9,265 29.8480 276,542
EUR:NTD 2,257 35.6743 80,517
JPY:NTD 2,150 0.2649 570
GBP:NTD 5 40.2053 201
SGD:NTD 663 22.3238 14,801
THB:NTD 3,659 0.9153 3,349
SEK:NTD 18,368 3.6187 66,468
MOP:NTD 13,608 3.7378 50,864
RMB:NTD 32,786 4.5789 150,124
CHF:NTD 276 30.5507 8,432
EUR:MYR 101 4.8459 1,869
USD:MYR 8,065 4.0545 224,401
GBP:MYR 817 5.4614 179,395
December 31, 2017
268
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vi. Analysis of foreign currency market risk arising from significant foreign exchange
variation:
Degree of Effect on Profit
Effect on Other
Comprehensive
Variation or Loss Income
( Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% 84,587$ -$
THB : NTD 1% 7,759 -
EUR : NTD 1% 2,780 -
USD : MYR 1% 2,732 -
MOP : NTD 1% 2,027 -
JPY : NTD 1% 1,547 -
RMB : NTD 1% 1,073 -
USD:THB 1% 979 -
SGD:TWD 1% 959 -
THB:USD 1% 676 -
RMB:USD 1% 190 -
USD:SAR 1% 76 -
SAR:NTD 1% 45 -
EUR:USD 1% 28 -
Financial liabilities
Monetary items
USD : SAR 1% 10,052 -
USD : NTD 1% 3,299 -
USD : MYR 1% 1,321 -
EUR : MYR 1% 809 -
EUR : NTD 1% 464 -
EUR:USD 1% 422 -
SGD : TWD 1% 121 -
MOP : TWD 1% 104 -
RMB:NTD 1% 79 -
SAR:NTD 1% 33 -
USD:SGD 1% 29 -
December 31, 2018
Sensitivity Analysis
269
~93~
Degree of Effect on Profit
Effect on Other
Comprehensive
Variation or Loss Income
( Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD 1% $ 114,193 -$
EUR : NTD 1% 5,417 -
JPY : NTD 1% 1,174 -
GBP : NTD 1% 17 -
AUD : NTD 1% 433 -
MOP : NTD 1% 509 -
HKD : NTD 1% 70 -
SGD : NTD 1% 11,205 -
THB : NTD 1% 33 -
RMB : NTD 1% 369 -
SAR : NTD 1% 416 -
USD : THB 1% 36 -
USD : SGD 1% 60 -
USD : MYR 1% 3,737 -
EUR : USD 1% 307 -
Financial liabilities
Monetary items
USD : NTD 1% 2,765 -
EUR : NTD 1% 805 -
JPY : NTD 1% 6 -
GBP : NTD 1% 2 -
SGD : NTD 1% 148 -
THB : NTD 1% 33 -
SEK : NTD 1% 665 -
MOP : NTD 1% 509 -
RMB : NTD 1% 1,501 -
CHF : NTD 1% 84 -
EUR : MYR 1% 19 -
USD : MYR 1% 2,244 -
GBP : MYR 1% 1,794 -
December 31, 2017
Sensitivity Analysis
270
~94~
Price risk
The Group’s equity securities, which are exposed to price risk, are the held financial assets at
fair value through other comprehensive income, financial assets at fair value through profit or
loss and available-for-sale financial assets. To manage its price risk arising from investments
in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done
in accordance with the limits set by the Group.
Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from borrowings. Borrowings issued at variable rates
expose the Group to cash flow interest rate risk which is partially offset by cash and cash
equivalents held at variable rates. During the years ended December 31, 2018 and 2017, the
Group’s borrowings at variable rate were denominated in NTD and USD.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the
clients or counterparties of financial instruments on the contract obligations. According to
the Group’s credit policy, each local entity in the Group is responsible for managing and
analyzing the credit risk for each of their new clients before standard payment and delivery
terms and conditions are offered.
ii. Individual risk limited is controlled by internal risk that assesses the credit quality of the
customers, taking into account their financial position, past experience and other factors.
iii. The Group adopts the 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 Group adopts the assumptions under IFRS 9, the default occurs when the customers’
contract payments are past due over 90 days.
v. The Group classifies customers’ accounts receivable and contract assets in accordance
with customer types. The Group applies the simplified approach using provision matrix
and loss rate methodology to estimate expected credit loss under the provision matrix basis.
vi. The Group used the forecastability of Taiwan Institute of Economic Research boom
observation report to adjust historical and timely information to assess the default
possibility of accounts receivable. On December 31, 2018, the provision matrix is as
follows:
271
~95~
Note 1: Government institutions, state-owned enterprises and listed companies
Note 2: Companies that are not included in Note 1.
Movements in relation to the group applying the simplified approach to provide loss
allowance for accounts receivable, contract assets and lease payments receivable are as
follows:
(c) Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated
by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs so that the Group
does not breach borrowing limits or covenants on any of its borrowing facilities. Such
forecasting takes into consideration the Group’s debt financing plans, covenant
compliance, compliance with internal balance sheet ratio targets.
ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled
derivative financial liabilities into relevant maturity groupings based on the remaining
period at the balance sheet date to the contractual maturity date for non-derivative
financial liabilities and to the expected maturity date for derivative financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows.
Excellent
customers
(Note 1)
General
customers
(Note 2)
Individual
assessment
customers Total
December 31, 2018
Expected loss rate 0.03%~0.40% 0.03%~100% 50%~100%
Total book value 4,488,537$ 4,699,248$ 5,148$ 9,192,933$
Loss allowance 2,749)( 19,019)( 3,827)( 25,595)(
2018
Accounts receivable
At January 1_IAS 39 84,920$
Adjustments under new standards -
At January 1_IFRS 9 84,920
Provision for impairment 32,211
Reversal of impairment 3,894)(
Write-offs 87,642)(
At December 31 25,595$
272
~96~
(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.
Non-derivative financial liabilities
December 31, 2018 Less than 1 year More than 1 year
Short-term borrowings 13,457,335$ -$
Notes payable 18,788 -
Accounts payable (including related parties) 11,350,974 -
Other payables (including related parties) 4,692,516 -
Long-term borrowings (including current portion) 131,788 1,670,586
Non-derivative financial liabilities:
December 31, 2017 Less than 1 year More than 1 year
Short-term borrowings 6,738,434$ -$
Notes payable - -
Accounts payable (including related parties) - -
Other payables (including related parties) - -
Long-term borrowings (including current portion) 348,794 2,180,678
Derivative financial liabilities:
Between 3 months
December 31, 2018 Less than 3 months and 1 year
Exchange rate swaps (net-settled) $ - $ -
Forward exchange contracts 548 -
Derivative financial liabilities:
Between 3 months
December 31, 2017 Less than 3 months and 1 year
Exchange rate swaps (net-settled) $ - $ 3,580
Forward exchange contracts 5,239 -
273
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(3) Fair value information
A. The different levels that the inputs to valuation techniques are used to measure fair value of
financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. A market is regarded as active if it meets
all the following conditions: the items traded in the market are homogeneous; willing
buyers and sellers can normally be found at any time; and prices are available to the
public. The fair value of the Group’s investment in listed stocks, beneficiary
certificates with quoted market prices is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly. The fair value of the Group’s investment
in most derivative instruments is included in Level 2.
Level 3: Inputs for the asset or liability that are not based on observable market data.
B. The related information of financial and non-financial instruments measured at fair value by level
on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:
(a) The related information of natures of the assets and liabilities is as follows:
December 31, 2018 Level 1 Level 2 Level 3 Total
Financial assets:
Financial assets at fair value
through profit or loss
Beneficiary certificates 504,323$ -$ -$ 504,323$
Derivative instruments - 50,315 - 50,315
Financial assets at fair value
through other comprehensive
income
Equity securities-current 473,549 - - 473,549
Equity securities
-non-current
- - 788,611 788,611
Debt securities - 26,778 - 26,778
Total 977,872$ 77,093$ 788,611$ 1,843,576$
Financial liabilities:
Financial liabilities at fair value
through profit or loss
Derivative instruments -$ 548$ -$ 548$
274
~98~
(b) The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are
listed below by characteristics:
ii. Except for financial instruments with active markets, the fair value of other financial
instruments is measured by using valuation techniques or by reference to counterparty quotes.
C. There was no transfer between Level 1 and Level 2 for the years ended December 31, 2018 and
2017.
December 31, 2017 Level 1 Level 2 Level 3 Total
Financial assets:Financial assets at fair value
through profit or loss
Beneficiary certificates 580,697$ -$ -$ 580,697$
Derivative instruments - 497 - 497
Available-for-sale financial
assets
Equity securities 515,074 - - 515,074
Bond securities - 132,555 - 132,555
Total 1,095,771$ 133,052$ -$ 1,228,823$
Financial liabilities:
Financial liabilities at fair value
through profit or loss
Derivative instruments -$ 8,819$ -$ 8,819$
Listed shares Open-end fund
Market quoted price Closing price Net asset value
275
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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. Group finance segment is in charge of valuation procedures for fair value measurements being
categorised within Level 3, which is to verify independent fair value of financial instruments.
Such assessment is to ensure the valuation results are reasonable by applying independent
information to make results close to current market conditions, confirming the resource of
information is independent, reliable and in line with other resources and represented as the
exercisable price, and frequently calibrating valuation model, performing back-testing, updating
inputs used to the valuation model and making any other necessary adjustments to the fair value.
Investment property is valuated regularly by the Group’s Finance segment based on the valuation
methods and assumptions announced by the Financial Supervisory Commission, Securities and
Futures Bureau or through outsourced appraisal performed by the external valuer.
G. The following is the qualitative information of significant unobservable inputs and sensitivity
analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair
value measurement:
2018
Equity securities
At January 1 739,940$
Gains and losses recognised in profit or loss
Recorded as non-operating income and expenses 49,159
Recorded as unrealised gains (losses) on
valuation of investments in equity
instruments measured at fair value
through other comprehensive income
27,102)(
Purchases in this year 159,452
Sales in this year 132,851)(
Effects of changes in foreign exchange rates 13
At December 31 788,611$
Fair value at
December 31,
2018
Valuation
technique
Significant
unobservable
input
Range (weighted
average)
Relationship of
inputs to fair
value
Non-derivative
equity
instrument:
Unlisted shares 239,615$ Market
comparable
companies
Price to book
ratio multiple,
discount for
lack of
marketability
Median:1.86
Average:1.79
Liquidity discount:
17.5%
The higher the
multiple and
control
premium, the
higher the fair
value
276
~100~
H. The Group has carefully assessed the valuation models and assumptions used to measure fair
value. However, use of different valuation models or assumptions may result in different
measurement. The following is the effect of profit or loss or of other comprehensive income from
financial assets and liabilities categorised within Level 3 if the inputs used to valuation models
have changed:
(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
Chang
e
Favourable
change
Unfavourable
change
Favourable
change
Unfavourable
change
Financial assets
Equity
instrument
Price to book
ratio multiple,
discount for
lack of
marketability
± 1% $ - $ - $ 24,521 ($ 24,521)
December 31, 2018
Recognised in profit or
loss
Recognised in other
comprehensive income
277
~101~
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 Group 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 Group 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 Group, 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;
278
~102~
(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 Group 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.
279
~103~
(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.
280
~104~
B. The reconciliations of carrying amount of financial assets transfered from December 31, 2017,
IAS 39, to January 1, IFRS 9, were as follows:
Available-
for-sale
-equity
Available-
for-sale
-liability
Measured at
fair value
through other
comprehensive
income-equity
Measured at
fair value
through other
comprehensive
income-liability Total
Retained
earnings
Others
equity
Transferred into and
measured at fair
value through
profit or loss $ - $ - $ 96,980 $ 96,980 13,288)($ -$ Transferred into and
measured at fair
value through other
comprehensive
income-equity 515,074 - 579,531 1,094,605 - -
Impairment loss
adjustment - - - - 180,418 ( 180,418)
Fair value adjustment - - - - - 76,717 Gain or loss of
changes in fair
value attributable
to non-controlling
interests - - - - 230)( 230
Transferred into and
measured at fair
value through other
comprehensive
income-liability - 132,555 - 132,555 - -
$ 515,074 $ 132,555 $ 676,511 $ 1,324,140 $ 166,900 ($ 103,471)
Measured
at cost
Effects
IAS 39
IFRS 9
281
~105~
(a) Under IAS 39, because the cash flows of debt instruments, which were classified as:
available-for-sale financial assets amounting to $132,555, 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 IFRS9.
(b) Under IAS 39, because the equity instruments, which were classified as: available-for-sale
financial assets, financial assets at cost, amounting to $515,074, $579,531, 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 Group recognised net loss amounting to $51,566 on financial assets held for trading
for the year ended December 31, 2017.
ii. The trading items and contracts information of derivatives are as follows:
Items December 31, 2017
Current items:
Financial assets held for trading
Beneficiary certificates 576,999$
Non-hedging derivatives 497
577,496
Valuation adjustment of financial assets held for trading 3,698
581,194$
Non-current items:
Financial liabilities held for trading non-hedging derivatives 8,819$
Contract amount
(notional principal) Contract period
Foreign exchange swap
contract (1 item) THB 67,900 thousand 2017.05.25~2018.05.25
Non-delivery of forward
exchange contract-buy (14 item) USD 28,370 thousand 2017.12.19~2018.01.31
Foreign exchange contract-
buy (2 item) EUR 1,200 thousand 2017.12.20~2018.01.22
December 31, 2017
282
~106~
(b) Available-for-sale financial assets
i. The Group recognised $12,448 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 $152,810 which were initially classified as “financial assets at fair value through profit
or loss” were reclassified to “available-for-sale financial assets” on July 1, 2008, in
accordance with paragraph 50 (c) of IAS 39. The relevant information is set forth below:
(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 $9,110, respectively, for the year
ended December 31, 2017. The accumulated total changes in fair value of the above
listed stocks that were recognized in profit or loss and other comprehensive income
before January 1, 2016 were $0 and ($20,558), respectively.
(iii.) If the above listed stocks had not been reclassified to “available-for-sale financial
assets” on July 1, 2008, the (loss) gain from change in fair value of those assets
should have been recognized for the following periods:
iii. No financial assets at fair value through profits or loss held by the Group was pledged to
others.
Items December 31, 2017
Current items:
Listed stocks 532,676$
Corporate bonds 143,649
676,325
Valuation adjustment 28,696)(
647,629$
December 31, 2017
Book value/Fair value
Listed (TSE or OTC) stocks 175,828$
For the year ended
December 31, 2017
Listed (TSE or OTC) stocks 9,110$
283
~107~
(c) Financial assets at cost
i. Based on the Group’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 Group classified those
stocks as ‘financial assets measured at cost’.
ii. As the operating results of investee companies accounted for using the cost method had
deteriorated, their net worth has declined significantly. The Company expects that the
probability of a recovery in their net worth is remote. As a result, loss on decline in market
value of $13 were recognized for the year ended December 31, 2017.
iii. As of December 31, 2017, no financial assets at cost held by the Group were pledged to
others.
iv. In August 2016, the Board of Directors approved the Group’s investment of US $13,200
in Ever Victory Global Limited for an ownership stake of 2.32%. The investment will be
made in several installments over several years. In December 2016, Investment
Commission, Ministry of Economic Affairs approved the investment of US $13,181. In
2017, the Company invested $74,347 (US $2,309) and $58,426 (US $1,921) in March and
September, respectively.
Items December 31, 2017
Non-Current items:
CDIB & Partners Investment Holding Corp 250,000$
Core Pacific City Co., Ltd. 190,000
Ever Victory Global Limited. 132,773
Utech Solar Corp. 96,980
Metro-consultant Co., Ltd. 3,000
Global Strategic Investment Inc. 2,886
TeamWIN Opto-Electronics Co., Ltd. 475
CHIYODA(Thailand) Co. Ltd. 329
Eastern Pacific Energy Sdn. Bhd. 68
Total 676,511$
284
~108~
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 Group arising from default by the clients
or counterparties of financial instruments on the contract obligations. According to the
Group’s credit policy, each local entity in the Group is responsible for managing and
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.
(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 Group’s accounts receivable which have been impaired is as follows:
(i.) As of December 31, 2017, the Group’s accounts receivable that were impaired amounted
to $ 84,920.
(ii.) Movements in the provision for impairment of accounts receivable are as follows:
Group 1 Group 2 Group 3
Notes and accounts receivable 991,740$ 848,016$ 2,738,145$
December 31, 2017
2017
At Januay 1 1,011,847$
Provision of impairment 87,096
Write-offs during the period 53,228)(
Reversal for impairment 960,795)(
At December 31 84,920$
285
~109~
(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
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’.
December 31, 2017
Note and accounts receivable
Up to 30 days 130,961$
31 to 90 days 343,060
91 to 180 days 207,751
Over 181 days 98,868
780,640$
286
~110~
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 $978,958.
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$100 million or 20% of paid-in capital or more:
Please refer to table 7.
I. Derivative financial instruments undertaken during the reporting periods: Please refer to Notes
6(2) and 12(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland
China):Please refer to table 9.
December 31, 2017
Aggregate costs incurred plus recognised profits (less recognised
losses)
410,766,276$
Less: Progress billings 400,887,072)(
Net balance sheet position for construction in progress 9,879,204$
Presented as:
Receivables from customers on construction contracts 23,759,310$
Payables to customers on construction contracts 13,880,106)(
9,879,204$
287
~111~
(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.
14. SEGMENTAL FINANCIAL INFORMATION
(1) General information
A. The Group has identified which segments should be reported based on the information used by
the Board of Directors to make decisions.
B. The Board of Directors classify reportable segments as construction engineering department,
environmental resource department, sales department and other operating departments.
(2) Measurement of segmental financial information
The Board of Directors evaluates the performance of segments based on segmental income. Interest
income and expenses cannot be attributed to any segment because such activity is handled by the
Company’s financial department.
(3) Segmental income, assets and liabilities of segments
The segmental financial information provided to the Board of Directors is as follows:
Construction
Engineering
Environmental
Resource Sales Other Operating
Department Department Department Departments Total
External revenues 57,122,560$ 4,819,569$ 1,276,827$ 850,586$ 64,069,542$
Internal revenues 3,447,220 27,528 - 481,556 3,956,304
Segmental revenues 60,569,780$ 4,847,097$ 1,276,827$ 1,332,142$ 68,025,846$
Segmental income 1,258,748$ 1,128,916$ 160,491$ 120,586$ 2,668,741$
Depreciation and
amortization 396,142$ 88,240$ 3,596$ 81,645$ 569,623$
For the year ended December 31, 2018
Construction
Engineering
Environmental
Resource Sales Other Operating
Department Department Department Departments Total
External revenues 66,610,992$ 4,479,587$ 184,704$ 331,321$ 71,606,604$
Internal revenues 3,417,034 172,185 - 462,066 4,051,285
Segmental revenues 70,028,026$ 4,651,772$ 184,704$ 793,387$ 75,657,889$
Segmental income 1,637,235$ 1,077,417$ 21,985$ 235,345$ 2,971,982$
Depreciation and
amortization 398,521$ 30,902$ 518$ 91,614$ 521,555$
For the year ended December 31, 2017
288
~112~
(4) Reconciliation information of segmental income
Intra-segment sales are arm’s length transactions. The measurement of external revenues reported
to the Board of Directors is consistent with revenues in the statement of comprehensive income. The
reconciliation information of income from continuing operations before income tax and segmental
income is as follows:
(5) Information on products and services
Details of revenue is as follows:
2018 2017
Segmental income 2,668,741$ 2,971,982$
Adjustment and elimination 47,038 43,044
Share of profit (loss) of associates and
joint ventures accounted for using equity
method 33,557)( 99,008
Interest income 216,808 131,658
Foreign exchange gain (loss) 59,774 151,026)(
Finance costs 157,908)( 104,140)(
Reversal of provision for bad debt expense - 960,795
Others 264,377 40,032
Income from continuing operations before
income tax 3,065,273$ 3,991,353$
For the years ended December 31,
2018 2017
Engineering service revenue 57,122,560$ 66,610,992$
Environmental resource service revenue 4,819,569 4,479,587
Sales revenue 1,276,827 184,704
Other operating revenue 850,586 331,321
Total 64,069,542$ 71,606,604$
For the years ended December 31,
289
~113~
(6) Geographical information
Geographical information for the years ended December 31, 2018 and 2017 is as follows:
(7) Major customer information
Information of major customer which present 10% operating revenue in the consolidated income
statements of the Group for the years ended December 31, 2018 and 2017 is as follows:
Non-current Non-current
Revenue assets Revenue assets
Taiwan 47,071,069$ 8,742,232$ 59,020,133$ 8,696,232$
Asia 16,670,848 5,439,061 12,239,718 1,788,422
America 327,625 818,602 346,753 4,258
Total 64,069,542$ 14,999,895$ 71,606,604$ 10,488,912$
For the years ended December 31,
2018 2017
Revenue Segment Revenue Segment
Company F 7,682,647$ Construction
service segment
11,893,499$ Construction
service segment
Company C 13,847,797 〞 15,413,235 〞
2018 2017
For the years ended December 31,
290
Item Value
0 CTCI Corp. CTCI
Engineering
& Construction
Sdn. Bhd.
Other
receivables
Yes 1,075,900$ 1,075,900$ -$ - 2 - For
operational
need
-$ - -$ 3,491,746$ 6,983,492$ -
0 CTCI Corp. CTCI
Singapore Pte.
Ltd.
Other
receivables
Yes 1,383,300 1,383,300 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI Arabia Ltd. Other
receivables
Yes 1,444,780 1,444,780 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI
Machinery
Corp.
Other
receivables
Yes 650,000 650,000 432,000 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI Smart
Engineering
Corp.
Other
receivables
Yes 500,000 500,000 50,000 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
CTCI Corporation and its subsidiaries
Loans to others
For the year ended December 31, 2018
Table 1 Expressed in thousands of NTD
(Except as otherwise indicated)
Tabl e 1 Page 1291
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
0 CTCI Corp. CTCI Shanghai
Co., Ltd.
Other
receivables-
related
parties
Yes 92,019$ -$ -$ - 2 - For
operational
need
-$ - -$ 3,491,746$ 6,983,492$ -
0 CTCI Corp. CTCI
(Thailand) Co.,
Ltd.
Other
receivables
Yes 500,000 500,000 397,044 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CIPEC
Construction Inc.
Other
receivables
Yes 614,800 614,800 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
1 CTCI Advanced
Systems Inc.
CTCI Corp. Other
receivables
Yes 45,000 45,000 - - 2 - For
operational
need
- - - 54,452 217,807 -
2 CTCI Overseas
Co., Ltd.
Superiority
(Thailand) Co.,
Ltd.
Other
receivables
Yes 65,778 65,778 65,778 2.83% 2 - For
operational
need
- - - 688,802 688,802 -
2 CTCI Overseas
Co., Ltd.
CIPEC
Construction Inc.
Other
receivables
Yes 313,926 312,472 - - 2 - For
operational
need
- - - 688,802 688,802 -
2 CTCI Overseas
Co., Ltd.
CTCI CMCE
JV SDN. BHD.
Other
receivables
Yes 38,552 37,704 - - 2 - For
operational
need
- - - 688,802 688,802 -
Tabl e 1 Page 2292
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
2 CTCI Overseas
Co., Ltd.
CTCI
Netherlands
B.V.
Other
receivables-
related
parties
Yes 36,497$ -$ -$ - 2 - For
operational
need
-$ - -$ 688,802$ 688,802$ -
3 CTCI Overseas
(BVI) Co., Ltd.
CIPEC
Construction Inc.
Other
receivables
Yes 20,949 20,811 20,802 2.22% 2 - For
operational
need
- - - 698,646 698,646 -
4 ECOVE
Enviroment
Corporation
ECOVE Solar
Energy
Corporation
Other
receivables-
related
parties
Yes 200,000 200,000 87,000 1.01% 2 - For
operational
need
- - - 487,824 1,951,295 -
5 ECOVE Waste
Management
Corporation
CTCI Corp. Other
receivables
Yes 14,000 7,000 - - 2 - For
operational
need
- - - 11,346 45,385 -
5 ECOVE Waste
Management
Corporation
CTCI
Machinery
Corp.
Other
receivables
Yes 14,000 7,000 - - 2 - For
operational
need
- - - 11,346 45,385 -
5 ECOVE Waste
Management
Corporation
CTCI Smart
Engineering
Corp.
Other
receivables
Yes 14,000 7,000 7,000 1.01% 2 - For
operational
need
- - - 11,346 45,385 -
6 ECOVE
Environmental
Services
Corporation
ECOVE Solvent
Recycling
Corporation
Other
receivables
Yes 70,000 70,000 50,000 1.57% 2 - For
operational
need
- - - 96,634 386,534 -
Tabl e 1 Page 3293
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
6 ECOVE
Environmental
Services
Corporation
ECOVE
Miaoli Energy
Corporation
Other
receivables
Yes 70,000$ 70,000$ 39,500$ 1.01% 2 - For
operational
need
-$ - -$ 96,634$ 386,534$ -
6 ECOVE
Environmental
Services
Corporation
CTCI
Machinery
Corp.
Other
receivables
Yes 140,000 35,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Resources
Engineering
Inc.
Other
receivables
Yes 140,000 35,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Corp. Other
receivables
Yes 140,000 70,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Smart
Engineering
Corp.
Other
receivables
Yes 140,000 70,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
Tabl e 1 Page 4294
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
7 CTCI Shanghai
Co., Ltd.
CTCI Trading
Shanghai
Co., Ltd.
Other
receivables-
related
parties
Yes 92,334$ -$ -$ - 2 - For
operational
need
-$ - -$ 196,870$ 196,870$ -
8 ECOVE Solar
Energy Corporation
ECOVE South
Corporation Ltd.
Other
receivables
Yes 14,000 14,000 - - 2 - For
operational
need
- - - 292,439 292,439 -
8 ECOVE Solar
Energy Corporation
ECOVE Solar
Power
Corporation
Other
receivables
Yes 200,000 200,000 - - 2 - For
operational
need
- - - 292,439 292,439 -
8 ECOVE Solar
Energy Corporation
ECOVE Central
Corporation Ltd.
Other
receivables
Yes 17,000 17,000 1,000 1.71% 2 - For
operational
need
- - - 292,439 292,439 -
9 CTCI Beijing Co.,
Ltd.
CTCI Shanghai
Co., Ltd.
Other
receivables
Yes 269,502 268,452 - - 2 - For
operational
need
- - - 712,899 712,899 -
Tabl e 1 Page 5295
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, 2018
Note 4:.The numbers filled in for the nature of loans are as follows:
(1) Business association is labeled as “1”
(2) Short-term financing is labeled as “2”.
Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.
Note 6: Fill in purpose of loan when nature of loan belongs to short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.
Note 7: The calculation and amount on ceiling of loans are as follows:
[The company]
(1) The limit on loans granted to a single party shall not exceed 20% of the Company's net assets value.
(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.
[Domestic subsidiaries and overseas subsidiaries]
(1) The limit on loans granted to a single party by domestic subsidiaries and overseas subsidiaries shall not exceed 10% and 40% of the Company's net value, respectively.
(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.
Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Govering Loaning of Funds and Making
of Endorsements/Guarantees by public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they
have not yet been appropriated. However, this balance should excluded the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has
authorised the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2,of the “Regulations Governing Loaning of Funds and Making of Endorsements/
Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be
excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.
Tabl e 1 Page 6296
Company name
Relationship
with the
endorser/
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 of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
CTCI Corporation and its subsidiaries
Provision of endorsements and guarantees to others
For the year ended December 31, 2018
Table 2 Expressed in thousands of NTD
(Except as otherwise indicated)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
Tabl e 2 Page 1297
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 -
Tabl e 2 Page 2298
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 -
Tabl e 2 Page 3299
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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
CTCI Shanghai
Co., Ltd.
5 462,218 253,413 - - - - 924,435 N N Y -
2 CTCI Smart
Engineering
Corp.
CTCI Machinery
Corp.
5 462,218 1,698,800 - - - - 924,435 N N N -
Tabl e 2 Page 4300
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
3 CTCI Machinery
Corp.
CTCI Smart
Engineering Corp.
5 1,438,350$ 560,000$ 560,000$ 560,000$ -$ 116.80% 2,876,700$ N N N -
4 CTCI Chemical
Corp.
CTCI Machinery
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.
CTCI Trading
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.
CTCI Smart
Engineering Corp.
5 867,505 267,102 267,102 267,102 - 92.37% 1,735,011 N N N -
7 CTCI Overseas
Co., Ltd.
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 -
Tabl e 2 Page 5301
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 -
9 ECOVE Solar
Energy
Corporation
ECOVE Central
Corporation Ltd.
2 1,462,194 19,790 16,790 16,790 - 2.71% 2,193,291 N N N -
9 ECOVE Solar
Energy
Corporation
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
ECOVE Solar
Energy Corporation
5 408,122 12,420 12,420 12,420 - 6.09% 612,183 N N N -
Tabl e 2 Page 6302
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 7303
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
CTCI Corp. Fund Fuh Hwa China New Economy
Balance
N/A Financial assets at fair
value through profit or
loss-current
500,000 5,000$ - 4,610$ -
CTCI Corp. Fund BlackRock Global Fund - European
Value Fund A2 USD Hedged
N/A Financial assets at fair
value through profit or
loss-current
12,438 4,602 - 3,835 -
CTCI Corp. Fund Fubon US Preferred Stock ETF N/A Financial assets at fair
value through profit or
loss-current
500,000 10,000 - 9,115 -
19,602$ 17,560$
Adjustment 2,042)(
17,560$
CTCI Corp. Common Stock China Steel Chemical Corp. The Company is the
supervisor
Financial asset at fair value
through 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 value
through other comprehensive
income-current
1,717,015 17,342 - 12,380 -
CTCI Corp. Common Stock Taiwan Cement Corp. N/A Financial asset at fair value
through other comprehensive
income-current
1,980,000 68,447 - 70,092 -
186,404$ 322,355$
Adjustment 135,951
322,355$
Footnote
(Note 4)
CTCI Corporation and its subsidiaries
Holding 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
(Except as otherwise indicated)
Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
Tabl e 3 Page 1304
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
CTCI Corp. Common Stock Core Pacific City Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-non-current
22,428,000 360,000$ 2.26 239,615$ -
CTCI Corp. Common Stock CDIB & Partners
Investment Holding
Corp.
The Company is the
supervisor
Financial assets at fair value
through 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 the
Board of director
Financial assets at fair value
through other comprehensive
income-non-current
300,000 3,000 6.00 3,000 -
CTCI Corp. Common Stock Ever Victory Global Limited. N/A Financial assets at fair value
through 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 value
through 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 Money
Market Fund
N/A Financial assets at fair value
through 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 value
through other comprehensive
income-current
265,030 1,911 - 1,911 -
CTCI Investment Corp. Common Stock CTCI Corp. The Company Financial assets at fair value
through 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 value
through other comprehensive
income non-current
283,500 962 0.65 962 -
Tabl e 3 Page 2305
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
CTCI Development Corp. Common Stock CTCI Corp. The Company Financial assets at fair value
through other comprehensive
income-non-current
912,170 40,135$ 0.12 40,135$ -
CTCI Development Corp. Common Stock CTCI Advanced
System Inc.
Subsidiary Financial assets at fair value
through 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 value
through other comprehensive
income-current
675,010 4,867 - 4,867 -
CTCI Development Corp. Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through 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 value
through profit or loss-current
8,143,624 109,997 - 109,997 -
CTCI Resources
Engineering Inc.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
726,080 5,235 - 5,235 -
CTCI Resources
Engineering Inc.
Common Stock Global Strategic Investment Inc. N/A Financial assets at fair value
through other comprehensive
income-non-current
567,000 1,924 1.29 1,924 -
CTCI Resources
Engineering Inc.
Fund Yuanta De-Li Money Market Fund N/A Financial assets at fair value
through profit or loss-current
3,685,390 59,999 - 59,999 -
CTCI Resources
Engineering Inc.
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through 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 value
through profit or loss-current
207,498 3,277 - 3,277 -
Tabl e 3 Page 3306
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Waste
Management Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
1,311,441 20,033$ - 20,033$ -
ECOVE Waste
Management Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
1,333,007 18,005 - 18,005 -
ECOVE Waste
Management Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
891,706 9,202 - 9,202 -
ECOVE Waste
Management Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
478,841 16,951 - 16,951 -
ECOVE Wujih Energy
Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
65,511 1,001 - 1,001 -
ECOVE Wujih Energy
Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
148,083 2,000 - 2,000 -
ECOVE Wujih Energy
Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
4,616,996 47,650 - 47,650 -
ECOVE Wujih Energy
Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
475,508 16,833 - 16,833 -
ECOVE Environment
Corp.
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
472,758 16,735 - 16,735 -
ECOVE Environment
Corp.
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
198,085 2,044 - 2,044 -
Tabl e 3 Page 4307
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Environment
Corp.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
455,157 3,282$ - 3,282$ -
ECOVE Environment
Corp.
Common Stock TeamWIN Opto-Electronics
Co., Ltd.
N/A Financial assets at fair value
through other comprehensive
income-non-current
150,000 475 2.46 475 -
ECOVE Environment
Corp.
Common Stock Eastern Pacific Energy Sdn. Bhd. ECOVE Environment
Corp.'s President is the
director
Financial assets at fair value
through other comprehensive
income-non-current
10,000 68 10.00 68 -
ECOVE Environmental
Services Corporation
Common Stock CTCI Corp. The Company Financial assets at fair value
through other comprehensive
income-current
1,028 45 - 45 -
ECOVE Environmental
Services Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
1,251,971 44,320 - 44,320 -
ECOVE Environmental
Services Corporation
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
559,567 4,034 - 4,034 -
ECOVE Environmental
Services Corporation
Fund Schroder 2022 Emerging Market
Sovereign Bond Fund
N/A Financial assets at fair value
through profit or loss-current
35,000 10,596 - 10,596 -
ECOVE Environmental
Services Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
3,366,412 45,470 - 45,470 -
ECOVE Environmental
Services Corporation
Fund Capital Money Market Fund N/A Financial assets at fair value
through profit or loss-current
620,717 10,000 - 10,000 -
ECOVE Mioali Energy
Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
518,246 7,000 - 7,000 -
Tabl e 3 Page 5308
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Mioali Energy
Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
65,579 1,001$ - 1,001$ -
ECOVE Mioali Energy
Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
581,852 6,005 - 6,005 -
CTCI (Thailand) Co.,
Ltd.
Common Stock CHIYODA(Thailand) Co. Ltd. N/A Financial assets at fair value
through 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 value
through other comprehensive
income-current
500 22 - 22 -
CTCI Advanced System
Inc.
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
6,547,236 100,016 - 100,016 -
CTCI Advanced System
Inc.
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
908,578 32,164 - 32,164 -
CTCI Advanced System
Inc.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
674,430 4,862 - 4,862 -
CTCI Advanced System
Inc.
Bonds BANK OF CHINA LTD PARIS N/A Financial assets at fair value
through 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.
Tabl e 3 Page 6309
Number of
shares
(thousands) Amount
Number of
shares
(thousands) Amount
Number of
shares
(thousands) Selling price Book value
Gain (loss) on
disposal
Number of
shares
(thousands) Amount
CTCI Advanced
Systems Inc.
FSITC Taiwan Money Market Financial assets at fair
value 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
Environment
Corp.
ECOVE Solar Energy Corporation Equity investments
accounted for under the
equity method
Gintech Energy
Corporation.
Other related
party
28,270 311,114 34,976 532,213
(Note 5)
- - - - 63,246 854,787
ECOVE
Environmental
Services
Corporation
Franklin Templeton Sincom Money
Market Fund
Financial assets at fair
value 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.
Table 4 Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,
2018
CTCI Corporation and its subsidiaries
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
For the year ended December 31, 2018
Addition
(Note 3)
Disposal
(Note 3)
Investor
Marketable
securities
(Note 1)
General
ledger account
Counterparty
(Note 2)
Relationship
with
the investor
(Note 2)
Balance as at
January 1, 2018
Table 4 Page 1310
Table 5 Expressed in thousands of NTD
(Except as otherwise indicated)
Reason for
Relationship Basis or acquisition of
Relationship Original owner who between the
originalDate of the reference used real estate and
Real estate Real estate Date of the Transaction Status of with the sold the real estate owner and the original in setting the status of the Other
acquired by acquired event amount payment Counterparty counterparty to the counterparty acquirer transaction Amount price real estate commitments
CTCI
Development
Corp.
Land 2018/1/23 1,984,400$ 198,440$ Xintianmu
Development
Co., Ltd.
None - - - -$ Appraisal report To build second
office 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$300 million or 20% of paid-in capital or more
For the year ended December 31, 2018
the real estate is disclosed below:
If the counterparty is a related party, information as to the last transaction of
CTCI Corporation and its subsidiaries
Table 5 Page 1311
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable)
ECOVE Environmental
Services Corporation
ECOVE Waste Management
Corporation
Second-tier
subsidiary(Sales) 572,562)($ 0.89% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference100,417$ 1.00% -
ECOVE Environmental
Services Corporation
ECOVE Wujih Energy
Corporation
Second-tier
subsidiary(Sales) 236,890)( 0.37% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference83,809 0.84% -
ECOVE Environmental
Services Corporation
ECOVE Mioali Energy
Corporation
Second-tier
subsidiary(Sales) 149,943)( 0.23% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference23,224 0.23% -
ECOVE Environmental
Services Corporation
ECOVE Solvent Recycling
Corporation
Second-tier
subsidiary(Sales) 108,464)( 0.17% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference38,491 0.38% -
ECOVE Wujih Energy
Corporation
ECOVE Waste Management
Corporation
Second-tier
subsidiary(Sales) 382,669)( 0.60% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference69,964 0.70% -
CTCI Corp.Blue Whale Water
Technology Co., Ltd.Associate (Sales) 369,767)( 0.58% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference539 0.01% -
CTCI Corp. Powertec Energy Corp. Associate (Sales) 423,310)( 0.66% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference- - -
CTCI Corporation and its subsidiaries
Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Table 6 Expressed in thousands of NTD
(Except as otherwise indicated)
FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
Tabl e 6 Page 1312
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Corp. CTCI Overseas Co., Ltd Subsidiary (Sales) 565,150)($ 0.88% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference86,164$ 0.86% -
CTCI Overseas Co., Ltd. CTCI Corp. The Company (Sales) 316,188)( 0.49% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,955 0.92% -
CTCI Engineering &
Construction Sdn. Bhd.
CCJV P1 Engineering &
Construction Sdn. Bhd.Subsidiary (Sales) 400,143)( 0.62% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference68,015 0.68% -
CTCI Advanced Systems
Inc.CTCI Corp. The Company (Sales) 293,102)( 0.46% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference35,490 0.35% -
CTCI Development Corp. CTCI Corp. The Company (Sales) 302,282)( 0.47% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,457 0.01% -
CTCI Machinery Corp. CTCI Corp. The Company (Sales) 347,699)( 0.54% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference5,120 0.05% -
CTCI (Thailand) Co., Ltd. CTCI Corp. The Company (Sales) 360,643)( 0.56% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference8,299 0.08% -
CTCI Smart Engineering
Corp.
ECOVE Solar Energy
Corporation
Second-tier
subsidiary(Sales) 211,230)( 0.33% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference19,338 0.19% -
CTCI Beijing Co., Ltd. CTCI Corp. The Company (Sales) 211,770)( 0.33% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference2,741 0.03% -
CIMAS Engineering
CompanyCTCI Corp. The Company (Sales) 123,762)( 0.19% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference4,312 0.04% -
Tabl e 6 Page 2313
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Engineering &
Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate (Sales) 463,873)($ 0.72% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference565,408$ 5.63% -
CTCI Corp. EVER ECOVE Corp. Associate (Sales) 44,447)( 0.07% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference374,425 3.73% -
ECOVE Waste Management
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 572,562 0.89%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference100,417)( 0.89% )( -
ECOVE Waste Management
Corporation
ECOVE Wujih Energy
Corporation
Second-tier
subsidiaryPurchases 382,669 0.60%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference69,964)( 0.62% )( -
ECOVE Wujih Energy
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 236,890 0.37%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference83,809)( 0.74% )( -
ECOVE Mioali Energy
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 149,943 0.23%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference23,224)( 0.21% )( -
ECOVE Solvent Recycling
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 108,464 0.17%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference38,491)( 0.34% )( -
CTCI Corp. Pan Asia Corp. Associate Purchases 145,731 0.23% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,867)( 0.81% )( -
CTCI Corp.CTCI Advanced Systems
Inc.Subsidiary Purchases 293,102 0.46%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference35,490)( 0.31% )( -
CTCI Corp. CTCI Machinery Corp. Subsidiary Purchases 347,699 0.54% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference5,120)( 0.05% )( -
Tabl e 6 Page 3314
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Corp. CTCI Development Corp. Subsidiary Purchases 302,282$ 0.47% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,457)($ 0.01% )( -
CTCI Corp. CTCI (Thailand ) Co., Ltd. Subsidiary Purchases 360,643 0.56% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference8,299)( 0.07% )( -
CTCI Corp. CTCI Overseas Co., Ltd. Subsidiary Purchases 316,188 0.49% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,955)( 0.81% )( -
CTCI Engineering
& Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate Purchases 1,598,407 2.49%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference205,489)( 1.82% )( -
CCJV P1 Engineering &
Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate Purchases 1,589,866 2.48%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,060,653)( 9.39% )( -
CCJV P1 Engineering &
Construction Sdn. Bhd.
CTCI Engineering &
Construction Sdn. Bhd.Subsidiary Purchases 400,143 0.62%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference68,015)( 0.60% )( -
CTCI Overseas Co., Ltd. CTCI Corp. The Company Purchases 565,150 0.88% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference86,164)( 0.76% )( -
CTCI Corp. CTCI Beijing Co., Ltd.Second-tier
subsidiaryPurchases 211,770 0.33%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference2,741)( 0.02% )( -
CTCI Corp.CIMAS Engineering
Company
Second-tier
subsidiaryPurchases 123,762 0.19%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference4,312)( 0.04% )( -
Note: ECOVE Solvent Recycling Corporation are accuunted in property, plant, and equipment.
Tabl e 6 Page 4315
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 Services
Corporation.
ECOVE Waste Management
Corporation.Second-tier subsidiary 100,417 3.83 - - - -
Note 1:Other accounts receivable arise from lending capital.
Note 2:Cash dividends
CTCI Corporation and its subsidiaries
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Expressed in thousands of NTD
(Except as otherwise indicated)
Amount collected
subsequent to the
balance sheet date
Allowance for
doubtful accounts Creditor Counterparty
Relationship
with the counterparty
Balance as at December 31,
2018 Turnover rate
Overdue receivables
Tabl e 7 Page 1316
General ledger account Amount Transaction terms
Percentage of consolidated total operating
revenues or total assets (Note 3)
0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Sales revenue 565,150)($ Negotiated by both parties 0.88% )(
1 ECOVE Environmental Services
Corporation
ECOVE Waste Management
Corporation
3 〃 572,562)( 〃 0.89% )(
1 〃 ECOVE Mioali Energy
Corporation
3 〃 149,943)( 〃 0.23% )(
1 〃 ECOVE Wujih Energy
Corporation
3 〃 236,890)( 〃 0.37% )(
1 〃 ECOVE Solvent Recycling
Corporation
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.
CCJV P1 Engineering &
Construction Sdn. Bhd.
3 〃 400,143)( 〃 0.62% )(
7 ECOVE Wujih Energy Corporation ECOVE Waste Management
Corporation
3 〃 382,669)( 〃 0.60% )(
8 CTCI Overseas Co., Ltd. CTCI Corp. 2 〃 316,188)( 〃 0.49% )(
9 CTCI Smart Engineering Corp ECOVE Solar Energy
Corporation
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 and its subsidiaries
Significant inter-company transactions during the reporting years
For the year ended December 31, 2018
Table 8 Expressed in thousands of NTD
(Except as otherwise indicated)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
Tabl e 8 Page 1317
General ledger account Amount Transaction terms
Percentage of consolidated total operating
revenues or total assets (Note 3)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
1 ECOVE Environmental Services
Corporation
ECOVE Waste Management
Corporation
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 construction
receipt
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 〃 〃
Tabl e 8 Page 2318
General ledger account Amount Transaction terms
Percentage of consolidated total operating
revenues or total assets (Note 3)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
0 CTCI Corp. CTCI 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 Business
Co., 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 Engineering
Corp.
3 〃 560,000 〃 〃
12 CTCI Resources Engineering Inc. CTCI Smart Engineering
Corp.
3 〃 267,102 〃 〃
13 ECOVE Environment Corp. ECOVE Solar Energy
Corporation
3 〃 1,143,589 〃 〃
14 ECOVE Solar Energy Corporation ECOVE Solar Power
Corporation
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.
Tabl e 8 Page 3319
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
CTCI Corp. CTCI Smart Engineering
Corp.
Taiwan Design, management,
and building of nuclear
power, thermal power,
fire pumped storage
power generation and
others related to
engineering.
$ 456,251 $ 456,251 59,098,624 97.09 $ 150,695 ($ 325,492) ($ 316,020) A subsidiary
CTCI Corp. CTCI Resources
Engineering Inc.
Taiwan Mining of geology, sea oil
and gas, marbal and
rare;planning, design,
monitor of civil, traffic
environment and various
mechanical and
electrical equipment.
263,455 263,455 24,762,252 99.05 284,047 33,446 30,724 A subsidiary
CTCI Corp. CTCI Advanced
Systems Inc.
Taiwan Systems planning, design,
integration, and
engineering for various
IT systems, etc.
44,409 44,409 11,444,842 48.72 265,289 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 of
petrochemical 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 processing
of steel, piping, heat
treatment, manufacture
of pollution control
equipment and non-
destructive testing, etc.
293,800 293,800 20,000,000 100.00 480,434 67,207 67,207 A subsidiary
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Corporation and its subsidiaries
Information on investees (not including investees in Mainland China)
For the year ended December 31, 2018
Table 9 Expressed in thousands of NTD
(Except as otherwise indicated)
Tabl e 9 Page 1
320
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Corp. CTCI Arabia Ltd. Arabia Construction and
maintenance of refinery, storage
tanks and
chemical 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 recycling
site and
maintenance of related
mechanical and
equipment, etc.
4,958 4,958 - 30.00 57,921 167,023 50,107 A subsidiary
CTCI Corp. CTCI Singapore Pte.
Ltd.
Singapore Investment and planning
of 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 planning
of 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 planning
of 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, the
Group strengthen the collaborative
relationship with local business
owner and supplier, developing
adequate potential supplier, and
help them to operate projects,
purchase and other related
businesses.
3,217 3,217 100,000 100.00 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 Unit BTO
Project.
347,900 347,900 34,790,000 49.00 434,937 143,958 70,539 An investee under
equity method
Tabl e 9 Page 2
321
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Corp. Pan Asia Corp. Taiwan Input of foreign labor
and technologies,
technical cooperation
with foreign construction
business, and construction of
engineering construction, etc.
$ 71,543 $ 71,543 39,219,509 34.27 $ 526,590 $ 19,375 $ 6,640 An investee under
equity method
CTCI Corp. EVER ECOVE Corp. Taiwan Waste service, waste clear and
steam power cogeneration.
250,000 - 25,000,000 25.00 246,635 ( 13,460) ( 3,365) An investee under
equity 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 under
equity method
$ 10,553,599 ($ 208,134)
CTCI Development
Corp.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
13,522 13,522 480,661 6.77 16,158 58,813 3,982 A second-tier subsidiary
CTCI Development
Corp.
ECOVE Environment
Corp.
Taiwan General investment. 11,270 11,270 243,918 0.36 17,762 806,912 3,084 A subsidiary
CTCI Development
Corp.
CTCI Resources
Engineering Inc.
Taiwan Mining of geology, sea oil
and gas, marbal and
rare;planning, design,
monitor of civil, traffic
environment and various
mechanical and
electrical equipment.
23 23 1,388 0.01 16 33,446 2 A subsidiary
CTCI Development
Corp.
Crown Asia-2
Investment Limited
Taiwan General investment. 2,531 2,531 25,000 100.00 1,111 504 504 A second-tier subsidiary
CTCI Investment
Corporation
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
32,153 32,153 1,657,207 23.34 55,708 58,813 13,728 A second-tier subsidiary
Tabl e 9 Page 3
322
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Investment
Corporation
ECOVE Environment
Corp.
Taiwan General investment. $ 1,374 $ 1,374 32,132 0.05 $ 2,339 $ 806,912 $ 406 A subsidiary
CTCI Investment
Corporation
CTCI Smart Engineering
Corp.
Taiwan Design, management,
and building of nuclear
power, thermal power,
fire pumped storage
power generation and
others related to
engineering.
11 11 1,000 0.002 3 ( 325,492) ( 2) A subsidiary
CTCI Investment
Corporation
Powertec Energy
Corp.
Taiwan Basically chemical industry
power generation, rotation
electric, machinery
manufacturing of electric
power and services of
energy technologies.
1,832,107 1,832,107 211,291,668 16.03 1,227,090 ( 1,565,744) ( 257,825) An investee under
equity method
CTCI Investment
Corporation
MIE INDUSTRIAL
SDN. BHD.
Malaysia Equipment & Instrument,
Procurement & Contruction &
Panel.
139,885 139,885 9,450,000 21.00 242,908 267,611 57,388 An investee under
equity method
CTCI Machinery
Corp.
Boretech
Resource
Recovery
Engineering
Co., Ltd.
(Cayman)
Cayman
Island
Share holding and
investment.
154,744 154,744 6,666,667 10.00 146,084 2,188 277 An investee under
equity method
ECOVE Environment
Corp.
ECOVE Waste Management
Corporation
Taiwan International trade and
environmental service of waste
disposal, equipment installation
and mechanical installation, etc.
20,000 20,000 2,000,000 100.00 113,462 58,674 58,674 A second-tier subsidiary
ECOVE Environment
Corp.
ECOVE Wujih Energy
Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
425,085 425,085 29,400,000 98.00 1,242,060 275,512 270,002 A second-tier subsidiary
ECOVE Environment
Corp.
ECOVE Environmental
Services Corporation
Taiwan Management of waste
recycling site and maintenance of
related
mechanical and
equipment, etc.
339,921 339,921 14,065,936 93.15 894,799 367,025 341,905 A second-tier subsidiary
Tabl e 9 Page 4
323
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
ECOVE Environment
Corp.
ECOVE Mioali
Energy Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
$ 1,012,483 $ 1,012,483 56,249,000 75.00 $ 1,003,951 $ 129,055 $ 96,790 A second-tier subsidiary
ECOVE Environment
Corp.
ECOVE Solar Energy
Corporation
Taiwan Energy technology service. 762,349 279,465 63,245,452 100.00 854,787 43,423 27,700 A second-tier subsidiary
ECOVE Environment
Corp.
Yuan Ding
Resources
Management Corp.
Taiwan Waste service, waste clear other
environmental service, and
environmental pollution service,
etc.
27,000 27,000 2,700,000 60.00 23,543 78 47 A second-tier subsidiary
ECOVE Environment
Corp.
Boretech
Resource
Recovery
Engineering
Co., Ltd.
(Cayman)
Cayman
Island
Share holding and
investment.
309,489 309,489 13,333,333 20.00 292,168 2,188 554 An investee under
equity method
ECOVE Environment
Corp.
ECOVE Solvent Recycling
Corporation
Taiwan Operating basic chemical industry
and manufacture of other chemical
products.
86,480 - 8,099,000 90.00 80,168 ( 7,015) ( 6,312) A second-tier subsidiary
ECOVE Environment
Corp.
EVER ECOVE Corp. Taiwan Waste service, waste clear and
steam power cogeneration.
50,000 - 5,000,000 5.00 49,336 ( 13,460) ( 664) An investee under
equity method
ECOVE Environmental
Services Corporation
ECOVE Wujih Energy
Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
6,000 6,000 600,000 2.00 25,348 275,512 5,510 A second-tier subsidiary
ECOVE Environmental
Services Corporation
CTCI Chemical
Corp.
Taiwan Manufacture, wholesale,
and retail of industrial
chemicals.
24,851 24,851 1,910,241 26.90 64,214 58,813 15,824 A second-tier subsidiary
ECOVE Environmental
Services Corporation
Sinogal-Waste
Services Corp.
Macao Management of waste
recycling site and
maintenance of related
mechanical and
equipment, etc.
4,964 4,964 - 30.00 57,921 167,023 50,107 A second-tier subsidiary
Tabl e 9 Page 5
324
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
ECOVE Environmental
Services Corporation
ECOVE Mioali
Energy Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
$ 13 $ 13 1,000 0.001 $ 18 $ 129,055 $ 2 A second-tier subsidiary
ECOVE Environmental
Services Corporation
ECOVE Solvent Recycling
Corporation
Taiwan Operating basic chemical industry
and manufacture of other chemical
products.
10 - 1,000 0.01 8 ( 7,015) 2 A second-tier subsidiary
ECOVE Waste
Management
Corporation
ECOVE Environmental
Services Corporation
Taiwan Management of waste
recycling site and maintenance of
related
mechanical and
equipment, etc.
53 53 1,000 0.01 64 367,025 23 A second-tier subsidiary
ECOVE Waste
Management
Corporation
Yuan Ding
Resources
Management Corp.
Taiwan Waste service, waste clear other
environmental service, and
environmental pollution service,
etc.
18,000 18,000 1,800,000 40.00 15,695 78 31 A second-tier subsidiary
ECOVE Solar Energy
Corporation
ECOVE Solar Power
Corporation
Taiwan Energy technology service. 180,000 180,000 18,000,000 100.00 204,061 18,678 18,678 A second-tier subsidiary
ECOVE Solar Energy
Corporation
ECOVE Central
Corporation
Ltd.
Taiwan Energy technology service. 7,500 7,500 750,000 100.00 8,737 719 719 A second-tier subsidiary
ECOVE Solar Energy
Corporation
ECOVE South Corporation
Ltd.
Taiwan Energy technology service. 16,500 16,500 1,650,000 100.00 17,969 918 918 A second-tier subsidiary
ECOVE Solar Energy
Corporation
G.D. International, LLC. USA Energy technology service. 189,197 189,197 - 100.00 368,589 27,685 27,927 A second-tier subsidiary
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-tier subsidiary
CTCI Overseas
(BVI) Corp.
CTCI Overseas
Co., Ltd.
Hong Kong Investment and planning
of related engineering.
276,815 276,815 6,740,000 100.00 1,723,118 170,493 170,493 A second-tier subsidiary
Tabl e 9 Page 6
325
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Overseas
Co., Ltd.
CTCI Arabia Ltd. Arabia Construction and
maintenance of refinery, storage
tanks and
chemical plant.
$ 22,610 $ 22,610 500 50.00 ($ 562,811) $ 164,510 $ 82,255 A subsidiary
CTCI Overseas
Co., Ltd.
Universal Engineering
(BVI) Corp.
BVI Investment and planning
of related engineering.
1,694 1,694 50,000 100.00 32,618 57,182 57,182 A second-tier subsidiary
CTCI Overseas
Co., Ltd.
CIPEC
Construction Inc.
Philippines Construction and
maintenance of refinery, storage
tanks and
chemical plant.
663 663 9,973 39.89 ( 10,282) ( 26,131) ( 10,432) A second-tier subsidiary
CTCI Overseas
Co., Ltd.
CIMAS
Engineering Corp.
Vietnam Chemical, petrochemical,
feasibility study &
planning, engineering
design, procurement &
fabrication, erection,
construction &
commissioning.
26,330 26,330 - 50.00 45,776 349 174 A second-tier subsidiary
CTCI Overseas
Co., Ltd.
CTCI Engineering &
Construction Sdn. Bhd.
Malaysia Investment and planning
of related engineering.
2,879 2,879 300,000 40.00 ( 2,044) ( 124,226) ( 49,691) A subsidiary
CTCI Overseas
Co., Ltd.
CINDA
Engineering &
Construction
Private Limited
India Chemical, petrochemical,
feasibility study &
planning, engineering
design, procurement &
fabrication, erection,
construction &
commissioning.
31,022 31,022 8,000,000 100.00 ( 33,345) ( 190,178) ( 190,178) A second-tier subsidiary
CTCI Overseas
Co., Ltd.
SUMBER MAMPU SDN.
BHD.
Malaysia Building of related engineering. 95 95 12,040 10.00 167,588 62,121 62,121 A second-tier subsidiary
Tabl e 9 Page 7
326
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
Universal
Engineering
(BVI) Corp.
Superiority
(Thailand) Co., Ltd.
Thailand Investment and planning
of related engineering.
$ 151 $ 151 2,156 49.00 ($ 83,961) $ 55,884 $ 55,884 A second-tier subsidiary
Superiority
(Thailand) Co.,
Ltd.
CTCI (Thailand)
Co., Ltd.
Thailand Design and building of
petrochemical plant.
12,628 12,628 1,300,500 51.00 ( 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-tier subsidiary
CTCI Smart
Engineering
Corp.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
7,354 7,354 656,360 9.24 21,090 58,813 5,434 A second-tier subsidiary
CTCI Resources
Engineering Inc.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
7,354 7,354 656,360 9.24 21,331 58,813 5,437 A second-tier subsidiary
CTCI Singapore
Pte. Ltd.
CTCI Netherlands B.V. Netherlands Engineers and other technical
design and consultancy.
11,274 11,274 300,000 100.00 48,904 5,738 5,738 A second-tier subsidiary
CTCI Engineering &
Construction Sdn.
Bhd.
CTCI Malaysia SDN.
BHD.
Malaysia Investment and planning
of related engineering.
1,357 1,357 150,000 20.00 60,115 77,840 15,568 A second-tier subsidiary
CTCI Malaysia
SDN. BHD.
MIE INDUSTRIAL
SDN. BHD.
Malaysia Equipment & Instrument,
Procurement & Construction,
Panel.
185,537 185,537 12,600,000 28.00 313,796 267,611 78,289 An investee under
equity method
SUMBER MAMPU
SDN. BHD.
CTCI Malaysia SDN.
BHD.
Malaysia Investment and planning
of related engineering.
5,428 5,428 600,000 80.00 240,458 77,840 62,272 A second-tier subsidiary
Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules,
it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at 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.
Tabl e 9 Page 8
327
Remitted to
Mainland China
Remitted back
to Taiwan
CTCI Beijing
Co., Ltd.
Design, survey, construction
and inspection of various
engineering and construction
projects, plants, machinery
and equipment, and
environmental protection
projects.
$ 433,473 2 $ 313,998 $ - $ - 313,998$ $ 266,564 100.00 $ 266,564 $ 1,782,248 $ 295,938 Note 3
CTCI Shanghai
Co., Ltd.
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 selling
of ethylene and othres.
10,277,948 2 132,773 159,452 - 292,225 - 1.31 - 292,225 - Note 5
CTCI Trading
Shanghai Co., Ltd.
General trade. 23,748 2 - - - - 20,281 100.00 20,281 64,678 - Note 6
CTCI Corporation and its subsidiaries
Information on investees (not including investees in Mainland China)
For the year ended December 31, 2018
Expressed in thousands of NTD
Investee in
Mainland China
(Except as otherwise indicated)
Book value of
investments in
Mainland China
as of December
31, 2018
Accumulated
amount
of investment
income
remitted back to
Taiwan as of
December 31,
2018
Table 10
Footnote Main business activities Paid-in capital
Investment method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2018
Accumulated
amount
of remittance
from Taiwan to
Mainland China
as of December
31, 2018
Ownership
held by
the
Company
(direct or
indirect)
Investment income
(loss) recognised
by the Company
for the year ended
December 31, 2018
(Note 2(2)B)
Net income of
investee as of
December 31,
2018
Amount remitted from Taiwan
to Mainland China/
Amount remitted back
to Taiwan for the year ended
December 31, 2018
Table 10 Page 1328
Company name
Accumulated amount of remittance
from Taiwan to Mainland China
as of December 31, 2018
Investment amount
approved by the Investment
Commission of the Ministry
of Economic Affairs
(MOEA)
Ceiling on investments in
Mainland China imposed
by the Investment
Commission of MOEA
CTCI Corp. $ 1,122,134 $ 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)Others
Note 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 2329
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.
330
331
332
333
334
335
CTCI CORPORATION PARENT COMPANY ONLY BALANCE SHEETS
DECEMBER 31, 2018 AND 2017 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)
~6~
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)
336
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.
~7~
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
337
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)
The accompanying notes are an integral part of these parent company only financial statements.
~8~
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
338
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
The accompanying notes are an integral part of these parent company only financial statements.
~9~
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
339
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
~10~
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)
340
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
The accompanying notes are an integral part of these parent company only financial statements.
~11~
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
341
~12~
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 by
International
Accounting
Standards Board
Amendments to IFRS 2, ‘Classification and measurement of share-based
payment transactions’
January 1, 2018
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS 4,
Insurance contracts’
January 1, 2018
IFRS 9, ‘Financial instruments’ January 1, 2018
IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contracts
with customers’
January 1, 2018
Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017
Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised
losses’
January 1, 2017
Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018
IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018
342
~13~
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.
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
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
343
~14~
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,
New Standards, Interpretations and Amendments
Effective date by
International
Accounting
Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ January 1, 2019
IFRS 16, ‘Leases’ January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019
Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ January 1, 2019
IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle January 1, 2019
344
~15~
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.
New Standards, Interpretations and Amendments
Effective date by
International Accounting
Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of
Material’
January 1, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
To be determined by
International Accounting
Standards Board
IFRS 17, ‘Insurance contracts’ January 1, 2021
345
~16~
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.
346
~17~
(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.
347
~18~
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.
348
~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.
349
~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.
350
~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
351
~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.
352
~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.
353
~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.
354
~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.
355
~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, 2017
Cash 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$
356
~27~
(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, 2018
Current 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 ended
December 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 Period
Non-delivery foreign exchange contract-buy (7 items) USD 33,000,000 2018.05.02~2019.06.10
Foreign exchange swap contract (5 items) USD 50,000,000 2018.12.05~2019.01.09
Merchandise exchange contract (3 items) USD 3,580,000 2018.10.31~2019.03.29
December 31, 2018
Contract Amount
(notional principal)
357
~28~
(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, 2018
Current items:
Equity instruments
Listed stocks $ 186,404
Valuation adjustment 135,951
$ 322,355
Non-current items:
Equity instruments
Unlisted shares $ 908,225
Valuation adjustment ( 123,385)
$ 784,840
For the year ended
December 31, 2018
Equity instrument at fair value through other comprehensive income
Fair value change recognized in other comprehensive income $ 31,316
Debt 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
358
~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, 2017
Accounts receivable 4,504,151$ 835,227$
Less: Allowance for uncollectible accouts 210)( 3,417)(
4,503,941$ 831,810$
December 31, 2018
Up 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, 2017
Prepayment 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 2017
At 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$
359
~30~
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 Development
Corporation
Taiwan100.00% 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
360
~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 $180,000.
December 31, 2018 December 31, 2017
Current assets 137,194$ 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, 2017
Current 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, 2017
Current 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$
Share in associate's net assets 2,795,718$ 2,696,371$
Carrying amount of the associate 2,795,718$ 2,696,371$
ECOVE Environment Corp.
361
~32~
December 31, 2018 December 31, 2017
Current 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$
Share in associate's net assets 1,746,615$ 1,836,511$
Carrying amount of the associate 1,833,752$ 1,923,648$
CTCI Overseas (BVI) Co., Ltd.
December 31, 2018 December 31, 2017
Current 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, 2017
Current 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.
362
~33~
Statement of comprehensive income
Year ended December 31, 2018 Year ended December 31, 2017
Revenue 328,792$ 328,819$
Profit for the year from
continuing operations
126,065$ 134,541$
Other comprehensive
income (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, 2017
Revenue 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)($
CTCI Investment Corporation
Year ended December 31, 2018 Year ended December 31, 2017
Revenue 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, 2017
Revenue -$ -$
Total comprehensive
income (loss) 170,375$ 358,026)($
Dividends received from
associates -$ -$
CTCI Overseas (BVI) Co., Ltd.
363
~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, 2017
Revenue 945,874$ 3,107,468$
Total comprehensive income 164,510$ 586,647)($
CTCI Arabia Ltd.
Year ended December 31, 2018 Year ended December 31, 2017
Revenue 1,011,015$ 721,118$
Total comprehensive income 79,338)($ 81,074)($
CTCI Singapore Pte. Ltd.
December
31, 2018
December
31, 2017
Pan Asia Corp. Taiwan 34.27% 34.27% Associate Equity method
Shareholding ratio
Company
name Principal place of business
Nature of
relationship Method of measurement
December 31, 2018 December 31, 2017
Current 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.
364
~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 $186,200 in Blue
Whale Water Technology Co., Ltd.
Year ended December 31, 2018 Year ended December 31, 2017
Revenue 5,677,230$ 5,380,591$
Profit for the year from
continuing operations 19,375$ 57,009$
Other comprehensive
income, net of tax 207 2,035
Total comprehensive income 19,582$ 59,044$
Dividends received from
associates 17,649$ 7,844$
Pan Asia Corp.
365
~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 ($1,060,127) for the year ended December 31, 2018, which
was recognized based solely on the audit reports of other independent accountants.
366
~37~
(7) Property, plant and equipment
A. No borrowing costs attributable to property, plant and equipment was capitalised for the years ended December 31, 2018 and 2017.
B. No property, plant and equipment was pledged to others as collateral for the years ended December 31, 2018 and 2017.
Land Buildings Machinery
Transportation
equipment
Office
equipment
Other
equipment Total
At January 1, 2018
Cost 127,228$ 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$
2018
Opening 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, 2018
Cost 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$
367
~38~
Land Buildings Machinery
Transportation
equipment
Office
equipment
Other
equipment Total
At January 1, 2017
Cost 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$
2017
Opening 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, 2017
Cost 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$
368
~39~
(8) Investment property
Land Buildings Total
At January 1, 2018
Cost 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, 2018
Cost 115,692$ 76,683$ 192,375$
Accumulated depreciation - 40,121)( 40,121)(
115,692$ 36,562$ 152,254$
Land Buildings Total
At January 1, 2017
Cost 115,692$ 76,683$ 192,375$
Accumulated depreciation - 37,430)( 37,430)(
115,692$ 39,253$ 154,945$
2017
Opening net book amount
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$
369
~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 $180,000 in CTCI
Development Corp. under the resolution by the Board of Directors in December 2018 had not
yet been registered.
(10) Short-term borrowings
2018 2017
Rental income from investment property 6,358$ 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, 2017
Long-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 Collateral
Unsecured 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$
370
~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 Collateral
Unsecured borrowings
Mizuho Bank, Ltd. 1,250,000$ 0.70% -
HSBC 920,000 0.68% -
The Bank of Tokyo-Mitsubishi UFJ 580,000 0.72% -
Sumitomo Mitsui
Banking Corporation 20,000 0.75% -
2,770,000$
December 31, 2018 December 31, 2017
Materials 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, 2017
Accrued 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, 2017
Joint 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, 2017
Net 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$
371
~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, 2017
Present 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 of
defined benefit
obligations
Fair value of
plan assets
Net defined
benefit liability
Year ended December 31, 2018
At 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$
372
~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 of
defined benefit
obligations
Fair value of
plan assets
Net defined
benefit liability
Year ended December 31, 2017
At January 1 3,589,967$ 1,333,842)($ 2,256,125$
Current service cost 20,858 - 20,858
Interest expense (income) 43,079 16,006)( 27,073
3,653,904 1,349,848)( 2,304,056
Remeasurements:
Change in demographic
assumptions 51,189 - 51,189
Change in financial assumptions 89,917 2,066 91,983
Experience adjustments 83,702)( - 83,702)(
57,404 2,066 59,470
Pension fund contribution - 326,403)( 326,403)(
Paid pension 208,768)( 204,897 3,871)(
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%
For the years ended December 31,
373
~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 $119,910, respectively.
(16) Share-based payment-employee compensation
A. As of December 31, 2018 and 2017, the Company’s share-based payment arrangements were as
follows:
Increase
0.25%
Decrease
0.25%
Increase
0.25%
Decrease
0.25%
December 31, 2018
Effect on present value of
defined benefit obligation 67,291)($ 69,368$ 59,510$ 58,131)($
December 31, 2017
Effect 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
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
374
~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 in
thousand)
Weighted-average
exercise price
(in dollars)
No. of units
(shares in
thousand)
Weighted-average
exercise price
(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)
Weighted-average
exercise price
(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 - -
2018
For the year ended December 31,
375
~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, 2017
Fifth plan of employee stock options 4~5 years 4~5 years
Sixth plan of employee stock options 4~5 years -
Type of
arrangement Grant date Stock price
Exercise
price
Expected
price
volatility
Expected
option
life
Expected
dividend
Risk free
interest
rate
Fair value
per unit
Fifth plan of
employee stock
options
2017.4.11 NT$52.2 NT$52.2 28.06%~
29.05%
4~5 years 0% 0.80%~
0.89%
NT$ 12.19~
NT$ 14.17
Sixth plan of
employee stock
options
2018.3.9 NT$45.9 NT$45.9 24.96%~
26.37%
4~5 years 0% 0.63%~
0.72%
NT$ 9.56~
NT$ 11.29
Name of company holding the shares Reason for reacquisition
Number of shares
(shares in
thousand) Carrying amount
Subsidiary-ECOVE
Environmental Services Corp.
To maintain
stockholders' equity
1 $ 10
Subsidiary-CTCI Investment
Corp.
" 344 3,241
Subsidiary-CTCI Development
Corp.
"912 8,584
11,835$
December 31, 2018
376
~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 amount
Subsidiary-ECOVE
Environmental Services Corp.
To maintain
stockholders' equity
1 $ 10
Subsidiary-CTCI Investment
Corp.
" 344 3,241
Subsidiary-CTCI Development
Corp.
"912 8,584
11,835$
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$
377
~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 2017
At 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 earnings58,978)( -
At December 31 2,217,619$ 3,061,699$
378
~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
Dividends
per share
(in NT dollars) Amount
Dividends
per 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
Dividends
per 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
379
~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, 2018
Revenue from contracts with customer contracts 35,684,680$
35,684,680$
For the year ended
December 31, 2018
Construction
Engineering
Revenue
Other
Operating
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 contracts
Timing 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, 2018
Contract assets-construction contract revenue 19,713,867$
Contract liabilities-construction contract revenue 9,470,793)(
10,243,074$
380
~51~
(21) Expenses by nature
(22) Employee benefit expense
As of December 31, 2018 and 2017, the Company had 2,641 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 4,837,348 5,220,741
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 1,087,136 2,192,929
33,530,648$ 45,727,905$
For the years ended December 31,
Operating costs Operating expenses Total
Salaries and wages 3,456,659$ 659,931$ 4,116,590$
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
4,017,662$ 819,686$ 4,837,348$
For the year ended December 31, 2018
Operating costs Operating expenses Total
Salaries and wages 3,912,039$ 602,760$ 4,514,799$
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
4,469,723$ 751,018$ 5,220,741$
For the year ended December 31, 2017
381
~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 $16,537,
respectively. The aforementioned amounts were recognized in salary expenses and other
expenses, respectively.
The employees’ compensation and directors’ remuneration were estimated and accrued based on
an amount of 1.5% to 5% and not higher than 1.5% of distributable profit of current period for
the year ended December 31, 2018.
Employees’ compensation and directors’ remuneration of 2017 as resolved at the meeting of
Board of Directors were in agreement with those amounts recognized in the 2017 financial
statements.
Information about employees’ compensation and directors’ remuneration of the Company as
resolved at the meeting of Board of Directors will be posted in the “Market Observation Post
System” at the website of the Taiwan Stock Exchange.
(23) Income tax
A. Components of income tax expense:
B. Reconciliation of differences between financial income and taxable income:
Note: The basis of applicable tax rate is calculated by the rate applicable to the Company.
2018 2017
Current tax :
Current tax on profits for the year 410,263$ 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$
For the years ended December 31,
2018 2017
Income 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$
For the years ended December 31,
382
~53~
C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:
January 1
Recognised in
profit or loss
Recognised in
other
comprehensive
income 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
383
~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 in
profit or loss
Recognised in
other
comprehensive
income 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
384
~55~
(24) Earnings per share
Amount
after tax
Weighted-average number of
ordinary shares outstanding
(shares in thousands)
Earnings per
share
(in dollars)
Basic earnings per share
Profit attributable to the
ordinary shareholders
of the parent 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$
For the year ended December 31, 2018
385
~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 $559,593, respectively.
The Company’s future aggregate minimum lease payments under non-cancellable operating leases
are as follows:
Amount
after tax
Weighted-average
number of
ordinary shares
outstanding
(shares in thousands)
Earnings per share
(in dollars)
Basic earnings per share
Profit attributable to the
ordinary shareholders
of the parent 2,805,348$ 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$
For the year ended December 31, 2017
December 31, 2018 December 31, 2017
Not 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$
386
~57~
7. RELATED PARTY TRANSACTIONS
(1) Names of related parties and relationship
Names of related parties Relationship with the Group
ECOVE Environment Corp. Subsidiary
CTCI Development Corporation Subsidiary
CTCI Smart Engineering Corporation Subsidiary
CTCI Resources Engineering Inc. Subsidiary
CTCI Advanced Systems Inc. Subsidiary
ECOVE Environmental Services Corporation. Subsidiary
CTCI Chemical Corp. Subsidiary
ECOVE Waste Management Corporation. Subsidiary
CTCI Overseas Co., Ltd. Subsidiary
ECOVE Miaoli Energy Corporation. Subsidiary
CTCI Shanghai Co., Ltd. Subsidiary
CTCI Beijing Co., Ltd. Subsidiary
CTCI Machinery Corp. Subsidiary
CTCI & HEC Water Business Co., Ltd Subsidiary
CTCI Engineering & Construction Sdn. Bhd. Subsidiary
CTCI CMCE JV SDN. BHD. Subsidiary
CINDA Engineering & Construction Private Limited Subsidiary
CTCI Arabia Ltd. Subsidiary
CTCI Netherlands B.V. Subsidiary
CTCI Malaysia Sdn Bhd Subsidiary
Universal Engineering (BVI) Corporation Subsidiary
CIPEC Construction Inc. Subsidiary
CCJV P1 Engineering & Construction Sdn. Bhd. Subsidiary
CIMAS ENGINEERING COMPANY Subsidiary
CTCI Americas, Inc. Subsidiary
CTCI (Thailand ) Co., Ltd. Subsidiary
CTCI Singapore Pte. Ltd. Subsidiary
Blue Whale Water Technology Corp. Associates
Powertech Energy Corp. Associates
Pan Asia Corp. Associates
Boretech Resource Recovery Associates
MIE INDUSTRIAL SDN. BHD. Associates
EVER ECOVE CORP. Associates
HDEL-CTCI (Linhai) Corporation Associates
CTCI Foundation Other related parties
CTCI Education Foundation Other related parties
387
~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 $959,245
was reversed and recognized as other gains and losses.
B. Other operating revenue
The rate on the human resource support contracts entered into with related parties are set through
negotiation by both parties. The collection terms of 30 days were approximately the same as
those with third parties.
C. Purchases of services:
The rate on the construction contracts entered into with related parties are set through negotiation
by both parties. The payment terms of 30 days were approximately the same as those with third
parties.
2018 2017
Associates 833,667$ 695,387$
Subsidiaries 725,310 357,773
Other related parties 371 2,913
1,559,348$ 1,056,073$
For the years ended December 31,
2018 2017
Subsidiaries 23,210$ 50,796$
Associates 7,067 7,366
30,277$ 58,162$
For the years ended December 31,
2018 2017
Subsidiaries 1,470,896$ 2,294,389$
Associates 158,471 293,622
1,629,367$ 2,588,011$
For the years ended December 31,
388
~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 2017
Subsidiaries 12,339$ 159,287$
For the years ended December 31,
December 31, 2018 December 31, 2017
Subsidiaries 248,169$ 129,701$
Associates 375,112 14,398
Other related parties 420 788
623,701$ 144,887$
2018 2017
Subsidiaries 121,054$ -$
For the years ended December 31,
December 31, 2018 December 31, 2017
Subsidiaries 63,155$ 59,018$
Associates 96 252
Other related parties 1 -
63,252$ 59,270$
December 31, 2018 December 31, 2017
CTCI 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 2017
Subsidiaries 5,537$ 6,925$
For the years ended December 31,
389
~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, 2017
Subsidiaries 348,680$ 1,042,606$
Associates 93,412 211,166
442,092$ 1,253,772$
December 31, 2018 December 31, 2017
Subsidiaries 3,700$ 25,819$
December 31, 2018 December 31, 2017
Subsidiaries 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, 2017
Land and buidings Subsidiaries 152,254$ 153,600$
Lessee Rental amount 2018 2017
Subsidiaries-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$
For the years ended December 31,
Lessor Leased assets Rental amount 2018 2017
Other related parties Land / Buildings$698/month/
semiannual payment8,372$ 8,372$
Subsidiaries-D Land / Buildings$22,547/month/month
Refundable deposits $128,300270,570 270,570
278,942$ 278,942$
For the years ended December 31,
390
~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 $15,580,563, respectively.
Q. Key management compensation
8. PLEDGED ASSETS
December 31, 2018 December 31, 2017
Other related party 15,000$ 15,000$
General
ledger account
Amount of
traded shares Target of trade Sales price
Gain (loss)
on sales
Other related party
Financial assets at
fair value through
profit-non current
17,556,000 UTECH SOLAR
CORPORATION132,851$ 64,277$
2018
December 31, 2018 December 31, 2017
Associates 1,984,300$ 769,300$
Subsidiaries 32,683,364 28,931,809
34,667,664$ 29,701,109$
2018 2017
Salaries and other short-term employee
benefits95,377$ 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$
For the years ended December 31,
Pledged assets December 31, 2018 December 31, 2017 Purpose
Other non-current assets
Pledged bank deposits 141,948$ 8,135$ Guarantee for oil expense and bank guarantee
Refundable deposits 197,938 208,094 Guarantee for oil expense, rent, construction contracts
339,886$ 216,229$
Book value
391
~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.
392
~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 $6 billion on December 12, 2018. As of March 14, 2019, the Company has not
submitted an application to the competent authority for approval for raising domestic unsecured
corporate bonds.
12. OTHERS
(1) Capital risk management
There was no significant change in the reporting period. Please refer to Note 12 in the consolidated
financial statements for the year ended December 31, 2017.
The gearing ratios as of December 31, 2018 and 2017, were as follows:
(2) Financial risk of financial instruments
A. Financial instruments by category
December 31, 2018 December 31, 2017
Total borrowings 6,330,000$ 2,770,000$
Total equity 17,458,729$ 17,952,032$
Gearing ratio 36.26% 15.43%
December 31, 2018 December 31, 2017
Financial assets
Financial assets at fair value through profit
or loss
Financial assets mandatorily measured at
fair value through profit or loss66,113$ 47,678$
Financial assets at fair value through other
comprehensive income1,107,195$ -$
Available-for-sale financial assets
Available-for-sale financial assets - 406,401
Financial assets at cost - 672,753
-$ 1,079,154$
393
~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 loss548$ 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$
394
~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 Currency
Amount
(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
395
~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 ($34,354), respectively.
Foreign Currency
Amount
(In Thousands) Exchange Rate Book Value
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD 299,914$ 29.84 8,949,434$
EUR:NTD 15,123 35.67 539,366
SGD:NTD 7,277 22.32 162,423
JPY:NTD 442,250 0.26 117,152
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
396
~67~
v. Analysis of foreign currency market risk arising from significant foreign exchange
variation:
Degree of
Variation
Effect on Profit
or Loss
Effect on Other
Comprehensive
Income
(Foreign currency:
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, 2018
Sensitivity Analysis
397
~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 of
Variation
Effect on Profit
or Loss
Effect on Other
Comprehensive
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, 2017
Sensitivity Analysis
398
~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.
Excellent
customers
(Note 1)
General
customers
(Note 2)
Individual
assessment
customers Total
December 31, 2018
Expected loss rate 0% 0% 0%
Total book value 2,591,543$ 1,908,546$ 4,062$ 4,504,151$
Loss allowance - 210 - 210
399
~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
400
~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 months
Between 3 months
and 1 year
Forward exchange contracts $ 548 $ -
Derivative financial liabilities:
December 31, 2017 Less than 3 months
Between 3 months
and 1 year
Forward exchange contracts $ 4,426 $ -
401
~72~
(a) The related information of natures of the assets and liabilities is as follows:
December 31, 2018 Level 1 Level 2 Level 3 Total
Financial 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$
402
~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 Total
Financial 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 fund
Marked quated price Closing price Net asset value
403
~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 loss
Additions 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 at
December 31,
2018
Valuation
technique
Significant
unobservable
input
Range (weighted
average)
Relationship of
inputs to fair
value
Non-derivative
equity
instrument:
Unlisted shares 239,615$ Market
comparable
companies
Price to book
ratio multiple,
discount for
lack of
marketability
Median:1.86
Average:1.79
Liquidity discount:
17.5%
The higher the
multiple and
control
premium, the
higher the fair
value
404
~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
change
Financial 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
405
~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;
406
~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.
407
~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.
408
~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 at
fair value
through other
comprehensive
income-equity
Measured at
fair value
through other
comprehensive
income-liability Total
Retained
earnings
Other
equity
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)
Measured
at cost
Effects
IAS 39
IFRS 9
409
~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 2017.12.19~2018.01.31
Foreign exchange contract-
buy (2 item) EUR 1,200 thousand 2017.12.20~2018.01.22
December 31, 2017
410
~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, 2017
Book value/Fair value
Listed (TSE or OTC) stocks 91,574$
For the year ended
December 31, 2017
Listed (TSE or OTC) stocks 6,105$
411
~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$
412
~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 3
Notes and accounts receivable 26,925$ 424,951$ 222,814$
December 31, 2017
2017
At Januay 1 959,995$
Provision of impairment 3,417
Reversal for impairment 959,995)(
At December 31 3,417$
December 31, 2017
Note and accounts receivable
Up to 30 days 66,371$
31 to 90 days 66,157
91 to 180 days 167,354
Over 181 days 2,125
302,007$
413
~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 $591,298.
December 31, 2017
Aggregate costs incurred plus recognised profits (less recognised
losses)
305,319,806$
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$
414
~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$100 million or 20% of paid-in capital or more:
Please refer to table 7.
I. Derivative financial instruments undertaken during the reporting periods: Please refer to Notes
6(2) and 12(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 8.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland
China):Please refer to table 9.
(3) Information on investments in Mainland China
A. Basic information: Please refer to table 10.
B. Significant transactions, either directly or indirectly through a third area, with investee companies
in the Mainland Area: None.
415
Item Value
0 CTCI Corp. CTCI
Engineering
& Construction
Sdn. Bhd.
Other
receivables
Yes 1,075,900$ 1,075,900$ -$ - 2 - For
operational
need
-$ - -$ 3,491,746$ 6,983,492$ -
0 CTCI Corp. CTCI
Singapore Pte.
Ltd.
Other
receivables
Yes 1,383,300 1,383,300 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI Arabia
Ltd.
Other
receivables
Yes 1,444,780 1,444,780 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI
Machinery
Corp.
Other
receivables
Yes 650,000 650,000 432,000 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CTCI Smart
Engineering
Corp.
Other
receivables
Yes 500,000 500,000 50,000 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
CTCI Corporation
Loans to others
For the year ended December 31, 2018
Table 1 Expressed in thousands of NTD
(Except as otherwise indicated)
Table 1 Page 1416
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
0 CTCI Corp. CTCI Shanghai
Co., Ltd.
Other
receivables-
related
parties
Yes 92,019$ -$ -$ - 2 - For
operational
need
-$ - -$ 3,491,746$ 6,983,492$ -
0 CTCI Corp. CTCI
(Thailand) Co.,
Ltd.
Other
receivables
Yes 500,000 500,000 397,044 1.01% 2 - For
operational
need
- - - 3,491,746 6,983,492 -
0 CTCI Corp. CIPEC
Construction Inc.
Other
receivables
Yes 614,800 614,800 - - 2 - For
operational
need
- - - 3,491,746 6,983,492 -
1 CTCI Advanced
Systems Inc.
CTCI Corp. Other
receivables
Yes 45,000 45,000 - - 2 - For
operational
need
- - - 54,452 217,807 -
2 CTCI Overseas
Co., Ltd.
Superiority
(Thailand) Co.,
Ltd.
Other
receivables
Yes 65,778 65,778 65,778 2.83% 2 - For
operational
need
- - - 688,802 688,802 -
2 CTCI Overseas
Co., Ltd.
CIPEC
Construction Inc.
Other
receivables
Yes 313,926 312,472 - - 2 - For
operational
need
- - - 688,802 688,802 -
2 CTCI Overseas
Co., Ltd.
CTCI CMCE
JV SDN. BHD.
Other
receivables
Yes 38,552 37,704 - - 2 - For
operational
need
- - - 688,802 688,802 -
Table 1 Page 2417
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
2 CTCI Overseas
Co., Ltd.
CTCI
Netherlands
B.V.
Other
receivables-
related
parties
Yes 36,497$ -$ -$ - 2 - For
operational
need
-$ - -$ 688,802$ 688,802$ -
3 CTCI Overseas
(BVI) Co., Ltd.
CIPEC
Construction Inc.
Other
receivables
Yes 20,949 20,811 20,802 2.22% 2 - For
operational
need
- - - 698,646 698,646 -
4 ECOVE
Enviroment
Corporation
ECOVE Solar
Energy
Corporation
Other
receivables-
related
parties
Yes 200,000 200,000 87,000 1.01% 2 - For
operational
need
- - - 487,824 1,951,295 -
5 ECOVE Waste
Management
Corporation
CTCI Corp. Other
receivables
Yes 14,000 7,000 - - 2 - For
operational
need
- - - 11,346 45,385 -
5 ECOVE Waste
Management
Corporation
CTCI
Machinery
Corp.
Other
receivables
Yes 14,000 7,000 - - 2 - For
operational
need
- - - 11,346 45,385 -
5 ECOVE Waste
Management
Corporation
CTCI Smart
Engineering
Corp.
Other
receivables
Yes 14,000 7,000 7,000 1.01% 2 - For
operational
need
- - - 11,346 45,385 -
6 ECOVE
Environmental
Services
Corporation
ECOVE Solvent
Recycling
Corporation
Other
receivables
Yes 70,000 70,000 50,000 1.57% 2 - For
operational
need
- - - 96,634 386,534 -
Table 1 Page 3418
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
6 ECOVE
Environmental
Services
Corporation
ECOVE
Miaoli Energy
Corporation
Other
receivables
Yes 70,000$ 70,000$ 39,500$ 1.01% 2 - For
operational
need
-$ - -$ 96,634$ 386,534$ -
6 ECOVE
Environmental
Services
Corporation
CTCI
Machinery
Corp.
Other
receivables
Yes 140,000 35,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Resources
Engineering
Inc.
Other
receivables
Yes 140,000 35,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Corp. Other
receivables
Yes 140,000 70,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
6 ECOVE
Environmental
Services
Corporation
CTCI Smart
Engineering
Corp.
Other
receivables
Yes 140,000 70,000 - - 2 - For
operational
need
- - - 96,634 386,534 -
Table 1 Page 4419
Item Value
Allowance
for
doubtful
accounts
CollateralLimit on loans
granted to
a single party
(Note 7)
Ceiling on
total loans
granted
(Note 7) Footnote
Reason
for short-term
financing
(Note 6)
No.
(Note 1) Creditor Borrower
General
ledger
account
(Note 2)
Is a
related
party
Maximum
outstanding
balance during
year ended
December 31,
2018
(Note 3)
Balance at
December 31,
2018
(Note 8)
Actual amount
drawn down
Interest
rate
Nature of
loan
(Note 4)
Amount of
transactions
with the
borrower
(Note 5)
7 CTCI Shanghai
Co., Ltd.
CTCI Trading
Shanghai
Co., Ltd.
Other
receivables-
related
parties
Yes 92,334$ -$ -$ - 2 - For
operational
need
-$ - -$ 196,870$ 196,870$ -
8 ECOVE Solar
Energy Corporation
ECOVE South
Corporation Ltd.
Other
receivables
Yes 14,000 14,000 - - 2 - For
operational
need
- - - 292,439 292,439 -
8 ECOVE Solar
Energy Corporation
ECOVE Solar
Power
Corporation
Other
receivables
Yes 200,000 200,000 - - 2 - For
operational
need
- - - 292,439 292,439 -
8 ECOVE Solar
Energy Corporation
ECOVE Central
Corporation Ltd.
Other
receivables
Yes 17,000 17,000 1,000 1.71% 2 - For
operational
need
- - - 292,439 292,439 -
9 CTCI Beijing Co.,
Ltd.
CTCI Shanghai
Co., Ltd.
Other
receivables
Yes 269,502 268,452 - - 2 - For
operational
need
- - - 712,899 712,899 -
Table 1 Page 5420
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, 2018
Note 4:.The numbers filled in for the nature of loans are as follows:
(1) Business association is labeled as “1”
(2) Short-term financing is labeled as “2”.
Note 5: Fill in the amount of business transactions when nature of the loan is related to business transactions, which is the amount of business transactions occurred between the creditor and borrower in the current year.
Note 6: Fill in purpose of loan when nature of loan belongs to short-term financing, for example, repayment of loan, acquisition of equipment, working capital, etc.
Note 7: The calculation and amount on ceiling of loans are as follows:
[The company]
(1) The limit on loans granted to a single party shall not exceed 20% of the Company's net assets value.
(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.
[Domestic subsidiaries and overseas subsidiaries]
(1) The limit on loans granted to a single party by domestic subsidiaries and overseas subsidiaries shall not exceed 10% and 40% of the Company's net value, respectively.
(2) The ceiling on total loans shall not exceed 40% of the Company's net assets value.
Note 8: The amounts of funds to be loaned to others which have been approved by the board of directors of a public company in accordance with Article 14, Item 1 of the “Regulations Govering Loaning of Funds and Making
of Endorsements/Guarantees by public Companies” should be included in its published balance of loans to others at the end of the reporting period to reveal the risk of loaning the public company bears, even though they
have not yet been appropriated. However, this balance should excluded the loans repaid when repayments are done subsequently to reflect the risk adjustment. In addition, if the board of directors of a public company has
authorised the chairman to loan funds in instalments or in revolving within certain lines and within one year in accordance with Article 14, Item 2,of the “Regulations Governing Loaning of Funds and Making of Endorsements/
Guarantees by Public Companies”, the published balance of loans to others at the end of the reporting period should also include these lines of loaning approved by the board of directors, and these lines of loaning should not be
excluded from this balance even though the loans are repaid subsequently, for taking into consideration they could be loaned again thereafter.
Table 1 Page 6421
Company name
Relationship
with the
endorser/
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 of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
CTCI Corporation
Provision of endorsements and guarantees to others
For the year ended December 31, 2018
Table 2 Expressed in thousands of NTD
(Except as otherwise indicated)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
Table 2 Page 1422
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 2423
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 3424
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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
CTCI Shanghai
Co., Ltd.
5 462,218 253,413 - - - - 924,435 N N Y -
2 CTCI Smart
Engineering
Corp.
CTCI Machinery
Corp.
5 462,218 1,698,800 - - - - 924,435 N N N -
Table 2 Page 4425
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
3 CTCI Machinery
Corp.
CTCI Smart
Engineering Corp.
5 1,438,350$ 560,000$ 560,000$ 560,000$ - 116.80% 2,876,700$ N N N -
4 CTCI Chemical
Corp.
CTCI Machinery
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.
CTCI Trading
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.
CTCI Smart
Engineering Corp.
5 867,505 267,102 267,102 267,102 - 92.37% 1,735,011 N N N -
7 CTCI Overseas
Co., Ltd.
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 5426
Company name
Relationship
with the
endorser/
guarantor
(Note 2)
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
(Note 3)
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
(Note 7)
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
(Note 7)
Outstanding
endorsement/
guarantees
amount at
December 31,
2018
(Note 5)
Number
(Note 1)
Endorser/
guarantor
Party being
endorsed/guaranteedLimit on
endorsements/
guarantees
provided for a
single party
(Note 3)
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31,
2018
(Note 4)
Provision of
endorsements/
guarantees to
the party in
Mainland
China
(Note 7) Footnote
Actual amount
drawn down
(Note 6)
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 -
9 ECOVE Solar
Energy
Corporation
ECOVE Central
Corporation Ltd.
2 1,462,194 19,790 16,790 16,790 - 2.71% 2,193,291 N N N -
9 ECOVE Solar
Energy
Corporation
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
ECOVE Solar
Energy Corporation
5 408,122 12,420 12,420 12,420 - 6.09% 612,183 N N N -
Table 2 Page 6427
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 7428
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
CTCI Corp. Fund Fuh Hwa China New Economy
Balance
N/A Financial assets at fair
value through profit or
loss-current
500,000 5,000$ - 4,610$ -
CTCI Corp. Fund BlackRock Global Fund - European
Value Fund A2 USD Hedged
N/A Financial assets at fair
value through profit or
loss-current
12,438 4,602 - 3,835 -
CTCI Corp. Fund Fubon US Preferred Stock ETF N/A Financial assets at fair
value through profit or
loss-current
500,000 10,000 - 9,115 -
19,602$ 17,560$
Adjustment 2,042)(
17,560$
CTCI Corp. Common Stock China Steel Chemical Corp. The Company is the
supervisor
Financial asset at fair value
through 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 value
through other comprehensive
income-current
1,717,015 17,342 - 12,380 -
CTCI Corp. Common Stock Taiwan Cement Corp. N/A Financial asset at fair value
through 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
(Except as otherwise indicated)
Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
Table 3 Page 1429
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
CTCI Corp. Common Stock Core Pacific City Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-non-current
22,428,000 360,000$ 2.26 239,615$ -
CTCI Corp. Common Stock CDIB & Partners
Investment Holding
Corp.
The Company is the
supervisor
Financial assets at fair value
through 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 the
Board of director
Financial assets at fair value
through other comprehensive
income-non-current
300,000 3,000 6.00 3,000 -
CTCI Corp. Common Stock Ever Victory Global Limited. N/A Financial assets at fair value
through 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 value
through 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 Money
Market Fund
N/A Financial assets at fair value
through 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 value
through other comprehensive
income-current
265,030 1,911 - 1,911 -
CTCI Investment Corp. Common Stock CTCI Corp. The Company Financial assets at fair value
through 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 value
through other comprehensive
income non-current
283,500 962 0.65 962 -
Table 3 Page 2430
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
CTCI Development Corp. Common Stock CTCI Corp. The Company Financial assets at fair value
through other comprehensive
income-non-current
912,170 40,135$ 0.12 40,135$ -
CTCI Development Corp. Common Stock CTCI Advanced
System Inc.
Subsidiary Financial assets at fair value
through 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 value
through other comprehensive
income-current
675,010 4,867 - 4,867 -
CTCI Development Corp. Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through 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 value
through profit or loss-current
8,143,624 109,997 - 109,997 -
CTCI Resources
Engineering Inc.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
726,080 5,235 - 5,235 -
CTCI Resources
Engineering Inc.
Common Stock Global Strategic Investment Inc. N/A Financial assets at fair value
through other comprehensive
income-non-current
567,000 1,924 1.29 1,924 -
CTCI Resources
Engineering Inc.
Fund Yuanta De-Li Money Market Fund N/A Financial assets at fair value
through profit or loss-current
3,685,390 59,999 - 59,999 -
CTCI Resources
Engineering Inc.
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through 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 value
through profit or loss-current
207,498 3,277 - 3,277 -
Table 3 Page 3431
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Waste
Management Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
1,311,441 20,033$ - 20,033$ -
ECOVE Waste
Management Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
1,333,007 18,005 - 18,005 -
ECOVE Waste
Management Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
891,706 9,202 - 9,202 -
ECOVE Waste
Management Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
478,841 16,951 - 16,951 -
ECOVE Wujih Energy
Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
65,511 1,001 - 1,001 -
ECOVE Wujih Energy
Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
148,083 2,000 - 2,000 -
ECOVE Wujih Energy
Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
4,616,996 47,650 - 47,650 -
ECOVE Wujih Energy
Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
475,508 16,833 - 16,833 -
ECOVE Environment
Corp.
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
472,758 16,735 - 16,735 -
ECOVE Environment
Corp.
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
198,085 2,044 - 2,044 -
Table 3 Page 4432
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Environment
Corp.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
455,157 3,282$ - 3,282$ -
ECOVE Environment
Corp.
Common Stock TeamWIN Opto-Electronics
Co., Ltd.
N/A Financial assets at fair value
through other comprehensive
income-non-current
150,000 475 2.46 475 -
ECOVE Environment
Corp.
Common Stock Eastern Pacific Energy Sdn. Bhd. ECOVE Environment
Corp.'s President is the
director
Financial assets at fair value
through other comprehensive
income-non-current
10,000 68 10.00 68 -
ECOVE Environmental
Services Corporation
Common Stock CTCI Corp. The Company Financial assets at fair value
through other comprehensive
income-current
1,028 45 - 45 -
ECOVE Environmental
Services Corporation
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
1,251,971 44,320 - 44,320 -
ECOVE Environmental
Services Corporation
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
559,567 4,034 - 4,034 -
ECOVE Environmental
Services Corporation
Fund Schroder 2022 Emerging Market
Sovereign Bond Fund
N/A Financial assets at fair value
through profit or loss-current
35,000 10,596 - 10,596 -
ECOVE Environmental
Services Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
3,366,412 45,470 - 45,470 -
ECOVE Environmental
Services Corporation
Fund Capital Money Market Fund N/A Financial assets at fair value
through profit or loss-current
620,717 10,000 - 10,000 -
ECOVE Mioali Energy
Corporation
Fund Taishin 1699 Money Market Fund N/A Financial assets at fair value
through profit or loss-current
518,246 7,000 - 7,000 -
Table 3 Page 5433
Type of marketable
securities Name of Investee company
Number of shares/
denominations
Book value
(Note 3) Ownership (%) Market value
Footnote
(Note 4)Securities held by
(Note 1)
Relationship with the
securities issuer
(Note 2)
General
ledger account
As of December 31, 2018
ECOVE Mioali Energy
Corporation
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
65,579 1,001$ - 1,001$ -
ECOVE Mioali Energy
Corporation
Fund Franklin Templeton Sinoam Money
Market Fund
N/A Financial assets at fair value
through profit or loss-current
581,852 6,005 - 6,005 -
CTCI (Thailand) Co.,
Ltd.
Common Stock CHIYODA(Thailand) Co. Ltd. N/A Financial assets at fair value
through 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 value
through other comprehensive
income-current
500 22 - 22 -
CTCI Advanced System
Inc.
Fund FSITC Taiwan Money Market N/A Financial assets at fair value
through profit or loss-current
6,547,236 100,016 - 100,016 -
CTCI Advanced System
Inc.
Common Stock Taiwan Cement Corp. N/A Financial assets at fair value
through other comprehensive
income-current
908,578 32,164 - 32,164 -
CTCI Advanced System
Inc.
Common Stock United Renewable Energy Co., Ltd. N/A Financial assets at fair value
through other comprehensive
income-current
674,430 4,862 - 4,862 -
CTCI Advanced System
Inc.
Bonds BANK OF CHINA LTD PARIS N/A Financial assets at fair value
through 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 6434
Number of
shares
(thousands) Amount
Number of
shares
(thousands) Amount
Number of
shares
(thousands) Selling price Book value
Gain (loss) on
disposal
Number of
shares
(thousands) Amount
CTCI Advanced
Systems Inc.
FSITC Taiwan Money Market Financial assets at fair
value 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
Environment
Corp.
ECOVE Solar Energy Corporation Equity investments
accounted for under the
equity method
Gintech Energy
Corporation.
Other related
party
28,270 311,114 34,976 532,213
(Note 5)
- - - - 63,246 854,787
ECOVE
Environmental
Services
Corporation
Franklin Templeton Sinoam Money
Market Fund
Financial assets at fair
value 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.
Table 4 Expressed in thousands of NTD
(Except as otherwise indicated)
Balance as at December 31,
2018
CTCI Corporation
Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital
For the year ended December 31, 2018
Addition
(Note 3)
Disposal
(Note 3)
Investor
Marketable
securities
(Note 1)
General
ledger account
Counterparty
(Note 2)
Relationship
with
the investor
(Note 2)
Balance as at
January 1, 2018
Table 4 Page 1435
Table 5 Expressed in thousands of NTD
(Except as otherwise indicated)
Reason for
Relationship Basis or acquisition of
Relationship Original owner who between the
originalDate of the reference used real estate and
Real estate Real estate Date of the Transaction Status of with the sold the real estate owner and the original in setting the status of the Other
acquired by acquired event amount payment Counterparty counterparty to the counterparty acquirer transaction Amount price real estate commitments
CTCI
Development
Corp.
Land 2018/1/23 1,984,400$ 198,440$
Xintianmu
Development
Co., Ltd.
None - - - -$ Appraisal
report
To build second
office buildingNone
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$300 million or 20% of paid-in capital or more
For the year ended December 31, 2018
the real estate is disclosed below:
If the counterparty is a related party, information as to the last transaction of
CTCI Corporation
Table 5, Page 1436
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable)
ECOVE Environmental
Services Corporation
ECOVE Waste Management
Corporation
Second-tier
subsidiary(Sales) 572,562)($ 0.89% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference100,417$ 1.00% -
ECOVE Environmental
Services Corporation
ECOVE Wujih Energy
Corporation
Second-tier
subsidiary(Sales) 236,890)( 0.37% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference83,809 0.84% -
ECOVE Environmental
Services Corporation
ECOVE Mioali Energy
Corporation
Second-tier
subsidiary(Sales) 149,943)( 0.23% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference23,224 0.23% -
ECOVE Environmental
Services Corporation
ECOVE Solvent Recycling
Corporation
Second-tier
subsidiary(Sales) 108,464)( 0.17% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference38,491 0.38% -
ECOVE Wujih Energy
Corporation
ECOVE Waste Management
Corporation
Second-tier
subsidiary(Sales) 382,669)( 0.60% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference69,964 0.70% -
CTCI Corp.Blue Whale Water
Technology Co., Ltd.Associate (Sales) 369,767)( 0.58% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference539 0.01% -
CTCI Corp. Powertec Energy Corp. Associate (Sales) 423,310)( 0.66% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference- - -
CTCI Corporation
Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Table 6 Expressed in thousands of NTD
(Except as otherwise indicated)
FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
Tabl e 6 Page 1437
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Corp. CTCI Overseas Co., Ltd Subsidiary (Sales) 565,150)($ 0.88% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference86,164$ 0.86% -
CTCI Overseas Co., Ltd. CTCI Corp. The Company (Sales) 316,188)( 0.49% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,955 0.92% -
CTCI Engineering &
Construction Sdn. Bhd.
CCJV P1 Engineering &
Construction Sdn. Bhd.Subsidiary (Sales) 400,143)( 0.62% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference68,015 0.68% -
CTCI Advanced Systems
Inc.CTCI Corp. The Company (Sales) 293,102)( 0.46% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference35,490 0.35% -
CTCI Development Corp. CTCI Corp. The Company (Sales) 302,282)( 0.47% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,457 0.01% -
CTCI Machinery Corp. CTCI Corp. The Company (Sales) 347,699)( 0.54% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference5,120 0.05% -
CTCI (Thailand) Co., Ltd. CTCI Corp. The Company (Sales) 360,643)( 0.56% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference8,299 0.08% -
CTCI Smart Engineering
Corp.
ECOVE Solar Energy
Corporation
Second-tier
subsidiary(Sales) 211,230)( 0.33% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference19,338 0.19% -
CTCI Beijing Co., Ltd. CTCI Corp. The Company (Sales) 211,770)( 0.33% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference2,741 0.03% -
CIMAS Engineering
CompanyCTCI Corp. The Company (Sales) 123,762)( 0.19% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference4,312 0.04% -
Tabl e 6 Page 2438
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Engineering &
Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate (Sales) 463,873)($ 0.72% )(
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference565,408$ 5.63% -
CTCI Corp. EVER ECOVE Corp. Associate (Sales) 44,447)( 0.07% )( 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference374,425 3.73% -
ECOVE Waste Management
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 572,562 0.89%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference100,417)( 0.89% )( -
ECOVE Waste Management
Corporation
ECOVE Wujih Energy
Corporation
Second-tier
subsidiaryPurchases 382,669 0.60%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference69,964)( 0.62% )( -
ECOVE Wujih Energy
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 236,890 0.37%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference83,809)( 0.74% )( -
ECOVE Mioali Energy
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 149,943 0.23%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference23,224)( 0.21% )( -
ECOVE Solvent Recycling
Corporation
ECOVE Environmental
Services Corporation
Second-tier
subsidiaryPurchases 108,464 0.17%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference38,491)( 0.34% )( -
CTCI Corp. Pan Asia Corp. Associate Purchases 145,731 0.23% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,867)( 0.81% )( -
CTCI Corp.CTCI Advanced Systems
Inc.Subsidiary Purchases 293,102 0.46%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference35,490)( 0.31% )( -
CTCI Corp. CTCI Machinery Corp. Subsidiary Purchases 347,699 0.54% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference5,120)( 0.05% )( -
Tabl e 6 Page 3439
Purchases
(sales) Amount
Percentage of total
purchases (sales) Credit term Unit price Credit term Balance
Percentage of
total notes/accounts
receivable (payable) FootnotePurchaser/seller Counterparty
Relationship
with the
counterparty
Transaction
Differences in transaction terms
compared to third party
transaction Notes/accounts receivable (payable)
CTCI Corp. CTCI Development Corp. Subsidiary Purchases 302,282$ 0.47% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,457)($ 0.01% )( -
CTCI Corp. CTCI (Thailand ) Co., Ltd. Subsidiary Purchases 360,643 0.56% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference8,299)( 0.07% )( -
CTCI Corp. CTCI Overseas Co., Ltd. Subsidiary Purchases 316,188 0.49% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference91,955)( 0.81% )( -
CTCI Engineering
& Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate Purchases 1,598,407 2.49%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference205,489)( 1.82% )( -
CCJV P1 Engineering &
Construction Sdn. Bhd.
MIE INDUSTRIAL SDN.
BHD.Associate Purchases 1,589,866 2.48%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference1,060,653)( 9.39% )( -
CCJV P1 Engineering &
Construction Sdn. Bhd.
CTCI Engineering &
Construction Sdn. Bhd.Subsidiary Purchases 400,143 0.62%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference68,015)( 0.60% )( -
CTCI Overseas Co., Ltd. CTCI Corp. The Company Purchases 565,150 0.88% 30 days after
seasonally billings
Negotiated by
both parties
No significant
difference86,164)( 0.76% )( -
CTCI Corp. CTCI Beijing Co., Ltd.Second-tier
subsidiaryPurchases 211,770 0.33%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference2,741)( 0.02% )( -
CTCI Corp.CIMAS Engineering
Company
Second-tier
subsidiaryPurchases 123,762 0.19%
30 days after
seasonally billings
Negotiated by
both parties
No significant
difference4,312)( 0.04% )( -
Note: ECOVE Solvent Recycling Corporation are accuunted in property, plant, and equipment.
Tabl e 6 Page 4440
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 Services
Corporation.
ECOVE Waste Management
Corporation.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$100 million or 20% of paid-in capital or more
For the year ended December 31, 2018
Expressed in thousands of NTD
(Except as otherwise indicated)
Amount collected
subsequent to the
balance sheet date
Allowance for
doubtful accounts Creditor Counterparty
Relationship
with the counterparty
Balance as at December 31,
2018 Turnover rate
Overdue receivables
Table 7 Page 1441
General ledger account Amount Transaction terms
Percentage of consolidated total operating revenues or
total assets (Note 3)
0 CTCI Corp. CTCI Overseas Co., Ltd. 1 Sales revenue 565,150)($ Negotiated by both parties 0.88% )(
1 ECOVE Environmental Services
Corporation
ECOVE Waste Management
Corporation
3 〃 572,562)( 〃 0.89% )(
1 〃 ECOVE Mioali Energy
Corporation
3 〃 149,943)( 〃 0.23% )(
1 〃 ECOVE Wujih Energy
Corporation
3 〃 236,890)( 〃 0.37% )(
1 〃 ECOVE Solvent Recycling
Corporation
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.
CCJV P1 Engineering &
Construction Sdn. Bhd.
3 〃 400,143)( 〃 0.62% )(
7 ECOVE Wujih Energy Corporation ECOVE Waste Management
Corporation
3 〃 382,669)( 〃 0.60% )(
8 CTCI Overseas Co., Ltd. CTCI Corp. 2 〃 316,188)( 〃 0.49% )(
9 CTCI Smart Engineering Corp ECOVE Solar Energy
Corporation
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
For the year ended December 31, 2018
Table 8 Expressed in thousands of NTD
(Except as otherwise indicated)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
Table 8 Page 1442
General ledger account Amount Transaction terms
Percentage of consolidated total operating revenues or
total assets (Note 3)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
1 ECOVE Environmental Services
Corporation
ECOVE Waste Management
Corporation
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 construction
receipt
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 2443
General ledger account Amount Transaction terms
Percentage of consolidated total operating revenues or
total assets (Note 3)
Number
(Note 1) Company name Counterparty
Relationship
(Note 2)
Transaction
0 CTCI Corp. CTCI 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 Business
Co., 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 Engineering
Corp.
3 〃 560,000 〃 〃
12 CTCI Resources Engineering Inc. CTCI Smart Engineering
Corp.
3 〃 267,102 〃 〃
13 ECOVE Environment Corp. ECOVE Solar Energy
Corporation
3 〃 1,143,589 〃 〃
14 ECOVE Solar Energy Corporation ECOVE Solar Power
Corporation
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 3444
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
CTCI Corp. CTCI Smart Engineering
Corp.
Taiwan Design, management,
and building of nuclear
power, thermal power,
fire pumped storage
power generation and
others related to
engineering.
$ 456,251 $ 456,251 59,098,624 97.09 $ 150,695 ($ 325,492) ($ 316,020) A subsidiary
CTCI Corp. CTCI Resources
Engineering Inc.
Taiwan Mining of geology, sea oil
and gas, marbal and
rare;planning, design,
monitor of civil, traffic
environment and various
mechanical and
electrical equipment.
263,455 263,455 24,762,252 99.05 284,047 33,446 30,724 A subsidiary
CTCI Corp. CTCI Advanced
Systems Inc.
Taiwan Systems planning, design,
integration, and
engineering for various
IT systems, etc.
44,409 44,409 11,444,842 48.72 265,289 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 of
petrochemical 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 processing
of steel, piping, heat
treatment, manufacture
of pollution control
equipment and non-
destructive testing, etc.
293,800 293,800 20,000,000 100.00 480,434 67,207 67,207 A subsidiary
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(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)
For the year ended December 31, 2018
Table 9 Expressed in thousands of NTD
(Except as otherwise indicated)
Table 9 Page 1445
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Corp. CTCI Arabia Ltd. Arabia Construction and
maintenance of refinery, storage
tanks and
chemical 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 recycling
site and
maintenance of related
mechanical and
equipment, etc.
4,958 4,958 - 30.00 57,921 167,023 50,107 A subsidiary
CTCI Corp. CTCI Singapore Pte.
Ltd.
Singapore Investment and planning
of 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 planning
of 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 planning
of 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, the
Group strengthen the collaborative
relationship with local business
owner and supplier, developing
adequate potential supplier, and
help them to operate projects,
purchase and other related
businesses.
3,217 3,217 100,000 100.00 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 Unit
BTO Project.
347,900 347,900 34,790,000 49.00 434,937 143,958 70,539 An investee under
equity method
Table 9 Page 2446
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Corp. Pan Asia Corp. Taiwan Input of foreign labor
and technologies,
technical cooperation
with foreign construction
business, and construction of
engineering construction, etc.
$ 71,543 $ 71,543 39,219,509 34.27 $ 526,590 $ 19,375 $ 6,640 An investee under
equity method
CTCI Corp. EVER ECOVE Corp. Taiwan Waste service, waste clear and
steam power cogeneration.
250,000 - 25,000,000 25.00 246,635 ( 13,460) ( 3,365) An investee under
equity 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 under
equity method
$ 10,553,599 ($ 208,134)
CTCI Development
Corp.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
13,522 13,522 480,661 6.77 16,158 58,813 3,982 A second-tier
subsidiary
CTCI Development
Corp.
ECOVE Environment
Corp.
Taiwan General investment. 11,270 11,270 243,918 0.36 17,762 806,912 3,084 A subsidiary
CTCI Development
Corp.
CTCI Resources
Engineering Inc.
Taiwan Mining of geology, sea oil
and gas, marbal and
rare;planning, design,
monitor of civil, traffic
environment and various
mechanical and
electrical equipment.
23 23 1,388 0.01 16 33,446 2 A subsidiary
CTCI Development
Corp.
Crown Asia-2
Investment Limited
Taiwan General investment. 2,531 2,531 25,000 100.00 1,111 504 504 A second-tier
subsidiary
CTCI Investment
Corporation
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
32,153 32,153 1,657,207 23.34 55,708 58,813 13,728 A second-tier
subsidiary
Table 9 Page 3447
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Investment
Corporation
ECOVE Environment
Corp.
Taiwan General investment. $ 1,374 $ 1,374 32,132 0.05 $ 2,339 $ 806,912 $ 406 A subsidiary
CTCI Investment
Corporation
CTCI Smart Engineering
Corp.
Taiwan Design, management,
and building of nuclear
power, thermal power,
fire pumped storage
power generation and
others related to
engineering.
11 11 1,000 0.002 3 ( 325,492) ( 2) A subsidiary
CTCI Investment
Corporation
Powertec Energy
Corp.
Taiwan Basically chemical industry
power generation, rotation
electric, machinery
manufacturing of electric
power and services of
energy technologies.
1,832,107 1,832,107 211,291,668 16.03 1,227,090 ( 1,565,744) ( 257,825) An investee under
equity method
CTCI Investment
Corporation
MIE INDUSTRIAL
SDN. BHD.
Malaysia Equipment & Instrument,
Procurement & Contruction &
Panel.
139,885 139,885 9,450,000 21.00 242,908 267,611 57,388 An investee under
equity method
CTCI Machinery
Corp.
Boretech
Resource
Recovery
Engineering
Co., Ltd.
(Cayman)
Cayman
Island
Share holding and
investment.
154,744 154,744 6,666,667 10.00 146,084 2,188 277 An investee under
equity method
ECOVE Environment
Corp.
ECOVE Waste
Management
Corporation
Taiwan International trade and
environmental service of waste
disposal, equipment installation
and mechanical installation, etc.
20,000 20,000 2,000,000 100.00 113,462 58,674 58,674 A second-tier
subsidiary
ECOVE Environment
Corp.
ECOVE Wujih Energy
Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
425,085 425,085 29,400,000 98.00 1,242,060 275,512 270,002 A second-tier
subsidiary
ECOVE Environment
Corp.
ECOVE Environmental
Services Corporation
Taiwan Management of waste
recycling site and maintenance of
related
mechanical and
equipment, etc.
339,921 339,921 14,065,936 93.15 894,799 367,025 341,905 A second-tier
subsidiary
Table 9 Page 4448
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
ECOVE Environment
Corp.
ECOVE Mioali
Energy Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
$ 1,012,483 $ 1,012,483 56,249,000 75.00 $ 1,003,951 $ 129,055 $ 96,790 A second-tier
subsidiary
ECOVE Environment
Corp.
ECOVE Solar Energy
Corporation
Taiwan Energy technology service. 762,349 279,465 63,245,452 100.00 854,787 43,423 27,700 A second-tier
subsidiary
ECOVE Environment
Corp.
Yuan Ding
Resources
Management Corp.
Taiwan Waste service, waste clear other
environmental service, and
environmental pollution service,
etc.
27,000 27,000 2,700,000 60.00 23,543 78 47 A second-tier
subsidiary
ECOVE Environment
Corp.
Boretech
Resource
Recovery
Engineering
Co., Ltd.
(Cayman)
Cayman
Island
Share holding and
investment.
309,489 309,489 13,333,333 20.00 292,168 2,188 554 An investee under
equity method
ECOVE Environment
Corp.
ECOVE Solvent Recycling
Corporation
Taiwan Operating basic chemical industry
and manufacture of other chemical
products.
86,480 - 8,099,000 90.00 80,168 ( 7,015) ( 6,312) A second-tier
subsidiary
ECOVE Environment
Corp.
EVER ECOVE Corp. Taiwan Waste service, waste clear and
steam power cogeneration.
50,000 - 5,000,000 5.00 49,336 ( 13,460) ( 664) An investee under
equity method
ECOVE
Environmental
Services Corporation
ECOVE Wujih Energy
Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
6,000 6,000 600,000 2.00 25,348 275,512 5,510 A second-tier
subsidiary
ECOVE
Environmental
Services Corporation
CTCI Chemical
Corp.
Taiwan Manufacture, wholesale,
and retail of industrial
chemicals.
24,851 24,851 1,910,241 26.90 64,214 58,813 15,824 A second-tier
subsidiary
ECOVE
Environmental
Services Corporation
Sinogal-Waste
Services Corp.
Macao Management of waste
recycling site and
maintenance of related
mechanical and
equipment, etc.
4,964 4,964 - 30.00 57,921 167,023 50,107 A second-tier
subsidiary
Table 9 Page 5449
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
ECOVE
Environmental
Services Corporation
ECOVE Mioali
Energy Corporation
Taiwan Environmental service of
waste disposal device
installation, steam power
cogeneration, etc.
$ 13 $ 13 1,000 0.001 $ 18 $ 129,055 $ 2 A second-tier
subsidiary
ECOVE
Environmental
Services Corporation
ECOVE Solvent Recycling
Corporation
Taiwan Operating basic chemical industry
and manufacture of other chemical
products.
10 - 1,000 0.01 8 ( 7,015) 2 A second-tier
subsidiary
ECOVE Waste
Management
Corporation
ECOVE Environmental
Services Corporation
Taiwan Management of waste
recycling site and maintenance of
related
mechanical and
equipment, etc.
53 53 1,000 0.01 64 367,025 23 A second-tier
subsidiary
ECOVE Waste
Management
Corporation
Yuan Ding
Resources
Management Corp.
Taiwan Waste service, waste clear other
environmental service, and
environmental pollution service,
etc.
18,000 18,000 1,800,000 40.00 15,695 78 31 A second-tier
subsidiary
ECOVE Solar Energy
Corporation
ECOVE Solar Power
Corporation
Taiwan Energy technology service. 180,000 180,000 18,000,000 100.00 204,061 18,678 18,678 A second-tier
subsidiary
ECOVE Solar Energy
Corporation
ECOVE Central
Corporation
Ltd.
Taiwan Energy technology service. 7,500 7,500 750,000 100.00 8,737 719 719 A second-tier
subsidiary
ECOVE Solar Energy
Corporation
ECOVE South Corporation
Ltd.
Taiwan Energy technology service. 16,500 16,500 1,650,000 100.00 17,969 918 918 A second-tier
subsidiary
ECOVE Solar Energy
Corporation
G.D. International, LLC. USA Energy technology service. 189,197 189,197 - 100.00 368,589 27,685 27,927 A second-tier
subsidiary
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-tier
subsidiary
CTCI Overseas
(BVI) Corp.
CTCI Overseas
Co., Ltd.
Hong Kong Investment and planning
of related engineering.
276,815 276,815 6,740,000 100.00 1,723,118 170,493 170,493 A second-tier
subsidiary
Table 9 Page 6450
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
CTCI Overseas
Co., Ltd.
CTCI Arabia Ltd. Arabia Construction and
maintenance of refinery, storage
tanks and
chemical plant.
$ 22,610 $ 22,610 500 50.00 ($ 562,811) $ 164,510 $ 82,255 A subsidiary
CTCI Overseas
Co., Ltd.
Universal Engineering
(BVI) Corp.
BVI Investment and planning
of related engineering.
1,694 1,694 50,000 100.00 32,618 57,182 57,182 A second-tier
subsidiary
CTCI Overseas
Co., Ltd.
CIPEC
Construction Inc.
Philippines Construction and
maintenance of refinery, storage
tanks and
chemical plant.
663 663 9,973 39.89 ( 10,282) ( 26,131) ( 10,432) A second-tier
subsidiary
CTCI Overseas
Co., Ltd.
CIMAS
Engineering Corp.
Vietnam Chemical, petrochemical,
feasibility study &
planning, engineering
design, procurement &
fabrication, erection,
construction &
commissioning.
26,330 26,330 - 50.00 45,776 349 174 A second-tier
subsidiary
CTCI Overseas
Co., Ltd.
CTCI Engineering &
Construction Sdn. Bhd.
Malaysia Investment and planning
of related engineering.
2,879 2,879 300,000 40.00 ( 2,044) ( 124,226) ( 49,691) A subsidiary
CTCI Overseas
Co., Ltd.
CINDA
Engineering &
Construction
Private Limited
India Chemical, petrochemical,
feasibility study &
planning, engineering
design, procurement &
fabrication, erection,
construction &
commissioning.
31,022 31,022 8,000,000 100.00 ( 33,345) ( 190,178) ( 190,178) A second-tier
subsidiary
CTCI Overseas
Co., Ltd.
SUMBER MAMPU SDN.
BHD.
Malaysia Building of related engineering. 95 95 12,040 10.00 167,588 62,121 62,121 A second-tier
subsidiary
Table 9 Page 7451
Balance as at
December 31, 2018
Balance as at
December 31, 2017 Number of shares Ownership (%) Book value
Net profit (loss)
of the investee for the year
ended December 31, 2018
(Note 2(2))
Investment income(loss)
recognised by the Company for
the year ended December 31,
2018(Note 2(3)) Footnote Investor
Investee
(Notes 1 and 2) Location Main business activities
Initial investment amount Shares held as at December 31, 2018
Universal
Engineering
(BVI) Corp.
Superiority
(Thailand) Co., Ltd.
Thailand Investment and planning
of related engineering.
$ 151 $ 151 2,156 49.00 ($ 83,961) $ 55,884 $ 55,884 A second-tier
subsidiary
Superiority
(Thailand) Co.,
Ltd.
CTCI (Thailand)
Co., Ltd.
Thailand Design and building of
petrochemical plant.
12,628 12,628 1,300,500 51.00 ( 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-tier
subsidiary
CTCI Smart
Engineering
Corp.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
7,354 7,354 656,360 9.24 21,090 58,813 5,434 A second-tier
subsidiary
CTCI Resources
Engineering Inc.
CTCI Chemical
Corp.
Taiwan Manufacture wholesale,
and retail of industrial
chemicals.
7,354 7,354 656,360 9.24 21,331 58,813 5,437 A second-tier
subsidiary
CTCI Singapore
Pte. Ltd.
CTCI Netherlands B.V. Netherlands Engineers and other technical
design and consultancy.
11,274 11,274 300,000 100.00 48,904 5,738 5,738 A second-tier
subsidiary
CTCI Engineering &
Construction Sdn.
Bhd.
CTCI Malaysia SDN.
BHD.
Malaysia Investment and planning
of related engineering.
1,357 1,357 150,000 20.00 60,115 77,840 15,568 A second-tier
subsidiary
CTCI Malaysia
SDN. BHD.
MIE INDUSTRIAL
SDN. BHD.
Malaysia Equipment & Instrument,
Procurement & Construction,
Panel.
185,537 185,537 12,600,000 28.00 313,796 267,611 78,289 An investee under
equity method
SUMBER MAMPU
SDN. BHD.
CTCI Malaysia SDN.
BHD.
Malaysia Investment and planning
of related engineering.
5,428 5,428 600,000 80.00 240,458 77,840 62,272 A second-tier
subsidiary
Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules,
it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at 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 8452
Remitted to
Mainland China
Remitted back
to Taiwan
CTCI Beijing
Co., Ltd.
Design, survey, construction
and inspection of various
engineering and construction
projects, plants, machinery
and equipment, and
environmental protection
projects.
$ 433,473 2 $ 313,998 $ - $ - 313,998$ $ 266,564 100.00 $ 266,564 $ 1,782,248 $ 295,938 Note 3
CTCI Shanghai
Co., Ltd.
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 selling
of ethylene and othres.
10,277,948 2 132,773 159,452 - 292,225 - 1.31 - 292,225 - Note 5
CTCI Trading
Shanghai Co., Ltd.
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)
For the year ended December 31, 2018
Expressed in thousands of NTD
Investee in
Mainland China
(Except as otherwise indicated)
Book value of
investments in
Mainland China
as of December
31, 2018
Accumulated
amount
of investment
income
remitted back to
Taiwan as of
December 31,
2018
Table 10
Footnote Main business activities Paid-in capital
Investment method
(Note 1)
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2018
Accumulated
amount
of remittance
from Taiwan to
Mainland China
as of December
31, 2018
Ownership
held by
the
Company
(direct or
indirect)
Investment income
(loss) recognised
by the Company
for the year ended
December 31, 2018
(Note 2(2)B)
Net income of
investee as of
December 31,
2018
Amount remitted from Taiwan to
Mainland China/
Amount remitted back
to Taiwan for the year ended
December 31, 2018
Table 10 Page 1453
Company name
Accumulated amount of remittance
from Taiwan to Mainland China
as of December 31, 2018
Investment amount approved
by the Investment
Commission of the Ministry
of Economic Affairs
(MOEA)
Ceiling on investments in
Mainland China imposed
by the Investment
Commission of MOEA
CTCI Corp. $ 1,122,134 $ 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)Others
Note 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 2454
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 Amount
Cash 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$
455
CTCI CORPORATION
DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT
DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
Sheet 2
Sheet2 page1
Financial Commodities
Number of
Shares/Units
Par value
(in dollars) Amount Costs
Price
(in dollars) Amount Notes
Mutual 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
456
CTCI CORPORATION
DETAILS OF ACCOUNTS RECEIVABLE
DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
Sheet 3
Sheet3 page1
Client Name Amount Notes
Client:
SPCC Joint Venture 1,503,401$
Taiwan Power Company Nuclear & Thermal
Power 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 not
exceed 5% of the account balance
4,504,151
Less:Allowance for bad debts 210)(
4,503,941$
457
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 Cost
Project
(loss) gain
Completed
and roll-out
Balance at
December 31,
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
458
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
Name
Number of
Shares Amounts
Number of
Shares Amounts
Investment
income
(loss) gain
Number of
Shares Ownership Amounts Fair value Collateral
CTCI Smart Engineering Corporation 59,098,624 261,339$ - 205,376$ 316,020)($ 59,098,624 97.09 150,695$ 150,695$ None
CTCI 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
459
CTCI CORPORATION
DETAILS OF ACCOUNTS PAYABLE
DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
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 balance
did not exceed 2% of the account
balance
4,903,869$
460
CTCI CORPORATION
DETAILS OF PARTIAL CONSTRUCTION BILLINGS
FOR THE YEAR ENDED DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
Sheet 7
Sheet7 page1
Project No.
Balance at
January 1,
2018
Additions
(Deductions)
Completed and
roll-out
Balance at
December 31,
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$
461
CTCI CORPORATION
DETAILS OF OPERATING REVENUE
FOR THE YEAR ENDED DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
Sheet 8
Sheet8 page1
Items Summary Amount Notes
Refining and petrochemical
project 22,868,343$
Basic construction 2,687,721
Resources environmental 10,082,387
Others 46,229
35,684,680$
462
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 2,649,861
Manufacturing expenses 3,201,125
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$
463
CTCI CORPORATION
DETAILS OF MANUFACTURING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
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 772,854
3,201,125$
464
CTCI CORPORATION
DETAILS OF OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2018
(EXPRESSED IN THOUSAND OF NEW TAIWAN DOLLARS)
Sheet 11
Sheet11 page1
Items
General and
administrative
expenses
Research and
development
expenses Total
Payroll expenses 636,880$ 74,623$ 711,503$
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 127,837 22,683 150,520
927,704$ 120,849$ 1,048,553$
Note: As of December 31, 2018 the Company contributed $15,000 cash to CTCI Education Foundation.
465
89, Sec. 6, Zhongshan N. Rd., Taipei 11155, Taiwan, R.O.C.
TEL:(02)2833-9999 FAX:(02)2835-8223
WEB SITE : www.ctci.com
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