CTCI Annual Report

2015 Annual Report

CTCI Corporation 89, Sec. 6, Zhongshan N. Rd., Taipei111 11155,55 Taiwan, R.O.C. 89 11155 89 Tel: (886)2-2833-9999Tel: (886)2-2833-9999台北市中山北路六段號 Tel: (886)2-2833-9999台北市中山北路六段號 Fax: Fax:(886)2-2833-8833 (886)2-2833-8833 Fax: (886)2-2833-8833 wwwww.ctciw..comctci.com.tw .tw www.ctci.com.tw

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: MC.Hsiao @ctci.com.tw

Deputy Spokesperson Name: Patrick Lin Title: Chief Financial Officer Tel: 886-2-2833-9999 ext. 16015 E-mail: [email protected]

Headquarters and Branches Headquarters Address: 89, Sec. 6, Zhongshan North Rd., Taipei, Taiwan Tel: 886-2- 2833-9999

Branch CTCI CORPORATION ABU DHABI BRANCH Address: Shaikh Sultan Bin Srour Al Dhaheri Building, Al Salam Street, Abu Dhabi Tel: 971-26711572 CTCI CORPORATION ITALY BRANCH Address: Via G. Carducci, 1221013 Gallarate(VA), Italy Tel: 39- 0331 771026 CTCI CORPORATION QATAR BRANCH Address: Office No.6 , 1st Floor, Al-Emadi Business Centre, C-Ring Road, Doha City,State of Qatar. P.O Box: 30261 Tel: (+974) 4451-7383

Stock Transfer Agent KGI Securities Co. Ltd. Address: 5th Fl., 2, Sec. 1, Chung Ching South Rd., Taipei, Taiwan Website: http://www.kgieworld.com.tw/ Tel: 886-2-2389-2999

Auditors PriceWaterHouseCoopers Auditors: Shyh-Rong Ueng, Huei-Shyang Wang Address: 27th Fl., 333, Sec. 1, Keelung Rd., Taipei, Taiwan Website: http://www.pwc.com/tw Tel.: 886-2-2729-6666

Corporate Website http://www.ctci.com.tw

Contents

I. Letter to Shareholders ...... 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 ...... 21 3.4 Implementation of Corporate Governance ...... 26 3.5 Public Expenses of CPA ...... 71 3.6 Information for change of CPA ...... 71 3.7 The Company's Chairman, President and Managers Responsible for Finance or Accounting who have Held a Post in the CPA Office or its Affiliated within the Latest Year .... 71 3.8 Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders ...... 72 3.9 Information Disclosing the Relationship between any of the Company’s Top Ten Shareholders ...... 75 3.10 Shareholdings of the Company Directors, Supervisors, Managements, and Direct and Indirect Investments of the Company in Affiliated Companies ...... 76

IV. Capital Overview 4.1 Capital and Shares ...... 77 4.2 Issuance of Corporate Bonds ...... 81 4.3 Preferred Shares ...... 81 4.4 Issuance of Depository Receipt ...... 81 4.5 Employee Stock Options ...... 82 4.6 New Restricted Employee Shares ...... 84 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions ...... 84 4.8 Financing Plans and Implementation ...... 84

V. Operational Highlights 5.1 Business Activities ...... 85 5.2 Market and Sales Overview ...... 92 5.3 Human Resources ...... 96 5.4 Environmental Protection Expenditure ...... 98 5.5 Labor Relations...... 99 5.6 Important Contracts ...... 105

VI. Financial Information 6.1 Five-Year Financial Summary ...... 106 6.2 Five-Year Financial Analysis ...... 114 6.3 Audit Committee’s Review Report in the Most Recent Year ...... 120 6.4 Consolidated Financial Statements and Independent Auditors’ Report in the Most Recent Year ...... 121 6.5 Financial Statements and Independent Auditors’ Report in the Most Recent Year ...... 121 6.6 Impact of the Financial Distress Occurred to the Company and Affiliates in the Recent Years until the Annual Report being published ...... 121

VII. Review of Financial Conditions, Financial Performance, and Risk Management 7.1 Analysis of Financial Status ...... 122 7.2 Analysis of Financial Performance ...... 123 7.3 Analysis of Cash Flow ...... 123 7.4 Major Capital Expenditure Items ...... 124 7.5 Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year ...... 124 7.6 Analysis of Risk Management ...... 124 7.7 Other ...... 130

VIII. Special Disclosure 8.1 Summary of Affiliated Companies ...... 131 8.2 Private Placement Securities in the Most Recent Years ...... 152 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years .. 152 8.4 Other Supplementary Information ...... 156

Appendices 1 Consolidated Financial Statements and Independent Auditors’ Report in the Most Recent Year ...... 157 2 Financial Statements and Independent Auditors’ Report in the Most Recent Year ...... 279

I. Letter from the Chairman & CEO

Dear Shareholders, Friends and Colleagues, In 2015, with all the dedication and hard work of our staff, we continue to grow and make business breakthroughs. I would hereby like to report the 2015 business review, the 2016 strategic plan and blueprint for CTCI as follows:

2015 Business Review a) Operation Results The consolidated sales revenue for 2015 amounted to NTD67.05 billion, increased by NTD9.36 billion, or a 16.23% growth compared to that of 2014. The consolidated operating expenses were NTD2.43 billion, while the consolidated non-operating income was NTD318.7 million. The consolidated net income was reported at NTD2.04 billion, and the earnings per share (EPS) was at NTD2.69. b) Business Achievement The year 2015 has been filled with challenges for all international engineering companies. With a sharp decline in crude oil price, we had seen a substantial recession of refinery and petrochemical markets. In spite of this, we still managed to produce outstanding results. Last year, we were able to secure over NTD64.45 billion worth of new contracts, while the backlog of contracts hitting a record high of NTD190.5 billion. Revenue and profit both remained at a high level of performance as well.

Particularly worth noting, the joint venture of CTCI and CB&I was awarded an 870 KTA steam cracker and U&O package project in Oman. The contract amount is worth USD2.8 billion, marking a grand victory for our company in overseas EPC market. Not only was it the first successful alliance with an American engineering company but also was it the largest overseas project CTCI ever acquired. This great achievement marks the successful entrance to the Oman market, a gratifying achievement for all of us. In addition to Oman, we have also demonstrated outstanding business achievement by entering the U.S. market, a monumental milestone for CTCI in the shale gas market.

C) Innovation and R&D In 2015, CTCI’s Innovation R&D Center kept up its efforts to enhance core design capability and improve the efficiency of project execution through continuous research and development in information integration between multiple disciplines, expansion for the breadth and depth of engineering technologies, as well as design automation.

To create competitive differentiation and advantage, development of iEPC is undergoing to shift the manner of EPC operation from batch processing to micromanagement, so that each design modification can be supervised in time, allowing all operations to be fully integrated and effectively managed. The engineering-object-oriented Tag Platform, acting as the foundation of iEPC, improves project control capability and increases the efficiency of project execution by organizing associated documents, 3D models, material take-off, material requisition, installation quantities, and layout across stages of engineering, procurement, construction and commission, into a chain of project engineering information, and agile data. Also, job site efficiency is enhanced with continuous promotion of mobile devices and applications utilized at key job sites, so that construction information is more accessible via portable e-form. Regarding sites ISO layout control, we implemented QR code to ensure each installation is done in correct layout, and on top of that, Intergraph SPC is applied to construction management, offering construction planning simulation, availability of layout drawings and materials, as well as actual installation progress, to be displayed in 4D visualization, so that construction schedule is managed more effectively.

For technology expertise, we have completed the research of Failure Mode and Effect Analysis & Criticality Analysis (FMEA/CA), the basic design of applying thin-film technology to zero-liquid discharge system, the design of stud bolts welded to the steel column embedded in RC piers, truss supported conical roof tank structure design, pulsation and piping vibration analysis for reciprocating compressor, and cathodic protection application for offshore structure and facility and so on. In the meantime, our internal design guidelines and existing engineering software have been revised according to the updated code/standard and other information collected for engineering practices from domestic or abroad.

As for design automation, we further refined pump seal plan selection system, and developed more applications for Revit BIM 3D. We have also completed the automated control room layout design, typical piping modeling for unit equipment, and CAD program for power system, all of which greatly enhanced the quality, speed, and accuracy in EPC project execution.

2016 Outlook Looking forward to the year 2016, we will actively and firmly move towards the existing goals and schedule through continuous advancement, thereby, extending brighter records for a better future.

In terms of hydrocarbon business, we must expand market territory while following the growth objectives of “keeping revenue at current level and raising the rate of return.” Last year, we successfully exploited the Oman market and formally entered the shale gas market. Additionally, we signed strategic cooperation framework agreement with a Chinese enterprise to jointly explore hydrocarbon projects, and currently Russia and Commonwealth of Independent States have joined the program. Besides, we must bridge the gap in high-threshold technology development by picking up the pace to acquire and merge foreign engineering companies.

The objectives of Infrastructure, Environment & Power Business Operations (IEPBO) is to “increase revenue and maintain profitability”. The aim of Chinese government’s Public-Private Partnership (PPP) policy being to “introduce private-sector funds, invest in infrastructure and expanding domestic market”, this coincides with CTCI’s policy in developing a stable long-term business. “The Belt and Road” (B&R) initiative, on the other hand, utilizes foreign reserves for the excessive capacity. Thus, to grasp the enormous business opportunities for PPP and the B&R initiative of China, we must maintain a keen sensitivity and take initiatives.

The mission of CTCI in the pursuit of sustainability is to provide optimized engineering services, while process optimization for EPC services is the foundation to improve technological expertise. Accordingly, we have specifically conducted review and improvement on operation process for engineering design, procurement, and construction dimensions respectively. Presently, some have been reached with preliminary outcome and are currently in the commissioning phase. We expect all colleagues to work together and continue to advance capabilities. Optimizing EPC process, however, is not the only way we can do to perfect our engineering services. We also expect to collect clients’ practical requirement and opinions for our proposed design or services in after-sales services for projects completed and handed over to clients. Consequently, we intend to grasp the future business opportunities in new plant constructions for existing clients while accumulating more experience in high-quality engineering services so that we could be prepared to develop new potential customers.

Strategy and Blueprint The speed and scope of economic fluctuations, industry changes and market shifts have accelerated and expanded in recent years, propelling us to stand up against the challenge of grasping trends of the future and prepare ourselves to establish a foundation for the global market. Looking ahead into the future, with the view of “envisioning with innovation and insight to the future”, we could be well-equipped to grasp the dynamic in the global engineering market with broader horizon and an open mind, taking challenges with positive and proactive mentality and continue to create new prospects, fly higher and see further.

With the successful extraction of shale gas in the United States, the global oil and petrochemical outlook has changed dramatically. As a result, the most booming and brisk market for petrochemical investment has shifted from OPEC to the United States. Additionally, we consider the B&R initiative of China to be equally important as it brings massive business opportunities for infrastructure projects. Over the past 30 years, China was fully committed to infrastructure development, accumulating solid technical capabilities and experiences to start exporting its capacity under the strategic support from the Chinese Government. The establishment of Asian Infrastructure Investment Bank ensures stable financing of EPC projects. The presence of technical capabilities and funds has invigorated this emerging market.

The two key points of our business: maximization of existing business and development of new ventures aim to trigger growth in revenue and expand the business scale. The business opportunities brought by the U.S. market and B&R initiative have intensified our confidence. To maximize existing business and develop new ventures not only requires us to grasp the market dynamics, more importantly; we have to possess the skills and capabilities to handle these tasks. The key to success lies in formidable integration capacity and sophisticated management capabilities. We need to be faster, better and more competitive in order to differentiate ourselves from the competitors. To improve our skills, we must strengthen the four managerial topics, including service optimization, talent fostering, establishing corporate brand image, and bring the overall group synergy into full practice. In terms of service optimization, we started incorporating the concept of Industry 4.0 to EPC management so that management becomes more exquisite and real time while changing our work processing methods from stage-wise to immediate, meaning a change or issue is dealt with at the time of happening. As for talent fostering, we must pick up the pace of talent fostering in order to quickly pass down the skills and experiences, while carrying out smooth transition and succession, enhancing our capabilities with a younger core. To comprehensively strengthen marketing, we exhibit professional and international brand image to the greater global communities to acquaint with CTCI. Last but not least, we drafted the development strategy related to the establishment of core products of each business operation unit and real-time exquisite project management, so that our resources will be utilized more effectively.

The international market is always full of challenges and opportunities. In the midst of the ever moving world trends and industrial environment, only continually upgrading our capabilities and envision with innovation would maintain the competitive advantage of CTCI. As long as we can sustain the value of innovative engineering service, drive towards the mission of “To Satisfy Our Customers with Optimized Engineering Services,” and complete all works for each owner with our best effort, CTCI will be able to maintain sustainable growth. To realize the vision of becoming “The Most Reliable Global Engineering Service Provider”, we must meet global customer satisfaction so that they will recognize CTCI’s services as Number One. Meanwhile, as higher capacity represents more responsibilities, we will remain dedicated to CTCI’s corporate principles of “Professionalism, Integrity, Teamwork, Innovation” to deliver more state-of-the-art quality projects, making greater contribution and giving back to the society. This is the best approach for us to fulfill our corporate social responsibilities.

Sincerely,

John T. Yu Chairman & CEO

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

Year Milestones 2015.03 CTCI Honored with the 4th "National Industrial Innovation Award--Deep Development of Industry Fundamental Technology Award" 2015.04 CTCI Corporation, Advanced Control & Systems Inc., and KD Holding Corporation ranked as "Grade A++" in the "2014 Information Disclosure and Transparency Rankings". 2015.05 In terms of the overall ranking in the Top 650 Service Enterprises by CommonWealth Magazine 2015, CTCI ranked as 28th, and retained Top 1 spot in the contractor sector for years in a row. It also ranked as 35rd in Top 50 Most Profitable Companies (net profit after tax). 2015.06 CTCI Corporation, Advanced Control & Systems Inc., and KD Holding Corporation Evaluated as Top 5% in the “2014 Corporate Governance Evaluation System” 2015.08 CTCI and KD Holding ranked the 29th and 4th in the categories of “large enterprise” and “mid-size enterprise” respectively in Corporate Social Responsibility” by CommonWealth Magazine in 2015. 2015.09 From the latest evaluation results of the Dow Jones Sustainability Index (DJSI), CTCI was selected for Emerging Markets Index Membership with excellent performance and, therefore, became a pioneer enterprise in the field of Engineering & Construction Industry in Taiwan 2015.10 CTCI group ranked the 103rd among “The International Design Firms”, the 122nd among “The International Contractors”, the 136th among “The Global Design Firms”, and the 149th among “The Global Contractors” in the 2015 ENR Rankings. 2015.11 CTCI and KD Holding recognized by the Taiwan Institute for Sustainable Energy with “Silver Award” and “Bronze Award” of services industry respectively under the Taiwan Top 50 Corporate Sustainability Report Award. CTCI was also granted the honors of “Transparency and Integrity Awards” and “Growth through Innovation Awards”. 2015.11 CTCI Won the 15th Public Construction Golden Quality Award for CPC Talin Flare Gas Recovery System (FGRS) Project

III. Corporate Governance Report 3.1 Organization Board of 3.1.1 Organization Chart Directors Remuneration Secretariat Committee of the Board Corporate Governance Committee Audit Dept. Audit Chairman Committee Domestic Subsidiaries Vice Chairman Management Strategy Overseas Regional Heads Committee Subsidiaries Managing Director of the Board President

Executive Management Infrastructure, Environment Hydrocarbon Business & Power Business Operations EPC Operations Plant Maintenance Business Environment & Resources Operations Operations (HBO) (EPCO) Operations (PMBO) Innovation R&D Center Business Operations (ERBO) (EMO) (IEPBO)

Engineering Legal and Compliance Marketing & Sales Marketing & Sales Business Development Project Engineering Marketing & Sales Sino Environmental Legal Dept. Dept. I (Taiwan) Infrastructure Dept. I Management Manager Dept. Department IT Division IT Dept. I KD Holding Corp. Services Corp. Division Division Division Division

Contract Management Marketing & Sales Civil & Building Dept. II Infrastructure Dept. II Maintenance IT Dept. II Leading Energy Corp. Dept. (SEA, India , Australia) Engineering Dept. Department Project Division Ⅰ (Taiwan, China) Infrastructure Division Mechanical QHSE Division Marketing & Sales & Equipment HD Resources Dept. III (ME, Africa) Infrastructure Dept. Ⅲ Engineering Dept Reliability HSE Management Management Corp. Finance Dept. Department Dept. Instrumentation Infrastructure & Control Project Division Ⅱ Marketing & Sales System Engineering Administration Dept. IV Power & Environment Marketing & Sales Dept. Quality Management Fortune Energy Corp. Accounting Dept. (S.E. Asia, India) Resources Division Dept. Dept. Center Engineering Piping Engineering Division Dept. F/A & Strategic Investment Planning Division Relation Office Power & Environment Project Division Ⅲ Resources Dept. Ⅰ Electrical (M.E. ) Engineering Dept. Corporate Administration Dept. Power & Environment Ⅱ Process Engineering Resources Dept. Dept.

Strategy and Business LNG Project Division Development Dept. Power & Environment Plant Commissioning Resources Dept. Ⅲ Dept.

AGS & PR Office Power & Environment Resources Project Procurement Dept. Project Service Marketing & Sales Dept. Management Dept. Division Administration Brand & PR Division Management Dept. Purchasing Dept. Proposal Dept. Estimating Dept. Procurement Proposal & Estimating Division Project Site Subcontracting Administration Dept. Division Dept. Estimating Dept. Project Control Dept. Logistics Dept. Human Resources Human Resources Technology Technology Construction Division Dept. Development Division Development Division Dept. Construction Logistics Dept.

Construction Operation Dept.

3.1.2 Operations and functions of the various departments Department Operations & Functions Immediate Secretariat of The Responsible for conducting the operations related to the boards Board of Board of directors, shareholders meetings, commissions and employee Directors stock warrant, stock affairs and M.O.P.S matters of the various member companies Auditing Office 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 QHSE Division Responsible for establishing the Company’s quality management President system, guiding various projects to establish the quality activity documents, leading the quality auditing operation of various permanent departments and projects, and researching various corrective actions against quality IT Division Responsible for defining the company’s information policy, planning and promoting the information systems, supervising the information dept. affairs of various affiliates Innovation Responsible for developing new products, innovating procedures R&D Center and developing new operating technology Executive Legal Dept. Responsible for handling disputes, litigation, arbitration, Management non-litigation Operations Contract Responsible for contract reviewing (EMO) Management Dept. Investment Responsible for liaising with shareholders, corporate investors Relation Office and the media, and providing investors with timely and correct information about the company’s operation Corporate Responsible for auditing the project cost, releasing commodity Administration price information and helping the cost-related system Dept. development Finance Dept. Responsible for supporting the project’s achievement of financial objectives, planning and executing important financial tasks and controlling the project risk to increase the company’s earnings Accounting Dept. Responsible for verifying the company’s income, providing the actual accounting information in a timely manner, and well-founding various financial management systems Strategy and Responsible for corporate strategy and developing new business Business Development Dept. Human Resources Responsible for human resource’s strategies and management, Dept. providing the talents corporate needs to meet corporate’s mission AGS & PR Office Responsible for managing the general affairs, administration, and Dept. external public relations to ensure corporate administration running well and keep good relations with external customers and medias. Project Responsible for the administrative general affairs of overseas and Site Administration domestic construction project sites to ensure the operation of Dept. administrative management at the site Brand Management Responsible for Corporate brand strategy and external Dept. communication 6

Department Operations & Functions Hydrocarbon Marketing & Sales Responsible for developing the market, collecting business Business Division information, establishing cooperative relations, striving for Operations bidding and winning opportunities, analyzing competitors’ (HBO) 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 Responsible for developing and integrating LNG projects related Division business Project Service Responsible for controlling the various information about Division refining and petro-chemical projects, and achieving the objectives together with the projects Proposal & Responsible for defining the quotation strategies and work plans, Estimating Division organizing the quotation taskforce, drafting the project execution strategies and development execution plan, executing the project risk assessment, preparing technical and business tender documentation, clarifying and negotiating after tender submission, and preparing case closure report of the quotation Technology Responsible for collecting refining and petro-chemical production Development process technical information, providing technical advice, Division assisting projects/business to seek jobs, assisting the project planning test run taskforce of the Business Dept., executing the test run to complete projects as scheduled Infrastructure, Business Responsible for developing the market, collecting business Environment Development information, establishing cooperative relations, striving for & Power Division bidding and winning opportunities, analyzing competitors’ Business status, planning strategic alliances, preparing qualification Operations proposals and reviewing & suggesting tender documentation, (IEPBO) participating in tender opening, negotiating for contracts and maintaining after-sale service

Infrastructure Responsible for executing the projects and developing the Division business about MRT, HSR, light rail, steel plant, air separation plant, desulfuration and De-NOx

Power & Responsible for executing the projects and developing the Environment business about gas power plants, cogeneration plants, coal-fired Resources Division power plants, incinerators, sewage and pure water treatment plants, water recycling and seawater desalination plants

Technology Responsible for collecting infrastructure and energy & Development environment production process technical information, providing Division technical advice, assisting projects/business to seek jobs, assisting the project planning test run taskforce of the Business Dept., executing the test run to complete projects as scheduled

Department Operations & Functions EPC Engineering Responsible for executing quality, HSE and cost control of project Operations Management engineering management Division Engineering Responsible for coordinating and integrating the human Division 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 Responsible for the procurement, inspection and transportation Division business, and supervising and confirming the quality/SHE requirements about all of the procurement documents Construction Responsible for supporting interaction of various business Division divisions and subsidiaries, and supervising the compliance of various quotations and project site operations with the company’s requirement Plant Responsible for hydrocarbon plants maintenance business Maintenance Business Operations

3.2 Directors and Management Team 3.2.1 Directors April 30th, 2016 Date Executives, Directors Current First Shareholding or Supervisors who Shareholding when Shareholding Spouse & Minor Date Term Elected by Nominee Experience are spouses or Title Nationality Name Elected (Rep. of juridical Shareholding Other Position Elected (Years) (Rep. of Arrangement (Education) within two degrees person) juridical of kinship person) Shares % Shares % Shares % Shares % Title Name Relation -PMD 61, Harvard Business School, USA -B.S., Electrical John T. Yu Feb. 8, Jun. 26, 2002 912,170 0.12 Engineering, National Chairman R.O.C. (Rep. of GRQ 3 912,170 0.12 2,000,000 0.26 0 0 Taiwan University Note 1 - - - Investment 2014 (Feb. 9, (1,103,471) (0.14) -Senior Vice President / Corporation) 1999) Executive Vice President / President, CTCI Corporation -MBA, EMBA program in International Business Management, National Taiwan University John H. Lin Feb. 8, Vice Jun. 26, 2002 344,436 0.05 -B.S., Mechanical R.O.C. (Rep. of Innovest 3 344,436 0.05 450,000 0.06 0 0 Engineering, National Note 2 - - - Chairman Investment 2014 (Jun. 25, (363,355) (0.05) Cheng Kung University Corporation) 2002) - Senior Vice President / Executive Vice President / President, CTCI Corporation -MBA, EMBA Program in International Business Management, National Taiwan University Andy Sheu Jun. 23, -B.S., Power Mechanical Managing (Rep. of Sino Jun. 26, 2006 1,028 0.00 Engineering, National R.O.C. Environmental 3 1,028 0.00 1,966 0.00 0 0 Tsing-Hua University Note 3 - - - (1,031,281) (0.14) Director Services 2014 (Jun. 26, -Managing Director, CTCI Corporation) 2014) (Thailand) Co., Ltd. - Senior Vice President / Executive Vice President / President, CTCI Corporation

-Columbia University, USA. Master in Independent Jun. 26, Jun. 26, Computer Science and R.O.C. Johnny Shih 3 0 0 0 0 0 0 0 0 Business Administration Note 5 - - - Director 2014 2014 (Note 4) -Vice Chairman, Far eastern International Bank Independent Jun. 26, Jun. 26, S.J.D., Harvard R.O.C. Jack Huang 3 0 0 0 0 0 0 0 0 Note 6 - - - Director 2014 2014 University -M.S., Institute of traffic and Transportation, National Chiao Tung University Independent Jun. 26, Jun. 26, -National Policy Advisor -Minister without R.O.C. Frank Fan 3 0 0 0 0 0 0 0 0 to the President - - - Director 2014 2014 Portfolio & Chairperson of Public Construction Commission, Executive Yuan Jun. 26, Jun. 23, -Chairman, USI Director R.O.C. Quintin Wu 3 0 0 0 0 0 0 0 0 Note 7 - - - 2014 2006 Corporation -MA, the University of Texas at Dallas -Country Manager, G.E. -Chairman, Delta Jun. 26, Feb. 8, Capital Electronics Inc. Director R.O.C. Yancey Hai 3 0 0 0 0 0 0 0 0 - - - 2014 2002 -Vice President, -Director, Delta Citibank, Taipei Branch Networks, Inc. -CEO, Delta Electronics Foundation -MBA, Wharton School, University of Jun. 26, Jun. 14, Pennsylvania Director R.O.C. Leslie Koo 3 0 0 0 0 0 0 0 0 Note 8 - - - 2014 2005 -Chairman & President, Taiwan Cement Corporation -M.S. & Ph.D., Chemical Engineering, University -Chairman, CTCI of Wyoming, USA Jun. 26, Apr. 1, Foundation -President & Chairman, Director R.O.C. Wenent Pan 3 0 0 0 0 0 0 0 0 -Chairman, Gintech - - - 2014 2012 CPC Corporation Energy Corporation -Chairman & CEO, Kuo Kuang Power Co.

-MBA, Harvard Business School -Executive Director, -Independent Director, Morgan Stanley Group Far Eastern Mar. 26, -Executive Vice Jun. 26, International Bank President, China Director R.O.C. Bing Shen 3 1999 0 0 0 0 0 0 0 0 -Independent Director, - - - 2014 Development Industrial (Note 9) Far Eastern New Bank Century Corporation -President, CDIB & Partners Investment Holding Corp. Apr. 6, -MBA, University of Teng-Yaw Yu Jun. 26, 1979 60,862,051 7.97 Leicester, UK Director R.O.C. (Rep. of CTCI 3 60,862,051 7.97 818 0.00 0 0 - CEO,CTCI Foundation - - - (36,650) (0.00) -CEO, Taiwan Green Foundation) 2014 (Jun. 26, 2014) Productivity Foundation -EMBA, Business Administration, National Taiwan University of Science and Technology -M.S., Mechanical Michael Yang Jun. 22, Engineering, National (Rep. of Crown Jun. 26, 2011 500 0.00 Taiwan University Director R.O.C. 3 500 0.00 347,097 0.05 0 0 Note 10 - - - Asia 2 (0) (0) -B.S., Mechanical Investment 2014 (Mar. 7, 2016) engineering, Tatung Limited) University - Senior Vice President/ Executive Vice President, CTCI Corporation Note 1: Chairman, CTCI Corporation / Chairman, CTCI Overseas Corp., Ltd. / Director, Jing Ding Engineering & Construction Co., Ltd. / Director, Pan Asia Corporation / Director, TSC Venture Capital Corporation / Director, Gintech Energy Corporation / Director, Utech Solar Co., Ltd. / Director, Taiwan Cement Co., Ltd. / Supervisor, China Steel Chemical Corporation / Director, TSRC Corporation / Chairman, CTCI Education Foundation / Director, Taiwan Foundation for Heavy Ion Radiotherapy

Note 2: Vice Chairman, CTCI Corporation / Chairman, KD Holding Corporation / Chairman, CTCI (Thailand) Co., Ltd. / Deputy Chairman, CTCI Overseas Corp., Ltd. / Director, CIMAS Engineering Co., Ltd. / Director, Shang Ding Engineering & Construction Co., Ltd. / Chairman, Universal Engineering (BVI) Corporation / Director, Superiority (Thailand) Co., Ltd. / Chairman, CTCI Singapore Pte. Ltd. / Chairman, G.D. Development Corporation / Vice Chairman, BORETECH Resource Recovery Engineering Co., Ltd. (Cayman)

Note 3: Managing Director, CTCI Corporation / Director, CTCI (Thailand) Co., Ltd. / Chairman, CTCI Overseas (BVI) Corporation / Director, CTCI Overseas Corp., Ltd. / Vice Chairman, CIMAS Engineering Co., Ltd. / Chairman, CTCI Americas, Inc. / Director, CTCI Arabia Ltd.

Note4: Mr. Johnny Shih is not the director or supervisor of the Company during the period from Jun. 15, 2005 to Jun. 25, 2014.

Note5: Vice Chairman, Far Eastern New Century Corporation / Vice Chairman, Oriental Union Chemical Corporation / Chairman, Everest Textile Company Limited / Director, Asia Cement Corporation

Note 6: Partner-in-Charge, Jones Day Taipei Office / Independent director, Taiwan Mobile Co., Ltd / Independent director, WPG Holdings Limited / Independent director, Systex Corporation / Director, Yulon Motor Co., Ltd

Note 7: -Chairman, USI Corporation, China General Plastics Corp., Taita Chemical Co., Ltd, Asia Polymer Corporation, Union Polymer International Investment Corporation, Acme Electronics Corporation, USI Optronics Corporation, Swanson Plastics Corporation, Swanson Technologies Corporation, Chong Loong Trading Co. Ltd., USIFE Investment Co., Ltd., CGPC Polymer Corporation, APC Investment Corporation, Taiwan United Venture Capital Corp., USI Management Consulting Corp., Taiwan United Venture Management Corporation, Thintec Materials Corporation, Acme Electronics (Cayman) Corp., INOMA Corporation, USI Education Foundation -Director, Taiwan VCM Corporation, China General Terminal & Distribution Company, USI (Hong Kong) Company Limited, Swanlake Traders Ltd., USI International Corporation, Acme Components (Malaysia) Sdn. Bhd., Forever Young Co., Ltd., Curtana Company Limited, Swanson Plastics (Singapore) Pte. Ltd., Swanson Plastics (Malaysia) Sdn. Bhd., Swanson International Limited, Swanson Plastics (India) Private Limited, Swanson Plastics (Nantong) Co., Ltd., Swanson Plastics (Kunshan) Co., Ltd., Golden Amber Enterprises Ltd., ACME Electronics (BVI) Corporation, ACME Electronics (Kunshan) Co., Ltd., ACME Electronics (Guangzhou) Co., Ltd., Forum Pacific Trading Ltd., Taita (BVI) Holding Co., Ltd., APC (BVI) Holding Co., Ltd., CGPC (BVI) Holding Co., Ltd., CGPC America Corporation, China General Plastics (Hong Kong) Ltd., Krystal Star International Corporation, A.S. Holdings (UK) Limited, ASK-Swanson (Kunshan) Company Limited, Acme Ferrite Products Sdn. Bhd., Swanson Plastics (Tianjin) Co., Ltd., USIM Corporation Sdn. Bhd., Cypress Epoch Limited, Ever Conquest Global Limited, Ever Victory Global Limited, Dynamic Ever Investments Ltd., USIG (Shanghai) Co., Ltd., PT. Swanson Plastics Indonesia, Emerald Investment Corporation, KHL Venture Capital Co., Ltd., KHL IB Venture Capital Co., Ltd. -President, Union Polymer International Investment Corporation, USI Management Consulting Corp. -CEO, USI Corporation, Asia Polymer Corporation, China General Plastics Corp., Taita Chemical Company Limited., Acme Electronics Corporation, USI Optronics Corporation -Executive Supervisors, Chinese National Federation of Industries

Note 8: Chairman & President, Taiwan Cement Corporation / Chairman & President, China Synthetic Rubber Corp. / Chairman, Taiwan Prosperity Chemical Corporation / Chairman, E-ONE Moli Energy Corp. / Chairman, TA-HO Maritime Corporation / Chairman, Ho-Ping Power Company / Managing Director, Industrial Bank of Taiwan / Director, China Steel Chemical Co.,

Note9: 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.

Note10: Director & President, CTCI Corporation / Chairman, Innovest Investment Corporation / Director, KD Holding Corporation / Director, Resources Engineering Services Inc. / Director, CTCI Overseas Corp., Ltd. / Director, CTCI Chemicals Corporation / Director, CINDA Engineering & Construction Pvt., Ltd. / Director, Pan Asia Corporation / Chairman, Crown Asia 2 Investment Limited

Major shareholders of the institutional shareholders April 30th, 2016 Name of institutional shareholders Major shareholders of the institutional shareholders GRQ Investment Corporation CTCI Corporation (100%) Innovest Investment Corporation CTCI Corporation (100%) KD Holding Corporation (93.15%), A-Lang, Chang (0.94%), Tsung-Chih, Tseng (0.29%), Wei-Hsiung, Chan Sino Environmental Services Corporation (0.29%), Ching-Yao, Teng (0.23%), Ssu-Jung, Tsai (0.20%), Shu-Hui , Wu (0.20%), Yu-Ling, Teng (0.18%), Sen-Ming, Lu (0.17%), Hui-Ching, Lin (0.15%) Crown Asia 2 Investment Limited GRQ Investment Corporation (100%) CTCI Foundation N/A

Major shareholders of the major shareholders that are juridical persons April 30th, 2016 Name of juridical persons Major shareholders of the juridical persons Chiyoda Corporation(9.17%), Chinatrust Commercial Bank Trust (8.09%), CTCI Foundation(7.97%), Fubon Life Insurance Co., Ltd.(5.80%), Cathay Life Insurance Co., Ltd.(2.29%), American Funds Developing World Growth CTCI Corporation and Income Fund(2.18%), Chunghwa Post Co., Ltd.(2.14%), USI Corporation(1.99%), Asia Polymer Corporation(1.90%), KGI Bank(1.88%) CTCI Corporation(58.05%), Fubon Life Insurance Co., Ltd. (6.89%), Nan Shan Life Insurance Co., Ltd.(3.93%), Parkwell Investment Limited(1.60%), Julius Baer Multipartner(0.73%), Fubon Financial Holding Venture Capital KD Holding Corporation Corp.(0.71%), Deutsche Invest I- Deutsche Invest I Asian Small/Mid Cap (0.57%), Taiwan Life Insurance Co, Ltd.(0.51%), SinoPac Securities Corporation Co., Ltd.(0.47%), Wang Sheng song(0.42%) GRQ Investment Corporation CTCI Corporation (100%)

Professional qualifications and independence analysis of directors and supervisors April 30th, 2016 Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Number of Criteria Independence Criteria(Note) Experience Other Public

Companies in An Instructor or Higher Position in a A Judge, Public Prosecutor, Attorney, Have Work Experience in Which the Department of Commerce, Law, Certified Public Accountant, or Other the Areas of Commerce, Individual is Finance, Accounting, or Other Professional or Technical Specialist Who Law, Finance, or Accounting, Concurrently Academic Department Related to has Passed a National Examination and or Otherwise Necessary for 1 2 3 4 5 6 7 8 9 10 Serving as an the Business Needs of the Company been Awarded a Certificate in a the Business of the Independent Name in a Public or Private Junior College, Profession Necessary for the Business of Company College or University the Company Director John T. Yu - - V V V V V V 0 John H. Lin - - V V V V V V 0 Andy Sheu - - V V V V V V 0 Johnny Shih - - V V V V V V V V V V V 0 Jack Huang - V V V V V V V V V V V V 3 Frank Fan - - V V V V V V V V V V V 0 Quintin Wu - - 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 Leslie Koo - - V V V V V V V V V V V 0 Wenent Pan - - V V V V V V V V V 2 Bing Shen - - V V V V V V V V V V V 2 Teng-Yaw Yu - - V V V V V V V V V 0 Michael Yang - - V V V V V V 0 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 April 30th, 2016 Managers who Spouse & Shareholding are Spouses or Date Shareholding Minor by Nominee Within Two Title Nationality Name Experience(Education) Other Position Effective Shareholding Arrangement Degrees of Kinship Shares % Shares % Shares % Title Name Relation -Chairman, Innovest Investment Corporation -Director, KD Holding -EMBA, Business Administration, Corporation National Taiwan University of Science -Director, Resources Engineering and Technology Services Inc. -M.S., Mechanical Engineering, -Director, CTCI Overseas Corp., Michael Jun. 26 , National Taiwan University Ltd. President R.O.C. 0 0 347,097 0.05 0 0 -B.S., Mechanical engineering, Tatung - - - Yang 2014 -Director, CTCI Chemicals University Corporation -Vice President/ Senior Vice President/ -Director, CINDA Engineering & Executive Vice President, CTCI Construction Pvt., Ltd. Corporation -Director, Pan Asia Corporation -Chairman, Crown Asia 2 Investment Limited -Chairman, GRQ Investment -MBA, Global EMBA of National Corporation Executive Chengchi University -Director, Jingding Engineering Mark W. Jan. 1 , -Mechanical Engineering, National &Construction Co., Ltd. Vice R.O.C. 408,732 0.05 150,205 0.02 0 0 - - - H. Yang 2010 Taipei Institute of Technology -Director, CTCI (Thailand) Co., President -Vice President/ Senior Vice President, Ltd. CTCI Corporation -Director, CTCI Overseas (BVI) Corporation -Chairman, CTCI Arabia Ltd. -MBA, Chulalongkorn University, -Director, CTCI (Thailand) Co., Thailand Ltd. Executive -B.S., Civil Engineering, Feng-Chia -Director, CTCI Americas, Inc. M. H. Jan. 1 , University -Director, CTCI Overseas (BVI) Vice R.O.C. 10,000 0.00 201,431 0.03 0 0 - - - Wang 2013 -Vice President/ Senior Vice President, Corporation President CTCI Corporation -Director, CCJV P1 Engineering & -Deputy Managing Director/ Managing Construction Sdn. Bhd. Director, CTCI (Thailand) Co., Ltd. -Director, MIE Industrial Sdn. Bhd.

-Chairman, CINDA Engineering & Construction Private Limited -M.S., Management, National Sun -Director, E&C Engineering Yat-sen University Executive Corporation Pao-Yao Jan. 1 , -B.S., Mechanical Engineering, -Director, Innovest Investment Vice R.O.C. 12,628 0.00 326,000 0.04 0 0 Tatung University - - - Pan 2006 Corporation President - Vice President/ Senior Vice President, -Director, Pan Asia Corporation CTCI Corporation -Director, Metro Consulting Service Corporation -Chairman, CTCI Engineering & Construction Sdn. Bhd. -Ph.D., Chemical Engineering, National -Director, KD Holding Tsin Hua University Corporation -MBA, EMBA Program in Accounting, -Director, Sino Environmental National Taiwan University Executive Services Corporation Ming-Cheng Jan. 1 , -M.S., Chemical Engineering, National -Director, Powertec Energy Vice R.O.C. 2,000 0.00 69,000 0.01 0 0 Tsin Hua University - - - Hsiao 2006 Corporation President -B.S., Chemical Engineering Tamkang -Director, Unisurpass University Technology Co.,Ltd - Senior Vice President, CTCI -Director, Unimighty Co., Ltd. Corporation -Director, Crown Asia 2 Investment Limited -MBA, EMBA Program in Finance, Senior Tien-Nan National Taiwan University Jan. 1 , Vice R.O.C. Pan 127,000 0.02 437,863 0.06 0 0 -B.S., Business Administration, National None - - - 2005 President (Note 1) Taiwan University -Vice President, CTCI Corporation -B.S., Mechanical Engineering, Senior Tam-Kang University Ching-Lin Jan. 1 , -Chairman, Jingding Engineering Vice R.O.C. 278,000 0.04 300,559 0.04 0 0 -Vice President, CTCI Corporation - - - Hsu 2012 & Construction Co., Ltd. President -President, Jingding Engineering & Construction Co., Ltd.

-Ph.D., Business Administration, Macau University of Science and Technology -M.S., Business Administration, Macau University of Science and Technology -Supervisor, Resources Senior -Executives Program, Graduate School Andrew Jan. 1 , Engineering Services Inc. of Business Administration, NCCU Vice R.O.C. 30,250 0.00 229,575 0.03 0 0 -Supervisor, Level Biotechnology - - - Tsai 2013 -B.S., Feng Chia University President Inc. -President, E&C Engineering Corporation -Chairman, Shang Ding Engineering & Construction Co., Ltd. -EMBA, Executive Master of Business Administration, National Central University Senior -B.S. Mechanical Engineering, TamKang Brad Chen Jul. 1 , University Vice R.O.C. 24,000 0.00 0 0 0 0 None - - - (Note 2) 2013 -General Manager, Inner Mongolia President Dongyuan Science and Technology Co., Ltd. -Senior Vice President, Oriental Petrochemical (Shanghai) Corp. Senior -B.S., National Taipei University of Jung-Yu Jan. 1 , Technology -Supervisor, HD Resource Vice R.O.C. 604 0.00 211,000 0.03 0 0 - - - Han 2016 -Senior General Manager/ Vice Management Corporation President President, CTCI Corporation -B.S., Department of Naval Senior Chen-San Jan. 1 , Architecture, National Kaohsiung Vice R.O.C. 348,116 0.05 152,000 0.02 0 0 Marine University -Director, Pan Asia Corporation - - - Hu 2016 President -Senior General Manager/Vice President, CTCI Corporation -M.S., Mechanical Engineering, Senior National Chiao Tung University Jan. 1 , -B.S., Mechanical Engineering, National -Director, Sino Environmental Vice R.O.C. Todd Chen 67,099 0.01 8,000 0.00 0 0 - - - 2016 Chiao Tung University Services Corporation President -Senior General Manager/ Vice President, CTCI Corporation -B.S., Chemical Engineering, Tunghai Vice Kai Lee Jan. 1 , University R.O.C. 0 0 206,000 0.03 0 0 None - - - President (Note 3) 2009 -Senior General Manager, CTCI Corporation

-M.S., Chemical Engineering, National Cheng Kung University Vice C. F. Chiou Jan. 1 , -B.S., Chemical Engineering, National R.O.C. 334,401 0.04 0 0 0 0 None - - - President (Note 4) 2007 Central University, Taiwan -Senior General Manager, CTCI Corporation -Ph.D., Chemical Engineering, TAMU, USA -M.S., Chemical Engineering, TAMU, USA -B.S., Chemistry, National Tsing-Hua Vice Teh-Ming Jan. 1 , University, Taiwan -Supervisor, CTCI Chemicals R.O.C. 316,064 0.04 0 0 0 0 - - - President Tao 2006 -Senior Research Engineer, Dowell Corporation Schlumberger (USA) SR-RE -CEO, CTCI Foundation -Project Manager, CTCI Foundation -Director, Industrial Safety and Health, CPC Corporation -EMBA, Executive Master of Business Administration of National Cheng Chi University -M.S., Mechanical Engineering, Vice Jan. 1 , -Director, GRQ Investment National Central University R.O.C. Steve Jean 1,668 0.00 151,000 0.02 0 0 Corporation - - - President 2011 -B.S., Civil Engineering , National Taipei Institute of Technology -General Director, CIMAS Engineering Co., Ltd. -M.S., Management, National Taiwan University of Science and Technology Vice Jan. 1 , -B.S., Ming Chi University of -Director, CTCI Engineering & R.O.C. M. G. Lee 0 0 113,029 0.01 0 0 - - - President 2013 Technology Construction Sdn. Bhd. -Senior General Manager, CTCI Corporation -LL.M., Legal Studies, University of Illinois Springfield Vice Po-Chien Jan. 1 , -LL.B., Department of Law, Soochow -Director, Fortune Energy R.O.C. 117,144 0.02 0 0 0 0 - - - President Wang 2013 University Corporation -Senior General Manager, CTCI Corporation

-B.S., Civil Engineering, National Cheng Vice Ching-Hsiang Jan. 1 , Kung University -Supervisor, E&C Engineering R.O.C. 244,904 0.03 30,000 0.00 0 0 - - - President Tseng 2014 -Senior General Manager, CTCI Corporation Corporation -M.S., Mechanical Engineering, National Taiwan University of Science and Technology Vice Shen-Peng Apr. 1 , -Director, Jingding Engineering -Mechanical Engineering, St. John's R.O.C. 10,000 0.00 175,289 0.02 0 0 & Construction Co., Ltd. - - - President Liao 2014 University of Technology -Executive Vice President, JDEC Corporation -B.S., Mechanical Engineering, Tamkang University Vice Tsai-Ming Apr. 1 , -Chemical Engineering, National Taipei R.O.C. 303,912 0.04 12,855 0.00 0 0 -Director, CTCI Arabia Ltd. - - - President Wang 2014 Institute of Technology -Senior General Manager, CTCI Corporation -M.S., Chemical Engineering, National Central University -Chairman, CIPEC Construction, Vice Apr. 1 , -B.S., Chemical Engineering, Inc. R.O.C. Min-Li Lee 95,156 0.01 18,000 0.00 0 0 - - - President 2014 Chung-Yuan Christian University -Chairman, Accuracy -Senior General Manager, CTCI International, Inc. Corporation -Executive Master of Business Administration, National Sun Yat-Sen University Vice Jing-Shing Apr. 1 , -Supervisor, GRQ Investment -Chemical Engineering, National Taipei R.O.C. 258,307 0.03 0 0 0 0 Corporation - - - President Wu 2014 University of Technology -Senior General Manager, CTCI Corporation -EMBA, Executive Master of Business Administration of National Central University -B.A., Economics, Soochow University, Vice Jan. 5 , -Supervisor, Gintech Energy Taiwan R.O.C. J.H. Chen 24,000 0.00 0 0 0 0 Corporation - - - President 2015 -VP, Human Resources Center, Integrated Business Services Center, Coretronic Corporation -CHO, WPG Holdings

-B.S. in Nuclear Engineering, National Vice Mar. 12, Tsing-Hua University -Director, Innovest Investment R.O.C. Y. S. Liao 98,000 0.01 0 0 0 0 - - - President 2015 -President, E&C Engineering Corporation Corporation -Director, Shang Ding -MBA, EMBA Program in Finance, Engineering & Construction Co., National Taiwan University Ltd. -MBA, University of -Director, SINOGAL - Waste Massachusetts-Boston, USA Services Co., Ltd. Vice -B.S., Business Administration, -Supervisor, Yuan Ding Mar. 28, Tamkang University Resources Management Corp. President R.O.C. Patrick Lin 57,280 0.01 240,000 0.03 0 0 - - - 2007 -Director, Financial Division, Coretronic -Supervisor, Xiang Ding & CFO Corporation Environmental Consultant -Manager, Financial Division, Powerchip (shanghai) Co., Ltd. Technology Corporation -President, GRQ Investment -Director, Societe Generale Corporate & Corporation Investment Banking -President, Innovest Investment Corporation -Supervisor, Sino Environmental -EMBA, National Chengchi University Accounting Jun. 13, Services Corporation -B.S., Accounting, Soochow University R.O.C. SH Lin 5,000 0.00 156,649 0.02 0 0 -Supervisor, G.D. Development - - - Officer 2008 -General Manager, CTCI Corporation Corporation

Note1: SVP Tien-Nan Pan is dismissed on Jan. 4, 2016. Note2: SVP Brad Chen is dismissed on April 1, 2015. Note3: VP Kai Lee is dismissed on Oct. 6, 2015. Note4: VP C. F. Chiou is dismissed on Nov. 15, 2015.

3.3 Remuneration of Directors, President, and Vice President 3.3.1 Remuneration of Directors December 31st, 2015; Unit: NT$ thousands; thousand shares Remuneration Ratio of total Relevant remuneration received by directors who are also employees Ratio of total compensation Compensation Base remuneration Salary, Bonuses, Exercisable New Restricted (A+B+C+D+E+F+ paid to Compensation Pension Fund(B) Directors’ Allowances(D) (A+B+C+D) to and Allowances Pension Fund(F) Employees’ Compensation Employee Stock Employee Shares directors from Compensation (C) net income (%) (G) G) to net an invested Title Name (A) (E) Options (H) (I) income(%) company All Consolidated other than the All All All All All All All CTCI All All All company’s CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated Entities CTCI Consolidated CTCI Consolidated CTCI Consolidated subsidiary Entities Entities Entities Entities Entities Entities Entities Cash Stock Cash Stock Entities Entities Entities John T. Yu Chairman (Rep. of GRQ Investment Corporation) John H. Lin Vice (Rep. of Innovest Chairman Investment Corporation) Andy Sheu (Rep. of Sino Managing Environmental Director Services Corporation) (Note1) Independent Johnny Shih 10,800 11,000 0 0 15,000 15,000 28,668 33,405 2.67 2.91 8,498 9,937 667 667 116 0 116 0 2,247 2,247 0 0 3.12 3.44 0 Jack Huang Director Frank Fan Quintin Wu Yancey Hai Leslie Koo Wenent Pan Bing Shen Director Teng-Yaw Yu (Rep. of CTCI Foundation) Takao Kamiji (Rep. of Crown Asia 2 Investment Limited) Note 1: NT$ 667 thousands are allocated to the pension plan in 2015.

Name of Directors

Bracket Total of (A+B+C+D) Total of (A+B+C+D+E+F+G) All Consolidated All Consolidated CTCI CTCI Entities Entities Under NT$ 2,000,000 Takao Kamiji Takao Kamiji Takao Kamiji Takao Kamiji Andy Sheu / Johnny Shih / Andy Sheu / Johnny Shih / Johnny Shih /Jack Huang / Johnny Shih /Jack Huang / Jack Huang / Frank Fan / Jack Huang / Frank Fan / Frank Fan / Quintin Wu / Frank Fan / Quintin Wu / NT$2,000,000 ~ NT$5,000,000 Quintin Wu / Yancey Hai / Quintin Wu / Yancey Hai / Yancey Hai / Leslie Koo / Yancey Hai / Leslie Koo / Leslie Koo / Wenent Pan / Leslie Koo / Wenent Pan / Wenent Pan / Bing Shen / Wenent Pan / Bing Shen / Bing Shen / Teng-Yaw Yu Bing Shen / Teng-Yaw Yu Teng-Yaw Yu Teng-Yaw Yu NT$5,000,000 ~ NT$10,000,000 John H. Lin NT$10,000,000 ~ NT$15,000,000 John H. Lin Andy Sheu Andy Sheu John T. Yu John T. Yu NT$15,000,000 ~ NT$30,000,000 John T. Yu John T. Yu John H. Lin John H. Lin NT$30,000,000 ~ NT$50,000,000

NT$50,000,000 ~ NT$100,000,000

Over NT$100,000,000

Total

3.3.2 Compensation of President and Executive Vice President December 31st, 2015; Unit: NT$ thousands; thousand shares Ratio of total Compensation Exercisable paid to the Bonuses and Employees’ compensation New Restricted Salary(A) Pension Fund (B) Employee Stock president and Allowances (C) Compensation (D) (A+B+C+D) to net Employee Shares executive vice Options income (%) president Title Name from an All invested All All All All All All CTCI Consolidated company CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated CTCI Consolidated other than the Entities Entities Entities Entities Entities Entities Entities company’s Cash Stock Cash Stock subsidiary Michael President Yang Mark W. H. 8,313 11,823 1,448 1,448 16,083 16,083 245 0 245 0 1.28 1.45 1,487 1,487 0 0 0 Executive Yang Vice President M. H. Wang Note: Pension contributed according to actuaries’ report and resolution of the board of directors’ meeting.

Name of President and Executive Vice President Bracket 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 Michael Yang / Mark W. H. Yang / M. H. Wang Michael Yang / Mark W. H. Yang / M. H. Wang NT$10,000,000 ~ NT$15,000,000 NT$15,000,000 ~ NT$30,000,000 NT$30,000,000 ~ NT$50,000,000 NT$50,000,000 ~ NT$100,000,000 Over NT$100,000,000 Total

Employees’ Compensation Granted to Management Team Unit: NT$ thousands Employee Bonus Ratio of Total Employee Bonus Title Name - in Stock Total Amount to Net - in Cash (Fair Market Value) Income (%) Managing Director Andy Sheu President Michael Yang Executive Vice President Mark W. H. Yang Executive Vice President M. H. Wang Senior Vice President Ching-Lin Hsu Senior Vice President Andrew Tsai Senior Vice President Ming-Cheng Hsiao Senior Vice President Pao-Yao Pan Vice President Teh-Ming Tao Vice President M. G. Lee Vice President Steve Jean Executive Vice President Chen-San Hu 0 1,395 1,395 0.07 Officers Vice President Jung-Yu Han Vice President Po-Chien Wang Vice President Ching-Hsiang Tseng Vice President Shen-Peng Liao Vice President Tsai-Ming Wang Vice President Min-Li Lee Vice President Todd Chen Vice President Jing-Shing Wu Vice President J.H. Chen Vice President Y. S. Liao Vice President & CFO Patrick Lin Accounting Officer SH Lin Note: The distributed amount is based on the total amount approved by Board of Directors and calculated accordingly to each executive officers’ on-job days in the previous year.

3.3.3 Comparison of Remuneration for Directors, Supervisors, Presidents and Executive Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and Executive Vice Presidents Unit: NT$ thousands Year 2014 2015 CTCI All Consolidated Entities CTCI All Consolidated Entities Title Total Ratio to net Total Ratio to net Total Ratio to net Total Ratio to net remuneration income (%) remuneration income (%) remuneration income (%) remuneration income (%) Directors Supervisors 99,360 5.28 106,160 5.64 89,838 4.40 99,724 4.89 Presidents and Executive Vice President

A. The compensation of Directors and Supervisors Directors and Supervisors are paid traveling allowance, Directors/Supervisors remuneration and Committee remuneration annually. Therefore, the compensation of each year keeps steady with total amount paid less than 3% of the annual net income after income tax. The traveling allowance is stipulated with reference to other public listed companies and companies within the similar industry field. The remuneration is stipulated per the section of profit allocation in Articles of Incorporation. The remuneration of Directors/Supervisors who hold concurrent positions in the affiliates is stipulated under the same standard. B. The compensation of the President and Executive Vice Presidents The annual compensation includes payroll, awards, bonus and Directors’/Supervisors’ fee. Payroll is stipulated with the approval of the Personnel Committee, Remuneration Committee and the Board of Directors referring to the Company operation, budgeted increase rate and personal key performance. The overall incremental rates for the recent years are around 3%. Awards are stipulated with the approval of the Personnel Committee, Remuneration Committee and the Board of Directors referring to the Company operation, budget and personal key performance. The award of the recent years is similar. Bonus is stipulated per the section of profit allocation in Article of Incorporation. The total amount of bonus is distributed in proportion to the overall payroll, which corresponds to the bonus distribution of all the other employees. The Directors’/Supervisors’ fee (applicable to all affiliates) is at a fixed number with reference to the average level of the companies within the similar industry field. C. Future risks association The standard, structure and system of the compensation of Directors, Supervisors, President and Executive Vice Presidents are subject to future risk factors and will not encourage Directors, Supervisors, President and Executive Vice Presidents to risk danger in desperation for pursuit of rewards in order to avoid the Company loss suffering even after the compensation payment.

3.4 Implementation of Corporate Governance 3.4.1 Board of Directors A total of 7 meetings of the board of directors were held in the previous period, Directors’ attendance was as follows: (As of March 31, 2016) Attendance Attendance Title Name By Proxy Remarks in Person rate (%) John T. Yu Chairman (Rep. of GRQ Investment 7 0 100 Corporation) John H. Lin Vice (Rep. of Innovest 7 0 100 Chairman Investment Corporation) Andy Sheu Managing (Rep. of Sino Environmental 7 0 100 Director Services Corporation) Independent Johnny Shih 6 1 86 Director Independent Jack Huang 7 0 100 Director Independent Frank Fan 7 0 100 Director Director Quintin Wu 5 2 71

Director Yancey Hai 5 2 71

Director Leslie Koo 4 3 57

Director Wenent Pan 5 2 71

Director Bing Shen 7 0 100 Be dismissed Takao Kamiji on March 6, Director (Rep. of Crown Asia 2 5 0 83 2016 and shall Investment Limited) present 6 times. Be newly appointed on Michael Yang March 7, 2016 Director (Rep. of Crown Asia 2 0 1 0 and shall Investment Limited) present 1 times. Teng-Yaw Yu Director 7 0 100 (Rep. of CTCI Foundation)

Other mentionable items: 1. If there are the matters referred to in Article 14-3 of Securities and Exchange Act and resolutions of the directors’ meetings objected to by Independent Directors or subject to qualified opinion and recorded or declared in writing, the dates of meetings, sessions, contents of motions, all independents’ opinion and the Company’s response to independent directors’ opinion should be specified: None 2. If there is Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motions, causes for avoidance and voting should be specified: (1) Directors’ Names: Andy Sheu Contents of motion: The 8th meeting of the 13th term Board of Directors (2015.06.22): Approval of the increase of employee’s monthly meal allowance. Causes for avoidance and voting should be specified: Manager Director Andy Sheu recused himself during discussion of and voting on this item because of the interested party relationship. (2) Directors’ Names: Takao Kamiji Contents of motion: The 10th meeting of the 13th term Board of Directors (2015.11.06): Approval of increase shareholding ratio of CCJV P1 Engineering & Constructions Sdn. Bhd. Causes for avoidance and voting should be specified: Director Takao Kamiji recused himself during discussion of and voting on this item because of the interested party relationship. (3) Directors’ Names: Andy Sheu Contents of motion: The 11th meeting of the 13th term Board of Directors (2015.12.18): Approval of the average salary increase rate of 2016. Causes for avoidance and voting should be specified: Manager Director Andy Sheu recused himself during discussion of and voting on this item because of the interested party relationship. (4) Directors’ Names: Andy Sheu Contents of motion: The 11th meeting of the 13th term Board of Directors (2015.12.18): Approval of enhance employee incentive programs. Causes for avoidance and voting should be specified: Manager Director Andy Sheu recused himself during discussion of and voting on this item because of the interested party relationship. (5) Directors’ Names: Andy Sheu Contents of motion: The 11th meeting of the 13th term Board of Directors (2015.12.18): Approval of the remuneration of the management officers of the Company. Causes for avoidance and voting should be specified: Manager Director Andy Sheu recused himself during discussion of and voting on this item because of the interested party relationship. (6) Directors’ Names: John T. Yu, John H. Lin Contents of motion: The 11th meeting of the 13th term Board of Directors (2015.12.18): Approval of the amendment to the remuneration of the Chairman and Vice Chairman of the Company. Causes for avoidance and voting should be specified: Chairman John T. Yu and Vice Chairman John H. Lin recused themselves 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) The Company has elected three independent directors and established the Audit Committee which is composed of all independent directors on June 26, 2014. Please refer to the section 3.4.2 “The State of Operations of the Audit Committee”. (2) From 2011, the Company has disclosed the major resolutions of the Board meeting voluntarily on the Company website. (3) In accordance with the Articles of Association, the Company has purchased D&O insurance for directors and supervisors in order to reduce and diversify major damage risks of the Company and the shareholders.

3.4.2 The State of operations of the Audit Committee or the State of participation in board meetings by the supervisors (1) The Company has elected three independent directors and established the Audit Committee in lieu of supervisors on June 26, 2014. (2) A total of 6 meetings of the Audit Committee were held in the previous period. Independent Directors’ attendance was as follows: (As of March 31, 2016) Attendance in Attendance rate Title Name By Proxy Remarks Person (%) Independent Johnny Shih 6 0 100 Director Independent Jack Huang 6 0 100 Director Independent Frank Fan 6 0 100 Director Other mentionable items: 1. If there are the matter referred to in Article 14-5 of Securities and Exchange Act and resolution that was not approved by the Audit Committee but be undertaken upon the consent of two-thirds or more of all directors, the dates of meetings, sessions, contents of motions, the Audit Committee’ resolutions and the Company’s response to the Audit Committee’s opinion should be specified: None 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 submits the same reports via e-mail for review by the Independent Directors on a monthly basis. The Internal Audit officer communicates with the Independent Directors in person quarterly. There was no further issue after responding their comments in 2015. B. The Internal Audit officer presents the findings of audit reports in the meetings of the Audit Committee and the Board of Directors. All the Independent Directors have adequate access to how audit performs. During 2015, 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 2015, the communication channel between Independent Directors and CPAs functioned well.

3.4.3 Corporate Governance and Operation, Differences from the Corporate Governance Best Practice Principles for the TWSE/ GTSM Listed Companies and Reasons Operation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM Listed Companies” and reasons 1. Does the Company establish and disclose V In the 10th meeting of the 10th board of directors, the None the Corporate Governance Practice establishment of the Corporate Governance Practice Principals in accordance with the Corporate Principals was decided on 24 July 1996, which had been Governance Best Practice Principles for the modified in accordance with the regulations and real TWSE/ GTSM Listed Companies? practice in these years. The latest revision was made in the 18th meeting of the 12th board of directors on 28 March 2014 and was published in the Market Observatory Post System (MOPS) and the website of the Company. 2. Ownership structure and shareholder’s V None equity (1) Does the Company set up the internal (1) The Company has set up spokesman and investor standard operation procedure to handle relation office as the liaison channel to handle issues like issues such as shareholder’s advices, the shareholders’ advices or disputes. questions, disputes and accusations for implementation accordingly?

(2) Does the Company have control over the (2) The Company has been submitting monthly report to major shareholders, who control the the Market Observatory Post System, assigned by the Company and have the name list of the Securities and Futures Bureau about the change of the major shareholders who have the shareholding of the insiders (directors, managers and ultimate control over the Company? shareholders who have more than 10% of the total shares) in accordance with the 25th article of the Securities and Exchange Act.

(3) Does the Company set up and implement (3) In addition to establishing the “Supervision and the risk control and firewall mechanism Management of Subsidiaries” based on the “Regulations with the subsidiaries and affiliates? Governing Establishment of Internal Control System by Public Companies” set by the Financial Supervisory

Operation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM Listed Companies” and reasons 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) Does the Company stipulate internal (4) The Company has set up the “Measures to Prevent regulation, prohibiting the insiders of the Insider Trading”, “Code of Business Conduct and Ethics company to make use of the unpublished for the Board of Directors and Managers” and information for the trading of securities? “Employee Code of Ethics and Conduct”, prohibiting use of the unpublished information for the trading of securities. 3. Composition and Responsibilities of the Board of Directors (1) Is there establishment of the V (1) In consideration of diversity and fairness, the members None diversification and thorough of the board of directors include practicing lawyer, implementation about the composition business professionals, and listed company operators of the board of directors? from various industries such as electronics, plastics, optoelectronic, textile, cement, etc.

(2) In addition to the establishment of the V (2) In addition to the establishment of the Remuneration The tasks of the Corporate Remuneration Committee and Audit Committee and Audit Committee regulated by the law, Governance Committee include Committee, does the Company have the Company also set up the Corporate Governance the function of nomination other functional committees? Committee whose major jobs include the programming committee.

Operation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM Listed Companies” and reasons of the composition of the board of directors/ functional committees, the qualification assessment of the independent directors, the programming of the succession of the managing echelon, the assessment of the company risk control policy and risk evaluation criteria/ tracing of the major risk accidents and revision of the performance regarding the implementation of the company governance system…etc. The committee is composed of 10 directors and has held 31 meetings since its establishment. It works strictly and plays a decisive role in the major company policy decisions.

(3) Is there performance appraisal of the V (3) The Company does not set up the criteria for the It may be done in accordance board of directors, which is carried out performance appraisal of the board of directors. with the result of the evaluation annually? when required.

(4) Is there regular assessment of the V (4) Beginning Dec 20, 2012, the Company set up a scheme None independence of the certified public in order to enhance independence and capability of accountant every year? engaged Certified Public Accountant. The Company exams and evaluates CPA’s independence and capability. After the result is approved by Board of Directors and Audit committee in March 2016. CPAs Shyh-Rong Ueng and Huei-Shyang Wang from PricewaterhouseCoopers were qualified. Both CPAs do not have any direct interest relationship with either the Board of Directors or the Company, and believed to have more than sufficient capabilities on auditing, taxation and time cost efficiency.

Operation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM Listed Companies” and reasons 4. Does the Company establish communication V The Company establishes "CSR" and "Investor Relations" None channel for stakeholders, set up a dedicated sections in its corporate website to explain to stakeholders section in its corporate website for the conducts for fulfilling CSR and may be contacted via its stakeholders, and properly respond to corporate website when needed. The Company will give CSR-related issues concerned by proper feedback to any reasonable concerns raised by the stakeholders? stakeholders. 5. Does the Company entrust the professional V The Company has entrusted the department of the stock None stock affair agency for the shareholder affair agency of the KGI Securities Co. Ltd. to assist us in the affairs? stock affairs. 6. Information Disclosure V None (1) Does the Company set up a website to (1) disclose information regarding the a) The Company has set up a Chinese/English website Company’s finance, business and (www.ctci.com.tw) to disclose information regarding corporate governance status? the Company’s finance and business status and update information regularly. b) The Company has disclosed information regarding the organization and function of Internal Auditing Dept., “Rules Governing Procedure for Making of Endorsements or Guarantees”, “Rules Governing Acquisition and Disposal of Assets” and “Rules Governing Procedure for Loaning of Funds” on the Company website. (2) Is there any other information disclosure (2) channels (e.g., maintaining an a) The Company has set up a Chinese/English website English-language website, appointing and has appointed Brand Management Dept. to responsible people to handle information handle information collection and disclosure. collection and disclosure, appointing b) The Company has appointed the Head of Executive spokespersons, webcasting investors Management Office as the spokesperson, CFO as conference)? deputy spokesperson and they are responsible for speaking to the public. The Company will hold

Operation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM Listed Companies” and reasons 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. 7. Is there other important information, which V Please refer to the【Note】 None helps to understand the governance and operation of the company, which includes but not limited to the rights and interest of the staff, cares for the employees, investor relations, relation with the suppliers, rights of the stakeholders, trainings received by the directors and supervisors, the implementation of the risk management policy and risk assessment criteria, the liability insurance policies taken out for the directors and supervisors…etc? 8. Does the Company conduct the self- V The Company has conducted the self-evaluation through None assessment for corporate governance or the corporate governance evaluation system which is does the company entrust other developed by the TWSE Corporate Governance Center and professional organization to assess the report to the Corporate Governance Committee on March company governance? (If yes, please specify 2016. the opinion of the board of directors, result of the self- assessment or assessment conducted by the entrusted professional organization, the major defects, suggestions and improvement…etc.)

【Note】 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 supervisors and make presentation about the business regularly in the meeting of the board of directors. (For detailed information, please refer to the important information concerning the corporate governance and operation.) 4. All directors and supervisors should attend the meeting of the board of directors except for special situation and their presence of the meeting will be registered in the Market Observatory Post System. 5. To recuse themselves to avoid conflicts of interests is the basic consensus for directors of the Company. 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 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. 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:

 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 Procedure” 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. “Exquisite Works Award, Customer Satisfaction” is the standard of CTCI and provides customer assurance. In addition to complying with regulations of international standards (ISO, OHSAS), the Company has regularly designated a third party to authenticate credibility. In addition customer satisfaction is periodically surveyed particularly about Company work for clients being on schedule, within budget and of proper quality meeting environmental standards.

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

Criteria Meet One of the Following Professional Qualification Requirements, Together with at Least Number of Independence Criteria(Note 2) Five Years Work Experience Other Public An Instructor or Higher Position A Judge, Public Prosecutor, Have Work Experience in Companies in in a Department of Commerce, Attorney, Certified Public the Areas of Commerce, Which the Identity Law, Finance, Accounting, or Accountant, or Other Professional Law, Finance, or Individual is Remark (Note1) Other Academic Department or Technical Specialist Who has Accounting, or Otherwise Concurrently (Note 3) 1 2 3 4 5 6 7 8 Related to the Business Needs Passed a National Examination Necessary for the Serving as a of the Company in a Public or and been Awarded a Certificate in Business of the Company member of Private Junior College, College a Profession Necessary for the Remuneration Name or University Business of the Company Committee Independent Johnny Shih - - V V V V V V V V V 0 N/A Director Independent Jack Huang - V V V V V V V V V V 3 N/A Director Independent Frank Fan - - V V V V V V V V V 0 N/A Director

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.

Note 3: Does the member comply with the provision of Article 6, paragraph 5 of the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter” if he/she is a director of the Company.

B. The state of operations of the Remuneration Committee a. This committee is comprised of 3 members. b. The term of current committee members is from June 26, 2014 to June 25, 2017: A total of 4 meetings of the Remuneration Committee were held in the previous period: (As of March 31, 2016) Attendance in Attendance rate Title Name By Proxy Remarks Person (%) Convener Johnny Shih 4 0 100

Member Jack Huang 4 0 100

Member Frank Fan 4 0 100 Other mentionable items: 1. If the 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 the 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

3.4.5 Corporate Social Responsibility (CSR) Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons 1. Corporate Management Practices V None (1) Does the Company formulate (1) CTCI established the CSR Promotion and CSR Report Publication Procedure in November 2009 CSR policy or systems and to define the organizational framework, responsibility and authority of the CSR Committee, review the implementation and to specify the cautions and rules for promoting CSR within CTCI. When setting issues to be status? promoted within CTCI, these issues are considered in accordance with the Global Reporting Initiatives (GRI) G4 Guidelines 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) Does the Company arrange CSR (2) The Company holds environmental education courses irregularly, and promotes the concept trainings regularly? of corporate social responsibilities through various approaches, such as trainings, public announcement and activities held. (3) Does the Company establish (3) In the end of 2008, CTCI CSR Committee was established, under which three working groups exclusively (or concurrently) were set up. The CSR Committee administers the planning, promotion, implementation, data dedicated units with senior consolidation, review and improvement of the CSR work of CTCI. The CSR Committee shall management authorized by the report to the Board on a regular basis. Board to be in charge of CSR Promotion and report to the Board? (4) Does the Company make a (4) CTCI values employee welfare and care. Apart from offering a base salary higher than the reasonable remuneration minimum local wage, CTCI also appeals in internal and external fairness as well as individual policy; combine performance fairness. In terms of external fairness, we have external professionals surveying the salary and assessment of employees with benefit survey with fully understanding of the market rate while analyzing the employment CSR policy; and regulate an environment as the foundation of our salary design. For internal fairness, the salary structure

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons explicit and effective system of is designed based on the evaluation of skills and duties of employees so as to insure that the reward and punishment? salary standard is appropriate and irrespective of gender difference. To encourage better performance of colleagues, CTCI also combines one's payment with his/her performance, especially for variable bonus, to realize individual fairness in salary with one's organizational performance, departmental performance, and personal performance. Additionally, salary review is performed according to the market salary survey and personal performance ever year. Aside from specifying in Topic 1, Performance, Rewards and Discipline of Chapter 6 Work Rule in the Employees Manual, we also speculated CTCI Employees Reward and Punishment Regulations accordingly, so as to boost morale and strengthen disciplines with fairness, justice, openness, and rationality. 2. Sustainable Environment V None Development (1) Does the company dedicate (1) As a member of the society, CTCI shall spare no pain to save energy and reduce carbon itself to improve the efficiency emissions. In terms of engineering expertise, CTCI has been making continuous innovation of of all kinds of resources and engineering technologies to reduce energy consumption and reduce pollution. For routine use the renewable materials affairs, CTCI urges employees to save energy and resources and emphasize the importance of that impact on the saving paper, electricity, water and petroleum consumption. environment less? (2) Does the company set up an (2) CTCI has long been dedicating to the R&D of green engineering technologies. The aims are to environmental management provide owners with economical, feasible environmental and energy-saving solutions, to system that suits the nature of reduce pollution, to lower impacts to human health and environment risk, and to bring industry? 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.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons (3) Does the Company pay (3) attention to the impact of (a) In paper usage, we continuously urge employees to reduce unnecessary printing. If it is climate change on its necessary to print, employees are encouraged to print data on both sides of the paper to operations; carry out the reduce paper consumption. In 2015, the total paper consumption at the headquarters was investigation of greenhouse 65,810kg, which was decreased by 32,834kg (33.29%) when compared with 2014. In 2015, the gas inventory; and make paper recycling volume was 21,045, at a recycling rate of 31.98%. In 2016, we will strategies of energy efficiency, continuously reinforce the appeal for paper conservation with better implementation in carbon and greenhouse gas double-sided printing and reuse paper which has been printed on one side. reduction for the company? (b) In terms of electricity (power) saving, at CTCI headquarters, the total electricity consumption in 2015 was 6,113,805 kWh, decreased by 2.3% compared with the previous year, with an annual accumulative consumption at 3,100 kWh per person. The considerably decreased power consumption and bill was not only a result of energy-efficient habits cultivated by colleagues, but also the intelligent use of hardware, such as Inverter Air Conditioner, LED, and T5 lighting, and the AC and lighting setting centrally controlled. (c) In the aspect of water consumption, besides installing a large quantity of water-saving facets, we save water by controlling the water output volume, time and regular inspection of water usage, stickers were also designed as a reminder for water saving. In 2014, the total water consumption was 22,093m3, decreased by 2.33% when compared with the previous year with an annual accumulative consumption of 11.21m3 per person. In 2016, except for continuous promotion of water conservation, we would actively seek out effective water saving practice. (d) In addition to promoting energy saving concepts, CTCI also supported the Earth Hour activity and turned off all lights in CTCI from 20:30 to 21:30 on 28 March 2015. For one thing, it is an act to restate our support for energy saving and carbon reduction; for another, it is an example to encourage employees to save energy and reduce carbon emissions from small things, in order to do our part to mitigate global warming.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons 3. Social Welfare Protection V None (1) Does the company formulate (1) In compliance with the United Nations Global Compact regarding regulations over human management policies and rights, labor standards, environment and anti-corruption, in addition to ensuring all daily procedures in accordance with operations conforming to corporate ethics, CTCI develops basic conduct standards of relevant regulations as well as compliance for all board directors, managers, employees and procurement staff. This set of International Covenant on standards Corporate Governance Norms, Business Ethical Behavior Norms for Board Members Human Rights? and Managers, Code of Employee Ethics and Behavior, and Work Ethical Behavior Rules for Procurement Staff. (2) Does the company create a (2) The company established an investigation team and complaint hotline for corruption and mechanism and channel for briberies, which accept reporting from persons inside and outside of the organization at all employees’ complaint and time. The reporting and consulting hotline is (02-2835-5936) or the email address: settle it properly? [email protected]. The department in charge of the complaints is the Human Resource Department. We encourage employees to notify any infringement of law, regulation or staff regulations through named reporting. The company should by any means hold confidentiality of the identity of the person submitting this report to avoid threats. In cases that one is suspicious of corrupt practices but could not be verified of the action violating the law, the consulting hotline is available for immediate report. Colleagues can even write e-mails to the feedback box, which will be directly responded by the manager of Human Resource Department or related departments for further handling. (3) Does the company provide (3) Establishing a friendly workplace and continuously activating health promotion program: CTCI employees with a safe and established a health center in 2013. We advocate health promotion through inviting healthy working environment physicians or nutritionists as well as other experts to hold health promotion seminars and as well as the regular tutorials provide physician on-site services every month. The topics of health promotion seminars regarding the knowledge of feature mental, physical and spiritual wellbeing. Related contents will be published on CTCI safety and health? Monthly and posted on the corporate website as well. Moreover, to create a friendly

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons workplace, we set up a breastfeeding room in 2012 for female colleagues who become new moms. In 2015, there were totally 931 people benefitted from physicians’ on-site service and healthcare provided by the registered nurses; accumulatively 1,566 people used the breastfeeding room, and 1,092 people participated in the 12 health promotion seminars held. (4) Does the company create a (4) At present, there are 3,379 employees in CTCI (new recruits in 2015 were at about 14.12%, mechanism of regular totally 477 employees). In appointment and promotion, we have no limit or restriction of any communication for employees kind or in any form on gender, ethnic origin, political orientation, and religion (belief). Those and notify them of any who are qualified for the post are given equal opportunities to fill the post. The equal rights significant operational changes and obligations of employees are specified in the Employee Handbook and continuously that might impact on them? published on the corporate Intranet. In employment age, we strictly follow the regulatory requirements prescribed in the Labor Standard Law. That is to say, no child labor incident has happened or has been reported at CTCI. At CTCI, eliminating sexual harassment and sexual discrimination is a commitment. In order to prevent workplace sexual harassment, apart from specifying the relevant rules in the Employee Handbook and educating employees, we have established a hotline and a dedicated e-mail for employees to report and make suggestions for eliminating sexual harassment. In 2011, the “Sexual Harassment Complaint Handling Committee” was set up. Responsible for the handling of sexual harassment cases or probable events, the committee should protect the confidentiality and privacy of the parties involved and set forth the findings within 3 months after the case is raised. The Sexual Harassment Complaint Handling Committee has 7 committee members in total with the chairman being the supervisor of the HR Division. Other committee members are selected from employees in different departments by the heads of each business operation unit. The proportion of female committee members should not be less than 1/2. In 2015, we received one complaint on a construction site related to physical harassment. The sexual harassment complaint handling committee held 5 meetings to discuss the matter and also inspected the site for further

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons details. The complainant of this incident had also reported to the police and the matter was investigated by the Prosecutors Office. After it was declared to be valid by the Criminal Court, our Company has also carried out punishments according to Company Policy. To enhance the industrial relation and guarantee rights of the labor, CTCI sets up a “Employment Coordination Meeting” on a quarterly basis (i.e., 4 meetings for a year). Issues concerned by employees of the quarter are reported or discussed in the meetings. Major issues raised are CTCI business development and the employees’ health, safety, welfare, salary, reward and punishments. The “Employment Coordination Meeting” is composed of 6 management representatives and 6 labor representatives. The executive vice president in the management representatives is the chairman to assign personnel familiar with business operations and labor situations as management representatives. The 6 labor representatives are elected by the constituency (units of business operations) and each term is 3 years. Wherein, supervisors above the rank of senior vice president are not allowed to serve as labor representatives, and female representatives must not be less than one-third of the total labor representatives. In internal communication, we hold “Forum with Executives” each quarter for employees to discuss with higher level supervisors face to face and raise opinions and questions about company operation or management. The forum attracts 50 to 60 employees to participate each time. During the discussion, employees raised questions enthusiastically and feedbacks are directly provided. At the forum, managers can hear the voice of employees, and employees can understand better about company policy and direction. Furthermore, higher-level supervisors will also discuss with recruits regularly to understand opinions and ideas of them through face to face communications. (5) Does the company draw up (5) To provoke the passion for work in every employee and in consideration of the need for the workable plans of vocational organization to satisfy employees with self-realization, CTCI started promoting Individual skills development for Development Plant (IDP) for all employees since 2014. Each employee may develop different

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons employees? 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) Does the company formulate (6) The company conducts customer satisfaction survey on the projects in progress and the policies and a complaint projects during its closing to warrantee period semiannually. The Brand Management procedure regarding consumer Department will send out the questionnaire to customers. Then, the “Customers Services rights protection based on the Feedback Group” will make analysis on the survey results and seek effective solutions for workflow of R&D, further improvement by respective departments following acquiring approval by the procurement, production, President. This has ensured CTCI's quality standard can win customers' trust and meet their operation and service? expectations. (7) Does the Company abide by (7) A commitment to quality is the key that enables CTCI to operate sustainably, it is also a relevant regulations and promise that CTCI has kept to its clients. To do so, we established Quality Management international standards in the System based on ISO 9001:2008 to make sure all vital stages of project management, marketing and labeling of their engineering, procurement, construction, fabrication, commissioning and maintenance are in products and services? compliance with engineering and regulation requirements. We had been certified since 1996. (8) Does the Company check if the (8) For new vendors requested by the management to undergo plant visiting survey, suppliers had any record of "Self-Assessment Sheet of Contractor's Corporate Sustainable Management" will be affecting environment and distributed and filled in beforehand for evaluations of their social and environmental society in the past before doing performances. Vendors that do not undergo plant visits will have to sign "Contractor’s business with them? Commitments on Corporate Sustainable Management", promising to be in compliance with the sustainable operation practice. As of 2015, the 596 vendors listed in Tier 1 will have to

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons fill in "Self-Assessment Sheet of Contractor's Corporate Sustainable Management" every year. We are scheduled to complete the survey within 3 years by surveying over 200 vernders each year to evaluate the possible environmental and social impacts of the Tier 1 suppliers. (9) Do the contracts signed (9) Since 2011, we began to incorporate "Corporate Social Responsibilities" with vendor between the Company and evaluations; while beginning with 2014, we add more items including "Environmental suppliers contain the terms Management", "Labor Conditions", "Human Rights" and "Social Impact" to the list to ensure that the contract can be the vendor is qualified with ISO14001/OHSAS 18001certification, and comply with terminated or canceled at any requirements for quality, price, delivery period, safety, health, environmental management, time if the supplier violate labor conditions, health management, and employee welfare. Disqualified vendors will be against its policy of CSR and suspended for cooperation following such stringent review process. has significant impact on environment and society? 4. Information Disclosure V None Enhancement (1) Does the Company disclose any (1) relevant and reliable (a) Being one of the leading transparent companies, we participated in the “Information information regarding CSR on Disclosure and Transparency Ranking System” launched by TWSE and GreTai since 2004, and its official website and Market were ranked as a listed company with rather transparent information disclosure. After Observatory Post System? reformation of the evaluation system in 2006, we were ranked as a Grade A listed company in information disclosure. In 2010 and 2011, an A+ Grade for listed company in information disclosure was issued. Moreover, from 2012 to 2015, CTCI has been ranked as an A++ company, the top ranking a company can ever receive, for four years in a row. 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

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons 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. (c) In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI CSR Report in 2008 to disclose the information concerning our materiality issues according to the GRI Guideline. We also regularly submit the report to the British Standards Institution (BSI) for verification. In fact, we are the first private business in Taiwan to have our CSR report pass the BSI verification. For more details, Please refer to the item 7 “If the corporate social responsibility reports have received assurance from external institutions, they should state so below“ of this table 5. If the Company has established corporate social responsibility principles based on “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies,” please describe any discrepancy between the principles and their implementation: verified by BSI, a third party, CTCI CSR Report is in compliance with the three major principles of AA1000 Assurance Standard, which are Inclusivity, Materiality and Responsiveness. 6. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices (1) Environmental Protection: To strengthen and carry out environmental protection policies, we reorganized the CSR Committee and set up Environmental Protection Group in the beginning of 2013. Uniting senior staff in engineering project management and experts in related fields, we regulated guiding principles and work procedures for environmental protection with general manager of Innovation R&D Center serving as the group supervisor. The major responsibility of Environmental Protection Group is to strengthen and integrate environmental measures and convene meetings to track the execution progress. Moreover, CSR-related works are listed as Key Performance Indicators of each business operation unit of CTCI. With the focus being Green Engineering, CTCI is dedicating efforts to minimize pollution, and lower the impacts made to human health and the

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons environment during the whole Life Cycle of engineering projects, including engineering (E), procurement (P), construction (C), commissioning (K), selection of materials and equipments, and maintaining work after plant turn over to the owners. All the procedures are taken with approaches that are economical and viable and that can realize multi-win situation among CTCI, cooperative partners, stakeholders and the social environment by enhancing the green competitiveness of the industry. To ensure projects undertaken to be environmentally friendlier, we have been engaging in technology R&D and new technology implementation to prevent air pollution, enhance energy efficiency rate (EER), and protect the ecosystem and environment. In air pollution control, the oil hydrodesulfurization technology and SCR deNOx technology are the most commonly used deSOx and deNOx technologies to significantly reduce pollutants emitting into the air. With experience in air pollution control accumulated for more than 23 years, besides applying the hydrodesulfurization technology and SCR deNOx technology, we select deNOx, deSOx, dust removal and wastewater treatment units based on the waste gas cleaning system (WGCS) or air quality control system (AQCS) concepts to reduce pollutant emissions from the off-site waste gas discharge outlet and flue, in order to provide customers with the best package equipment and optimal system operation design to significantly reduce GHG emissions. In recent years, the world is looking into the impacts of greenhouse effect on the Earth brought by climate change. As a leading enterprise of environmental protection, the total sales of electricity sold back to Taiwan Power Company in 2015 for waste incineration plants operated by ERBO of CTCI is approximately at 872,684.86 MWh, which can supply 250,000 households with electricity. Based on the public information provided by Taiwan Power Company in 2015, an average of 291 kWh is consumed by each household every month. Thanks to the transference of electricity, CO2 emission was reduced around 456,000 Mt, which equals to a reduction of 184,000 Mt of coal (1 Mt coal can produce 2.48 Mt. CO2), equivalent to the volume of CO2 absorbed by 1,172 Daan Forest Park for one year (the CO2 absorbency of Daan Forest Park for one year is 389 Mt). A total waste of 6,622,070.62 Mt was processed in 24 incineration plants around Taiwan in August 2015 out of these 24 plants were operated by ERBO of CTCI with a total waste of 2,159,940.22 Mt received and 2,150,800.49 Mt of them being treated. 1,679,678.01 Mt of the waste was general solid waste whereas 480,262.21 Mt was classified as industrial waste, equal to the total waste generated by 5.426 million people per year (based on the statistics of Monthly Report (325 Issue) by Department of Waste Management, Environmental Protection Administration, Executive Yuan, approx.0.848 kg waste are produced by each person everyday from January to October of 2015) as well as the industrial waste produced by around 17,000 factories. We implemented the green building concept right from the beginning of building the CTCI Headquarters Building. We emphasize environmental greening, site water conservancy, energy saving, water conservation, resource recycling and other designs. Therefore, it is an all-round energy-saving green building. In fact, we won the National Architecture Gold Award for the planning and design and construction of the building. Besides the building

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons itself, greening work was performed for the surroundings. For example, there is a park in front of the building and open space with trees on both sides for employees to enjoy leisure. According to the law, the building coverage rate in this district is 55%. However, we built only 48.9% to voluntarily increase the space for greening. At CTCI, we have preserved the old trees and green space originally standing there. When greening the space, we have specifically planted different kinds of native trees, such as the Formosan ash, Formosan beech, and the Taiwan incense cedar. We also adopted mixed plantation in multiple layers to preserve species diversity." Honor Events: Environmental Protection Awards Description Premium Award in EPA 2014 Annual Keelung Incineration Plant operated and managed by ERBO was honored with the Premium Award in Appraisal for incineration plants Environmental Protection Administration (EPA) 2014 annual appraisal. Excellence Award in EPA 2014 Annual Xindian Plant, Taonan Plant, Miaoli Plant, and Houli Plant operated and managed by ERBO were honored Appraisal for incineration plants with the Excellence Awards in EPA 2014 annual appraisal. Honorable Mention for Innovative Miaoli Plant, operated and managed by ERBO, was awarded an Honorable Mention for 2015 Innovative Environmental Education Materials Environmental Education Materials by EPA. Energy Conservation Excellence Award Tainan Incinerator Plant, operated and managed by ERBO, was honored with the Energy Conservation Excellence Award of Southern Taiwan Science Park by Ministry of Science and Technology, ROC. ROC Enterprise Environmental Protection Tainan incinerator plant, operated by ERBO, was honored with the 23rd ROC Enterprise Environmental Silver Award by Environmental Protection Protection Silver Award for Environmental Protection Administration. Administration ROC Enterprise Environmental Protection Xindian incinerator plant, operated by ERBO, was honored with the 23rd ROC Enterprise Environmental BronzeAward by Environmental Protection Bronze Award for Environmental Protection Administration. Protection Administration Environmental Education Facilities and Tainan plant was certified as an environmental education facility and venue by Environmental Protection Venues Administration in 2015. Excellent Performance Award for Agency Tainan WtE plant, operated by ERBO, participated in selection of “Excellent adopting agency of air quality of Air Quality Purification Area Adoption purification area” held by Environmental Protection Administration, Executive Yuan and honored with excellent performance award.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons (2) Community Participation: CTCI has devoted itself to engineering for over 30 years and has contributed considerably to the society. Recently, upholding the concept “To spend what is taken from society in the best interest of society,” we took part in many charitable activities to fulfill corporate society responsibilities. After moving into the Shilin headquarters in March 2009, we has been holding CSR activities on an annual basis and invited charity organizations and community residents in Shilin and Tianmu to join us. Since 2011, we started long-term cooperation with Zhishan Cultural and Ecological Garden to hold Shilin Cultural Festival under the supervision of Ministry of Culture and Department of Cultural Affairs, Taipei City Government so as to promote local art activity and protect local environment and maintain a harmonious relationship with the neighborhood. Hopefully, we can foster regional development and improve the relationship between the enterprise and neighboring communities. Take the “The 2015 Shilin International Cultural Festival: Scenic Zhishan” as an example, we, for one thing, encouraged the CTCI colleagues to attend charity activities in the clubs basing on personal interests; for another, started the first step to promote culture rooting in local communities. The activity started from August, 2015 and lasted for two months. Besides musical shows, other activities include Birds Specimens Exhibit and guide trips by kids. During the cultural festival, representatives from Department of Cultural Affairs, Taipei City Government and Shilin District Head joined the event in person. Local citizens, students and parents also participated in the event enthusiastically. Nearly all activities were fully packed. This year, we organized an environmental experience tournament, aiming to strengthen environmental education by means of interesting games and defeating challenges. The whole event attracted about 3,933 participants. In the future, CTCI will continue the cooperation plan with Zhishan Cultural and Ecological Garden and combine the issues of environmental protection and energy saving with the activities and promote local culture so as to bring larger CSR effect into play. Honor Events: Community Participation Award Description Certificate of Appreciation by Taipei City CTCI was awarded a certificate of appreciation by Taipei City Government for Supporting the Sheltered Government Workshop. Certificate of Appreciation from the Wild To foster regional development and improve the relationship between the enterprise and neighboring Bird Society of Taipei communities, we again cooperated with Zhishan Cultural and Ecological Garden to hold the “2015 Shilin International Cultural Festival : Scenic Zhishan,” and was awarded the Certificate of Appreciation from its management unit, the Wild Bird Society of Taipei.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons Certificate of Appreciation from Taipei CTCI was awarded a certificate of appreciation by Taipei Society for Traffic Safety for sponsoring its annual Society for Traffic Safety meeting. Appreciation Trophy from the Chinese CTCI was awarded an appreciation trophy by the Chinese Institute of Engineers for sponsoring the 31st Institute of Engineers Sino-Japanese Modern Engineering and Technology Symposium.

(3) Contribution & Service to Society: Over time we have been actively participating in engineering-related associations and institutes and public construction projects to contribute our engineering expertise and services. To us, it is very important to fulfill CSR by integrating our core expertise and advantages. In 2015, we participated in 47 engineering-related associations and institutes (71 for all subsidiaries and affiliates) and was the chairperson or supervisor of some of them. This way, we could promote the development of these associations and institutes with our professional knowledge and skills and thereby enhance the overall standard of the industry along with competitors. In order to encourage employees to improve related skills by participating in professional groups, we have established a subsidization mechanism. In 2015, we subsidized 810 employees to participate in respective professional groups with a total spending of NT$543,916 (including subsidiaries and affiliates). We aggressively participate in public constructions, aiming to enhance national development standard and bring citizens convenient life and transportation with the best construction quality, and thereby effectively accomplish the goal of energy conservation and carbon reduction. In public constructions, we engage in the MRT system, power plant and sewerage works. Although many projects are difficult in engineering, we make continuous breakthroughs and innovations to seek the optimal solutions. As a result, apart from winning approval from the government for engineering quality, we have made excellent contribution to Taiwan and other countries. Take resource recycling plants (or incineration plants) for example, ERBO operates eight incineration plants in Taiwan; each plant site created more than 60 local job opportunities, totally about 500 job opportunities in Taiwan for the employment of operation and maintenance personnel, security guards and janitors. In the annual repair period, these plants offer 60 more additional job opportunities for maintenance personnel. Altogether, we created more than 1,000 job opportunities a year. Honor Events :Social Contribution and Service Award Description Outstanding Engineer Award by by CTCI EVP Mark W. H. Yang and VP C.F. Chiou were honored with Outstanding Engineer Award by Chinese Chinese Institute of Engineers Institute of Engineers.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons Prof. Yen-Ping Shih Engineering Paper CTCI Senior Engineer I-Hua Chung was honored with Prof. Yen-Ping Shih Engineering Paper Award. Award Outstanding Electrical Engineer Award by CTCI Associate Chief Engineer Yu-Chih Huang was honored with Outstanding Electrical Engineer Award by The Chinese Institute of Electrical The Chinese Institute of Electrical Engineering. Engineering Outstanding Contribution Award CTCI Assistant Chief Engineer Jia-Xing Wang was honored with 2015 “Outstanding Contribution Award” by Taiwan Welding Society. Chemical Engineering Technology Award CTCI Assistant Chief Engineer Kuo-Fu Chuang received the 2015 Chemical Engineering Technology Award from the Taiwan Institute of Chemical Engineering. Trophy for the 31st Sino-Japanese Modern CTCI was awarded a trophy for sponsoring the 31st Sino-Japanese Modern Engineering and Technology Engineering and Technology Symposium Symposium.

(4) Social and Public Interests: “To spend what is taken from society in the best interest of society” is a common Taiwanese saying. At CTCI, we have made it a reality, wholeheartedly. We provide a safe part-time job opportunity with learning value to the children of disadvantaged families. Besides relieving the financial pressure of these families, we broaden their career horizon and accumulate experience for them with our education and training system. In 2015, we offered 16 summer part-time job opportunities. To show concern for the disadvantaged in line with the “People with Disabilities Rights Protection Act,” we hire physically or mentally disabled citizens with working abilities. By the end of 2015, the number of physically or mentally disabled employees we have hired is 36. We also spare no effort to support disadvantaged groups. Besides inviting Genesis Social Welfare Foundation and Children Are Us Foundation to join and organize charity sales, we have established long-term cooperation with other social welfare groups. In 2011, we began cooperation with Children Are Us Foundation by organizing the Children Are Us Bakery Charity Sales at the headquarters every two weeks. The event earned tremendous employee support. As a result, employees bought bread from them vigorously to let those children feel the extra love and warmth from us. In the future, we will continue to organize charity sales and promote products for Children Are Us Foundation. We understand that these disadvantaged children need more than materials. They need job opportunities for them to walk out of their mishap, to grow in interpersonal interactions, and to earn respect and a sense of achievement. Whether it is cleaning work or bread charity sales, we always pay more concern to them voluntarily. As some employees said,

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons “When we can pay, we suddenly discovered that we are that rich!” Information technology advances every day. We need to upgrade hardware and software equipment regularly to ensure computer-aided design (CAD) quality. Therefore, we donate the replaced computer equipment to social charity groups for continuous use in order to reduce environmental burdens and to contribute to education in Taiwan. Over the years, we have donated replaced computer equipment with the assistance of Triple E-Institute. After proper maintenance, Triple E delivers the equipment to the charity groups or individuals in need of them. In 2015, we donated a total of 82 PCs, 80 monitors, 2 printers, 262 laptops, and 2 servers. We promise that we will continue to participate in social welfare plans to enforce social concern and fulfill CSR. Honor Events : Social Concern Awards Description Certificate of Appreciation from Sunshine CTCI received a Certificate of Appreciation from Sunshine Social Welfare Foundation for donating to Social Welfare Foundation victims of Formosa Fun Coast dust explosion incident for rehabilitation. Certificate of Appreciation from Triple-E CTCI received a Certificate of Appreciation from Tripe-E Institute for supporting the second-hand computer Institute recycling activity, “Your old computer, his new hope.” Received a Letter of Appreciation from CTCI awarded by Taipei City Government for supporting the sheltered workshop. Taipei City Government Certificate of Appreciation from CPC CTCI was awarded a Certificate of Appreciation from CPC for Participation in Winter Charity Auction. Certificate of Appreciation from CTCI was awarded a Certificate of Appreciation from Homeless Taiwan for donating laptops. Homeless Taiwan Certificate of Appreciation from CTCI was awarded a Certificate of Appreciation for sponsoring Chingshan Egolife orphanage. Chingshan Egolife

(5) Consumer Rights and Interests: Quality is one of the keys to sustainable operations and our most important commitment. We understand that however much cost we have saved and lead-time we have shortened, if we lose the trust of customers and the image and reputation of the corporation is damaged, nothing can compensate these. To ensure and assure quality, we have established the quality management system (QMS) for project management, design, procurement, construction, manufacture, commissioning and maintenance according to the ISO9001 International Standard so as to ensure the results of construction

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons conform to the design and designated quality objectives. In fact, such quality management system already passed the certification in 1996 and has been effectively implemented. We value customer privacy. Apart from signing the Non-Disclosure Agreement with customers, we request all project members to follow the non-disclosure terms. The project manager is even requested to sign the Project Non-Disclosure Agreement. In 2015, no infringement of customer privacy of any kind or in any form or loss of customer data was reported. To show our great emphasis on information security and information security risk management, also to continuously satisfy our customers with the optimized security and high quality IT services, we set up a special project implementing ISO/IEC 27001 system and rebuilding Information Security Management System from June 2014. After several months of hard work, CTCI was successfully certified with zero non-conformity by British Standards Institute on December 12, 2014.We also set up various channels, including telephone lines, e-mail and fax lines, to facilitate customers to communicate with us. Furthermore, we have discovered, collected, responded to, processed, and collated customer feedback according to the Reinforcement of Customer Service Policy. We have also established the Customer Services Feedback Group chaired by the president to conduct the customer satisfaction survey on backlog or projects whose warranty is still valid on a biannual basis. The Customer Services Feedback Group will discuss and review the survey results, analyze the causes of problems and suggest improvement actions. After being reviewed and approved by the president, these improvement actions will be delivered to the relevant departments for implementation to ensure that project quality conforms to the customer requirements and expectations. In addition to the feedback of external customers, we started the internal customer satisfaction survey in 2009. We also conducted a contrastive study with results in the external customer satisfaction surveys to exactly locate the problems, advantages and disadvantages of the organization and thereby to improve implemental ability and service quality of various work items and to continuously enhance customer satisfaction. Honor Events : Consumer Rights and Interests Awards Description The 15th Public Construction Golden CTCI won the 15th Public Construction Golden Quality Award for CPC Talin Flare Gas Recovery System Quality Award (FGRS) Project 2015 MOEA Public Construction Excellent CTCI won the 2015 MOEA Public Construction Excellent Quality Award for CPC Talin Flare Gas Recovery Quality Award System (FGRS) Project Excellent Performance Contractor Award CTCI Won the annual Excellent Performance Contractor Award from CPC for excellent construction quality from CPC and safety record for Talin #10 SRU Project.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons Outstanding Engineering Award by the Taipei MRT Xinyi Songshan Line Systemwide Electrical & Mechanical Work--Power Supply System Project Chinese Institute of Engineers contracted by CTCI won Outstanding Engineering Award by the Chinese Institute of Engineers.

(6) Human Rights: Apart from what is specified in Social Welfare Protection (1), based on the Act of Gender Equality in Employment and the Regulations for Implementing Unpaid Parental Leave for Raising Children announced by the competent authorities, we have established the policy of “unpaid parental leave for raising children” in the Employee Handbook. According to our policy, employees, after working at CTCI for one full year, may apply for the unpaid parental leave for raising children for each child under 3 years of age until he/she is 3 years old; provided that the length of leave should not be longer than two years. In 2015, 26 employees applied for “unpaid parental leave for raising children” (including 16 female employees and 10 male employees). At present, we have outsourced the management of the CTCI Building to a professional property management company. In addition to the basic duty training, we have arranged education on human rights for the security guards. In the periodic training, we have also included the Unidentified Person Intrusion Standard Operating Procedure, Civilian Protest Standard Operating Procedure, CPR Administration Procedure, and Etiquette Education. Honor Events : Human Rights Protection Awards Description Certificate of Appreciation from Labor CTCI was awarded a certificate of appreciation for organizing the 5th Sepak Takraw and Songkran Festival Affairs Department, New Taipei City in New Taipei City. Government Awarded a Medal from Thailand Labor Awarded a certificate of recognition for taking care of Thai laborers. Affairs Department Taipei City Excellent Healthy Workplace CTCI was awarded Taipei City Excellent Healthy Workplace Prized to recognized its dedication and Prize resolution to create a healthy workplace and improve upon employees’ health. Certificate of Excellent Breastfeeding Room CTCI headquarters building was awarded the Certificate of Excellent Breastfeeding Room by Department by Department of Health, Taipei City of Health, Taipei City Government (Duration: September 2013 to August 2016). Government

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons (7) Safety, Health & Environment Management: The safety and health of employees, sub-contractors and customers and environmental protection are very important to us. Therefore, we have established an HSE management system according to the ISO 14001 and OHSAS 18001 international standards. Also, the president of CTCI proclaimed the organization’s HSE Policy Statement and implemented the new management system applicable to the office area at the headquarters to all project sites. CTCI HSE Policy was cosigned by CTCI President and heads of business operation units. Aside from requiring every colleague to comply with such policies, we also demonstrate our determination and emphasis on HSE. Every year, we also regularly hold HSE auditing. In the end of 2008, we further passed Taiwan Occupational Safety & Health Management System (TOSHMS) certification emphasizing labor participation, procurement safety management, contracting management etc. Since 2012, CNS 15506:2011 Occupational Safety and Health Management System Certificate had been implemented replacing TOSHMS. In November of 2014, we have passed review and successfully renewed HSE Management system certification which is due every three years. We have even established the Labor Safety and Health Committee with a total of 18 committee members while 6 of them are labor representatives (1/3). The committee holds a meeting every three months to review and discuss issues relating to labor safety and health management and communicates the results to all employees. In the engineering design phase for project execution, based on “Hazardous Work Place Review and Inspection Rules” and International Regulations (API, IEC), we conduct safety inspection reviews of work to improve operation safety and quality durability of the entire site. During construction for project, suppliers are requested to comply with the labor safety and health organization and personnel laws in the assembly work site and form a construction site labor safety and health organization to coordinate, communicate and resolve issues relating to labor safety and health of subcontractors and vendors. We also follow local laws and regulations when executing projects overseas. The QHSE Division of the headquarters draws up suitable management goals in accordance with the operation situation of the HSE management system every year. The execution progress of the goals set will be measured regularly and reported at the Management Review Meeting every quarter. In that way, the management level can allocate resources and make decisions according to the actual implementation status. Also, the overall HSE performance will be utilized as reference when setting up goals of the next year. With constant editing, we can set more effective goals and enhances the operation of HSE management system.To actually accomplish the annual HSE goals, we adopt various objectives to measure HSE performance at the project sites besides internal auditing. Considering the fact that the HSE performance at the project sites were only evaluated by HSE incident records as well as reward and punishment from external units, while management system, execution condition at the project sites, and corrective actions were not reviewed, the HSE Management Dept. hence formulated and optimized the HSE performance evaluation system for project site. Hopefully, the effectiveness and objectivity of the evaluation of the project HSE performance will be upgraded. To revise the evaluation indicators for HSE performance,

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons except for consulting existing standards in CTCI and related indicators by Ministry of Labor and Public Construction Commission, we further combined international documents of HSE performance evaluation and examination standards for HSE rewards, and stipulated four major aspects to enhance the overall project HSE evaluation mechanism, including “management system,” “on-site execution,” “evaluation by project owners,” and “governing agencies.” Also, consulting to statistical model, we formulated respective weight of each indicator to enhance the effectiveness and objectivity of the overall evaluation mechanism for project HSE performance. Certifications CTCI has passed: 1. CNS 15506:2011 Occupational Safety and Health Management System Certificate 2. ISO 9001:2008 Quality Management System Certificate 3. OHSAS 18001:2007 HSE Management System Certificate 4. ISO 14001:2004 HSE Management System Certificate Honor Events : Quality, Health, Safety and Environment Awards Description Certificate of Accident Free Man-hours by CTCI Corp. participated in the Accident Free Man-hours activity hosted by Ministry of Labor and was award Industrial Safety & Health Association of a Certificate of Accident Free Man-hours by Industrial Safety &Health Association of the ROC, Taiwan (with the ROC, Taiwan accumulated 33,891,274 accident free man-hours from Jan. 18, 2007 to Nov. 30, 2015). Excellent Performance Award for Air Tainan WtE Plant operated and managed by Environment & Resources Business Operations (ERBO) Quality Purification Area Adoption by honored with the Excellent Performance Award for Air Quality Purification Area Adoption by Environmental Protection Bureau of Environmental Protection Bureau of Tainan City Government. Tainan City Government Silver and Bronze Medal from Tainan Science Park Resource Recycling Center and Hsintien Refuse Incineration Plant operated and Environmental Protection Administration, managed by ERBO were honored with ROC Enterprise Environmental Protection Silver and Bronze Medal Executive Yuan from Environmental Protection Administration, Executive Yuan. Award of 2015 Outstanding Tainan Science Park Resource Recycling Center operated and managed by ERBO was recognized with Environmental Protection Units from Award of 2015 Outstanding Environmental Protection Units from Southern Taiwan Science Park. Southern Taiwan Science Park

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons Premium and Excellence Awards in EPA The result of 2014 appraisal held by Environmental Protection Administration, Executive Yuan has been 2014 Annual Appraisal announced. Keelung Plant won the premium award and Xindian Plant, Taonan Plant, Miaoli Plant, and Houli Plant were recognized with the excellence awards.

7. If the corporate social responsibility reports have received assurance from external institutions, they should state so below: In order to communicate with stakeholders and allow them to better understand our way of operation, we began publishing on an annual basis the CTCI Corporate Sustainability Report in 2008 to disclose the information concerning our materiality issues and according to the GRI Guidelines. We also regularly submit the report to the British Standards Institution (BSI) for verification. In fact, we are the first private business in Taiwan to have our CSR report pass the BSI verification. In the G4.0 Guidelines proclaimed in 2014, the GRI advised organizations that they should disclose information more comprehensively and more transparently. Upholding the attitude of being responsible and the spirit of information accessibility and transparency, we disclosed corporate information using the G4.0 Guidelines. Also, we passed the AA1000:2008 High Level accreditation from BSI and the GRI G4.0 Guidelines. All these point to one thing: We were a pioneer reporter using the GRI G4.0 Guidelines. In addition, to ensure that stakeholders at home and abroad can better understand the actual CSR activities at CTCI and to connect with the world, contents of this report also correspond to the Ten Principles of the UN Global Compact, the Seven Core Subjects in ISO2600:2010, and the Determination Items of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM-Listed Companies. All these show that the CSR activities and information disclosed in this report are complete and transparent. With the concerted effort of Company’s managers and all employees, we won numerous awards and credits in 2015 to prove our achievements in promoting CSR. Honor Events : Corporate Social Responsibility Awards Description Emerging Markets Index Membership for CTCI was selected for Emerging Markets Index Membership for DJSI with excellent performance and, Dow Jones Sustainability Indices (DJSI) therefore, became a pioneer enterprise in the field of Engineering & Construction Industry in Taiwan. Ranked as Grade A++ in the Information CTCI has been performing rather well regarding information disclosure, and was awarded Grade A+ in 2010 Disclosure and Transparency Rankings for and 2011, while the top ranking Grade A++ was issued from 2012 to 2015. Such an achievement TWSE-listed and GTSM-listed Companies demonstrates that CTCI’s efforts have been well recognized.

Implementation Status Deviations from “Corporate Governance Best-Practice Evaluation Item Principles Yes No Summary Statement for TWSE/GTSM Listed Companies” and reasons Evaluated as Top 5% in the “2014 CTCI was evaluated as top 5% of the TWSE listed companies and the Taipei Exchange (TPEx) listed companies. Corporate Governance Evaluation System” Top 50 for Excellence in Corporate Social CTCI’s accomplishment of CSR activities was recognized by the CommonWealth Magazine, listed 29th among Responsibilities by CommonWealth Top 50 of the Excellence in Corporate Social Responsibilities Award this year for the group of large enterprises Magazine (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 The ranking of 2015 Taiwan's Top 2000 Enterprises was based on the consolidated revenues and profits of the CommonWealth Magazine and retains Top companies for 2014, a result of the survey conducted by CommonWealth Magazine. In terms of the overall 1 in the contractor sector ranking in the Top 650 Service Enterprises, CTCI Corporation ranked as the 28th this year, retained Top 1 in the contractor sector for years in a row, and ranked as the 35th in the Top 50 Most Profitable Companies in the service sector. BSI 2015 Green Enterprise Award With the determination and actions in carrying out sustainable development and fulfilling corporate social responsibilities, CTCI has been awarded 2015 Green Enterprise Award by BSI. Recognized by the Taiwan Institute for CTCI is recognized by TAISE and honored with “Services Industry Silver Award” under the Taiwan Top 50 Sustainable Energy (TAISE) with the Honor Corporate Sustainability Report Award, “Growth through Innovation Awards,” as well as “Transparency and of Taiwan Corporate Sustainability Awards Integrity Awards” in 2015. CTCI will continue to improve the transparency of corporate governance, build reliable quality engineering, and take care of employees to form a harmonious partnership, while also focusing on environmental protection, reduction of resources waste, corporate image enhancement and achieving sound financial performance to fulfill CSR.

3.4.6 The Ethical Corporate Management Implementation Status Deviations from “Ethical Corporate Management Best Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM- Listed Companies” and reasons 1. Establishment of ethical corporate management V The Company established “Corporate Governance Principles”, “Ethical None policies and programs Corporate Management Best Practice Principles“, “Code of Ethics for Directors (1) Does the company declare its ethical corporate and Managers”, “Employee Code of Ethics and Conduct”, and “Procurement management policies and procedures in its Personnel Code of Conduct”. guidelines and external documents, as well as the Directors, and managers should obey the “Code of Ethics for Directors and commitment from its board to implement the Managers”, when they execute their function. policies? All employees are requested to follow the laws and ethics standard and (2) Does the company establish policies to prevent behavior principles clearly defined in “Employee Code of Ethics and Conduct”. 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? 2. Fulfill operations integrity policy V  The Company concluded the commerce contracts based on mutual trust and None (1) Does the company evaluate business partners’ good faith management principles. ethical records and include ethics-related clauses  The Company assigned Human Resources Department to be in charge of in business contracts? corporate integrity related matter and report to the board meeting (2) Does the company establish an exclusively (or periodically. concurrently) dedicated unit supervised by the  It is forbidden to have preferential affairs between employee and party. All Board to be in charge of corporate integrity? employees can’t pay or ask for present, entertainment, commission or bribe

Implementation Status Deviations from “Ethical Corporate Management Best Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM- Listed Companies” and reasons (3) Does the company establish policies to prevent for the advantage of themselves or third party, when they conduct their conflicts of interest and provide appropriate work. communication channels, and implement it?  The Company set up effective and faultless accounting system and internal (4) Has the company established effective systems control program to manage out of ordinary affairs. The Company also set for both accounting and internal control to up a specialized independent audit unit to execute yearly auditing plans and facilitate ethical corporate management, and are report the audit results to supervisors every month. The audit unit also has they audited by either internal auditors or CPAs to attend the Audit Committee and Board of Directors to report the faults on a regular basis? and extraordinary affairs in their internal control inspection, and push (5) Does the company regularly hold internal and related units to take modified measures and trace the results quarterly until external educational trainings on operational they are fully- modified. integrity?  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 V  The Company has the Accusation management regulation with a special None (1) Does the company establish both a telephone line and an investigation team to deal with the graft and bribe reward/punishment system and an integrity events. hotline? Can the accused be reached by an  The Company has the regulation of Reward and Punishment to deal with the appropriate person for follow-up? above cases. (2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the company provide proper whistleblower protection? 4. Strengthening information disclosure V The Company has disclosed the “Ethical Corporate Management Best Practice None (1) Does the company disclose its ethical corporate Principles” on its website and MOPS. management policies and the results of its

Implementation Status Deviations from “Ethical Corporate Management Best Practice Evaluation Item Yes No Summary Statement Principles for TWSE/GTSM- Listed Companies” and reasons implementation on the Company’s website and MOPS? 5. If the company has established its own ethical corporate principles based on “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, please describe the difference between operation practice and the ethical corporate principles: According to the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies”, the Company has obtained the approval of the “Ethical Corporate Management Best Practice Principles” (the “Principle”) in the 5th meeting of the 13th term Board of Directors in December 17th, 2014. The all employees, officers and board members should comply with the Principle. 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 Best Practice Principles“, “Code of Ethics for Directors and Managers”, “Employee Code of Ethics and 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.tw

3.4.8 Other Important Information Regarding Corporate Governance A. Training program for directors Study period Training Title Name Sponsoring Organization Course From To hours Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Governance Association arising in Mergers and Acquisitions Chairman John T. Yu Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Vice Governance Association arising in Mergers and Acquisitions John H. Lin Chairman Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Managing Governance Association arising in Mergers and Acquisitions Andy Sheu Director Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association Taiwan Academy of Banking 2015/09/22 2015/09/22 From Creation to Business Innovation 3.0 and Finance Independent Johnny Shih Capital Market Analysis, Responsibilities of Director Taiwan Academy of Banking 2015/12/23 22015/12/23 Directors and Supervisors arising in 3.0 and Finance Corporate Governance / Insider Trading Taiwan Academy of Banking 2015/05/05 2015/05/05 Corporate Governance 2.0 3.5 and Finance Taiwan Corporate Functional Responsibilities and Performance 2015/05/12 2015/05/12 3.0 Independent Governance Association Appraisal of the Board of Directors Jack Huang Director Taiwan Stock Exchange 「Corporate Governance、Financial 2015/06/26 2015/06/26 6.0 Corporation Supervision and Law」Seminar Taiwan Corporate How to Improve Efficacy of Board of 2015/09/20 2015/09/20 3.0 Governance Association Directors Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Independent Governance Association arising in Mergers and Acquisitions Frank Fan Director Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association

Business Models and Regulations for Securities & Futures 2015/08/21 2015/08/21 Prevention：Starts with Corporate 3.0 Institute Director Quintin Wu Governance / integrity Securities & Futures Master the trend of CSR and Corporate 2015/11/18 2015/11/18 3.0 Institute Governance to make winning opportunities Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Governance Association arising in Mergers and Acquisitions Director Yancey Hai Taiwan Corporate 2015/11/30 2015/11/30 Hostile Takeover Case Study：ASE vs. SPIL 3.0 Governance Association Securities & Futures 「Corporate Social Responsibility – 2015/01/22 2015/01/22 3.0 Institute Sustainable Values Reveal」Seminar Director Wenent Pan Taiwan Academy of Banking How CSR Drives Corporate Competitive 2015/04/14 2015/04/14 3.0 and Finance Advantage Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Governance Association arising in Mergers and Acquisitions Director Bing Shen Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association Taiwan Corporate Legal Liability of Directors and Supervisors 2015/08/07 2015/08/07 3.0 Governance Association arising in Mergers and Acquisitions Director Teng-Yaw Yu Taiwan Corporate 2015/11/06 2015/11/06 Enterprise Group Governance 3.0 Governance Association

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

C. Code of Business Conduct and Ethics for the Board of Directors and Managers

CTCI CORPORATION Code of Business Conduct and Ethics for the Board of Directors and Managers Amended on December 19th, 2007 Amended on August 8th, 2014

Article 1 (Objectives & Basis) This Code is formulated and approved by the Board of Directors pursuant to Article 6 of the Company’s Regulations on Corporate Governance in the greatest interest of the Company and for its sustained development, as well as to allow parties with interest in the company understand the ethical and behavioral standards for the Board of Directors and Managers.

Article 2 (Scope) Managers herein shall refer to all officers with the rank of Vice President and above, and Heads of the Finance and Accounting Departments.

Article 3 (Duty of Care) Directors and Managers shall comply with the law and provisions of this Code and shall lead by example in promoting the implementation of this Code and pursuing the highest ethical and behavioral standards. Directors and Managers shall have a duty of care during the performance of their duties; furthermore they shall not harm the rights and interests of the company for the benefit of any specific individual or organization, but shall aim to pursue the Company’s overall interest. All shareholders shall be treated equally during the exercise of their duties by the aforesaid.

Article 4 (Prevention of conflict of interest) Where the motions/issues tabled in the Board of Directors’ meetings are related to the interest of a Director which may pose a risk to the interest of the company, the said Director shall recuse himself from voting; furthermore he shall not represent other Directors in the exercise of their voting rights. Directors and Managers who enter into sale and purchase deals or loans or engage in other legal actions for themselves or on behalf of others should reveal the relevant items and issues and provide explanations to the Audit Committee.

Article 5 (Prohibition of Business Competition) Directors engaging in businesses which are in competition with those of the Company shall give prior report to the Shareholders’ Assembly and obtain approval in accordance with the provisions of the Company Law; Managers engaging in businesses which are in competition with those of the Company shall give prior report to the Board of Directors and obtain prior approval in accordance with the provisions of the Company Law.

Article 6 (Prevention of Personal Benefits) Any information obtained by Directors and Managers during the execution of their duties in relation to procurement, supply, business cooperation, strategic alliance or other business opportunities or other opportunities of profits shall be provided to the company as a matter of priority so as to maintain the interests of the company; the same shall not be used for personal or third-party gains.

Article 7 (Fair Trading) Directors and Managers should treat all counterparties and its workers fairly. They are prohibited from obtaining information through manipulation, non-disclosure and abuse of powers and from making false representations or from undertaking other unfair trading practice to obtain irregular benefits.

Article 8 (Insider Trading) Directors and Managers who in the course of work have access to information which may have a serious impact on the Company’s share price, shall maintain strict confidentiality of the said information prior to its public disclosure in accordance with the Securities Trading Act; utilization of the said information for insider trading is strictly prohibited.

Article 9 (Duty of Confidentiality) Directors and Managers who in the course of work have access to confidential information shall maintain the same. Save where the said confidential information has been publicly disclosed or provided on a need-to-know basis in the execution of work, they shall not disclose the said confidential information to anyone or use the same for any non work-related purposes. The duty of confidentiality shall continue to apply after the termination of the service of the Directors, Supervisors and Managers. Information which should be kept confidential includes all staff and customer information, inventions, trade secrets, technical information, product designs, specialized manufacturing knowledge, financial and accounting information, intellectual property rights and other relevant undisclosed information which may be useful to competitors or which may cause harm to the Company or its customers upon the disclosure of the same.

Article 10 (Protection and Appropriate Use of Company Assets) Directors and Managers shall have the duty to protect the Company’s assets and shall ensure the appropriate and lawful use of such assets in the Company’s business to prevent affecting the profitability of the business.

Article 11 (Compliance with the Law) Directors and Mangers shall comply with the law and the relevant Company policies and rules.

Article 12 (Political donations and activities) Directors and Managers shall in every way avoid influencing company staff in respect of political donations, supporting specific political parties and/or candidates or their participation in other political activities.

Article 13 The company should strengthen internal propagation of work ethics and encourage employees to report any cases of violations and the person(s) involved. The identity of the reporter shall be protected and kept confidential by the company to prevent any possible threats.

Article 14 (Violations) Directors and Managers shall refer all violations to the Corporate Governance Committee for its deliberation; incidents of severe violations shall be submitted to the Board of Directors for its deliberations. The persons concerned may make representations and appeals to the Company’s Corporate Governance Committee.

Article 15 (Procedures for waiver) Directors and Managers may be exempted from being subjected to the regulations as stated herein, if they have valid reasons, subject to the approval by the Board.

Article 16 (Implementation and Disclosure Methods) The Code shall be implemented after the board of directors grants the approval. The same procedure shall be followed when the Code has been amended.

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 66

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

6.0 Reference document CP-319-B CTCI Employees Reward and Punishment Regulations

7.0 Attachment Attachment 1 Work Flow Chart Attachment 2 Accusation Letter Attachment 3 Accusation Preliminary Examination Proposal

3.4.9 Internal Control System A. Statement of Internal Control System

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 2015 Date Resolutions of Shareholders’ Meeting Action Arisen 1. Adoption of the Company’s 2014 The resolution has been made and Business Report, Financial Statements implemented. and Consolidated Financial Statements. 2. Adoption of the Company’s distribution The ex-dividend date was on August 3rd, plan of 2014 earnings 2015, and cash dividend was paid on 2015.06.22 August 21st, 2015. In accordance with the total amount of common shares outstanding, the cash dividend per share had been adjusted to NT$ 2.23344690 actually. B. Major resolutions of the Board Meeting in recent years until the annual report being published: 2015.03.17 Approval of the Fiscal 2014 business report, financial reports and consolidated reports. Approval of the distribution plan of Fiscal 2014 earnings. Approval of “Statement of Internal Control System for the Year 2014”. Approval of the convening of the 2015 Annual General Meeting. Approval of the update of the Company’s paid-in capital registration. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the adjustment of a managerial officer of the Company. Approval of the removing the non-competition restrictions on a new managerial officer. 2015.05.08 Report on Consolidated financial reports as of March 31, 2015. Approval of the update of the Company’s paid-in capital registration. 2015.06.22 Approval of the ex-dividend record date of 2014. Approval of the increase of employee’s monthly meal allowance. 2015.08.07 Report on Consolidated financial reports as of June 30, 2015 Approval of the update of the Company’s paid-in capital registration. Approval on loans to subsidiaries for working capital requirement granted by the Company. 2015.11.06 Report on Consolidated financial reports as of September 30, 2015 Approval of increase shareholding ratio of CCJV P1 E&C Sdn. Bhd. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the CTCI Education Foundation scheduled to be established in 2016 Approval of the incorporation of a joint venture in Malaysia. Approval of the incorporation of a joint venture and a branch in the Netherlands as well as the incorporation of a branch in Oman. Approval of the update of the Company’s paid-in capital registration. 2015.12.18 Approval of the budget of 2016. Approval of the Year 2016 Audit Plan. Approval on loans to subsidiaries for working capital requirement granted by the Company.

Approval of the incorporation of a joint venture in Italy. Approval of the prescription/amendment to the Company’s “Internal Control Systems” and the internal rules. Approval of the “Plan for Improving Capability of Producing Financial Report”. Approval of the adjustment of managerial officers of the Company. Approval of the average salary increase rate of 2016. Approval of enhance employee incentive programs. Approval of the remuneration of the management officers of the Company. Approval of the amendment to the remuneration of the Chairman and Vice Chairman of the Company. 2016.03.18 Approval of amendment to the “Articles of Incorporation” of the Company. Approval of the distribution plan of the 2015 directors’ and employees’ remuneration. Approval of the Fiscal 2015 business report, financial reports and consolidated reports. Approval of the distribution plan of Fiscal 2015 earnings. Approval of “Statement of Internal Control System for the Year 2015”. Approval on loans to subsidiaries for working capital requirement granted by the Company. Approval of the convening of the 2016 Annual General Meeting. Approval of the update of the Company’s paid-in capital registration. Approval of the adjustment of member and assistants of the Functional Committee.

3.4.12 Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the 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

3.5 Professional fee of CPA 3.5.1 Information of CPA Accounting Firm Name of CPA Audit Period Note PriceWaterHouseCoopers Shyh-Rong Ueng Huei-Shyang Wang 2015.01.01-2015.12.31 -

3.5.2 Scale of professional fee of CPA Unit: NT$ thousands Item Audit Fee Non-audit Fee Total Amount (NTD) 1 Less than 2,000 2 2,000 ~ 4,000 (inclusive of 2,000) 2,314 2,314 3 4,000 ~ 6,000 (inclusive of 4,000) 5,664 5,664 4 6,000 ~ 8,000 (inclusive of 6,000) 5 8,000 ~ 10,000 (inclusive of 8,000) 6 More than 10,000 (inclusive of 10,000)

Unit: NT$ thousands Non-audit Fee Accounting Firm Name of CPA Audit Fee System Human Other Audit Period Note Registration Total Design Resource (Note1) Shyh-Rong Ueng 2015.01.01~2015.12.31 PriceWaterHouseCoopers Note 1 Huei-Shyang Wang 5,664 510 574 0 1,230 2,314 2015.01.01~2015.12.31 Note 1: The (other) professional fees except audit fee include: transfer-pricing report NT$680 thousand, translation fee of financial reports NT$550 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 Information on replacement of CPA : None

3.7 The Company's Chairman, President and Managers Responsible for Finance or Accounting who have Held a Post in the CPA Office or its Affiliated within the Latest Year : None

3.8 Changes in Shareholding of Directors, Managers and Major Shareholders Unit: Share 2015 As of April 30, 2016 Pledged Pledged Holding Holding Title Name Holding Holding Increase Increase Increase Increase (Decrease) (Decrease) (Decrease) (Decrease) GRQ Investment 0 0 0 0 Corporation Chairman Representative: (2,370,000) 0 0 0 John T. Yu Innovest Investment 0 0 0 0 Corporation Vice Chairman Representative: (950,000) 0 0 0 John H. Lin Sino Environmental 0 0 0 0 Services Corporation Managing Director Representative: (132,000) 0 230,000 0 Andy Sheu Independent Johnny Shih 0 0 0 0 Director Independent Jack Huang 0 0 0 0 Director Independent Frank Fan 0 0 0 0 Director Director Quintin Wu 0 0 0 0 Director Yancey Hai 0 0 0 0 Director Leslie Koo 0 0 0 0 Director Wenent Pan 0 0 0 0 Director Bing Shen 0 0 0 0 Crown Asia 2 Investment 0 0 0 0 Limited Representative: Director 0 0 0 0 Takao Kamiji Note1 Representative: 0 0 0 0 Michael Yang Note2 CTCI Foundation 0 0 0 0 Director Representative: 0 0 0 0 Teng-Yaw Yu Managerial Officers John T. Yu (2,370,000) 0 0 0 Managerial Officers John H. Lin (950,000) 0 0 0 Managerial Officers Andy Sheu (132,000) 0 230,000 0 Managerial Officers Michael Yang (263,597) 0 (61,750) 0 Managerial Officers Mark W. H. Yang (150,000) 0 120,000 0 Managerial Officers M. H. Wang (152,181) 0 10,000 0 Managerial Officers Pao-Yao Pan (296,500) 0 0 0 Managerial Officers Ming-Cheng Hsiao (26,000) 0 0 0 Managerial Officers Tien-Nan PanNote3 (181,863) 0 0 0 Managerial Officers Ching-Lin Hsu (254,949) 0 0 0 Managerial Officers Andrew Tsai (204,575) 0 20,250 0

Managerial Officers Brad Chen Note4 14,000 0 0 0 Managerial Officers Jung-Yu Han (176,500) 0 0 0 Managerial Officers Chen-San Hu 19,500 0 0 0 Managerial Officers Todd Chen 24,500 0 0 0 Managerial Officers Kai LeeNote5 (278,250) 0 0 0 Managerial Officers C. F. ChiouNote6 7,000 0 0 0 Managerial Officers Teh-Ming Tao 22,000 0 48,000 0 Managerial Officers Steve Jean (125,500) 0 0 0 Managerial Officers M. G. Lee (80,029) 0 0 0 Managerial Officers Po-Chien Wang 19,000 0 2,000 0 Managerial Officers Ching-Hsiang Tseng 20,000 0 0 0 Managerial Officers Shen-Peng Liao (141,289) 0 0 0 Managerial Officers Tsai-Ming Wang 10,000 0 23,000 0 Managerial Officers Min-Li Lee 9,250 0 0 0 Managerial Officers Jing-Shing Wu 19,500 0 0 0 Managerial Officers J.H. Chen Note7 12,000 0 12,000 0 Managerial Officers Y. S. Liao Note8 9,500 0 0 0 Managerial Officers Patrick Lin (208,000) 0 48,000 0 & CFO Accounting Officer SH Lin (153,649) 0 5,000 0 Note1: Be Dismissed on March 7, 2016 Note2: On Board on March 7, 2016 Note3: On Dismissed on January 4, 2016 Note4: Be Dismissed on April 1, 2015 Note5: Be Dismissed on October 6, 2015 Note6: Be Dismissed on November 15, 2015 Note7: On Board on January 5, 2015 Note8: On Board on March 12, 2015

3.8.1 Shares Trading with Related Parties Unit: Share Relationship between Transferee Reason Date of and Directors, Transaction Name for Transferee Shares Transaction Supervisors, Price (NT$) Transfer Managers and Major Shareholders Ching-Lin Hsu Donation 2015.04.23 Jui-Je Hsieh Spouse 300,199 NA John T. Yu Donation 2015.05.27 Hsiao-Yen Hsu Spouse 2,000,000 NA Michael Yang Donation 2015.06.01 Chih-Min Lo Spouse 275,347 NA John H. Lin Donation 2015.06.23 Li-Hua Hsu Spouse 450,000 NA M. H. Wang Donation 2015.06.23 Su-Hua Wu Spouse 187,181 NA Mark W. H. Donation 2015.07.03 Ping-Ping Cheng Spouse 150,000 NA Yang Yueh-Hsiang Pao-Yao Pan Donation 2015.07.06 Spouse 310,000 NA Cheng Ming-Cheng Hsing-Liang Donation 2015.07.09 Spouse 26,000 NA Hsiao Hsieh Patrick Lin Donation 2015.07.13 Hui-Tzu Lin Spouse 240,000 NA Kai Lee Donation 2015.07.13 I-Fen Liu Spouse 207,000 NA Steve Jean Donation 2015.07.13 I-Fen Lin Spouse 140,000 NA Chung-Ying Andrew Tsai Donation 2015.07.14 Spouse 229,575 NA Wang Tien-Nan Pan Donation 2015.07.16 Yueh-E Tseng Spouse 437,863 NA SH Lin Donation 2015.07.17 Chih-Chuan Liu Spouse 153,649 NA Jung-Yu Han Donation 2015.07.21 Kuei-Fen Chiu Spouse 192,000 NA Shen-Peng Liao Donation 2015.07.22 Shu-Mei Cheng Spouse 163,289 NA M. G. Lee Donation 2015.11.13 Shu-Ling Chou Spouse 103,029 NA Michael Yang Donation 2015.01.22 Chih-Min Lo Spouse 61,750 NA

3.8.2 Shares Pledge with Related Parties None

3.9 Information Disclosing the Relationship between any of the Company’s Top Ten Shareholders Shareholding The relationship between Spouse Shareholding by Nominee any of the Company’s Name & Minor Remarks Arrangement Top Ten Shareholders Shares % Shares % Shares % Name Relation Chiyoda 69,994,000 9.17 0 0 0 0 None None Corporation Chinatrust Commercial Bank 61,735,112 8.09 0 0 0 0 None None Trust CTCI Foundation 60,862,051 7.97 0 0 0 0 None None Fubon Life 44,265,000 5.80 0 0 0 0 None None Insurance Co., Ltd. Chairman: 0 0 0 0 0 0 None None Oliver Cheng Cathay Life 17,508,000 2.29 0 0 0 0 None None Insurance Co., Ltd. Chairman: 0 0 0 0 0 0 None None Hong-Tu Tsai American Funds Developing World 16,667,000 2.18 0 0 0 0 None None Growth and Income Fund Chunghwa Post Co., 16,322,000 2.14 0 0 0 0 None None Ltd. Chairman: 0 0 0 0 0 0 None None Wen-Chi Weng Subordinate Asia company of USI Corporation 15,180,656 1.99 0 0 0 0 Polymer USI Corporation Corporation’s subsidiary Asia Chairman of Chairman: 0 0 0 0 0 0 Polymer Asia Polymer Quintin Wu Corporation Corporation Parent company of Asia Polymer USI 14,496,107 1.90 0 0 0 0 Asia Polymer Corporation Corporation Corporation’s shareholder Chairman of Chairman: USI 0 0 0 0 0 0 USI Quintin Wu Corporation Corporation KGI Bank 14,372,000 1.88 0 0 0 0 None None Chairman: 0 0 0 0 0 0 None None Mark Wei

3.10 Shareholdings of the Company Directors, Supervisors, Managements, and Direct and Indirect Investments of the Company in Affiliated Companies As of April 30, 2016 Directors, Supervisors, Investment of the Managements Direct Total Investment Affiliated Company Company and Indirect Investment of the Company Share % Share % Share %

E&C Engineering Corporation 59,098,624 97.09 99,841 0.16 59,198,465 97.25 Resources Engineering Services 16,765,048 93.14 1,000 0.01 16,766,048 93.15 Inc. Advanced Control & Systems Inc. 11,444,842 48.72 338,833 1.44 11,783,675 50.16

GRQ Investment Corporation 169,000,000 100.00 0 0.00 169,000,000 100.00

Innovest Investment Corporation 114,000,000 100.00 0 0.00 114,000,000 100.00

KD Holding Corporation 38,457,105 58.05 306,957 0.46 38,764,062 58.51

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 450,000 60.00 300,000 40.00 750,000 100.00 Sdn. Bhd. 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

Pan Asia Corporation 39,219,509 34.27 0 0.00 39,219,509 34.27

CTCI Singapore Pte., Ltd. 5,100,000 100.00 0 0.00 5,100,000 100.00

CTCI & Partners Co., Ltd. 2,000,000 40.00 3,000,000 60.00 5,000,000 100.00 CCJV P1 Engineering & 247,500 99.00 2,500 1.00 250,000 100.00 Construction Sdn. Bhd. *SINOGAL - Waste Services Co., Ltd. doesn’t issue any stock related certificates.

IV. Capital Overview 4.1 Capital and Shares 4.1.1 Source of Capital A. Issued Shares As of April 30, 2016 Authorized Capital Paid-in Capital Remark Capital Par Year Increased Value Amount Amount Sources of by /Month Shares Shares Other (NT$) (NT$) (NT$) Capital Assets Other than Cash Retained 1997.07 10 300,000,000 3,000,000,000 288,417,000 2,884,170,000 None Earnings 1998.07 Retained ~ 10 520,000,000 5,200,000,000 476,000,000 4,760,000,000 None Earnings 2000.06 Retained 2001.06 10 720,000,000 7,200,000,000 547,600,000 5,476,000,000 None Earnings 2003.12 ~ 23.38 720,000,000 7,200,000,000 571,620,484 5,716,204,840 ECB None 2004.03 2004.08 Retained ~ 10 720,000,000 7,200,000,000 598,000,000 5,980,000,000 None Earnings 2006.08 2007.09 Retained ~ 10 900,000,000 9,000,000,000 631,438,000 6,314,380,000 None Earnings 2008.08 2010.01 ~ 10 900,000,000 9,000,000,000 698,666,648 6,986,666,480 CB & ESOP None 2011.04 2011.07 ~ 10 900,000,000 9,000,000,000 755,945,348 7,559,453,480 ESOP None 2014.12 2015.04 10 900,000,000 9,000,000,000 757,530,348 7,575,303,480 ESOP None Note 1 2015.06 10 900,000,000 9,000,000,000 758,645,098 7,586,450,980 ESOP None Note 2 2015.08 10 900,000,000 9,000,000,000 759,959,098 7,599,590,980 ESOP None Note 3 2015.12 10 900,000,000 9,000,000,000 760,508,848 7,605,088,480 ESOP None Note 4 2016.04 10 900,000,000 9,000,000,000 761,107,598 7,611,075,980 ESOP None Note 5 Note 1: 2015.04.19 MOEA Ruling Ref.No. 10401061210 Note 2: 2015.06.03 MOEA Ruling Ref.No. 10401101020 Note 3: 2015.08.25 MOEA Ruling Ref.No. 10401182450 Note 4: 2015.12.01 MOEA Ruling Ref.No. 10401251700 Note 5: 2016.04.13 MOEA Ruling Ref.No. 10501068390

B. Type of Stock Authorized Capital Share Type Remarks Issued Shares Un-issued Shares Total Shares Common Share 761,107,598 138,892,402 900,000,000 Listed stock

4.1.2 Status of Shareholders As of April 24, 2016 Foreign Other Domestic Government Financial Institutions Item Juridical Natural Total Agencies Institutions & Natural Person Persons Persons Number of 0 50 76 21,349 291 21,766 Shareholders Shareholding 0 188,010,968 149,534,262 111,189,642 314,538,976 763,273,848 (shares) Percentage (%) 0.00 24.63 19.59 14.57 41.21 100

4.1.3 Shareholding Distribution Status Common Shares (The par value for each share is NT$10) As of April 24, 2016 Class of Shareholding Number of Shareholding (Shares) Percentage (%) (Unit : Share) Shareholders 1 ~ 999 8,951 2,044,321 0.27 1,000 ~ 5,000 8,822 19,249,658 2.52 5,001 ~ 10,000 1,787 13,406,447 1.76 10,001 ~ 15,000 619 7,650,757 1.00 15,001 ~ 20,000 351 6,359,577 0.83 20,001 ~ 30,000 378 9,388,741 1.23 30,001 ~ 40,000 171 6,009,392 0.79 40,001 ~ 50,000 107 4,855,800 0.64 50,001 ~ 100,000 224 15,818,161 2.07 100,001 ~ 200,000 139 18,939,568 2.48 200,001 ~ 400,000 71 20,491,340 2.68 400,001 ~ 600,000 41 20,635,827 2.70 600,001 ~ 800,000 15 10,312,136 1.35 800,001 ~ 1,000,000 15 13,664,360 1.79 1,000,001 or over 75 594,447,763 77.89 Total 21,766 763,273,848 100.00

4.1.4 List of Major Shareholders As of April 24, 2016 Shareholding Shareholder's Name Shares Percentage (%) Chiyoda Corporation 69,994,000 9.17 Chinatrust Commercial Bank Trust 61,735,112 8.09 CTCI Foundation 60,862,051 7.97 Fubon Life Insurance Co., Ltd. 44,265,000 5.80 Cathay Life Insurance Co., Ltd. 17,508,000 2.29 American Funds Developing World Growth and Income Fund 16,667,000 2.18 Chunghwa Post Co., Ltd. 16,322,000 2.14 USI Corporation 15,180,656 1.99 Asia Polymer Corporation 14,496,107 1.90 KGI Bank 14,372,000 1.88

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

Item 2015 2014 As of March 31, 2016 Market Price per Share Highest Market Price 55.50 56.00 45.80 Lowest Market Price 33.05 39.70 34.60 Average Market Price 46.57 48.93 38.56 Net Worth per Share Before Distribution 22.45 22.53 23.04 After Distribution 20.04 20.27 NA Earnings per Share Weighted Average Shares 758,195 750,959 760,360 Diluted Earnings Per Share 2.69 2.79 0.62 Dividends per Share Cash Dividends 2.40 2.2334469 NA Stock Dividends  Dividends from Retained Earnings 0 0 0  Dividends from Capital Surplus 0 0 0 Accumulated Undistributed Dividends 0 0 0 Return on Investment Price / Earnings Ratio 17.31 17.54 15.55 Price / Dividend Ratio 19.40 21.91 NA Cash Dividend Yield Rate 0.05 0.05 NA Note 1: The Board of Directors has approved the 2015 earnings distribution and has not been resolved by the Shareholder’s Resolution in 2016 Note 2: Financial Report was reviewed by CPA in March 31, 2016

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%.

B. Proposed Distribution of Dividend: Cash dividend: NT$2.40 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 the 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 the 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 the 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 2015 Approved in Board of Directors Meeting for Employee and Directors’ Remuneration a. Recommended Distribution of Directors’ Remuneration is NT$ 15 million, and Employee Remuneration in cash is NT$55.111 million. b. Ratio of Recommended Employee Stock Bonus to Capitalization of Earnings: N/A c. Recounted EPS after Recommended Distribution of Employee and Directors’ and Supervisors’ Remuneration: NT$2.69 per share

D. Information of 2014 Earnings Set Aside to Employee Bonus and Directors’ and Supervisors’ Remuneration: Unit: NT$ Actual Distribution Recognized Estimated Amount Variance A B C=A-B Bonuses for Employees (Cash) 51,092,053 51,092,053 0

Remuneration for Directors 15,000,000 13,752,000 1,248,000 (Cash) The Estimation for 2014 Employee Bonus and Directors’ Remuneration is based on the percentage of earnings after tax and legal reserve consideration in the Articles of Incorporation. The difference between the actual 2014 Employee Bonus and Directors’ Remuneration distributed according to the resolution of the stockholders’ meeting and the Estimated Amount has been adjusted in the Income Statement of 2015.

E. The Information of Top Ten Recipients of Employee Bonuses in 2014: Name Title Amount(NT$) Andy Sheu Managing Director Michael Yang President Mark W. H. Yang Executive Vice President M. H. Wang Executive Vice President Andrew Tsai Senior Vice President 698,276 Tien-Nan Pan Senior Vice President Ming-Cheng Hsiao Senior Vice President Patrick Lin Vice President Teh-Ming Tao Vice President Ching-Lin Hsu Vice President

4.1.9 Buyback of Treasury Stock None

4.2 Issuance of Corporate Bonds None

4.3 Preferred Shares None

4.4 Issuance of Depository Receipt None

4.5 Employee Stock Options

4.5.1 Issuance of Employee Stock Options As of April 30, 2016 3rd Tranche 4th Tranche Type of Stock Option (Expired on 2015/7/7) (Note) Effective Date by Regulatory 2009/06/18 2010/06/09 Agency Issue date 2009/07/08 2010/06/18

Units issued 21,000 units 22,000 units Option shares to be issued as a percentage of 2.77 2.90 outstanding shares (%) The duration for options is 6 years, during which employees may not transfer, pledge, or gift their options except to heirs. Upon the Duration 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 share Subscribers may exercise their options by the following schedule and proportion:

The availability period The ceiling of option exercisable Conditional conversion (accumulate) periods and percentages 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 20,040,750 Shares 20,296,750 Shares

Exercised amount NT$450,422,948 NT$532,089,714 Number of shares yet to be 0 Shares 0 Shares converted Adjusted exercise price for those who have yet to N/A N/A exercise their rights Unexercised shares as a percentage of total issued 0 0 shares (%) Impact on possible dilution Dilution to Shareholders’ Equity is limited. of shareholdings Note: The expiration date of the 4th Tranche Employee Stock Options is Jun 17th 2016. The exercise date is rescheduled to April 22nd 2016 due to 2016 shareholders’ meeting.

4.5.2 List of Executives Receiving Employee Stock Options and the Top 10 Employees As of April 30, 2016 Exercised Unexercised No. of Option No. of Converted No. of Converted Option Shares as a Shares Strike Amount Shares as a Shares Strike Amount Shares as a Title Name Shares Percentage Converted Price (NT$ Percentage of Converted Price (NT$ Percentage of (thousand of Shares (thousand (NT$) thousands) Shares issued (thousand (NT$) thousands) Shares issued shares) issued (%) shares) (%) shares) (%) Managing Director Andy Sheu President Michael Yang Executive Vice President Mark W. H. Yang Executive Vice President M. H. Wang Executive Vice President Pao-Yao Pan Senior Vice President Tien-Nan PanNote1 Senior Vice President Ching-Lin Hsu Senior Vice President Andrew Tsai Senior Vice President Jung-Yu Han Senior Vice President Chen-San Hu 3rd: Senior Vice President Todd Chen The expiration date of the 4th Tranche Employee NT$20.6 Vice President Kai LeeNote2 Stock Options is Jun 17th 2016. The exercise date is

Vice President C. F. ChiouNote3 4,290 0.56 3,894 91,757 0.86 rescheduled to April 22nd 2016 due to 2016 4th: Vice President Teh-Ming Tao shareholders’ meeting. Any unexercised options NT$23.9 Vice President Steve Jean shall be deemed forfeited. -25.0 Vice President M. G. Lee Vice President Po-Chien Wang Vice President Ching-Hsiang Tseng Vice President Shen-Peng Liao Vice President Tsai-Ming Wang Vice President Min-Li Lee Vice President Jing-Shing Wu Vice President Y. S. Liao Vice President & CFO Patrick Lin Accounting Officer SH Lin Note1: Be dismissed on January 4, 2016. Note2: Be dismissed on October 6, 2015. Note3: Be dismissed on November 15, 2015.

Exercised Unexercised No. of Option No. of Converted No. of Converted Option Shares as a Shares Strike Amount Shares as a Shares Strike Amount Shares as a Title Name Shares Percentage Converted Price (NT$ Percentage of Converted Price (NT$ Percentage of (thousand of Shares (thousand (NT$) thousands) Shares issued (thousand (NT$) thousands) Shares issued shares) issued (%) shares) (%) shares) (%) Senior General Manager H.C. LEE Special Assistant William Chen Chief Engineer S. J. Chiang 3rd: Senior General Manager K. T. Chang The expiration date of the 4th Tranche Employee NT$20.6 Stock Options is Jun 17th 2016. The exercise date is Chief Engineer Leon Chen 468 0.06 468 11,386 0.06 rescheduled to April 22nd 2016 due to 2016 4th: Senior General Manager Tyrone Tsai shareholders’ meeting. Any unexercised options NT$23.9 shall be deemed forfeited. Senior General Manager Michael Chang -25.0 Senior General Manager Jim-D Chen General Manager L. A. Leu Deputy Chief Engineer Joe Chen

4.6 Status of New Restricted Employee Shares None 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions None 4.8 Financing Plans and Implementation None

V. Operational Highlights 5.1 Business Activities 5.1.1 Business Scope A. Main areas of business operations a. Hydrocarbon: Gas Processing, Petroleum Refining, Petrochemical, Chemical, Terminal, Polysilicon. b. Infrastructure, Environment & Power: Infrastructure, Transportation, Power, Steel & Nonferrous, Environmental Protection, Incineration & Energy Recovery, Water & Waste Water, Air Pollution Control. c. Environmental Resources: Investment and Development, O&M/Management of Incineration Plants, O&M/Management of Infrastructure, Resources Collection/Recycling Management, Renewable Energy, Renewal and Upgrade of Mechatronics System. d. Plant Maintenance Service: Maintenance Strategy, Maintenance Planning, Maintenance Execution, Asset Integrity Management, Overhaul management

B. Revenue distribution Unit；NT$ thousands Major Divisions Total Sales in Year 2015 (%) of total sales Engineering 62,985,942 93.93 Environment 3,628,146 5.41 General Trade 155,446 0.23 Others 288,106 0.43 Total 67,057,640 100.00

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. Macro Business Outlook: Based on the latest International Monetary Fund (IMF) report, the global economy kept growing in 2015 .The GDP growth rate in 2015 is 3.1%.The outlook of global economic growth will keep improving in 2016 and 2017. The global GDP growth rate is estimated to achieve 3.4% in 2016 and 3.6% in 2017.IMF think the growth of global economy will be slower, especially for emerging countries and developing countries. In advanced countries, the modest and unbalanced recovery will sustained, with a gradual further narrowing of output gap. The picture for emerging market and developing economies is diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016 to 2017 .Even though, IMF expects the economy will keep growing in 2016 to 2017, primarily reflects forecasts of a gradual improvement of growth rates in countries currently in economic distress. According to data compiled by the International Monetary Fund (IMF), the global economic growth rate in 2015 was 3.1%, with 1.9% of advance countries, and 4.0% of emerging countries. The IMF predicts that the global economic growth rate is 3.4% in 2016, with 2.1% of advance countries, and 4.3% of emerging countries. The Company is engaged in the engineering, procurement and construction (“EPC”) industry, which is closely tied to the overall economic conditions of our target markets. Many projects are initiated by government and consumption demands arising from the

private sector. Therefore, the economic growth of the Company’s target markets is a good indicator of potential business opportunities amount in those areas. The following table is IMF’s predictions of the economic growth rates in our major markets, and we find the economy growth are improving in our major markets the forecast economic growth rates of 2015 in these countries are expect to outperform than 2015, such as Taiwan, Singapore, Indonesia, Thailand, India ,USA, United Arab Emirates, Qatar and Kuwait. Most of the growth rates in the target markets also expect to outperform than average of the global, especially China, Indonesia, Vietnam and India are estimated to grow more than 5% in 2015. Overall, there are abundant business opportunities in those target markets of the Company. The Company will maintain the progressive and cautious mindset to participate the bidding.

Forecast of Economic Growth Rate Country 2015 2016 Global 3.1% 3.4% Taiwan 2.6% 2.8% China 6.9% 6.3% Singapore 2.2% 2.9% Indonesia 2.2% 2.9% Malaysia 4.7% 4.5% Thailand 2.5% 3.2% Vietnam 6.5% 6.4% India 7.3% 7.5% United States 2.5% 2.6% Mexico 2.3% 2.8% Saudi Arabia 3.4% 2.2% United Arab Emirates 3.0% 3.1% Qatar 4.7% 4.9% Kuwait 1.2% 2.5% Oman 4.4% 2.8% Sources: International Monetary Fund (IMF) - Data and Statistics

B. Market Overview and Future Development: The Company is mainly engaged in the field of engineering design, procurement and construction. As a professional EPC lump sum turn-key provider, the Company is the only enterprise in Taiwan with a paid-in capital over NT$7.6 billion out of more than 510 companies registered with the Chinese Association of Engineering Consultants. The Company is the largest representative company of EPC industry in Taiwan. Besides, the majority of domestic engineering consultant companies focus on domestic market which is limited and competitive. When the large-scale projects are under the tendency of lump sun turn-key type and opening for international bidding, there is only a few companies can compete or alliance with international companies. The developments of small-scale companies will be constrained. For the Company entered the international markets and then built up the significant reputations in the industry for years, CTCI has become a designated partner for many internationally well-known companies to collaborate with in various domestic projects. Moreover, being the leader in Taiwan market with highly competitive advantages, the Company alone is capable of bidding projects with single contract amount up to USD 1 billion.

C. The EPC Industry: Major clients of the Company are either state-owned company or private conglomerate in different countries in areas of refinery, petrochemical, general chemical, utility, infrastructure, environmental protection, steel manufacturing, incinerator, storage, pharmaceutical 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.

Engineering diagrams, Construction Downstream procedures and Midstream Upstream standards, Construction Requirement and management Specification Suppliers Client (Materials、 CTCI Equipments and (Owner) Construction) Completion of Completion construction or Certificate installation

D. Market Trend and Competition: a. The Trend (1) Large 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 transaction cost, clients turn to be reluctant to award specific sub-projects to different contractors and prefer 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) Increasing BOT projects in Public Sector In the public sector, the governments tend to boost economic growth by investing infrastructure projects. In order to reduce the government fiscal burden and encourage private sector to get involve with government’s projects, it’s becoming popular to announce BOT (Build-Operate-Transfer) projects for public sector projects. In the future, we will also introduce BOT model to emerging markets’ clients. After Taiwan joined the World Trade Organization and signed government purchase agreements with other countries, the domestic market in Taiwan is now available to foreign construction companies on an equal basis. Taiwanese engineering companies aim business potentials in emerging markets overseas via collaboration with other engineering firms worldwide, and strengthening the capability in finance and legal resources to cope with the ever-changing environment. (4) Technical Innovation Technical innovation becomes increasingly important to viability of EPC contractors. Generating value-added solutions to satisfy clients’ demands is a key challenge to engineering firms worldwide for maintaining competiveness on the market.

b. Competition There are around 16 EPC competitors globally, mainly in South Korea, Japan and Europe. In domestic market, there is not too much competitors with similar size. When the projects opened

for international bidding, the competitors are mainly from Korea and Japan. However, the Company still has the geographically advantages in Taiwan. In oversea markets, the Company has no obvious differences on technologies. The keys to award the contracts are the experience of project construction and the ability to control the cost. The Company has the advantage by developing China and South East Asia markets and setting local subsidies for years. In 2015, South East Asia is the biggest market of the Company. As for the petrochemical business in Middle East, the rigid competition from South Korea companies remains unchanged. Since the Company returned to middle east market in 2006, the Company already awarded projects in Oman, Saudi Arabia and Qatar. In 2015, The Company joint ventured with CB&I awarded a mega petrochemical plant in Oman. The Company plans to bid projects selectively in Middle East market and enhances the market share in overseas market.

5.1.3 Research and Development Overview A. Research and Development Expenses in Past Three Years Unit；NT$ thousands Item/Year 2013 2014 2015 Operating Revenue 31,446,326 38,060,203 42,049,227 R&D Expense 92,576 81,630 81,217 R&D Expense as percentage of Operating Revenue 0.29 0.21 0.19 (%) 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 2014 Projects 2015 Projects 1 The Application Research of Mobile Device The Innovation of Management Associated with Smart Tag in A Turnkey Project 2 The Integration Research of Visualization The Implementation, Promotion and Plant and Engineering Technology Information Extending Application of Existing Innovation Product 3 The Application Research of System Turnover The Research of Distributed Forestage and Information Management Platform Centralized Backstage Information Management System 4 The Integration and Application of Turnkey The Research of QR Code Application Project Engineering Material Information 5 The Research of Using Quantitative Risk The Research of the Integration and Handover Assessment to Improve Process Safety Technology of EPC Lump Sum Engineering Design Information 6 The Application and Research of Amine The Research of Applying Big Data Technology Absorber Design to Engineering Material Information Analysis 7 The Creation of Process FEED Procedure The Research of Failure Mode and Effect Analysis & Criticality Analysis (FMEA/CA) 8 The Economic Design of Structure in line with The Research of Process Design Software New Specification Application 9 The Integration Application and Research of The Establishment of Hydraulic Calculation BIM Technology for Architecture Engineering Guide for High Viscosity Fluid and Slurry 10 Connection Design for Steel Tube Column and The Basic Design of Applying Thin-film Beam Technology to Zero-liquid Discharge System

11 Equipment System Development for Project The New Technology and New Method for Application Civil and Building Engineering 12 Pressure Vessel Design Program Enhancement BIM 3D/4D Technology Research and Application 13 Tank Design Program Enhancement The Design of Stud Bolts Welded to The Steel Column Embedded in RC Piers 14 The Research and Development of Instrument The Development of Equipment Design Material and Man Hour Estimation Operation and Application System Management System 15 The Application of Industry Instrument The Development of Welding Document Wireless Control Technology Review Tools and High Pressure Equipment Design 16 The Research and Development of Instrument Truss Supported Conical Roof Tank Structure Underground Wiring Diagram Automation Design Design Technology 17 Modulation Data Bank Establishment for Unit The Automation Design Technology Equipment Piping Design Development for Instrument Control Room Layout 18 5D Engineering Design Development and The Application and Research of New Application Instrument Design Operation System 19 Automatic Piping Material Take-off Program The Integration and Development of Project Development for Quotation Stage Drawing and Material Information for Instrument Design 20 Electrical Design Data Integration and CAD The Application Research of Bentley Application Research OpenPlant 3D 21 The Optimization Design Application of MRT The Automatic Modeling of The Typical Piping Main Transformer Station Filter Around Unit Equipment 22 Pulsation and Piping Vibration Analysis for Reciprocating Compressor 23 Power System CAD Development 24 The Research and Development of Power System Design Data Integration System 25 Cathodic Protection Application for Offshore Structure and Facility 26 Seamless Integration between Startup and EPCK (STARTUP FLAWLESS) 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 2014 1. Visualization Engineering Technology Information Development and Research 2. The Research of Using Quantitative Risk Assessment to Improve Process Safety 3. Amine Absorber Design Research and Application 4. Structure Automation and Economization Design Research 5. Connection Design for Steel Tube Column and Beam 6. Precast Concrete Method Research for Pipe Rack 7. Tank Design Program Enhancement 8. Industry Instrument Wireless Control Technology Application 9. The Optimization Design Application of MRT Main Transformer Station Filter 10. The Automation and System Integration Research of Instrument Secondary

Cable Length Material Take-off 11. The Automatic Checking Development for Design Drawing’s Cable , Cable Tray and Conduit Length 12. The Cable List Automation Development of Cable Tray Cross Section 13. Instrument Underground Wiring Diagram Automation Design Development 14. Optimum Typical Unit Equipment of Piping Design Data Bank Establishment 15. SP3D Graphic Clash Reports 16. Automatic QR Code generation from ISO Drawing 17. Material Take-off Automation Development for Electrical Lighting Design Drawing 18. The Analysis Development between Each Time Piping Bulk Material and Requisition Information 2015 1. The Analysis and Research of Applying Big Data Technology to Engineering Material Information 2. SPE DI Related Technology Development 3. BIM 3D/4D Technology Research and Application 4. The Integration and Development of Project Drawing and Material Information for Instrument Design 5. Automatic 3D modeling of Typical Piping Design Around Equipment 6. Integrate P6, CMS and SPC to apply to 4D Construction Planning and Simulation 7. The Research of Failure Mode and Effect Analysis & Criticality Analysis 8. The Establishment of Hydraulic Calculation Guide for High Viscosity Fluid and Slurry 9. The Basic Design of Applying Thin-film Technology to Zero-liquid Discharge System 10. The Research of Super High Pressure Plant Design 11. The Design of Stud Bolts Welded to The Steel Column Embedded in RC Piers 12. Truss Supported Conical Roof Tank Structure Design 13. Pulsation and Piping Vibration Analysis for Reciprocating Compressor 14. Cathodic Protection Application for Offshore Structure and Facility 15. The establishment of Startup Flawless Guide

C. 2016 RD Direction and Major Technology Development a. 2016 RD Direction is to (1) Develop iEPC technology to increase intelligentized lump sum engineering operation (2) Develop the application of expertise technology to strengthen core design capability (3) Develop visualization engineering technology information to enhance project control capability (4) Develop HSE mobile system to carry out HSE management at job site (5) Establish the commissioning procedure to make a smooth handover for the project b. Major Technology developments are as follows: (1) Develop iEPC technology ‧ Provide micro and agile management according to project request ‧ Automation of engineering, procurement, construction operation ‧ Set up the intelligent application platform (2) Develop expertise technology application ‧ Build up the dynamic calculation and program simulation of Blowdown ‧ Develop the technology of fireproof, insulation applications of vitreous particle of fluorite ‧ Build up European code tank design technology ‧ The research of reliability, availability and maintainability analysis ‧ The research of Bow-Tie/ ALARP analysis ‧ The Risk Assessment and Analysis of Lighting Protection ‧ The Analysis of No-load Tap Changer(NLTC) from Step-up Transformer in Power Plant

(3) Develop the integrated information platform of visualization technology ‧ Continuous improvement of applying CMS to 4D ‧ Apply QR Code/RFID to construction engineering ‧ Apply visualization technology to pipe rack design and construction management system (4) Develop HSE mobile system (5) Establish start up procedure ‧ Continuous establishing commissioning expert system ‧ Set up the procedure of Pre-Start-up Safety Review (PSSR) ‧ Set up the standardization of shaft seal clean and maintenance of rotary machines 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. Engage in overseas projects aggressively and range into tier one engineering firms in the world. Following the Middle East, Southeast Asia and the North America market will be the main markets in the global petrochemical industry. The Company will maintain the progressive and cautious mindset to participate the bidding. The Company expects to establish a solid foundation in the global petrochemical industry and become the tier one international engineering company. The Company also evaluates to enter the new markets, such as Commonwealth of Independent States. b. Become one of the major players in the utility market. In recent years, the Company awarded the Lin Kou, Talin and Tung-Hsiao power plant expansion projects from Taiwan Power Company and overseas small power producer project from Thai Oil. According to a planned schedule of Taiwan Power Company, several power plant renovation projects will be released in the coming years. As the economy growing south-east Asia, power demand also increases simultaneously; potential power plants projects is foreseen recently in Malaysia, India, Vietnam Indonesia and Thailand. The Company will be bidding power plant projects progressively. B. Long Term Goals a. Emerging Markets Looking forward, to expand market share in the international petrochemical market is still one of the Company’s primary goals, and extend to emerging markets in north Africa, east Europe, Commonwealth of Independent States ,north America and south America from the regions of south-east Asia and middle-east. The Company also devoted to share successful experiences in non-hydrocarbon projects such as power plants, public transportation and incinerator to overseas markets, form China, south-east Asia and middle-east to rest of the world. b. New Techniques and New Areas The Company is planning to invest in new areas such as carbon-reducing techniques and alternative energy sources to complement our existing lines of services. These new businesses will contribute increasingly to the Company’s profitability and growth potential. 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$ 52.4 billion, while CTCI Group signed of NT$ 64.5 billion totally in 2015. The sales revenues of the Company amounted NT$ 42.0 billion, while the CTCI Group consolidated sales revenues amounted NT$ 67.1 billion totally in 2015. A. Sales Analysis by Major Services: a. By Area Area Group New Contracts Consolidated Sales Revenues Middle East 69% 19% Taiwan 18% 56% Malaysia 6% 10% China 4% 5% Others 3% 1% Thailand 0% 6% Singapore 0% 3% Total 100% 100%

b. By Industry Industry Group New Contracts Consolidated Sales Revenues Refinery/Petrochemical 75% 41% Others 6% 5% Infrastructure 6% 10% Steel and Non-Ferrous metals 6% 0% Hi-Tech 4% 2% Air Pollution Control 3% 0% Power 0% 37% Incineration 0% 5% Total 100% 100%

B. Market Share The Company has ranked No.1 in the domestic EPC market in Taiwan for years. 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. Within all companies under engineering service provider category, the revenues of the Company account for 15.8% of the total amount. On the global scene, the Company is well recognized by the U.S. Magazine Engineering News-Record in its annual rankings. For the year 2015, the Company is ranked, No.136 in Top 150 Global Design Firms Rankings, No.103 in Top 225 International Design Firms Rankings, No.148 in Top 250 Global Contractors Rankings, and No.122 in Top 250 International Contractors Rankings.

C. Industry Trend Overview a. Short Term Market Trend The global economic has been recovered in 2015 comparing to 2014. The advanced countries and emerging counties have the same path of recovery. The Middle East region still releases petrochemical projects and countries in the Southeast Asia region release National projects. The Company predicts such project investments in advanced and emerging countries will continue in 2016. Our views on the global market are briefed as following: (1) Taiwan We expect the government to maintain its policy on expanding domestic consumption, from which we target local projects as one of priorities in the coming years. Domestic power demand is increasing with economic growth, so the Taiwan Power Company begins to execute

renewal and expansion plans for many fire power plants approaching to their service life in northern, middle and southern Taiwan to satisfy the demand. Besides, for hydrocarbon projects, there are CPC’s petrochemical plants which joint venture with foreign companies, LNG receiving terminal project and other private-owned petrochemical plants expansion projects to strive for. For infrastructure projects, the Company is seeking to bid power supply and track work projects of mass rapid transportation (MRT) system, sewerage projects and ext. (2) South East Asia and India Malaysian National oil Company, PETRONAS, has started an integrated refinery and petrochemical industry in May 2012. In 2014, the Company already awarded an upstream refinery plant contract. The contract amount is more than US$ 1 billion. The downstream plants will be the Company’s main target projects. India performed relatively stable in BRIC countries. With the supports of Modi government, the willingness to invest in oil refineries, petrochemical plants, LNG receiving terminals and Re-gas facilities projects will be higher. Indonesian National oil Company, the PERTAMINA, are talking with many foreign investors, such as Aramco, Kuwait Petroleum International, PTTGC etc. for building new refinery plants or renew existing ones for satisfying domestic demand in 2020. The major opportunities in Thailand are mega power plants, small private-owned gas power plants, bio-fuel power plants, and municipal waste incineration power plants. The Company will seek for the business of combined-cycle power plants as well. The major opportunities in Vietnam will be the municipal waste incineration power plants and coal-fired power plants. Besides, the Company will also seek the coal-fired power plants subcontracting opportunities from renowned international EPC companies. Many new petrochemical projects will be available in Singapore along with several large infrastructure projects, including power supply and track work projects of MRT System projects. (3) China For both communications between straits increasing and the global economy recovering continuously, many Taiwanese companies are investing in downstream petrochemical plants in China, such as potential petrochemical and refinery project in Gulei Peninsula which has been approved by Taiwanese government. The Company’s primary goal now is to strength the capabilities of its subsidiaries in both Shanghai and Beijing for obtaining upcoming projects of Taiwanese petrochemical companies. Besides the petrochemical industry, benefited by the twelfth five-year economy plan of China, new opportunities are derived from the environmental protection, industrial wastewater treatment, and the metropolis refuse incineration markets. The Company plans to collaborate with local partners for such booming sectors. Moreover, there are also waste incineration power plant revamping opportunities in Macau. (4) Middle East and North Africa We are working on several EPC projects in Qatar and Saudi Arabia. Having build-up our experience in the region, we continue to be active for petrochemical EPC project bidding in the other countries of Middle East, such as Kuwait, Omen, Bahrain. In addition to the petrochemical industry, more bidding opportunities are available in the fields of power, desalination, waste water treatment, and MRT Systems…etc., while the competition is still intensive. Moreover, the Company will increase marketing efforts in North Africa. The national oil company of Algeria is planning to build more refineries plants. The Company will continue to track the relevant trends and developments. (5) USA Due to the promising shale gas development in US, there are many companies plan to do more investment. The company will keep collecting relevant information and select proper bidding opportunities. In 2015, The Company already awarded detailed design projects from Formosa Group in USA.

b. Long Term Market Trend The Company expects that refinery business would be promising in the coming few years. Emerging markets such as China, Indonesia, Vietnam, India, and Malaysia also contribute to this upward trend as their economy grows and creates new demands. 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 CTCI Corporation has been existed in the industry for more than 30 years. However, facing competition from engineering firms around the world, it is becoming increasingly crucial to utilize the resources on a global basis. That’s why the Company is setting up subsidiaries throughout Asia, in places like Beijing, Shanghai, Bangkok, Delhi and Hanoi, to develop more engineering talents at competitive costs. The Company also established a subsidiary in India in 2008 to assist the group to execute the numerous projects currently in progress. Looking ahead, the Company is on course to expand in more places such as Singapore to maintain its competitive advantages it has enjoyed to this date. In all, facing with stiffening competition, the Company is constantly trying to sustain efficient solutions by strengthening our global logistic network to lower down procurement costs, and strengthening capabilities in project management and risk control as well.

E. Advantages and Disadvantages for Long-Term Development & Corresponding Strategies a. Advantages (1) Domestic market is recovering Taiwan government continues to push ahead for a new national development plan. CPC Corporation and Taiwan Power Company continue execution their plans for renewal and expansion plans which provide stable source of domestic opportunities. Taiwanese petrochemical companies still invest in new capacity expansion in China; it is another potential business of the Company too. (2) Bidding for mega projects with professional capabilities. The Company is now the only engineering Company in Taiwan to be able to carry out projects with amount up to USD 1 billion without any partner. The Company has valuable experience in teamed up with foreign partners for project both for local and overseas for EPC project. 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 our 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 they can also be utilized globally such as China, Thailand, Vietnam, Malaysia, India, Singapore and the Middle East. The Company will integrate all the available resources to expand globally. (4) Strengthening Competiveness through Global Resources Management The Company’s subsidiaries in China (Beijing & Shanghai), Thailand, and Vietnam and India have contributed significantly to the projects carried out in Taiwan. The engineers in these subsidiaries have also gained invaluable experiences throughout the process. These subsidiaries will continue to serve the Company favorably in the years to come with low cost and work efficiency advantages. The Company established a subsidiary in Singapore in 2011 to continue its global expansion.

b. Disadvantages & Corresponding Strategies Item Corresponding Strategies Severe competition The Company plans to do the following to increase its chances of from Korean winning projects: competitors  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 The Company has adopted the following internal control mechanisms commodity prices to deal with commodity price fluctuations:  Shortening design timeframe, better control of procurement supply quantities and shipment schedule.  Multiple hedging mechanisms to reduce the associated risks to the minimum. Purchasing commodity swaps to lock-in the prices of basic materials required such as copper and nickel.  Arranging long-term supply contracts with suppliers. Enhancing relationships with major equipment manufacturers.  To reduce the procurement costs of the projects, actively seeking for low cost regional suppliers with stable quality. Difficulties in  The Company has established a risk management committee to executing overseas monitor and control all the relevant risks at both the project and the projects 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 2014 2015 As of March 31, 2016 Relation Relation Relation Item Company Company Company Amount % with Amount % with Amount % with Name Name Name Issuer Issuer Issuer 1 TPC 17,788,270 31 None TPC 19,864,146 30 None TPC 4,213,417 31 None 2 Others 39,903,667 69 None Others 47,193,494 70 None Others 9,420,272 69 None Total 57,691,937 100 Total 67,057,640 100 Total 13,633,689 100

B. Major Suppliers Information for the Last Two Calendar Years N/A

5.2.5 Production over the Last Two Years Unit: NT$ thousands 2014 2015 Engineering 50,096,146 58,301,255 Environment 2,891,796 3,018,765 General Trade 113,958 113,549 Others 215,672 187,993 Total 53,317,572 61,621,562

5.2.6 Shipments and Sales over the Last Two Years Unit: NT$ thousands 2014 2015 Local Export Local Export Engineering 43,527,493 10,157,629 53,017,613 9,968,329 Environment 3,522,118 13,214 3,017,909 610,237 General Trade 155,664 0 155,446 0 Others 315,819 0 288,106 0 Total 47,521,094 10,170,843 56,479,074 10,578,566

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 2014 2015 As of March 31, 2016 Permanent employee 2,590 2,581 2,582 Number of Employees Temporary employee 185 204 198 Total 2,775 2,785 2,780 Average Age 41.5 41.6 41.7 Average service seniority 10.8 10.8 12.5 Doctor 15 18 18 Master 1,200 1,236 1,237 Number of employees Bachelor 1,416 1,383 1,361 at each level of educational degree Senior High School 105 104 108 Senior High School 39 44 56 below

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 The Accountant of R.O.C. 2

5.3.2 Work Environment and Occupational Safety and Health A. HSE Policy CTCI’s HSE Policy Statements are set forth below: ‧ Insist Safety as the first priority; ‧ Promote personnel Health and Well-being; ‧ Protect Environment and Sustainability; ‧ Implement risk management system; ‧ Fulfill with legal and contract requirements; ‧ Engage in trainings and personnel participation; ‧ Improve HSE management system continuously. CTCI Corporation is always dedicated to creating and maintaining a sound working condition of health, safety, and environment protection (HSE). CTCI regards HSE as the priority among all of our activities. Also, we are enthusiastic to promote health management in workplace, to create a health working environment that free of harms to body and mind. We provide professional services with obligation to environment protection, aim for energy saving, carbon reduction, and prevent possible pollutions. We implement risk management mechanism, while prevention of occupational injuries and diseases as well as the environmental protection remains our highest concern among others. All of the projects related to planning, engineering design, procurement, construction and commissioning must be carried out in conformance with governments HSE legislations and the requirement specified in the contracts with customers is our commitment. To improve all personnel and collaborators’ knowledge on safety, health and environment protection, CTCI regularly held HSE training programs and often support HSE related activities and conferences, which personnel and collaborators are encouraged to participate actively. Moreover, CTCI spare no efforts on continuous improvement of each HSE activity to make sure the applicability and effectiveness of HSE management system. B. HSE Organization To ensure a safe and healthy environment provided by CTCI Corporation to our employees, also to ensure the project execution do not harm the environment, the company established HSE Management Department. CTCI also set up QHSE division. Under the direction of the group president, and the QHSE division, the HSE Management Department is in charge of formulating, planning, promoting and monitoring the corporate-level HSE activities, and instructing every department, project, subsidiaries in implementation. HSE Management Department also conducts internal auditing, monitors HSE performance of the corporation, and ensures the performance of HSE management work of every project activities, in order to prevent occupational accidents, protect employees’ safety and health, and conserve the environment. C. HSE Management System CTCI acquired ISO 14001 Environment Management System Certificate and OHSAS 18001 Occupational Health & Safety Management System Certificate in 2006, and has been continuously updating the latest version of international guidelines. For 3 years routine review in 2014, we successfully demonstrate our management systems’ compliance to OHSAS standards, thereby certification remain valid up to date. CTCI also acquired a TOSHMS (Taiwan Occupational Safety and Health Management System) Certificate in year 2009, and in 2012 it was approved with CNS 15506:2011.

To achieve continuous improvement of HSE management system, CTCI regularly review HSE performances, propose practical corrective actions and put into action, and annually revise the HSE objectives, to lower potential risk on safety, health and environment. Moreover, CTCI emphasizes concerns on safety management, incident prevention, energy conservation, and occupational health promotion. D. Operation of HSE Management System The operation of HSE management system followed the P-D-C-A process, scopes includes engineering design, procurement, construction, commissioning, emergency response, and headquarters etc. E. Statistic of Occupational Incidents CTCI as an international engineering corporation, in response to international clients’ requirements, the occupational injury statistics is conducted by the formula of TRCR, Disabling Injury or DARTR proclaimed by United State of Labor Department Occupational Safety and Health Administration (OSHA). Furthermore, the Root Cause Analysis (RCA) is conducted by the company in order to develop corrective and preventive and effective actions. Meanwhile, issues that are inter-departmental or systematic are documented, monitored and controlled.

Note1: Traffic incident are not included in the statistic number Note2: The United State of Labor Department Occupational Safety and Health Administration (OSHA)

Note3: Total recordable case rate ,TRCR＝

Note4: Days away from work, days of restricted work activity or job transfer incidence rate,

DARTR=

F. Awards To recognize its achievements in HSE, CTCI Corporation in 2015 received several awards from government authorities and clients. These are listed as follows: a. CTCI headquarters acquired Certificate of Zero Accident Proof from Ministry of Labor (totally 33.89 million accident free man-hours from January of 2007 to November of 2015) b. CTCI recognized by Taipei City Fire Department as the 2014 Outstanding Workplace for Fire Prevention Self-Management c. Talin Power Plant Project received an Appreciation of Zone Defense from Labor Standards Inspection Office Labor, Affairs Bureau, Kaohsiung City d. Talin Power Plant project awarded as the 2015 Excellent Company of Road Adopting Program from Environmental Protection Bureau, Kaohsiung City

5.4 Environmental Protection Expenditure CTCI Corporation is in the industry of engineering service, which that the workplace including the Headquarters building and job sites. Described respectively as following: 1. Headquarters building: Mostly office works, no polluting events happened ever. To dedicate to energy saving for environment protection, we replaced lighting of indoor offices and stair rooms with LED tubes, and replaced lighting in drinking area and parking lot with automatic sensor lighting system.

2. Job sites: Located in industrial zone in most cases, no influence to nearby residents is always the top demand. During construction process, all sub-contractors are requested to execute the environmental protection measures like waste management or any other to eliminate impacts on air, water, and soil to comply with regulations. No improper records happened before.

5.5 Relations between labor and employer 5.5.1 Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests A. Employees’ benefits a. Labor insurance (1) The Company’s employees are enrolled in the labor insurance program pursuant to laws. (2) The labor insurance premium includes the premium of the insurance against ordinary incident and occupational disaster. 70% of the insurance premium for ordinary incident will be borne by the Company, 20% thereof borne by the insured, 10% thereof borne by the government. The insurance premium for occupational disaster will be borne by the Company in full. b. National health insurance (1) The Company’s employees and their dependents are enrolled in the national health insurance program pursuant to laws. (2) The payable national health insurance premium shall be subject to the government’s relevant requirements. c. Group insurance (1) The Company’s employees are entitled to the additional group insurance purchased by the Company from the life insurance company externally. (2) The Company’s employees will be enrolled in the group insurance program immediately on the hiring date. The group insurance covers life insurance and accidental injury insurance, which will be borne by the Company in full. (3) The Company’s employees and their dependents may select the medical care insurance programs at their sole discretion, and 60% of the insurance premium will be borne by the Company. 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.

B. Top Management advanced studies: a. EMBA: Title Name Course Name Status EMBA, National Taiwan University of Science Graduated President Michael Yang and Technology, Taiwan in 2008 Executive Vice Mark W. H. Graduated EMBA, National Chengchi University, Taiwan President Yang in 2011 Executive Vice Graduated M. H. Wang EMBA, Chulalongkorn University, Thailand President in 2009 Executive Vice Graduated Pao-Yao Pan EMBA, National Sun Yat-sen University President in 2010 EMBA, Macau University of Science and Graduated Senior Vice Technology in 2008 Andrew Tsai President Doctor of Business Administration, Macau Graduated University of Science and Technology in 2013 Senior Vice Studied in Jung-Yu Han EMBA, National Chengchi University, Taiwan President 2009 Vice President Graduated Patrick Lin EMBA, National Taiwan University, Taiwan & CFO in 2013 Graduated Vice President Steve Jean EMBA, National Chengchi University, Taiwan in 2013 EMBA, National Taiwan University of Science Graduated Vice President M. G. Lee and Technology in 2008 Accounting Graduated SH Lin EMBA, National Chengchi University Officer in 2008

b. Top Management program: Title Name Course Name Status Executive Ming-Cheng Executive Management Training Program, During the period of Vice Hsiao National Taiwan University, Taiwan Apr. to Jul. 2013 President Executive Pao-Yao Top Management Training Course by During the period of Vice Pan National Taiwan University, Taiwan Mar. to June 2013 President National ChengChi University Business During the period of Senior Vice Executive Program Sep. 2005 to Apr. 2008 Andrew Tsai President Executive Management Training Program, During the period of National Taiwan University, Taiwan Mar. to June 2013 Participated in Advanced Executive During the period of Program for Senior Manager of National Senior Vice Jung-Yu Nov. 2005 to Jun. 2006 Taiwan University, Taiwan President Han Top Management Training Course by During the period of National Taiwan University, Taiwan Apr. to Jul. 2013 Senior Vice Chen-San Top Management Training Course by During the period of President Hu National Taiwan University, Taiwan Apr. to Jul. 2013 Participated in Advanced Executive During the period of Program for Senior Manager of National Dec. 2008 to Aug. 2009 Vice Taiwan University, Taiwan Steve Jean President Participated in Advanced Seminar on During the period of General Management of National Taiwan Sep. 2009 to Mar. 2010 University, Taiwan

100

Participated in Advanced Seminar on During the period of General Management of National Taiwan Vice Teh-Ming Feb. 2009 to Jul. 2009 University, Taiwan President Tao Top Management Training Course by During the period of National Taiwan University, Taiwan Apr. to Jul. 2013 Vice Top Management Training Course by During the period of M. G. Lee President National Taiwan University, Taiwan Apr. to Jul. 2013 Participated in Advanced Seminar on During the period of Vice General Management of National Taiwan Feb. 2009 to Jul. 2009 President Patrick Lin University, Taiwan & CFO Top Management Training Course by During the period of National Taiwan University, Taiwan Apr. to Jul. 2013 Participated in Advanced Seminar on During the period of General Management of National Taiwan Accounting Feb. 2009 to Jul. 2009 SH Lin University, Taiwan Officer Top Management Training Course by During the period of National Taiwan University, Taiwan Apr. to Jul. 2013

c. Training program about Corporate Governance: Sponsoring Name Date Course Hours Organization Michael Yang / Ming-Cheng Hsiao / Taiwan Corporate Legal Liability of Directors and Mark W. H. Yang / 2015/08/07 Governance Supervisors arising in Mergers and 3 Patrick Lin / Association Acquisitions SH Lin / Po-Chien Wang Michael Yang / Ming-Cheng Hsiao / Mark W. H. Yang / Taiwan Corporate Patrick Lin / 2015/11/06 Governance Enterprise Group Governance 3 SH Lin / Association Po-Chien Wang / J.H. Chen / Ai-ling Hsu

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 101

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$10.655 millions approximately per year. The average training hours will be more than 63.9 hours per person/year (177,930 hours/2,785 persons). The various training hours and costs are specified as following: Total number of Type Number of class Total hours (hour) Total costs (NT$) attendees Orientation training 53 468 57,165 4,653 Competence training 1,305 26,445 119,011 3,298,557 Management training 29 496 1,454 6,486,183 General knowledge training 39 107 168 759,129 Self-development training 3 3 132 107,368 Total 1,429 27,519 177,930 10,655,890

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”.

D. Retirement system and implementation thereof: The Company enforces the workers' retirement rules pursuant to the Labor Standard Law and allocates the pension reserve on a monthly basis. The rules are outlined as following: a. All of the Company’s employees shall comply with the rights and obligations defined in the workers’ retirement rules. b. The Company allocated the pension reserve equivalent to 5% of the total salary on a monthly basis before the end of September 2002, and 6.5% thereof after October 2002. The pension reserve will be deposited to the exclusive account maintained at the Bank of Taiwan. As of July 2005, the Company has executed the new system according to the employees’ will and choice, and allocated the pension fund according to the Labor Pension Act. c. Payment of pension fund: The Company paid the pension fund pursuant to the Labor Standard Act or Labor Pension Act pursuant to laws subject to the employees’ choice as of July 1, 2005.

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E. Other important agreements: a. The Company is engaged in the engineering service and possesses qualified personnel, a definite management philosophy, and a well-founded management system. In addition to the ordinary organization and system, the communication channels also include employees’ forums and labor and employer meetings held on a scheduled or non-scheduled basis, and installation of a suggestions box, so as to establish common consensus and a harmonious relationship between the employees and employer through the various channels. b. The Company is engaged in the business where the Labor Standard Law may apply and, therefore, it shall operate in accordance with the Labor Standard Law. c. Written undertaking for non-disclosure, non-competition and intellectual property right To secure the going concern, protect the group members’ interest and complete the corporate governance, the Company amends the “written undertaking for non-disclosure and copyright & patent right” to the “written undertaking for non-disclosure, non-competition and intellectual property right” and hopes that all employees may comply with the undertaking. All employees of CTCI and its domestic affiliates and overseas companies have already signed the undertaking.

5.5.2 Loss suffered by the Company due to dispute between labor and employer in the most recent fiscal years The Company is used to valuing the employees’ benefits and calling a labor and employer meeting and welfare committee meeting on a quarterly basis, and also installs the suggestions box to make a two-way communication channel available to employees. Therefore, the relationship between labor and employer is harmonious and no dispute over labor has arisen in the past. No material loss or punishment has been suffered by the Company due to dispute between labor and employer in the past three years. In the future, the Company will continue to adhere to the same principle and solidify the relationship between labor and employer further.

5.5.3 Employee Code of Ethics and Conduct 1. Objective This Code of Ethics and Conduct is established according to the resolutions made by the board of directors to provide a reference for employees to behave themselves and to let interested parties understand the ethical standards and code of conduct that CTCI employees shall follow when carrying out their duties. All CTCI employees shall read this Code carefully, understand it, and carry it out. 2. Scope Employee under this Code shall mean all CTCI employees. Where there are independent codes of ethics and codes of conduct established for directors, supervisors, and managers, the directors, supervisors, and managers of CTCI shall follow such codes. 3. Principle of Good Faith When carrying out their duties, employees shall pay attention to team spirit and disregard ego-centrism. Employees shall follow the principle of good faith and maintain an aggressive, serious, and responsible attitude. 4. Principle of Equality Under no circumstances shall employee discriminate and reject others in any form as a result of differences in gender, race, religions and beliefs, political party, aptitude, position, nationality, or age. 5. Work Environment Employees shall maintain a healthy and safe work environment together. No act of sexual harassment, violence or intimidation of any form or in any manner is allowed. 6. Refusal of Conflict of Interest and Opportunities for Personal Benefits CTCI employees are responsible to maintain and increase the profits legally gained by the organization and shall avoid: (1) opportunities to gain personal benefits or the benefits of a third party using the organizational property, information and/or benefits of their duties; and (2) competition with the organization.

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7. Fair Trade (1) Employees shall treat customers fairly and shall avoid concessions in trades with the interested party. (2) When carrying out their duties, employees shall not request, ask for in return, deliver or accept gifts, treatments, kickbacks or bribes in any form or engage in other act of pursuing unjust enrichment for the benefit of themselves or a third party; except for gifts or treatments as part of the social custom or those approved by the organization. 8. Internal Transaction Employees shall keep absolutely confidential information that may critically influence the stock transaction price of the organization they acknowledge or hold from work according to the Stock Exchange Act prior to the disclosure made by the organization. Employees shall also not engage in internal transaction with such information. 9. Non-disclosure Responsibility Employees shall respect the privacy of one another and shall not spread rumors or libel others. Either in service or after the termination of employment, employees shall carefully handle sensitive information obtained from work and shall not disclose such information to a third party or for use other than in work, except when such information is disclosed by the organization or for the purpose of carrying out one’s duty. Sensitive information specified in the foregoing paragraph shall include personnel and customer data, inventions, trade secrets, technical data, product design, manufacturing know-how, financial and accounting data, and intellectual properties of the organization, as well as unpublished information that can be used by competitors or damage the organization or its customers after disclosure. 10. Correct Documentation, Records and Reports Employees shall ensure the correctness and integrity of documentation and data of any kind processed by them and shall retain them properly. 11. Protection and Suitable Use of Organizational Property When carrying out their duties, employees shall avoid intercepting, interference, damage and/or intrusion of the organization data, information systems and network equipment to ensure the confidentiality, integrity and availability of organizational information. 12. Political Donation and Activity Under no circumstances shall employees influence other employees to make political donations, support specific political parties or candidates, or participate in any political activities. Employees shall also avoid any political activities during office hours and in the workplace. 13. Copyright Employees shall respect laws and regulations concerning intellectual property rights. Illegal use or duplication of copyrighted intellectual property is prohibited, including books, magazines and/or software. 14. Encouragement of Reporting Crimes or Offences of This Code of Conduct Supervisors shall reinforce the ethical education for employees and encourage them to report any crime or offence of this code of conduct in a signed report at any time. The organization shall keep confidential the identity and protect any informants to protect them against threat or retaliation. 15. Procedure of Exemption Employees may be exempted from particular items in this code of conduct with proper reason approved by the audit committee and the board of directors meeting. 16. Implementation This Code and its revisions shall be implemented after being reviewed by the audit committee and passed by the board of directors meeting. It shall be disclosed in the annual report, shareholder’s report, and the Market Observation Post System.

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5.6 Important Contracts Agreement Counterparty Period Major Contents Restrictions According to Jia Xing Petrochemical 2015/07/01 Jia Xing PTA Phase II, BDE Engineering contract content Co., Ltd. 2016/10/01 and DDE stipulation CPC Corporation, Taiwan According to 2015/04/15 CPC Talin #3 RDS & #8 SRU EPC Project & Construction contract content 2017/04/15 Revamping Project Division stipulation According to Formosa Plastics 2015/08/11 Engineering FPC LDPE Project, DDE contract content Corporation, Texas 2017/02/11 stipulation According to Nan ya Plastics 2015/08/04 NPCA 828KTA EG2 Engineering contract content Corporation, America 2017/04/15 Expansion Project, DDE stipulation Oman Oil Refineries and According to 2015/12/17 Oman ORPIC PKG-1 Steam EPC Petroleum Industries contract content 2019/12/17 Cracker and U&O, EPC Company SAOC (ORPIC) stipulation According to 2015/03/19 BASF 12 KTA EGSA Project, EPC BASF Chemical Co., Ltd. contract content 2016/06/30 EPC stipulation According to 2015/04/08 Gali Batu Depot Stabling EPC Land Transport Authority contract content 2019/11/30 Trackworks, EPC stipulation TPC Taichung Power Plant According to Taiwan Power Co., Ltd. 2015/12/31 550MWX4 Existing Unit EPC contract content Taichung Power Plant 2020/12/31 1~4 AQCS Retrofit Project, stipulation EPC

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VI. Financial Information 6.1 Condensed Financial Statement for the Recent 5 Years 6.1.1 Condensed Consolidated Balance Sheet - International Financial Reporting Standards

Unit: NT$ thousands Year Five-Year Financial Summary As of March Item 31, 2016 2011 2012 2013 2014 2015 (Note 4) Current Assets N/A 39,644,718 35,132,199 42,090,608 45,298,807 45,326,991 Property, Plant and N/A 7,288,315 7,150,831 7,026,878 7,001,676 6,958,097 Equipment Intangible Assets N/A 106,859 114,766 118,638 121,469 102,434 Other Assets N/A 6,750,308 6,551,449 7,647,224 7,808,634 7,768,999 Total Assets N/A 53,790,200 48,949,245 56,883,348 60,230,586 60,156,521 Before N/A 28,679,088 23,657,670 31,033,931 34,389,605 33,676,615 Current distribution Liabilities After N/A 30,781,491 25,156,119 32,732,020 Note 3 Note 3 distribution Non-current Liabilities N/A 6,546,811 6,893,439 6,365,262 6,112,898 5,857,754 Before N/A 35,225,899 30,551,109 37,399,193 40,502,503 39,534,369 Total distribution Liabilities After N/A 37,328,302 32,049,558 39,097,282 Note 3 Note 3 distribution Equity Attributable to Shareholders of The N/A 16,408,354 15,950,640 16,918,949 17,019,448 17,516,347 Parent Capital Stock N/A 7,349,960 7,474,343 7,575,303 7,611,076 7,625,146 Capital Surplus N/A 2,757,865 3,070,085 3,230,033 3,297,703 3,326,729 Before N/A 6,170,655 5,188,509 5,874,885 6,097,988 6,565,982 Retained distribution Earnings After N/A 4,068,252 3,690,060 4,176,796 Note 3 Note 3 distribution Other Equities N/A 141,709 229,538 250,563 24,516 10,325 Treasury Stocks N/A (11,835) (11,835) (11,835) (11,835) (11,835) Non-controlling N/A 2,155,947 2,447,496 2,565,206 2,708,635 3,105,805 Interests Before N/A 18,564,301 18,398,136 19,484,155 19,728,083 20,622,152 Total distribution Equity After N/A 16,461,898 16,899,687 17,786,066 Note 3 Note 3 distribution Note1: Condensed Consolidated Balance Sheets were under GAAP in 2011, hence not applicable. Note2: The post-distribution numbers are based on the Shareholder’s Resolution in the following year Note3: The 2015 earnings distribution has not been resolved by the Shareholder’s Meeting, hence not applicable Note4: The 2016 1Q consolidated financial statements have been reviewed by CPA. Asset revaluation has not been made.

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Condensed Balance Sheet - International Financial Reporting Standards

Unit: NT$ thousands Year Five-Year Financial Summary Item 2011 2012 2013 2014 2015 Current Assets N/A 24,682,142 21,723,839 27,948,158 27,683,068 Property, Plant and N/A 404,883 376,216 354,847 344,367 Equipment Intangible Assets N/A 92,630 99,555 108,317 112,131 Other Assets N/A 11,687,557 11,461,708 12,721,418 12,983,703 Total Assets N/A 36,867,212 33,661,318 41,132,740 41,123,269 Before N/A 18,250,272 14,278,377 20,713,133 20,493,816 Current distribution Liabilities After N/A 20,352,675 15,776,826 22,411,222 Note 3 distribution Non-current Liabilities N/A 2,208,586 3,432,301 3,500,658 3,610,005 Before N/A 20,458,858 17,710,678 24,213,791 24,103,821 Total distribution Liabilities After N/A 22,561,261 19,209,127 25,911,880 Note 3 distribution Equity Attributable to N/A 16,408,354 15,950,640 16,918,949 17,019,448 Shareholders of The Parent Capital Stock N/A 7,349,960 7,474,343 7,575,303 7,611,076 Capital Surplus N/A 2,757,865 3,070,085 3,230,033 3,297,703 Before N/A 6,170,655 5,188,509 5,874,885 6,097,988 Retained distribution Earnings After N/A 4,068,252 3,690,060 4,176,796 Note 3 distribution Other Equities N/A 141,709 229,538 250,563 24,516 Treasury Stocks N/A (11,835) (11,835) (11,835) (11,835) Non-controlling Interests N/A 0 0 0 0 Before N/A 16,408,354 15,950,640 16,918,949 17,019,448 distribution Total Equity After N/A 14,305,951 14,452,191 15,220,860 Note 3 distribution Note1: Condensed Consolidated Balance Sheets were under GAAP in 2011, hence not applicable. Note2: The post-distribution numbers are based on the Shareholder’s Resolution in the following year Note3: The 2015 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 Year Five-Year Financial Summary As of March Item 31, 2016 2011 2012 2013 2014 2015 (Note 2) Operating Revenues N/A 60,522,162 52,221,958 57,691,937 67,057,640 13,633,689 Gross Profit N/A 5,159,479 4,217,053 4,374,365 5,436,078 1,457,215 Operating Income N/A 3,237,648 2,365,775 2,702,331 3,001,912 1,001,598 Non-Operating Income N/A 215,739 144,135 462,501 318,740 135,609 & Expenses Income Before Income N/A 3,453,387 2,509,910 3,164,832 3,320,652 1,137,207 Tax Net Income from N/A 2,850,215 2,035,776 2,536,396 2,570,143 857,389 continuing operations Net Income(Loss) N/A 2,850,215 2,035,776 2,536,396 2,570,143 857,389 Other Comprehensive Income (Income after N/A (24,852) 86,584 114,414 (393,515) (15,436) tax) Total Comprehensive N/A 2,825,363 2,122,360 2,650,810 2,176,628 841,953 Income Net Income Attributable to N/A 2,445,282 1,641,730 2,092,199 2,040,610 467,994 Shareholders of The Parent Net Income Attributable to N/A 404,933 394,046 444,197 529,533 389,395 Non-controlling Interests Total Comprehensive Income (Loss) Attributable to N/A 2,438,974 1,729,559 2,205,850 1,695,145 453,803 Shareholders of the Parent Total Comprehensive Income (Loss) Attributable to N/A 386,389 392,801 444,960 481,483 388,150 Non-controlling Interests Earnings Per Share N/A 3.39 2.22 2.79 2.69 0.62 (NT$)

Note1: Condensed Consolidated Income Statements were under GAAP in 2011, hence not applicable. Note2: The 2016 1Q consolidated financial statements have been reviewed by CPA.

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Condensed Income Statement - International Financial Reporting Standards

Unit: NT$ thousands Year Five-Year Financial Summary Item 2011 2012 2013 2014 2015 Operating Revenues N/A 34,824,383 31,446,326 38,060,203 42,049,227 Gross Profit N/A 2,356,663 2,169,180 2,068,143 2,827,102 Operating Income N/A 1,303,017 1,129,995 1,282,847 1,193,000 Non-Operating Income & N/A 1,406,827 657,006 1,084,562 1,271,157 Expenses Income Before Income Tax N/A 2,709,844 1,787,001 2,367,409 2,464,157 Net Income from N/A 2,445,282 1,641,730 2,092,199 2,040,610 continuing operations Net Income(Loss) N/A 2,445,282 1,641,730 2,092,199 2,040,610 Other Comprehensive N/A (6,308) 87,829 113,651 (345,465) Income (Income after tax) Total Comprehensive N/A 2,438,974 1,729,559 2,205,850 1,695,145 Income Net Income Attributable to Shareholders of The N/A - - - - Parent Net Income Attributable to Non-controlling N/A - - - - Interests Total Comprehensive Income (Loss) Attributable to N/A - - - - Shareholders of the Parent Total Comprehensive Income (Loss) N/A - - - - Attributable to Non-controlling Interests Earnings Per Share (NT$) N/A 3.39 2.22 2.79 2.69

Note1: Condensed Income Statements were under GAAP in 2011, hence not applicable.

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6.1.2 Condensed Consolidated Balance Sheet - ROC GAAP Unit: NT$ thousands Year Five-Year Financial Summary Item 2011 2012 2013 2014 2015 Current assets 39,093,410 39,698,734 N/A N/A N/A Funds and Investments 1,424,355 1,274,120 N/A N/A N/A Fixed assets 10,691,671 10,508,302 N/A N/A N/A Intangible Assets 190,905 194,496 N/A N/A N/A Other assets 459,212 466,861 N/A N/A N/A Total assets 51,859,553 52,142,513 N/A N/A N/A Before 29,160,780 28,433,813 N/A N/A N/A Current distribution liabilities After 31,156,211 30,536,216 N/A N/A N/A distribution Long-term liabilities 4,920,695 4,255,113 N/A N/A N/A Other liabilities 1,980,962 2,277,652 N/A N/A N/A Before 36,062,437 34,966,578 N/A N/A N/A distribution Total liabilities After 38,057,868 37,068,981 N/A N/A N/A distribution Capital stock 7,126,540 7,349,960 N/A N/A N/A Capital Reserves 2,565,458 2,955,935 N/A N/A N/A Before 4,538,695 4,935,700 N/A N/A N/A Retained distribution Earnings After 2,543,264 2,833,297 N/A N/A N/A distribution Unrealized gain or loss on 148,017 183,088 N/A N/A N/A financial instruments Cumulative translation 133,625 92,246 N/A N/A N/A adjustments Unrecognized pension cost (338,227) (212,565) N/A N/A N/A Treasury stock (11,835) (11,835) N/A N/A N/A Total Before 14,162,273 15,292,529 N/A N/A N/A stockholders' distribution equity of After parent 12,166,842 13,190,126 N/A N/A N/A distribution company Minority interest 1,634,843 1,883,406 N/A N/A N/A Before Total 15,797,116 17,175,935 N/A N/A N/A distribution Shareholders’ After Equity 13,801,685 15,073,532 N/A N/A N/A distribution Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year. Note2: Condensed Consolidated Balance Sheet was under IFRS during 2013 to 2015, hence not applicable.

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Condensed Balance Sheet - ROC GAAP Unit: NT$ thousands Year Five-Year Financial Summary Item 2011 2012 2013 2014 2015 Current assets 25,380,199 24,988,128 N/A N/A N/A Funds and Investments 8,164,176 8,720,265 N/A N/A N/A Fixed assets 458,645 404,883 N/A N/A N/A Intangible Assets 91,753 92,630 N/A N/A N/A Other assets 430,328 1,313,123 N/A N/A N/A Total assets 34,525,101 35,519,029 N/A N/A N/A Before 18,719,196 18,250,272 N/A N/A N/A Current distribution liabilities After 20,714,627 20,352,675 N/A N/A N/A distribution Long-term liabilities - - N/A N/A N/A Other liabilities 1,643,632 1,976,228 N/A N/A N/A Before 20,362,828 20,226,500 N/A N/A N/A distribution Total liabilities After 22,358,259 22,328,903 N/A N/A N/A distribution Capital stock 7,126,540 7,349,960 N/A N/A N/A Capital Reserves 2,565,458 2,955,935 N/A N/A N/A Before 4,538,695 4,935,700 N/A N/A N/A Retained distribution Earnings After 2,543,264 2,833,297 N/A N/A N/A distribution Unrealized gain or loss on 148,017 183,088 N/A N/A N/A financial instruments Cumulative translation 133,625 92,246 N/A N/A N/A adjustments Unrecognized pension cost (338,227) (212,565) N/A N/A N/A Treasury stock (11,835) (11,835) N/A N/A N/A Before Total 14,162,273 15,292,529 N/A N/A N/A distribution Shareholders’ After Equity 12,166,842 13,190,126 N/A N/A N/A distribution Note1: The post-distribution numbers are based on the Shareholder’s Resolution in the following year. Note2: Condensed Balance Sheet was under IFRS during 2013 to 2015, hence not applicable.

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Condensed Consolidated Income Statement - ROC GAAP Unit: NT$ thousands Year Five-Year Financial Summary

Item 2011 2012 2013 2014 2015 Operating revenues 56,279,714 60,738,850 N/A N/A N/A Gross profit 4,655,171 5,116,066 N/A N/A N/A Operating income 2,780,166 3,154,153 N/A N/A N/A Non-operating income 676,436 468,172 N/A N/A N/A Non-operating expenses 184,826 252,908 N/A N/A N/A Income from continuing 3,271,776 3,369,417 N/A N/A N/A operations before income tax Income from operations of 2,612,656 2,780,419 N/A N/A N/A continued segments - after tax Income from discontinued - - N/A N/A N/A departments Extraordinary gain or loss - - N/A N/A N/A Cumulative effect of - - N/A N/A N/A accounting principle changes Equity holders of the Company 2,262,733 2,392,436 N/A N/A N/A Minority interest 349,923 387,983 N/A N/A N/A Earnings Per Share (NT$) 3.22 3.32 N/A N/A N/A

Note1: Condensed Consolidated Income Statement was under IFRS during 2013 to 2015, hence not applicable.

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Condensed Income Statement - ROC GAAP Unit: NT$ thousands Year Five-Year Financial Summary

Item 2011 2012 2013 2014 2015 Operating revenues 33,000,979 34,824,383 N/A N/A N/A Gross profit 2,114,201 2,356,663 N/A N/A N/A Operating income 1,111,933 1,264,354 N/A N/A N/A Non-operating income 1,501,392 1,548,955 N/A N/A N/A Non-operating expenses 66,164 162,884 N/A N/A N/A Income from continuing 2,547,161 2,650,425 N/A N/A N/A operations before income tax Income from operations of 2,262,733 2,392,436 N/A N/A N/A continued segments - after tax Income from discontinued - - N/A N/A N/A departments Extraordinary gain or loss - - N/A N/A N/A Cumulative effect of - - N/A N/A N/A accounting principle changes Net income 2,262,733 2,392,436 N/A N/A N/A Earnings Per Share (NT$) 3.22 3.32 N/A N/A N/A

Note1: Condensed Income Statement was under IFRS during 2013 to 2015, hence not applicable.

6.1.3 Auditors’ Opinions in Past Five Years:

CPA Firm/Year 2011 2012 2013 2014 2015 Huei-Shyang Shyh-Rong Shyh-Rong Shyh-Rong Shyh-Rong Wang Ueng Ueng Ueng Ueng PriceWaterhouseCoopers Shyh-Rong Huei-Shyang Huei-Shyang Huei-Shyang Huei-Shyang Ueng Wang Wang Wang Wang modified modified modified modified modified Auditing Opinion unqualified unqualified unqualified unqualified unqualified opinion opinion opinion opinion opinion

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6.2 Financial Analysis for the Recent 5 Years 6.2.1 Consolidated Financial Ratio Analysis -International Financial Reporting Standards

Year Five-Year Financial Summary As of March Item 2011 2012 2013 2014 2015 31, 2016 Debt to Asset Ratio N/A 65.49 62.41 65.75 67.25 65.72 Financial Long-term Funds to Structure Properties, Plants N/A 308.32 353.69 367.86 369.07 380.56 (%) and Equipment Ratio Current ratio N/A 138.24 148.50 135.63 131.72 134.59 Quick ratio N/A 125.54 135.43 122.90 121.46 122.00 Liquidity (%) Interest Coverage N/A 3,632.33 2,465.03 3,655.79 3,811.55 4,071.67 Ratio Accounts Receivable N/A 13.05 8.83 8.24 9.85 8.44 Turnover (times) Average Collection N/A 27.96 41.33 44.29 37.05 43.24 Period (days) Inventory Turnover N/A N/A N/A N/A N/A N/A (times) Accounts Payable N/A 4.92 3.93 3.67 3.88 3.20 Operating Turnover (times) Performance Average Inventory Turnover Period N/A N/A N/A N/A N/A N/A (Days) Properties, Plant and Equipment N/A 8.30 7.23 8.14 9.56 7.81 Turnover (times) Total Assets N/A 1.13 1.02 1.09 1.15 0.91 Turnover (times) Return on Assets (%) N/A 4.71 3.37 4.09 3.61 3.27 Return on Equity (%) N/A 15.40 10.15 12.73 12.03 10.84 Income before tax N/A 46.99 33.58 41.78 43.63 59.66 Profitability to Capital Ratio (%) Net Margin (%) N/A 4.04 3.14 3.63 3.04 3.43 Earnings per share N/A 3.39 2.22 2.79 2.69 0.62 (NT$) Cash flow Ratio (%) N/A 6.43 (13.54) 16.27 (14.79) 22.71 Cash flow adequacy N/A 173.39 112.88 126.58 18.90 61.53 Cash flow Ratio (%) Cash reinvestment N/A (1.92) (13.15) 12.15 (27.10) 28.31 Ratio (%) Operating leverage N/A 4.10 5.24 4.60 4.48 3.57 Leverage Financial leverage N/A 1.03 1.05 1.03 1.03 1.03

Note1: Consolidated Financial Ratio Analysis was under GAAP in 2011, hence not applicable.

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Financial Ratio Analysis -International Financial Reporting Standards

Year Five-Year Financial Summary Item 2011 2012 2013 2014 2015 Debt to Asset Ratio N/A 55.49 52.61 58.87 58.61 Financial Long-term Funds to Structure (%) Properties, Plants and N/A 4,052.62 5,152.08 5,754.48 5,990.54 Equipment Ratio Current ratio N/A 135.24 152.15 134.93 135.08 Liquidity (%) Quick ratio N/A 122.38 137.83 122.37 124.86 Interest Coverage Ratio N/A N/A N/A N/A N/A Accounts Receivable N/A 13.82 9.39 9.40 11.67 Turnover (times) Average Collection Period N/A 26.42 38.88 38.82 31.27 (days) Inventory Turnover (times) N/A N/A N/A N/A N/A Accounts Payable Turnover N/A 4.23 3.28 3.27 3.54 Operating (times) Performance Average Inventory N/A N/A N/A N/A N/A Turnover Period (Days) Properties, Plant and Equipment Turnover N/A 86.01 80.52 104.12 120.28 (times) Total Assets Turnover N/A 0.94 0.89 1.02 1.02 (times) Return on Assets (%) N/A 6.73 4.66 5.59 4.97 Return on Equity (%) N/A 15.40 10.15 12.73 12.03 Income before tax to Profitability N/A 36.87 23.91 31.25 32.38 Capital Ratio (%) Net Margin (%) N/A 7.02 5.22 5.50 4.85 Earnings per share (NT$) N/A 3.39 2.22 2.79 2.69 Cash flow Ratio (%) N/A (5.68) (20.37) 6.66 (18.21) Cash flow adequacy Ratio N/A 188.63 98.99 75.28 (33.08) Cash flow (%) Cash reinvestment Ratio N/A (17.22) (26.80) (0.61) (27.28) (%) Operating leverage N/A 4.74 5.27 4.50 5.15 Leverage Financial leverage N/A 1.00 1.00 1.00 1.00

Note1: Financial Ratio Analysis was under GAAP in 2011, hence not applicable.

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The formulas for the above table: 1. Financial Structure (1) Debts to Assets Ratio = Total Liabilities / Total Assets (2) Long-term Funds to Properties, Plants and Equipment Ratio = (Total Shareholders' Equity plus Noncurrent Liabilities) / Net of Properties, Plants and Equipment 2. Liquidity (1) Current Ratio = Current Assets / Current Liabilities (2) Quick Ratio = (Current Assets - inventory - Prepaid Expense) / Current Liabilities (3) Interest Coverage Ratio = (Net Income before Income Tax and Interest Expenses) / Interest Expense 3. Operating Performance (1) Account Receivable Turnover = Net Sales / Average Accounts Receivable (2) Average Collection Period = 365/ Accounts Receivable Turnover (3) Inventory Turnover = Costs of Goods Sold / Average Inventory (4) Accounts Payable Turnover = Costs of Goods Sold / Average Accounts Payable (5) Average Inventory Turnover Period = 365 / Inventory Turnover (6) Properties, Plant and Equipment Turnover = Net Sales / Average of Net Properties, Plants and Equipment. (7) Total Assets Turnover Ratio = Net Sales / Average of Total Assets 4. Profitability Analysis (1) Return on Assets =[Net Income +Interest Expense×(1-Tax Rate)] / Average Total Assets (2) Return on Equity =Net Income / Average Shareholders' Equity (3) Net Margin = Net Income / Net Sales (4) Earnings per Share = (Net Income Attribute to Controlling Interest - Preferred Stock Dividend) / Weighed-average Number of Outstanding Shares 5. Cash Flow (1) Cash Flow Ratio = Cash Flows from Operating Activities / Current Liabilities (2) Cash Flow adequacy Ratio = Net Cash Flow from Operating Activities for the past 5 years / (Capital Expenditure + Increase in Inventory + Cash Dividends) for the past 5 years (3) Cash Reinvestment Ratio = (Net Cash Flow from Operating Activities - Cash Dividends) / (Gross Properties, Plants and Equipment + Long-term Investment + Other Noncurrent Assets + Working Capital) 6. Leverage Ratio (1) Operating Leverage = (Net Sales - Variable Operating Costs and Expenses) / Operating Income (2) Financial Leverage = Operating Income / (Operating Income-Interest Expenses)

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6.2.2 Consolidated Financial Ratio Analysis - ROC GAAP

Year Financial analysis in the past five years Item 2011 2012 2013 2014 2015 Debt to Asset Ratio 69.54 67.06 N/A N/A N/A Financial Long-term Funds to Fixed Assets structure (%) 193.78 203.94 N/A N/A N/A Ratio Current ratio 134.06 139.62 N/A N/A N/A Liquidity (%) Quick ratio 121.07 125.82 N/A N/A N/A Interest Coverage Ratio 34.20 34.99 N/A N/A N/A Accounts Receivable Turnover 12.50 13.73 N/A N/A N/A (times) Average Collection Period (days) 29.20 26.58 N/A N/A N/A Inventory Turnover (times) N/A N/A N/A N/A N/A Operating Accounts Payable Turnover 4.25 4.94 N/A N/A N/A Performance (times) Average Inventory Turnover N/A N/A N/A N/A N/A Period (Days) Fixed Assets Turnover (times) 5.26 5.78 N/A N/A N/A Total Assets Turnover (times) 1.09 1.16 N/A N/A N/A Return on Assets (%) 4.63 4.76 N/A N/A N/A Return on Stockholders' Equity 16.73 16.24 N/A N/A N/A (%) Ratio to Operating Income 39.01 42.91 N/A N/A N/A Profitability issued capital (%) Pre-tax Income 45.91 45.84 N/A N/A N/A

Net Margin (%) 4.02 3.94 N/A N/A N/A Earnings per share (NT$) 3.22 3.32 N/A N/A N/A Cash flow Ratio (%) 12.96 3.18 N/A N/A N/A Cash flow Cash flow adequacy Ratio (%) 147.11 162.95 N/A N/A N/A Cash reinvestment Ratio (%) 8.14 (4.03) N/A N/A N/A Operating leverage 4.40 4.13 N/A N/A N/A Leverage Financial leverage 1.04 1.03 N/A N/A N/A

Note1: Consolidated Financial Ratio Analysis was under IFRS during 2013 to 2015, hence not applicable.

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Financial Ratio Analysis - ROC GAAP

Year Financial analysis in the past five years Item 2011 2012 2013 2014 2015 Debt to Asset Ratio 58.98 56.95 N/A N/A N/A Financial Long-term Funds to Fixed Assets structure (%) 3,087.85 3,777.02 N/A N/A N/A Ratio Current ratio 135.58 136.92 N/A N/A N/A Liquidity (%) Quick ratio 125.31 122.71 N/A N/A N/A Interest Coverage Ratio 11,172.76 N/A N/A N/A N/A Accounts Receivable Turnover 11.08 13.82 N/A N/A N/A (times) Average Collection Period (days) 32.95 26.41 N/A N/A N/A Inventory Turnover (times) N/A N/A N/A N/A N/A Operating Accounts Payable Turnover 4.56 4.23 N/A N/A N/A Performance (times) Average Inventory Turnover N/A N/A N/A N/A N/A Period (Days) Fixed Assets Turnover (times) 71.95 86.01 N/A N/A N/A Total Assets Turnover (times) 0.96 0.98 N/A N/A N/A Return on Assets (%) 6.89 6.83 N/A N/A N/A Return on Stockholders' Equity 16.73 16.24 N/A N/A N/A (%) Ratio to Operating Income 15.60 17.20 N/A N/A N/A Profitability issued capital (%) Pre-tax Income 35.74 36.06 N/A N/A N/A

Net Margin (%) 6.86 6.87 N/A N/A N/A Earnings per share (NT$) 3.22 3.32 N/A N/A N/A Cash flow Ratio (%) 16.65 (5.49) N/A N/A N/A Cash flow Cash flow adequacy Ratio (%) 210.91 187.69 N/A N/A N/A Cash reinvestment Ratio (%) 8.78 (17.02) N/A N/A N/A Operating leverage 5.42 4.88 N/A N/A N/A Leverage Financial leverage 1.00 1.00 N/A N/A N/A

Note1: Financial Ratio Analysis was under IFRS during 2013 to 2015, hence not applicable.

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The formulas for the above table: 1. Financial Structure (1) Debts to Assets Ratio = Total Liabilities / Total Assets (2) Long-term Funds to Fixed Assets Ratio = (Total Shareholders' Equity plus Long-term Liabilities) / Net Fixed Assets 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 Receivables (including accounts and notes 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 Payables (including accounts and notes payable) (5) Average Inventory Turnover Period = 365 / Inventory Turnover (6) Fixed Assets Turnover = Net Sales / Net Fixed Assets (7) Total Assets Turnover = Net Sales / Total Assets 4. Profitability Analysis (1) Return on Assets =[Net Income +Interest Expense×(1-Tax Rate)] / Average Total Assets (2) Return on Shareholders' Equity =Net Income / Average Shareholders' Equity (3) Net Margin = Net Income / Net Sales (4) Earnings per Share = (Net Income - 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 Fixed Assets + Long-term Investment + Other Assets + Working Capital) 6. Leverage Ratio (1) Operating Leverage = (Net Sales - Variable Operating Costs and Expenses) / Operating Income (2) Financial Leverage = Operating Income / (Operating Income-Interest Expenses)

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

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6.4 Consolidated Financial Statements and Independent Auditors’ Report in the Most Recent Year Please refer to the Appendix 1

6.5 Financial Statements and Independent Auditors’ Report in the Most Recent Year Please refer to the Appendix 2

6.6 Impact of the Financial Dist ress Occurred to the Company and Affiliates in the Recent Years until the Annual Report being published: None

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VII. Review of Financial Conditions, Operating Results, and Risk Management 7.1 Analysis of Financial Status 7.1.1 Analysis of Financial Status Unit: NT$ thousands Year Difference Remark 2015 2014 Item Amount % (Note 1) Current Assets 45,298,807 42,090,608 3,208,199 7.62 Properties, Plants and Equipment 7,001,676 7,026,878 (25,202) -0.36 Intangible Assets 121,469 118,638 2,831 2.39 Other Assets 7,808,634 7,647,224 161,410 2.11 Total Assets 60,230,586 56,883,348 3,347,238 5.88 Current Liabilities 34,389,605 31,033,931 3,355,674 10.81 Non-current Liabilities 6,112,898 6,365,262 (252,364) -3.96 Total Liabilities 40,502,503 37,399,193 3,103,310 8.30 Equity attributable to owners of 17,019,448 16,918,949 100,499 0.59 the parent Capital stock 7,611,076 7,575,303 35,773 0.47 Capital surplus 3,297,703 3,230,033 67,670 2.10 Retained Earnings 6,097,988 5,874,885 223,103 3.80 Other equity interest 24,516 250,563 (226,047) -90.22 Note 2 Treasury stocks (11,835) (11,835) 0 0.00 Non-controlling interest 2,708,635 2,565,206 143,429 5.59 Total Equity 19,728,083 19,484,155 243,928 1.25 Note 1: The analysis is not applicable when the difference percentage does not exceed 20% and is less NT10, 000 thousands. Note 2: Other equity interest decreases, mainly due to accumulative translation transaction differences of foreign operations and fluctuation in the value of financial assets in held-to-maturity.

7.1.2 The evaluation basis of the balance sheet valuation items Item B/S valuation item Evaluation reference Evaluation basis 1 Monetary assets Spot rate on Compute exchange gain or loss based on the denominated in foreign balance sheet date spot rate currency 2 Financial instruments Fair market value on Evaluate based on the fair market value carried at fair value, balance sheet date available for sales and derivatives 3 Allowances for doubtful Historical records The recognition and valuation of accounts and credit allowance-for-bad-debts are based on the references controlling credit risks of our clients which are categorized such as low risk, medium-high risk, foreign owners..etc. A certain percentage of allowances for bad debts are determined according to the valuation of aging of accounts receivable in each category. Note: The accounts receivables from related parties are not subject for allowances-for-bad-debts. However if special credit risk prevails, the allowance for bad debts will be evaluated according to the risk. 4 Allowances for inventory Not applicable to Not applicable to the Company valuation and the Company obsolescence losses

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7.2 Analysis of Financial Performance 1. Analysis of Financial Performance Unit: NT$ thousands Year Difference Remark 2015 2014 Item Amount % (Note) Operating Revenue 67,057,640 57,691,937 9,365,703 16.23 Operating Costs (61,621,562) (53,317,572) 8,303,990 15.57 Gross Profit 5,436,078 4,374,365 1,061,713 24.27 Note 3 Operating Expenses (2,434,166) (1,672,034) 762,132 45.58 Note 2 Operating Income 3,001,912 2,702,331 299,581 11.09 Non-operating Income and expenses 318,740 462,501 (143,761) -31.08 Note 2 Profit before Income Tax 3,320,652 3,164,832 155,820 4.92 Income Tax Expense (750,509) (628,436) 122,073 19.42 Non-controlling Interest (529,533) (444,197) 85,336 19.21 Income attributable to owners of the parent 2,040,610 2,092,199 (51,589) -2.47 Note: The analysis is not applicable when the difference percentage does not exceed 20% and is less NT10,000 thousands. 2. The analysis of the differences： (1) The consolidated operating expense for 2015 increased compared to 2014 is mainly due to set aside allowance for doubtful account. (2) The consolidated non-operating revenue for 2015 decreased compared to 2014 is mainly due to the decrease of interest revenue and other non-operating revenue. 3. Analysis of gross profit: The consolidated revenue for 2015 increase compared to the previous year. This is mainly because domestic major projects are in the high-peak of construction revenue recognition. 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 2015 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 2015/12/31 2014/12/31 Difference ratio (%) Item Cash Flow Ratio (%) -14.79 16.27 -190.90 Fund Flow Adequacy Ratio (%) 18.90 126.58 -85.07 Cash Re-investment Ratio (%) -27.10 12.15 -323.05 Explanation to changes: 1. Cash flow ratio decreased due to net cash used in operating activities. 2. Fund flow adequacy ratio decreased due to net cash used in operating activities. 3. Cash re-investment ratio decreased due to net cash used in operating activities.

7.3.2 Analysis of Cash Liquidity The cash outflow of Year 2015 is NT$4,221.297 Millions. The cash balance in the end of the year is NT$5,589.006 Millions. Cash liquidity is fine.

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7.3.3 Analysis of Cash Liquidity for the Coming Year Unit: NT$ thousands Expected Net Cash Balance Expected Cash Expected Cash Leverage of Expected Cash Flow from at Beginning Inflow Surplus Cash Deficit Operating for the Year (Outflow) (Deficit) Activities Investment Plans Investment Plans 5,589,006 3,511,210 2,493,998 8,083,004 - - 1. Analysis of change in cash flow in Year 2016: (1) Operating activities: The sufficient backlog of CTCI Group and cost down policy will create net cash inflow. (2) Investing activities: The cash outflow is mainly due to new business investment. (3) Financing activities: The cash outflow is mainly due to cash dividends distribution. 2. Liquidity analysis and remedial measures against cash deficit: N/A

7.4 Major Capital Expenditure Items: None

7.5 Investment Policy in Last 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, U.S.A., Singapore; branches in Italy and Qatar; CTCI Co. Korea Liaison Office and CTCI Indonesia representative office. The Company established CCJV P1 Engineering & Construction Sdn. Bhd. in Malaysia in 2014. 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 2015 2014 Net Interest Income/Expense (A1) 31,545 60,175 Investment gain on money market 6,342 7,842 fund (A2) Sales(B) 67,057,640 57,691,937 Net Income before Tax(C) 3,320,652 3,164,832 A1/B(%) A2/B(%) 0.05 0.01 0.10 0.01 A1/C(%) A2/C(%) 0.95 0.19 1.90 0.25 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. As CBC cut the TWD interest rates in 2015, the sum of net interest income and investment gain on money market fund in 2015 is NT$ 37,887 thousand, which is lower than it was in 2014. 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 2015 2014 Net Foreign Exchange Gain/Loss(A) 109,098 274,536 Sales (B) 67,057,640 57,691,937 Net Income before Tax (C) 3,320,652 3,164,832 A/B(%) 0.16 0.48 A/C(%) 3.29 8.67 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 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, concluding 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 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 2015 2014 CPI 103.65 103.97 Annual Change of CPI -0.31 1.20 Construction Cost Indices 99.44 102.33 Annual Change of Construction Cost Indices -2.82 1.83 profit margin 8.11 7.22 Source：Directorate General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.(Taiwan)/ Base year 2011

Due to the industry nature, the analysis of inflation should be referred to not only CPI but also Construction Cost Indices. The Consumer Price Index of 2015 fell to 103.65, and the annual change of it declined by -0.31%. DGBAS estimates the annual change of CPI of 2016 will be 0.69%. But Taiwan Institute of Economic Research expect the CPI level of 2016 will not have a significant growth due to the prolonged downtrend of crude oil price and the downward revised forecasts for Taiwan's economic growth.. The total Construction Cost Indices of 2015 declined by 2.82% mainly due to the decrease of 5.02% of its material category index and the increase of 1.28% of its service category index. The causes include

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the downtrend of international raw material prices, the reduction in domestic scalar river dredging, the lack of domestic supply of sand and cement, and the increase of minimum wages. The Company would do the best to take potential inflation 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, 2016), Budget and Estimated Time to Finish Current Estimated Item Project Name Progress Budget Time (%) to Finish The development of Project Information Dashboard 1 26 2,244,000 105.12.31 Application The Maintenance and Implementation of Existing 2 25.2 20,180,000 105.12.31 Innovation RD Products 3 Mobilization Application Research at Job Site(2016) 21 4,084,000 105.12.31 The Research and Development of Intelligent 4 18 18,468,000 105.12.31 Application Platform (Tag Platform) The Research and Development of Intelligent System 5 16.8 2,376,000 105.12.31 Handover The Research and Application of intelligent Tag in 6 21 3,668,000 105.12.31 Lump Sum Engineering 7 AP Service 15 396,000 105.12.31 The Maintenance, Promotion and Extension of 8 25 5,940,000 105.12.31 Material Management System The Development of Integration and Application for 9 25 3,960,000 105.12.31 SmartPlant Design Information The Research of Process Risk and Equipment 10 25 2,310,000 105.12.31 Completed Assessment The Intelligent Development and Optimization of 11 25 5,280,000 105.12.31 Process Design Data A Discussion of Dynamic Calculation and Program 12 25 990,000 105.12.31 Simulation of Blowdown 13 The Programmed Coding for Safety Valve Sizing 25 1,320,000 105.12.31 The Development of Civil & Building Common 14 25 5,280,000 105.12.31 Database Operation System The Research and Development of Civil & Building 15 25 5,280,000 105.12.31 Design Flow Enhancement The Research of The Fireproof, Insulation Applications 16 70 3,965,000 105.12.31 of Vitreous Particle of Fluorite 17 Equipment Common Database Operation Platform 22 1,980,000 105.12.31

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Current Estimated Item Project Name Progress Budget Time (%) to Finish 18 Project Equipment Data Integration System 25 1,980,000 105.12.31 19 European Code Tank Design System 22 2,640,000 105.12.31 The Research and Development of Instrument 20 21 3,960,000 105.12.31 Common Database Operation Platform The Research of Integrated Database of intelligentized 21 21 4,488,000 105.12.31 Instrument Design Information 22 Piping Operation Workflow Enhancement 25 5,965,000 105.12.31 23 Agile Piping Design 25 11,905,000 105.12.31 The Advance Application of Power Information 24 24 4,533,000 105.12.31 Integration Platform The Development of Electrical Drawing Digitization 25 22 4,092,000 105.12.31 Application The Risk Assessment and Analysis of Lightning 26 22 2,292,000 105.12.31 Protection The Analysis of No-load Tap Changer(NLTC) from 27 20 830,000 105.12.31 Step-up Transformer in Power Plan 28 A Plan to Enhance Procurement Supply Chain 13.56 5,214,000 105.12.31 Integrating P6, CMS and SPC to Apply to 4D 29 15 1,320,000 105.12.31 Construction Planning and Simulation 30 Construction HSE Mobile System 20 1,272,000 105.12.31 The Development of Integrated, Intelligent 31 12 1,320,000 105.12.31 Construction Information Platform 32 Establishing Start-up Expert System 25 739,200 105.12.31 33 The Research and Promotion of SPPID Application 45 1,320,000 105.07.31

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 127

7.6.9 Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration None

7.6.10 Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, or Shareholders with Shareholdings of over 10% The fluctuated security price and the possibility of changing directors are the effect and risk, and strengthening company’s information transparency is the countermeasure. The Company has established functional committees beneath Board of Directors, such as Corporate Governance Committee, Audit Committee and Remuneration Committee, to strengthen Board of Directors functions, furthermore, to promote the corporate governance.

7.6.11 Effects of, Risks Relating to and Response to Changes in Control over the Company None

7.6.12 Litigation or Non-litigation Matters A. CTCI Corporation and Mitsubishi Heavy Industries, Ltd. were joint venture in the Kaohsiung Country Ren-Wu Resource Recovery Plant Project. The project completed on February 19, 2000 and accepted by Environmental Protection Administration on May 16, 2000. CTCI claimed for release of the guarantee bond in the amount of NTD 141,690 thousands, Environmental Protection Administration, however, declined the request due to one unsolved dispute between Kaohsiung City Government and O&M Contractor. After CTCI remitted in NTD 73,253 thousands to bank for exempting from the execution of the guarantee bond and filed a lawsuit to Taiwan Kaohsiung 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 liquated damages in the amount of NTD 1,708 thousands has been rejected. Afterwards, the Environmental Protection Administration appealed to the Taiwan High Court but failed. Further, the Environmental Protection Administration continued to appeal to the Taiwan Supreme Court. This lawsuit is remanded by Taiwan Supreme Court twice and now is under the trial of Taiwan High Court. The judgment of Taiwan High Court didn’t sustain the claim of Environmental Protection Administration and appealed to Taiwan Supreme Court by Environmental Protection Administration. The judgment of Taiwan Supreme Court remanded this case to Taiwan High Court. This lawsuit now is under the trial of Taiwan High Court. There is no material impact to CTCI’s finance as well as business development so far.

B. CTCI Corporation, Ishikawajima-Harima Heavy Industries Co., Ltd., Resource Engineering Services Inc. and East Construction Industry Co., Ltd were joint venture in the CPC Northern LNG Receiving Terminal Project and entered into a contract on July 23, 2004. CTCI claimed for additional costs, including direct and indirect costs, in the total amount of NTD 82,390 thousands for delay resulted from CPC Corporation’s contractor for another project and filed a lawsuit to Taipei District Court on March 5, 2010. After reviewing related document itself, CTCI reduced the claim amount to NTD 71,448,016 on March 1, 2011. The judgments of Taipei District Court and Taiwan High Court were not awarded to CTCI. CTCI appealed to Taiwan Supreme Court. The judgment of Taiwan Supreme Court sustained CTCI’s appeal and remanded for retrial. This lawsuit now is under the trial of Taiwan High Court. However, Taiwan High Court did not award to CTCI. CTCI appealed to Taiwan Supreme Court again. Finally Taiwan Supreme Court rejected CTCI’s appeal. There is no material impact to CTCI’s finance as well as business development so far.

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C. CTCI Corporation, Ishikawajima-Harima Heavy Industries Co., Ltd., Resource Engineering Services Inc. and East Construction Industry Co., Ltd were joint venture in the CPC Northern LNG Receiving Terminal Project and entered into a contract on July 23, 2004. CPC Corporation alleged it has limited budget and cannot pay the compensation of price escalation, so CTCI claimed for compensation of price escalation in the amount of USD 7,983 thousands and NTD 384,159 thousands and filed a lawsuit to Taipei District Court on March 5, 2010. The judgment of Taipei District Court is not awarded to CTCI. CTCI appealed to Taiwan High Court but was overruled. CTCI appealed to Taiwan Supreme Court. This lawsuit now is under the trial of Taiwan Supreme Court. There is no material impact to CTCI’s finance as well as business development so far.

7.6.13 Risk management organization framework A. Organization chart

Secretary Risk Management Executive Auditing Committee 秘書業務Service 風險管理執行委員會 Department稽核室

Risk Management Representative of Division/Department

全 All體 Employees 員工

Note: The dashed line indicates the communication mechanism between Risk Management Executive Committee and Auditing 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 Operations, Business Operations and Supporting Operations, President is the Chairman of committee, and the convener is Head of Executive Management Operations. 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.

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c. Auditing Department Auditing Department makes and executes annual audit plan in accordance with the result of risk evaluation.

d. Risk Management Representative Similar functions of divisions/ departments can be combined to a risk management unit and designate 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 division/department Head; - Summarize and prepare risk registers and improvement plan of the risk management unit; - Collect and monitor significant risk event of the division/department and evaluate the impact; - Assist division/department Head to 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 on risk management to members of the division/department on behalf of division/department Head;

e. All Employees Comply with company policy, perform duty in accordance with the R&R, implement relevant operations of risk management, and report to the supervisor immediately in case of a risk.

7.6.14 Other Major Risks Competiveness is enhanced with CTCI tracking international business and economic conditions and assessing the impact on corporate finance, sales and business implementation which is responded to through various means including the control of cash flows to facilitate capital turnover; development of new markets for added business; and strengthened core technology which including project management and quality control.

7.7 Other: 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

CTCI Group Companies Organization (Domestic) April 30, 2016

CTCI Corporation

100% 93.14% 48.72% 100% 58.05% 100% 97.09%

Resources Advanced Innovest CTCI Machinery GRQ Investment KD Holding E&C Engineering Engineering Control & Investment Corporation Corporation Corporation Corporation Services Inc. Systems Inc. Corporation

0.01% 1.38% 0.05% 0.002% 0.37%

98% 74.999% 60% 100% 93.15% 23.34% 100% Yuan Ding Sino HD Resources Crown Asia 2 Leading Energy Fortune Energy Resources Environmental CTCI Chemicals Management Investment Corporation Corporation Management Services Corporation Corporation Limited Corporation Corporation 2% 0.001% 40% 0.01% 26.90%

6.77% 9.24% 9.24%

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CTCI Group Companies Organization (Overseas) April 30, 2016

CTCI Corporation

Corporation

KD KD Holding

Investment

Innovest

& & Inc. Systems Environmental Environmental

Corporation

Engineering

Corporation

Advanced Advanced

Chemicals Chemicals

Services Services

Control Control

Sino Sino

E&C CTCI

100% 19.24% 100% 30% 40% 50% 100% 60% 49% 100% Office Liaison Korea 99% 100% 100%

CTCI & Partners Co., CTCIPartners &

CTCICorporation CTCICorporation

CTCI Singapore CTCISingapore TI(hiad Co., CTCI(Thailand)

(shanghai) Co.,Ltd. (shanghai) Century Ahead Ltd. Ahead Century (BVI)CTCI Overseas & CTCIEngineering

CTCI Americas, Inc. CTCIAmericas,

Construction Construction Construction Construction

Construction Co., Construction

Services Co.,Ltd. Services SINOGAL

Italian Branch Italian

Chemicals Corp. Chemicals

CTCI Arabia Ltd. CTCIArabia

Environmental Environmental

Engineering & Engineering Engineering & Engineering

Corporation

Chung Chung ding

Shang Ding Ding Shang

Xiang DingXiang Consultant

CCJV P1 CCJVP1

CTCI CTCI Overseas Companies

Bhd. Bhd.

Ltd. Ltd. Ltd. Ltd.

Waste Waste

Sdn Sdn

Pte.

. . . .

80.76% 30% 60% 50% 40% 51% Representative Office Representative

100% 20% Branch DHABI ABU 100% CTCICorporation

100% 100% CTCICorporation

CTCIMalaysia

CTCI Overseas Co.,CTCI Overseas

CTCI Netherlands CTCINetherlands

CTCI Indonesia CTCIIndonesia

Advanced Control Advanced

Technologies Ltd. Technologies

QatarBranch

Shanghai Shanghai

Trading Trading

& & Information

Bhd.

Ltd. B.V.

Co.,Ltd

XuanLi

Sdn . .

100% 100% 39.99% 50% 100% 49%

Construction Co., Construction Construction Pvt. Construction Inc. Construction (BVI)Engineering

Engineering Co., Engineering

Superiority

Engineering & Engineering

(Thailand)

Corporation

Universal Universal

Jingding

CIMAS CIMAS

CINDA

CIPEC

Ltd. Ltd. Ltd.

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(2) General information of the affiliates: th April 30 , 2016 ; Unit : $Thousands Date of Common Company Address Major Business Activities Incorporation Stock Issued E&C Engineering Corporation 1980.05.27 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 608,720 Planning and design of construction projects Resources Engineering Services Planning, design and supervision of mechanical and 1984.05.29 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 180,000 Inc. electrical engineering projects Advanced Control & Systems 1987.08.03 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 234,695 Design and installation of software Inc. Sino Environmental Services 1994.05.24 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 151,000 Environmental engineering Corporation GRQ Investment Corporation 1999.02.24 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 1,690,000 Real estate and leasing business Innovest Investment 1999.02.05 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 1,140,000 Investments Corporation KD Holding Corporation 1999.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 658,394 Investments

Leading Energy Corporation 2000.05.19 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 680,000 Environmental engineering

Fortune Energy Corporation 2002.11.07 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 750,000 Environmental engineering

CTCI Chemicals Corporation. 1999.08.04 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 71,000 Manufacturing of chemical products HD Resources Management No.69, Ln. 373, Changchun St., Wuri Dist., 2001.06.01 NTD 20,000 Environmental engineering Corporation Taichung City, Taiwan 19th Floor, 400 Phairojkijja Tower, Bangna-Trad Road KM.4, Tambol Bangna, CTCI (Thailand) Co., Ltd. 1987.08.15 THB 255,000 Planning and design of construction projects Amphoe Prakanong, Bangkok 10260 Thailand CTCI Overseas (BVI) P.O.Box 662, Road Town, Tortola British 1997.04.30 HKD 67,400 Investment, planning and design of construction Corporation Virgin Islands

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Suite 1801-5,18/F.,Tower 2,China Hong Kong CTCI OVERSEAS CORPORATION 1993.06.01 City, 33 Canton Road,Tsim Sha Tsui, Kowloon HKD 67,400 Planning and design of construction projects LIMITED Hong Kong 10F Royal City International Centre, No. 136, Jingding Engineering & 1993.02.17 Andingmenwai Street, Dongcheng District, USD 10,600 Planning and design of construction projects Construction Co., Ltd. Beijing SUITE 22-03B, 22nd Fl., Menara Tan & Tan CTCI Engineering & 1998.08.17 207 Jalan Tun Razak, 50400 Kuala Lumpur, MYR 750 Planning and design of construction projects Construction Sdn. Bhd. Malaysia CIMAS Engineering Company 6th Floor, Charmvit Building 117Tran Duy 2001.03.28 USD 3,600 Planning and design of construction projects Limited HungCau Giay District Hanoi, Vietnam Offshore Chambers, P.O.Box 217, Apia, Century Ahead Ltd. 2000.10.12 USD 750 Investments Samoa Chung Ding Chemicals Offshore Chambers, P.O.Box 217, Apia, 1999.02.12 USD 1,400 Trading of chemical materials Corporation Samoa P.O.Box 1962 Al Khobar 31952 Kindom of CTCI Arabia Ltd. 2002.10.27 SAR 5,000 Design and construction of chemical factories Saudi Arabia Shang Ding Engineering & Room.12, Floor.8, No.441, He Nang Bai 2003.09.24 USD 16,680 Consulting services for construction projects Construction Co., Ltd. Road, Zhabei District, Shanghai Advanced Control & Room 704, 7Fl, 26, Lane 168, Daduhe Road, 2001.09.21 USD 750 Computer skills services Information Technologies Ltd. Putuo District, Shanghai CTCI Machinery Corporation 2007.03.14 5, Xinggong Rd., Dashe Dist., Kaohsiung NTD 200,000 Planning and design of construction projects 19th Floor, Phairojkijja Tower, No. 400 Superiority (Thailand) Co., Ltd 2006.01.01 Bangna-Trad Road, K.M.4, Bangna, Bangkok THB 350 Planning and design of construction projects 10260 Thailand Akara Bldg.,24 De Castro Street, Wickhams Universal Engineering(BVI) Co., 2003.03.06 Cay I, Road Town, Tortola, British Virgin USD 50 Planning and design of construction projects Islands. Unit 402 SEDCCO 1 Building Roda St. Legaspi CIPEC Construction Inc. 2003.07.03 PHP 2,500 Planning and design of construction projects Village Makati City, Philippine. CINDA Engineering & B-92, 9th Floor, Himalaya House, 23 2008.08.08 INR 80,000 Planning and design of construction projects Construction Pvt. Ltd. Kasturba Gandhi Marg, New Delhi – 110001

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SUITE 22-03B, 22nd Fl., Menara Tan & Tan CTCI Malaysia Sdn. Bhd. 2002.06.04 207 Jalan Tun Razak, 50400 Kuala Lumpur, MYR 750 Planning and design of construction projects Malaysia Rua Dr. Pedro Jose Lobo, ns 1-3, Edificio SINOGAL - Waste Services Co., 2009.06.25 Banco Luso Internacional,15 andar, salas MOP 4,000 Environmental engineering Ltd. 1501 e 1510, em Macau Room 701, 7Fl, 26, Lane 168, Daduhe Road, Shanghai XuanLi Trading Co.,Ltd 2009.07.17 CNY 5,000 General trade. Putuo District, Shanghai 9555 West Sam Houston Pkwy South, Suite Business development and related engineering CTCI Americas, Inc. 2009.10.02 USD 100 420 Houston, Texas 77099 services and planning CTCI and Partners Company P.O.Box 1962 Al Khobar 31952 Kindom of 2009.09.14 SAR 5,000 Planning and design of construction projects Limited Saudi Arabia 80 Robinson Road #02-00 CTCI Singapore Pte. Ltd. 2011.01.10 USD 5,100 Planning and design of construction projects Singapore(068896) Yuan Ding Resources 2013.12.13 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 45,000 Environmental engineering Management Corp. Xiang Ding Environmental Room 2206-G,NO.89,East Yunling Rd., Putuo 2013.10.25 USD 140 Environmental engineering Consultant (shanghai) Co., Ltd. District, Shanghai city SUITE D23, 2nd Floor, Plaza Pekeliling, No.2, CCJV P1 Engineering & 2014.05.20 Jalan Tun Razak, 50400 Kuala Lumpur, MYR 250 Planning of construction projects Construction Sdn. Bhd. Malaysia Crown Asia 2 Investment 2011.04.21 10Fl, 89, Sec. 6, Zhongshan North Rd., Taipei NTD 250 Investments Limited Jan Pietersz. Coenstraat 7, Engineers and other technical design and CTCI Netherlands B.V. 2016.01.04 EUR 300 2595WP's-Gravenhage consultancy

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(3) Common Shareholders of the Company and Its Subsidiaries or Its Affiliates with Actual of Deemed Control: None

(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 April 30th, 2016 Shareholding Company Title Name of Representative Shares % E&C Engineering Chairman CTCI Corporation 59,098,624 97.09 Corporation Representative: Shou-Wei Lou Director CTCI Corporation 59,098,624 97.09 Representative: Pao-Yao Pan S. C. Chun Ting-Kuo Li S. L. Yang Shuh-Gong Lou Yang-Ting Chen Supervisor Innovest Investment Corporation 1,000 0.00 Representative: Ching-Hsiang Tseng President S. C. Chun Resources Chairman CTCI Corporation 16,765,048 93.14 Engineering Representative: Kuo-Ann Wu Services Inc. Director CTCI Corporation 16,765,048 93.14 Representative: Michael Yang Michael Chung Ming-Shan Yu Tian-Shyh Lee Tsung-Hsin Li Chi-Min Chien Supervisor GRQ Investment Corporation 1,000 0.01 Representative: Andrew Tsai President Michael Chung Advanced Chairman CTCI Corporation 11,444,842 48.72 Control & Representative: Hwei-Nan Yih Systems Inc. Director CTCI Corporation 11,444,842 48.72 Representative: Yin-Fan Liu Charles Y. Huang Bao-Lang Chen Hou-Sheng Chan Hung-I Chen 389,000 1.66 Independent Ray Chang Director Hsi-Peng Lu Amy Lee President Yin-Fan Liu 72,022 0.31

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Shareholding Company Title Name of Representative Shares % Sino Chairman KD Holding Corporation 14,065,936 93.15 Environmental Representative: J.J. Liao Services Director KD Holding Corporation 14,065,936 93.15 Corporation Representative: Ming-Cheng Hsiao Todd Chen Eric Tiao B.J. Liang Daniel Hsin-I Ting Shane Shieh Supervisor HD Resource Management Corporation 1,000 0.01 Representative: SH Lin President Eric Tiao GRQ Investment Chairman CTCI Corporation 169,000,000 100.00 Corporation Representative: Mark W. H. Yang Director CTCI Corporation 169,000,000 100.00 Representative: Jin-Wen Chang Ho-Chuang Lee Steve Jean Jim-Druan Chen Supervisor CTCI Corporation 169,000,000 100.00 Representative: J.S. Wu President Patrick Lin Innovest Chairman CTCI Corporation 114,000,000 100.00 Investment Representative: Michael Yang Corporation Director CTCI Corporation 114,000,000 100.00 Representative: Pao-Yao Pan Sharon Chiang Leon Chen Y. S. Liao Supervisor CTCI Corporation 114,000,000 100.00 Representative: James Wang President Patrick Lin KD Holding Chairman CTCI Corporation 38,457,105 58.05 Corporation Representative: John H. Lin Director CTCI Corporation 38,457,105 58.05 Representative: Michael Yang Ming-Cheng Hsiao Wen-Whe Pan Yang-Min Liu Parkwell Investment Limited 1,060,000 1.60 Representative: Kuan-Shen Wang Independent Sidney Hsin-Huai Chow Director Shean-Bii Chiu Eugene Chien President J.J. Liao

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Shareholding Company Title Name of Representative Shares % CTCI Chemicals Chairman Innovest Investment Corporation 1,657,207 23.34 Corporation. Representative: Steven Chang Director Innovest Investment Corporation 1,657,207 23.34 Representative: Michael Yang Kevin S.P. Jen Mark H.C. Jen Michael C. Chang Joe C.L. Chen Shirley Chou 576,910 8.13 Supervisor GRQ Investment Corporation 480,661 6.77 Representative: Teh-Ming Tao Roentec Company Limited 407,396 5.74 Representative: Han-Bin Li President Kevin S.P. Jen Leading Energy Chairman KD Holding Corporation 66,640,000 98.00 Corporation Representative: J.J. Liao Director KD Holding Corporation 66,640,000 98.00 Representative: Jin-Yiu Hsueh Weapon Wu Cheng-Shen Wang Chen-Chin Chen Supervisor Sino Environmental Services Corporation 1,360,000 2.00 Representative: Chang-Hong Lin President Jin-Yiu Hsueh HD Resources Chairman KD Holding Corporation 2,000,000 100.00 Management Representative: J.J. Liao Corporation Director KD Holding Corporation 2,000,000 100.00 Representative: Yun-Peng Shih Ai-Cheng Ho Chun-Jung Hung Sheng-Jung Chiang Supervisor KD Holding Corporation 2,000,000 100.00 Representative: Jung-Yu Han President Yun-Peng Shih Fortune Energy Chairman KD Holding Corporation 56,249,000 75.00 Corporation Representative: J.J. Liao Director KD Holding Corporation 56,249,000 75.00 Representative: Forest M.H. Lin Po-Chien Wang Feng-Hui Lee Topco Scientific Co., Ltd. 18,700,000 24.93 Representative: Fa-Siang Tan Supervisor Sino Environmental Services Corporation 1,000 0.00 Representative: Yan-Long Lee Topco International Investment Co., Ltd. 50,000 0.07 Representative: Su-Qing Lu President Jin-Yiu Hsueh

138

Shareholding Company Title Name of Representative Shares % CTCI Machinery Chairman CTCI Corporation 20,000,000 100.00 Corporation Representative: Tung-Chih Huang Director CTCI Corporation 20,000,000 100.00 Representative: Chey-Chan Lee Michael Shih Rong-Ting Chen Tzu-Jung Tseng Ivan Chang Wen-Shen Hsueh Supervisor CTCI Corporation 20,000,000 100.00 Representative: Yuan-Shuang Kuan President Chey-Chan Lee CTCI (Thailand) Director CTCI Corporation 1,249,500 49.00 Co., Ltd. Representative: John H. Lin Andy Sheu Mark W. H. Yang M. H. Wang Jeff Hsu Michael Hong Superiority (Thailand) Co.,Ltd 1,300,500 51.00 Representative: Rungthip Chin Thira Jaturonrassamee CTCI Overseas Director CTCI Corporation 6,740,000 100.00 (BVI) Representative: Andy Sheu Corporation M. H. Wang Mark W. H. Yang Jingding Chairman CTCI Overseas Corporation Limited USD 10,600,000 100.00 Engineering & Representative: Ching-Lin Hsu Construction Director CTCI Overseas Corporation Limited USD 10,600,000 100.00 Co., Ltd. Representative: John T. Yu Mark W. H. Yang Tieh-Shih Chang Shen-Peng Liao Supervisor CTCI Overseas Corporation Limited USD 10,600,000 100.00 Representative: Hen-Hsin Ko President Tieh-Shih Chang Shang Ding Chairman CTCI Overseas Corporation Limited USD 13,470,000 80.76 Engineering & Representative: Shou-Wei Lou Construction Director E&C Engineering Corporation USD 3,210,000 19.24 Co., Ltd. Representative: John H. Lin Patrick Lin CTCI Overseas Corporation Limited USD 13,470,000 80.76 Representative: Chang Ning Tzou Supervisor CTCI Overseas Corporation Limited USD 13,470,000 80.76 Representative: David Wang President Chang Ning Tzou

139

Shareholding Company Title Name of Representative Shares % CTCI Overseas Director CTCI Overseas (BVI) Corporation 6,740,000 100.00 Corporation Representative: John T. Yu Limited John H. Lin Andy Sheu Michael Yang CTCI Engineering Chairman CTCI Corporation 450,000 60.00 & Construction Representative: Ming-Cheng Hsiao Sdn. Bhd. Director CTCI Corporation 450,000 60.00 Representative: Ming-Gen Lee Steven C.H. Wu Hope Sun Eric Chiu CTCI Overseas Corporation Limited 300,000 40.00 President Eric Chiu CTCI Arabia Ltd. Chairman CTCI Corporation SAR 2,500,000 50.00 Representative: M. H. Wang Director CTCI Corporation SAR 2,500,000 50.00 Representative: Andy Sheu C.L. Yen CTCI Overseas Corporation Limited SAR 2,500,000 50.00 Representative: Scott Chen T.M. Wang En-Cheng Lin President Scott Chen CIMAS Chairman Vietnam Machinery Erection Corporation USD 1,188,000 33.00 Engineering Representative: Hoang Minh Khoi Company Vice CTCI Overseas Corporation Limited USD 1,800,000 50.00 Limited Chairman Representative: Andy Sheu BOM CTCI Overseas Corporation Limited USD 1,800,000 50.00 Members Representative: John H. Lin Ming-Shyan Lee Vietnam Machinery Erection Corporation USD 1,188,000 33.00 Representative: Nguyen Viet Hung Sincerity Engineering Co., Ltd. USD 612,000 17.00 Representative: Yang Yi-Chung General Director Ming-Shyan Lee Chung Ding Chairman CTCI Chemicals Corporation 1,400,000 100.00 Chemicals Representative: Steven Chang Corporation Director Richard Yao Century Ahead Director Advanced Control & Systems Inc. USD 750,000 100.00 Ltd. Representative: Hwei-Nan Yih Yin-Fan Liu Ai-Cheng Ho President Hwei-Nan Yih Superiority Director Universal Engineering BVI Representative: THB 171,500 49.00 (Thailand) Co., John H. Lin Ltd Jeff Hsu 3 independent shareholders THB 178,500 51.00 Representative: Rungthip Chin

140

Shareholding Company Title Name of Representative Shares % Advanced Chairman Century Ahead Ltd. USD 750,000 100.00 Control & Representative: Hwei-Nan Yih Information Director Century Ahead Ltd. USD 750,000 100.00 Technologies Representative: Yin-Fan Liu Ltd. Benjamin C. N. Tsai Supervisor Century Ahead Ltd. USD 750,000 100.00 Representative: Chuan-Ju Shen President Zong-Kuan Su CTCI Malaysia Chairman Sumber Mampu Sdn. Bhd. 600,000 80.00 Sdn. Bhd. Representative: Mohamed Nor Bin Abu Bakar Director CTCI Engineering & Construction Sdn. Bhd. 150,000 20.00 Representative: Frank Wu Ting-Chuang Li Sumber Mampu Sdn. Bhd. 600,000 80.00 Representative: Kamaruddin Bin Anuer, Muhammad Anas Bin Marjunit SINOGAL - Chairman Helder Jose Moura Dos Santos MOP 800,000 20.00 Waste Services Director Pereira Taveira Pinto, Carlos Manuel MOP 800,000 20.00 Co., Ltd. CTCI Corporation MOP 1,200,000 30.00 Sino Environmental Services Corporation MOP 1,200,000 30.00 Director J.J. Liao Eric Tiao Patrick Lin President Jeng-Long Su CIPEC Chairman CTCI Overseas Corporation Limited 9,998 40.00 Construction Inc. Representative: M.L. Lee Director CTCI Overseas Corporation Limited 9,998 40.00 Representative: Wen-Pin Lo Accuracy International Inc. 14,997 60.00 Representative: Romuel Consunji Randolph Ang Grace Z. Fernandez President Romuel Consunji CINDA Chairman Pao-Yao Pan INR 80,000,000 100.00 Engineering & Director Michael Yang Construction Tim Lin Pvt. Ltd. Dingo Ku Jsh-hong Tsai Managing Tim Lin Director Shanghai XuanLi Chairman Shang Ding Engineering & Construction Co., Ltd. CNY 5,000,000 100.00 Trading Co.,Ltd Representative: Shou-Wei Lou Director Shang Ding Engineering & Construction Co., Ltd. Representative: Chang Ning Tzou Yu-Li Zhu Supervisor Shang Ding Engineering & Construction Co., Ltd. Representative: S. C. Chun President Chang Ning Tzou

141

Shareholding Company Title Name of Representative Shares % CTCI Americas, Chairman Andy Sheu 100,000 100.00 Inc. Director M. H. Wang Sean Hsu Ebrahim Fatemizadeh President Sean Hsu CTCI and Partners Chairman CTCI Overseas Corporation Limited 3,000,000 60.00 Company Limited Representative: John H. Lin CTCI Corporation 2,000,000 40.00 Universal Chairman John H. Lin 50,000 100.00 Engineering (BVI) Co., CTCI Singapore Chairman John H. Lin 5,100,000 100.00 Pte. Ltd. Director Steven C.H. Wu Eric Chiu Lee Wei Hsiung Managing Steven C.H. Wu Director Yuan Ding Chairman KD Holding Corporation 2,700,000 60.00 Resources Representative: J.J. Liao Management Director KD Holding Corporation 2,700,000 60.00 Corp. Representative: Yun-Peng Shih Yu-Jheng Huang Supervisor HD Resource Management Corporation 1,800,000 40.00 Representative: Patrick Lin President Yun-Peng Shih Xiang Ding Chairman Sino Environmental Services Corporation USD 140,000 100.00 Environmental Representative: J.J. Liao Consultant Supervisor Sino Environmental Services Corporation USD 140,000 100.00 (shanghai) Co., Representative: Patrick Lin Ltd. President Jin-Yiu Hsueh CCJV P1 CTCI Corporation 247,500 99.00 Engineering & Chiyoda Corporation 2,500 1.00 Construction Director M. H. Wang Sdn. Bhd. Steven C.H. Wu Rick Wu Takahashi Akemi CTCI CTCI Singapore Pte. Ltd. EUR 300,000 100.00 Netherlands B.V. Director David Wang Crown Asia 2 Chairman GRQ Investment Corporation TWD 250,000 100.00 Investment Representative: Michael Yang Limited Director GRQ Investment Corporation Representative: Ming-Cheng Hsiao

142

8.1.2 Operation overview of the Company and affiliates December 31st, 2015; Unit: NT$ Thousands Total Total Common Total Operating Net Income Earnings Per Company Total Assets Stockholders’ Operating Stock Issued Liabilities Income (Loss) (Loss) Share (NT$) Equity Revenue E&C Engineering Corporation $ 608,720 $ 3,318,163 $ 2,497,949 $ 820,214 $ 4,344,867 $ 157,164 $ 135,937 $ 2.23 Resources Engineering Services Inc. 180,000 853,173 546,197 306,976 1,570,167 (5,066) 627 0.03 Advanced Control & Systems Inc. 234,695 1,168,289 651,898 516,391 1,405,126 79,012 79,749 3.40 Sino Environmental Services Corporation 151,000 2,033,935 1,196,361 837,574 2,779,033 333,203 338,612 22.42 GRQ Investment Corporation 1,690,000 5,077,810 2,569,771 2,508,039 329,380 157,721 110,579 0.65 Innovest Investment Corporation 1,140,000 1,087,863 5,995 1,081,868 (53,008) (55,070) (55,825) (0.49) KD Holding Corporation 658,394 4,457,596 18,642 4,438,954 731,917 685,246 710,370 10.84 Leading Energy Corporation 680,000 1,737,454 202,504 1,534,950 629,132 298,619 251,011 3.69 Fortune Energy Corporation 750,000 1,969,265 630,170 1,339,095 366,722 187,325 178,088 2.37 CTCI Chemicals Corporation 71,000 294,181 84,444 209,737 430,466 58,516 72,452 10.20 HD Resources Management Corporation 20,000 329,736 255,347 74,389 880,309 30,139 26,337 13.17 CTCI (Thailand) Co., Ltd. 232,356 1,171,359 920,575 250,783 3,109,575 14,953 16,965 6.65 CTCI Overseas (BVI) Corporation 328,621 2,438,548 128 2,438,420 - (616) 306,893 - CTCI Overseas Corporation Limited 284,443 4,392,280 1,979,958 2,412,322 1,702,991 147,893 307,287 45.59 Jingding Engineering & Construction Co., Ltd. 365,920 2,212,776 476,527 1,736,249 2,333,495 92,064 113,574 1.55 CTCI Engineering & Construction Sdn. Bhd. 5,752 91,230 10,785 80,445 80,353 62,063 62,782 83.69 CIMAS Engineering Company Limited 95,271 162,593 48,035 114,558 174,041 14,267 11,547 - Century Ahead Ltd. 23,678 29,552 - 29,552 - (60) 6,166 - Chung Ding Chemicals Corporation 315 422 100 322 - (177) 26,107 - CTCI Arabia Ltd. 43,831 2,044,939 3,404,108 (1,359,169) 2,548,590 86,710 71,562 -

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Total Total Common Total Operating Net Income Earnings Per Company Total Assets Stockholders’ Operating Stock Issued Liabilities Income (Loss) (Loss) Share (NT$) Equity Revenue Shang Ding Engineering & Construction Co., 616,408 1,385,061 947,045 438,016 778,255 15,595 3,212 - Ltd. Advanced Control & Information 26,593 33,263 5,092 28,171 42,365 8,185 6,172 - Technologies Ltd. CTCI Machinery Corporation 200,000 1,831,707 1,373,930 457,777 2,328,074 88,016 69,346 17.51 Superiority (Thailand) Co., Ltd 319 53,132 60,513 (7,381) - (231) 7,891 4,025.84 Universal Engineering(BVI) Corporation 1,645 119,912 7,509 112,403 - (28,985) (20,215) - CIPEC Construction Inc. 1,753 16,095 18,294 (2,199) - (1,371) (2,497) - CINDA Engineering & Construction Pvt. Ltd. 39,592 446,612 243,716 202,896 212,108 10,444 90 0.01 CTCI Malaysia Sdn. Bhd. 5,752 251,119 180,782 70,337 114,707 3,124 48,638 64.85 SINOGAL - Waste Services Co., Ltd. 16,477 827,561 712,394 115,167 570,227 80,589 86,392 - Shanghai XuanLi Trading Co.,Ltd 24,974 307,992 274,754 33,238 392,955 7,051 4,836 - CTCI Americas, Inc. 3,290 31,546 23,948 7,599 29,624 (20,702) 222 - CTCI and Partners Company Limited 43,831 48,449 19,289 29,160 - (5,501) (5,501) (1.10) CTCI Singapore Pte. Ltd. 150,501 871,973 959,156 (87,183) 1,006,358 (265,045) (254,466) - Yuan Ding Resources Management Corp. 45,000 39,796 798 38,998 - (345) 1,029 0.23 Xiang Ding Environmental Consultant 4,294 23,694 15,615 8,079 39,212 2,875 2,155 - (shanghai) Co., Ltd. CCJV P1 ENGINEERING & CONSTRUCTION 1,899 1,556,225 1,355,108 201,117 2,883,366 171,758 176,897 707.56 SDN. BHD.

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8.1.3 The related information on the endorsements or guarantees for others, lending to others and derivative financial instruments of affiliates: A. Endorsements or guarantees for others: (as of March 31st, 2016) Unit: NT$ thousands Guarantee Ratio of the accumulated The Ending highest guarantee to Relationship The Ceiling on balance Assets No. balance the net asset Ceiling on total guarantee amount Guarantor with the guarantee for single as of pledged for (Note 1) Name during the value of the (Note 3) company enterprise March guarantee st Company as of (Note 2) period 31 ,2016 (Note 4) March 31st,2015 Advanced 100% of the net worth The ceiling for total guarantee is Control & Century Ahead from the latest $1,032,782, 200% of the net 1 Systems Inc. Limited 2 audited financial 20,097 19,308 - 3.63 worth from the latest audited (ACS) statements of ACS financial statements of ACS. 300% of the net worth The ceiling for total guarantee is E&C Shanghai XuanLi from the latest $4,921,284, 600% of the net 2 Engineering 5 audited financial 235,889 230,743 - 28.13 worth from the latest audited Corporation Trading Co., Ltd statements of E&C financial statements of E&C Engineering Corp. Engineering Corp. Shang Ding 300% of the net worth The ceiling for total guarantee is E&C Engineering & from the latest $4,921,284, 600% of the net 2 Engineering 5 audited financial 404,034 395,220 - 48.19 worth from the latest audited Corporation Construction statements of E&C financial statements of E&C Co., Ltd Engineering Corp. Engineering Corp. 300% of the net worth from the latest The ceiling for total guarantee is CTCI E&C Engineering audited financial $2,746,663, 600% of the net 3 Machinery Corporation 5 statements of CTCI 19,343 19,343 - 4.23 worth from the latest audited Corporation Machinery financial statements of CTCI Corporation Machinery Corp. 300% of the net worth The ceiling for total guarantee is CTCI CTCI from the latest $1,258,422, 600% of the net 4 Chemicals 4 audited financial 18,817 18,817 - 8.97 worth from the latest audited Corporation Corporation statements of CTCI financial statements of CTCI Chemicals Corporation Chemicals Corporation.

145

300% of the net worth The ceiling for total guarantee is Shang Ding from the latest $2,647,914, 600% of the net Engineering Shanghai XuanLi audited financial worth from the latest audited 5 & Trading Co., Ltd. 2 statements of Shang 110,534 106,194 - 24.06 financial statements of Shang Construction Ding Engineering & Ding Engineering & Construction Co., Ltd Construction Co., Ltd Co., Ltd. 300% of the net worth The ceiling for total guarantee is CTCI CTCI Americas, from the latest $14,159,330, 600% of the net 6 Overseas 3 audited financial 51,870 49,834 - 2.11 worth from the latest audited Inc. Corp. Ltd. statements of CTCI financial statements of CTCI Overseas Corp. Ltd. Overseas Corp. Ltd. 300% of the net worth The ceiling for total guarantee is Resources from the latest E&C Engineering audited financial $1,841,852, 600% of the net 7 Engineering 5 1,760 1,760 - 0.57 worth from the latest audited Corporation statements of Services Inc. Resources Engineering financial statements of Resources Services Inc. Engineering Services Inc. 200% of the net worth The ceiling for total guarantee is KD Holding G.D. from the latest $13,316,862, 300% of the net 8 Development 6 audited financial 635,076 621,926 - 13.14 worth from the latest audited Corporation Corporation statements of KD financial statements of KD Holding Corporation Holding Corporation. Note 1: 1.Company：0 2.Subsidiaries：Please fill in the number with a sequence. 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 and subsidiaries totally holds more than 50% of the voting shares. 4. A company directly and indirectly holds more than 50% of the voting shares in the company. 5. Contract required. 6. The relationship of Joint venture. Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote. Note 4: Fill in the maximum outstanding balance of endorsements/guarantees provided during the year ended March 31, 2015.

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B. Lending to others: (as of March 31st, 2016) The Ending Collateral Limit on highest balance Nature Amount Reason of Ceiling for Allowance lending No. Account item balance as of Interest of for short-term total Lender Borrower for bad for single (Note 1) (Note 2) during March rate Lending operation financing Name Value amount debts enterprise period 31st,2015 (Note 4) (Note 5) (Note 6) (Note 7) (Note 7) (Note 3) (Note 8) Advanced Accounts For Control & CTCI 1 receivable-related 49,000 49,000 - 2 0 operational 0 NA 0 53,243 212,972 Systems Inc. Corporation parties needs (ACS) Shang Ding CTCI Engineering Accounts For 1.1%~ 2 Overseas & receivable-related 391,222 375,862 2 0 operational 0 NA 0 943,955 943,955 1.269% Corp. Ltd. Construction parties needs Co., Ltd Superiority CTCI Accounts For (Thailand) 2 Overseas receivable-related 61,403 60,265 1.100% 2 0 operational 0 NA 0 943,955 943,955 Company Corp. Ltd. parties needs Limited CTCI CIPEC Accounts For 2 Overseas Construction receivable-related 18,163 17,450 1.100% 2 0 operational 0 NA 0 943,955 943,955 Corp. Ltd. Inc. parties needs CTCI Accounts For CTCI 2 Overseas receivable-related 40,194 38,616 - 2 0 operational 0 NA 0 943,955 943,955 Americas, Inc. Corp. Ltd. parties needs Universal CIPEC Accounts For Engineering 3 Construction receivable-related 1,673 1,673 1.278% 2 0 operational 0 NA 0 43,984 43,984 (BVI) Inc. parties needs Corporation CTCI Accounts For CTCI 4 Chemicals receivable-related 18,000 18,000 - 2 0 operational 0 NA 0 20,974 83,895 Corporation Corporation parties needs

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CTCI E&C Accounts For 4 Chemicals Engineering receivable-related 18,000 18,000 1.090% 2 0 operational 0 NA 0 20,974 83,895 Corporation Corporation parties needs CTCI CTCI Accounts For 4 Chemicals Machinery receivable-related 18,000 18,000 - 2 0 operational 0 NA 0 20,974 83,895 Corporation Corporation parties needs G.D. Accounts For KD Holding 5 Development receivable-related 30,000 30,000 1.600% 2 0 operational 0 NA 0 473,287 1,893,149 Corporation Corporation parties needs HD Resources Accounts For CTCI 6 Management receivable-related 7,000 7,000 - 2 0 operational 0 NA 0 8,491 33,963 Corporation Corporation parties needs HD Resources E&C Accounts For 6 Management Engineering receivable-related 7,000 7,000 1.090% 2 0 operational 0 NA 0 8,491 33,963 Corporation Corporation parties needs HD Resources CTCI Accounts For 6 Management Machinery receivable-related 7,000 7,000 1.090% 2 0 operational 0 NA 0 8,491 33,963 Corporation Corporation parties needs Sino Accounts For Environment CTCI 7 receivable-related 78,000 78,000 - 2 0 operational 0 NA 0 102,885 411,539 Services Corporation parties needs Corporation Sino E&C Accounts For Environment 1.07%~ 7 Engineering receivable-related 78,000 78,000 2 0 operational 0 NA 0 102,885 411,539 Services 1.09% Corporation parties needs Corporation Sino CTCI Accounts For Environment 7 Machinery receivable-related 78,000 78,000 1.090% 2 0 operational 0 NA 0 102,885 411,539 Services Corporation parties needs Corporation Sino Resources Accounts For Environment 7 Engineering receivable-related 78,000 78,000 1.090% 2 0 operational 0 NA 0 102,885 411,539 Services Services Inc. parties needs Corporation

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Jingding Shanghai Engineering Accounts For XuanLi 8 and receivable-related 116,923 114,372 1.755% 2 0 operational 0 NA 0 547,711 547,711 Trading Co., Construction parties needs Ltd. Co., Ltd. Note 1： Number for items explain as follows： ■Company：0 ■ Subsidiaries：Please fill in the number with a sequence. Note 2： This item is for account receivable-related parties, owner’s equity, prepayments, temporary payments etc. If any item belong 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 the 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 the 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 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.

149

C. Derivative Transactions Information: a. Derivatives transactions by the Dec. 31, 2015 (1) Up to December 31, 2015, CTCI Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 8,169,146 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid forward contracts is 47,868 thousand, listed in non-operating income, and the exchange gain of aforesaid forward contracts is 5,625 thousand, credited to operating cost. (2) Up to December 31, 2015, CTCI Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 577,178 thousand. As the counter-party has good credit, the financial risk is limited. The exchange gain of aforesaid SWAP contracts is 1,235 thousand, listed in non-operating income, and the exchange gain of aforesaid SWAP contracts is 1,510 thousand, credited to operating cost. (3) Up to December 31, 2015, CTCI Corporation engaged in Commodity SWAP transactions to hedge the risks from fluctuation in raw material prices. Total contract amount is 326,619 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 20,578 thousand, listed in non-operating expense. (4) Up to December 31, 2015, CTCI Overseas Corporation Limited engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 32,719 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 1,076 thousand, listed in non-operating income. (5) Up to December 31, 2015, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 116,382 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid SWAP contracts is 3,254 thousand, listed in non-operating income. (6) Up to December 31, 2015, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 173,607 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 2,552 thousand, listed in non-operating income. (7) Up to December 31, 2015, E&C Engineering Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 373,376 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 2,310 thousand, listed in non-operating expense. (8) Up to December 31, 2015, CTCI(Thailand) Company Limited engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 284,158 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 1,111 thousand, listed in non-operating expense. (9) Up to December 31, 2015, CTCI Machinery Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 315,581 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 578 thousand, listed in non-operating expense. (10) Up to December 31, 2015, CTCI Machinery Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 97,573 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 174 thousand, listed in non-operating

150

expense. (11) Up to December 31, 2015, CCJV P1 Engineering & Construction Sdn. Bhd. engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 724,251 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 7,139 thousand, listed in non-operating expense.

b. Derivatives transactions by the Mar. 31, 2016 (1) Up to March 31, 2016, CTCI Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 3,835,350 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 13,596 thousand, listed in non-operating expense, and the exchange gain of aforesaid forward contracts is 6,503 thousand, credited to operating cost. (2) Up to March 31, 2016, CTCI Corporation engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 281,640 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 8,125 thousand, listed in non-operating expense (3) Up to March 31, 2016, CTCI Overseas Corporation Limited engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 208,662 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 5,076 thousand, listed in non-operating income. (4) Up to March 31, 2016, CTCI Overseas Corporation Limited engaged in FX SWAP transactions to hedge the risks from FX commitment. Total contract amount is 58,135 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid SWAP contracts is 1,569 thousand, listed in non-operating expense. (5) Up to March 31, 2016, CTCI Chemicals Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 34,705 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 1,298 thousand, listed in non-operating income (6) Up to March 31, 2016, E&C Engineering Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 19,689 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 232 thousand, listed in non-operating expense. (7) Up to March 31, 2016, CTCI Machinery Corporation engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 59,349 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange loss of aforesaid forward contracts is 977 thousand, listed in non-operating expense. (8) Up to March 31, 2016, CCJV P1 Engineering & Construction Sdn. Bhd. engaged in FX forward transactions to hedge the risks from FX commitment. Total contract amount is 3,497,726 thousand. As the counter-party has good credit, the financial risk is limited. The total exchange gain of aforesaid forward contracts is 239,786 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

151

8.2 Private Placement Securities in the Most Recent Years: None 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years: Unit: NT$ thousands; Shares; % Shares Shares and Shareholdings & Endorsement Amount Stock Shareholding Date of Name of Fund and amount Investment amount in the amount made loaned to capital ratio of the acquisition or Mortgage subsidiary source amount disposed gain (loss) most recent for the the collected company (%) disposition acquired of year subsidiary subsidiary Sino $ 151,000 own 93.16 50,000 1,028 None None None 1997.08 Environmental reserves $1,764 $61 Services 50,000 1997.10 $258 Corporation $2,021 50,000 1997.10 $1,893 50,000 1997.12 $1,780 100,000 1997.12 $185 $3,673 50,000 1998.08 $3,092 1998.12 11,500 Stock dividend 61,000 1998.12 $45 $3,112 971,160 1999.12 $31,475 831,560 1999.12 $721 $26,951 505,871 2001.12 $13,256 2002.12 645,000 2004.08 9 Stock dividend 2005.10 9 Stock dividend

152

Shares Shares and Shareholdings & Endorsement Amount Stock Shareholding Date of Name of Fund and amount Investment amount in the amount made loaned to capital ratio of the acquisition or Mortgage subsidiary source amount disposed gain (loss) most recent for the the collected company (%) disposition acquired of year subsidiary subsidiary 2006.10 7 Stock dividend 2007.10 20 Stock dividend 2008.09 12 Stock dividend GRQ Investment $1,690,000 own 100 1999.03 550,000 912,170 None None None Corporation reserves $21,878 $53,818 200,000 1999.03 $303 $8,104 450,000 1999.04 $19,056 450,000 1999.04 $586 $18,791 350,000 1999.05 $14,677 620,000 1999.05 $831 $27,053 776,000 1999.06 $28,919 1999.07 168,200 Stock dividend 15,000 1999.07 $18 $584 100,000 1999.08 $3,044 427,000 2000.02 $1,274 $14,663 2000.07 68,220 Stock dividend

153

Shares Shares and Shareholdings & Endorsement Amount Stock Shareholding Date of Name of Fund and amount Investment amount in the amount made loaned to capital ratio of the acquisition or Mortgage subsidiary source amount disposed gain (loss) most recent for the the collected company (%) disposition acquired of year subsidiary subsidiary 2001.07 108,060 Stock dividend 2004.08 8,710 Stock dividend 2005.10 8,671 Stock dividend 2006.10 6,954 Stock dividend 2007.10 18,539 Stock dividend 2008.09 10,816 Stock dividend Innovest $1,100,000 own 100 328,000 344,436 None None None 1999.04 Investment reserves $14,198 $20,322 Corporation 105,000 1999.04 $108 $4,582 350,000 1999.05 $14,826 400,000 1999.05 $769 $17,881 250,000 1999.06 $9,659 1999.07 84,600 Stock dividend 308,840 2000.02 $420 $8,841 2000.07 84,600 Stock dividend 2001.07 40,803 Stock dividend

154

Shares Shares and Shareholdings & Endorsement Amount Stock Shareholding Date of Name of Fund and amount Investment amount in the amount made loaned to capital ratio of the acquisition or Mortgage subsidiary source amount disposed gain (loss) most recent for the the collected company (%) disposition acquired of year subsidiary subsidiary 2004.08 3,289 Stock dividend 2005.10 3,274 Stock dividend 2006.10 2,625 Stock dividend 2007.10 7,000 Stock dividend 2008.09 4,084 Stock dividend Crown Asia 2 500 500 Investment $ 250 Donation 100 2011.04 None None None $18 $18 Limited Note Note: Acquired in March 2016, the funding source is by donation.

155

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 2015 Performance New Order 860.12 644.57 Operating Revenue 631.25 670.58 Gross Profit 52.57 54.36

B. Utilization of information a. Implemented ISO 27001:2013 information security standard to all subsidiaries, to enhance CTCI Group information security management. b. Integrated all subsidiaries’ managing related IT systems to fulfill the intention of entire group’s sustainability operation. c. Built up a fully functioned Southeast Asia and Middle East communication network; allowing all meetings, calls, information between different places communicating smoothly. d. Implemented SAP-HR system for HR Department as well as all subsidiaries for them to establish the Successor Factors Plan. e. Established the myVideoKM System to enhance the knowledge training for all employees at job sites and all subsidiaries.

C. Corporate governance a. To enhance the risk audit operation and project enforcers’ risk concept b. To enhance the Company’s governance with higher rating.

D. 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 2015 Performance Water consumption in Less than 10.98M3/person 11.21 M3/person the workplace (average water consumption over the past two years) Power consumption in Less than 3,173 degree/person 3,100 degree/person workplace (average amount consumed electricity over the past two years) Health management - More than 12 seminars 12 seminars Promotion

g. To enhance the urgent response ability, there are a total of 35 qualified first-aid personnel.

8.4.2 Material Event Impact on Shareholders' Equity or Share Price in Recent Years until the Annual Report being published None

156 Appendix 1

CTCI CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2015 AND 2014

------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.

157

158

159 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (Adjusted) (Adjusted) December 31, 2015 December 31, 2014 January 1, 2014 Assets Notes AMOUNT % AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) $ 5,589,006 9 $ 9,810,303 17 $ 9,327,026 19 1110 Financial assets at fair value 6(2) through profit or loss - current 804,392 1 1,783,575 3 843,215 2 1125 Available-for-sale financial 6(3) assets - current 674,916 1 680,181 1 604,730 1 1150 Notes receivable, net 6(5) 33,036 - 11,774 - 3,244,527 7 1160 Notes receivable - related 7 parties 586,246 1 1,411,400 3 - - 1170 Accounts receivable, net 6(5) 6,579,269 11 4,964,255 9 4,367,870 9 1180 Accounts receivable - related 7 parties 32,679 - 3,927 - 4,136 - 1190 Due from customers for 6(6) contract work 26,890,108 45 18,758,973 33 12,372,269 25 1200 Other receivables 359,333 1 283,345 1 175,433 1 1210 Other receivables - related 7 parties 32,450 - 38,008 - 67,235 - 1220 Current income tax assets 3,372 - 170,268 - 163,728 - 130X Inventories 141,462 - 316,169 1 89,661 - 1410 Prepayments 6(7) 3,387,189 6 3,632,839 6 3,002,991 6 1470 Other current assets 8 185,349 - 225,591 - 869,378 2 11XX Current Assets 45,298,807 75 42,090,608 74 35,132,199 72 Non-current assets 1543 Financial assets measured at 6(4) cost - non-current 543,670 1 574,622 1 584,153 1 1550 Investments accounted for 6(8) using equity method 2,436,736 4 2,065,874 4 675,002 1 1600 Property, plant and equipment 6(9) and 8 7,001,676 12 7,026,878 12 7,150,831 15 1760 Investment property 6(10) and 8 822,392 1 827,635 2 833,141 2 1780 Intangible assets 121,469 - 118,638 - 114,766 - 1840 Deferred income tax assets 6(26) 517,930 1 540,924 1 561,828 1 1900 Other non-current assets 6(11) and 8 3,487,906 6 3,638,169 6 3,897,325 8 15XX Non-current assets 14,931,779 25 14,792,740 26 13,817,046 28 1XXX Total assets $ 60,230,586 100 $ 56,883,348 100 $ 48,949,245 100

(Continued)

160 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (Adjusted) (Adjusted) December 31, 2015 December 31, 2014 January 1, 2014 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT % Current liabilities 2100 Short-term borrowings 6(12) $ 4,284,834 7 $ 353,618 1 $ 991,965 2 2120 Financial liabilities at fair value 6(2) through profit or loss - current 9,469 - 14,907 - 20,061 - 2150 Notes payable 21,306 - 19,397 - 5,518 - 2170 Accounts payable 6(13) 15,019,223 25 15,454,053 27 13,348,156 27 2180 Accounts payable - related 7 parties 1,030,827 2 189,299 - 16,134 - 2190 Due to customers for contract 6(6) work 8,876,451 15 9,989,561 18 5,427,224 11 2200 Other payables 6(14) 2,586,401 4 2,523,644 4 2,688,807 6 2230 Current income tax liabilities 330,877 - 375,668 1 172,416 - 2300 Other current liabilities 6(15) 2,230,217 4 2,113,784 4 987,389 2 21XX Current Liabilities 34,389,605 57 31,033,931 55 23,657,670 48 Non-current liabilities 2540 Long-term borrowings 6(16) 2,611,950 4 2,926,350 5 3,296,297 7 2570 Deferred income tax liabilities 6(26) 496,941 1 440,049 1 422,653 1 2600 Other non-current liabilities 6(17) 3,004,007 5 2,998,863 5 3,174,489 6 25XX Non-current liabilities 6,112,898 10 6,365,262 11 6,893,439 14 2XXX Total Liabilities 40,502,503 67 37,399,193 66 30,551,109 62 Equity attributable to owners of parent Share capital 6(20) 3110 Common stock 7,611,076 13 7,575,303 13 7,474,343 15 Capital surplus 6(19)(21) 3200 Capital surplus 3,297,703 5 3,230,033 6 3,070,085 6 Retained earnings 6(22)(26) 3310 Legal reserve 2,852,010 5 2,663,798 5 2,499,625 5 3320 Special reserve 768,286 1 778,162 2 778,162 2 3350 Unappropriated retained earnings 2,477,692 4 2,432,925 4 1,910,722 4 Other equity interest 3400 Other equity interest 24,516 - 250,563 - 229,538 1 3500 Treasury stocks 6(20) ( 11,835 ) - ( 11,835 ) - ( 11,835 ) - 31XX Equity attributable to owners of the parent 17,019,448 28 16,918,949 30 15,950,640 33 36XX Non-controlling interest 2,708,635 5 2,565,206 4 2,447,496 5 3XXX Total equity 19,728,083 33 19,484,155 34 18,398,136 38 Significant contingent liabilities 9 and unrecognised contract Significant events after balance 11 sheet date 3X2X Total liabilities and equity $ 60,230,586 100 $ 56,883,348 100 $ 48,949,245 100

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 18, 2016.

161 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

For the years ended December 31 2015 2014 (adjusted) Items Notes AMOUNT % AMOUNT % 4000 Operating revenue 6(23) and 7 $ 67,057,640 100 $ 57,691,937 100 5000 Operating costs 6(24)(25) and 7 ( 61,621,562 ) ( 92 ) ( 53,317,572 ) ( 92 ) 5900 Gross Profit 5,436,078 8 4,374,365 8 Operating expenses 6(24)(25) 6200 General & administrative expenses ( 2,329,266 ) ( 3 ) ( 1,568,040 ) ( 3 ) 6300 Research and development expenses ( 104,900 ) - ( 103,994 ) - 6000 Total operating expenses ( 2,434,166 ) ( 3 ) ( 1,672,034 ) ( 3 ) 6900 Operating income 3,001,912 5 2,702,331 5 Non-operating income and expenses 7010 Other income 231,356 - 352,471 1 7020 Other gains and losses 171,698 - 167,836 - 7050 Finance costs ( 89,468 ) - ( 89,005 ) - 7060 Share of profit of associates and 6(8) joint ventures accounted for under equity method 5,154 - 31,199 - 7000 Total non-operating income and expenses 318,740 - 462,501 1 7900 Profit before income tax 3,320,652 5 3,164,832 6 7950 Income tax expense 6(26) ( 750,509 ) ( 1 ) ( 628,436 ) ( 1 ) 8200 Profit for the year $ 2,570,143 4 $ 2,536,396 5 Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial (losses) gains on defined benefit plans ( $ 151,730 ) - $ 137,081 - 8349 Income tax related to 6(26) components of other comprehensive income that will not be reclassified to profit or loss 24,708 - ( 23,250 ) - Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations ( 165,171 ) ( 1 ) 87,199 - 8362 Unrealized loss on valuation of 6(3) available-for-sale financial assets ( 101,322 ) - ( 86,616 ) - 8300 Total other comprehensive (loss) income for the year ( $ 393,515 ) ( 1 ) $ 114,414 - 8500 Total comprehensive income for the year $ 2,176,628 3 $ 2,650,810 5 Profit attributable to: 8610 Owners of the parent $ 2,040,610 3 $ 2,092,199 4 8620 Non-controlling interest 529,533 1 444,197 1 Total $ 2,570,143 4 $ 2,536,396 5 Comprehensive income attributable to: 8710 Owners of the parent $ 1,695,145 2 $ 2,205,850 4 8720 Non-controlling interest 481,483 1 444,960 1 Total $ 2,176,628 3 $ 2,650,810 5

9710 Basic earnings per share 6(27) $ 2.69 $ 2.79

9810 Diluted earnings per share 6(27) $ 2.68 $ 2.76

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 18, 2016.

162 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Equity attributable to owners of the parent Retained Earnings Other equity interest Cumulative translation Unrealized gain or differences of loss on Common Capital Unappropriated foreign available-for-sale Treasury Non-controlling Notes stock surplus Legal reserve Special reserve earnings operations financial assets stocks Total interest Total equity

For the year ended December 31, 2014 Balance at January 1, 2014 $ 7,474,343 $ 3,070,085 $ 2,499,625 $ 778,162 $ 2,432,195 $ 7,178 $ 222,360 ( $ 11,835 ) $ 16,472,113 $ 2,473,376 $ 18,945,489 The effects of retrospective application and restatement - - - - ( 521,473 ) - - - ( 521,473 ) ( 25,880 ) ( 547,353 ) Restated balance at January 1, 2014 7,474,343 3,070,085 2,499,625 778,162 1,910,722 7,178 222,360 ( 11,835 ) 15,950,640 2,447,496 18,398,136 Appropriation of 2013 earnings 6(22) Legal reserve - - 164,173 - ( 164,173 ) ------Cash dividends - - - - ( 1,498,449 ) - - - ( 1,498,449 ) ( 381,582 ) ( 1,880,031 ) Profit for the year - - - - 2,092,199 - - - 2,092,199 444,197 2,536,396 Employee stock options excercised by 6(21) subsidiary - 11,961 ------11,961 47,098 59,059 Convertible bonds transferred to common 6(21) stock - ( 683 ) ------( 683 ) ( 457 ) ( 1,140 ) Share-based payment transactions 6(21) - 15,610 ------15,610 7,691 23,301 Employee stock options exercised 6(21) 100,960 133,060 ------234,020 - 234,020 Cumulative translation differences of foreign operations - - - - - 95,209 - - 95,209 ( 8,010 ) 87,199 Unrealized loss on valuation of 6(3) available-for-sale financial assets ------( 74,184 ) - ( 74,184 ) ( 12,432 ) ( 86,616 ) Other comprehensive income for the year - - - - 92,626 - - - 92,626 21,205 113,831 Balance at December 31, 2014 $ 7,575,303 $ 3,230,033 $ 2,663,798 $ 778,162 $ 2,432,925 $ 102,387 $ 148,176 ( $ 11,835 ) $ 16,918,949 $ 2,565,206 $ 19,484,155 For the year ended December 31, 2015 Balance at January 1, 2015 (adjusted) $ 7,575,303 $ 3,230,033 $ 2,663,798 $ 778,162 $ 2,432,925 $ 102,387 $ 148,176 ( $ 11,835 ) $ 16,918,949 $ 2,565,206 $ 19,484,155 Appropriation of 2014 earnings 6(22) Legal reserve - - 188,212 - ( 188,212 ) ------Special reserve - - - ( 9,876 ) 9,876 ------Cash dividends - - - - ( 1,698,089 ) - - - ( 1,698,089 ) ( 382,095 ) ( 2,080,184 ) Profit for the year - - - - 2,040,610 - - - 2,040,610 529,533 2,570,143 Employee stock options excercised by 6(21) subsidiary - 19,556 ------19,556 40,539 60,095 Convertible bonds transferred to common 6(21) stock - ( 819 ) ------( 819 ) ( 572 ) ( 1,391 ) Share-based payment transactions 6(21) - 2,950 ------2,950 4,074 7,024 Employee stock options exercised 6(21) 35,773 45,983 ------81,756 - 81,756 Cumulative translation differences of foreign operations - - - - - ( 135,403 ) - - ( 135,403 ) ( 29,768 ) ( 165,171 ) Unrealized loss on valuation of 6(3) available-for-sale financial assets ------( 90,644 ) - ( 90,644 ) ( 10,678 ) ( 101,322 ) Other comprehensive income for the year - - - - ( 119,418 ) - - - ( 119,418 ) ( 7,604 ) ( 127,022 ) Balance at December 31, 2015 $ 7,611,076 $ 3,297,703 $ 2,852,010 $ 768,286 $ 2,477,692 ( $ 33,016 ) $ 57,532 ( $ 11,835 ) $ 17,019,448 $ 2,708,635 $ 19,728,083

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 18, 2016.

163 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the years ended December, 31 Notes 2015 2014

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated profit before tax for the year $ 3,320,652 $ 3,164,832 Adjustments to reconcile profit before income tax to net cash provided by operating activities Income and expenses having no effect on cash flows (Gain) loss on valuation of financial assets 6(2) ( 54,530 ) 6,864 Loss on reduction of capital of investments 26,671 2,397 Loss on disposal of property, plant and equipment 359 3,477 Share of profits of associates and joint ventures accounted for 6(8) under equity method ( 5,154 ) ( 31,199 ) Depreciation 6(24) 333,511 325,305 Amortization 6(24) 147,740 153,205 Provision for (reversal of) allowance for doubtful accounts 797,612 ( 61,714 ) Interest income ( 121,013 ) ( 149,180 ) Dividends income ( 42,962 ) ( 45,825 ) Interest expense 89,468 89,005 Impairment losses 6(4) 30,733 86,756 Compensation costs for employee stock options 6(25) 9,259 28,507 Discount on convertible bonds recognised as interest expense 182 492 Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets at fair value through profit or loss 798,114 ( 1,071,643 ) Notes receivable (including related parties) 16,990 1,821,353 Accounts receivable (including related parties) ( 1,654,476 ) ( 534,462 ) Due from customers for contract work ( 8,131,135 ) ( 6,386,704 ) Other receivables ( 88,752 ) ( 93,420 ) Other receivables - related parties 5,550 29,227 Inventories 174,707 ( 226,508 ) Prepayments 245,650 ( 629,848 ) Other current assets 40,242 643,787 Other non-current assets 184,935 247,639 Net changes in liabilities relating to operating activities Notes payable 1,909 13,879 Accounts payable ( 434,830 ) 2,105,897 Accounts payable - related parties 841,528 173,165 Due to customers for contract work ( 1,113,110 ) 4,562,337 Other payables 60,404 ( 165,163 ) Other current liabilities 116,433 1,310,277 Other non-current liabilities ( 201,662 ) ( 93,937 ) Cash (used in) generated from operations ( 4,604,975 ) 5,278,798 Interest received 133,321 134,206 Dividends received 90,169 117,115 Interest paid ( 87,701 ) ( 89,393 ) Income tax paid ( 616,329 ) ( 392,663 ) Net cash (used in) provided by operating activities ( 5,085,515 ) 5,048,063

(Continued)

164 CTCI CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the years ended December, 31 Notes 2015 2014

CASH FLOWS FROM INVESTING ACTIVITIES Interest received $ 463 $ 482

Increase in available-for-sale financial assets ( 75,540 ) ( 159,765 )

Decrease (increase) in financial assets measured at cost-non

current 27 ( 79,225 )

Proceeds from reduction of capital of investee company - 1,995

Increase in investments accounted for under the equity method 6(8) ( 419,922 ) ( 1,390,933 )

Proceeds from disposal of subsidiary shares 11,380 -

Acquisition of property, plant and equipment 6(9) ( 356,509 ) ( 139,460 )

Proceeds from disposal of property, plant and equipment 8,454 8,352

Increase in intangible assets ( 75,529 ) ( 76,881 )

Increase in refundable deposits ( 11,912 ) ( 11,946 )

Decrease (increase) in other non-current assets 22,760 ( 38,134 )

Net cash used in investing activities ( 896,328 ) ( 1,885,515 )

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings 3,931,216 ( 638,347 )

Repayment of long-term borrowings ( 314,400 ) ( 553,829 )

Increase in deposits received (recognized in other non-current

liabilities) 64,470 65,608

Proceeds from employee stock options exercised 159,444 327,328

Cash dividends paid ( 2,080,184 ) ( 1,880,031 )

Net cash provided by (used in) financing activities 1,760,546 ( 2,679,271 )

(Decrease) increase in cash and cash equivalents ( 4,221,297 ) 483,277

Cash and cash equivalents at beginning of year 9,810,303 9,327,026

Cash and cash equivalents at end of year $ 5,589,006 $ 9,810,303

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 18, 2016.

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CTCI CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2015 AND 2014 (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 CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION These consolidated financial statements were authorized for issuance by the Board of Directors on March 18, 2016.

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‖) According to Financial-Supervisory-Securities-Auditing No. 1030010325 issued by FSC on April 3, 2014, commencing 2015, companies with shares listed on the TWSE or traded on the Taipei Exchange or Emerging Stock Market shall adopt the 2013 version of IFRS (not including IFRS 9, ‗Financial instruments‘) as endorsed by the FSC and Regulations Governing the Preparation of Financial Reports by Securities Issuers effective January 1, 2015 (collectively referred herein as the ―2013 version of IFRS‖) in preparing the consolidated financial statements. The impact of adopting the 2013 version of IFRS is listed below: A.IAS 19 (revised), ‗Employee benefits‘ The revised standard makes amendments that net interest amount, calculated by applying the discount rate to the net defined benefit asset or liability, replaces the finance charge and expected return on plan assets. The revised standard eliminates the accounting policy choice that the actuarial gains and losses could be recognised based on corridor approach or recognised in profit or loss. The revised standard requires that the actuarial gains and losses can only be recognised immediately in other comprehensive income when incurred. Past service cost will be recognised immediately in the period incurred and will no longer be amortised using straight-line basis over the average period until the benefits become vested. An entity is required to recognise termination benefits at the earlier of when the entity can no longer withdraw an offer of those benefits and when it recognises any related restructuring costs, rather than when the entity is demonstrably committed to a

166 termination. Additional disclosures are required for defined benefit plans. Based on the Group‘s assessment, the impact of the standard is in the following table. Significant effects of applying the 2013 version of IFRS to the consolidated financial statements are summarized in the following table:

Consolidated balance sheet 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark January 1, 2014 Deferred income tax assets $ 449,881 $ 111,947 $ 561,828 (1) Others 48,387,417 - 48,387,417 Total assets $ 48,837,298 $ 111,947 $ 48,949,245 Other non-current liabilities $ 2,515,189 $ 659,300 $ 3,174,489 (1) Others 27,376,620 - 27,376,620 Total liabilities 29,891,809 659,300 30,551,109 Retained earnings 2,432,195 ( 521,473) 1,910,722 (1) Non-controlling interests 2,473,376 ( 25,880) 2,447,496 (1) Others 14,039,918 - 14,039,918 Total equity 18,945,489 ( 547,353) 18,398,136 Total equity and liabilities $ 48,837,298 $ 111,947 $ 48,949,245

Consolidated balance sheet 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark December 31, 2014 Deferred income tax assets $ 495,877 $ 45,047 $ 540,924 (1) Others 56,342,424 - 56,342,424 Total assets $ 56,838,301 $ 45,047 $ 56,883,348 Other non-current liabilities $ 2,734,962 $ 263,901 $ 2,998,863 (1) Others 34,400,330 - 34,400,330 Total liabilities 37,135,292 263,901 37,399,193 Retained earnings 2,651,692 ( 218,767) 2,432,925 (1) Non-controlling interests 2,565,293 ( 87) 2,565,206 (1) Others 14,486,024 - 14,486,024 Total equity 19,703,009 ( 218,854) 19,484,155 Total equity and liabilities $ 56,838,301 $ 45,047 $ 56,883,348

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Consolidated statement of comprehensive income 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark Year ended December 31, 2014 Operating revenue $ 57,691,937 $ - $ 57,691,937 Operating costs ( 53,526,514) 208,942 ( 53,317,572) (1) Operating expenses ( 1,721,728) 49,694 ( 1,672,034) (1) Non-operating income and expenses 462,501 - 462,501 Net income before tax 2,906,196 258,636 3,164,832 Income tax expense ( 584,468) ( 43,968) ( 628,436) (1) Profit for the period 2,321,728 214,668 2,536,396 Other comprehensive income, net of tax 583 113,831 114,414 (1) Total comprehensive income for the period $ 2,322,311 $ 328,499 $ 2,650,810 Profit attributable to: Owners of the parent $ 1,882,119 $ 210,080 $ 2,092,199 (1) Non-controlling interest 439,609 4,588 444,197 (1) Profit for the period $ 2,321,728 $ 214,668 $ 2,536,396 Comprehensive income attributable to: Owners of the parent $ 1,903,144 $ 302,706 $ 2,205,850 (1) Non-controlling interest 419,167 25,793 444,960 (1) Total comprehensive income $ 2,322,311 $ 328,499 $ 2,650,810 Earnings per share (in dollars): Basic $ 2.51 $ 0.28 $ 2.79 Diluted $ 2.48 $ 0.28 $ 2.76 Descriptions: (1)The Group recognised previously unrecognised past service cost and as a consequence of elimination of the corridor approach to recognise prior unrecognised actuarial losses by increasing net defined benefit liabilities by $659,300, and deferred tax assets by $111,947 and decreasing retained earnings by $521,473, and non-controlling interest by $25,880 at January 1, 2014, respectively; net defined benefit liabilities, deferred tax assets, operating costs and operating expenses were decreased by $395,399, $66,900, $208,942, and $49,694, respectively, and income tax expense, other comprehensive income, non-controlling interest and non-controlling interest profit were increased by $43,968, $92,626, $25,793 and $4,588 at December 31, 2014, respectively. B.IAS 1, ‗Presentation of financial statements‘ The amendment requires entities to separate items presented in OCI classified by nature into two groups on the basis of whether they are potentially reclassifiable to profit or loss subsequently when specific conditions are met. If the items are presented before tax then the tax related to each of the two groups of OCI items (those that might be reclassified and those that will not be reclassified) must be shown separately. Accordingly, the Group will adjust its presentation of the statement of comprehensive income.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group None.

(3) IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not yet included in the 2013 version of IFRS as endorsed by the FSC: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board IFRS 9, ‗Financial instruments' January 1, 2018 Sale or contribution of assets between an investor and its associate or To be determined by joint venture (amendments to IFRS 10 and IAS 28) International Accounting Standards Board Investment entities: applying the consolidation exception (amendments January 1, 2016 to IFRS 10, IFRS 12 and IAS 28) Accounting for acquisition of interests in joint operations January 1, 2016 (amendments to IFRS 11) IFRS 14, 'Regulatory deferral accounts' January 1, 2016 IFRS 15, ‗Revenue from contracts with customers' January 1, 2018 IFRS 16, 'Leases' January 1, 2019 Disclosure initiative (amendments to IAS 1) January 1, 2016 Disclosure initiative (amendments to IAS 7) January 1, 2017 Recognition of deferred tax assets for unrealised losses (amendments to January 1, 2017 IAS 12) Clarification of acceptable methods of depreciation and amortisation January 1, 2016 (amendments to IAS 16 and IAS 38) Agriculture: bearer plants (amendments to IAS 16 and IAS 41) January 1, 2016 Defined benefit plans: employee contributions (amendments to IAS July 1, 2014 19R) Equity method in separate financial statements (amendments to IAS 27) January 1, 2016 Recoverable amount disclosures for non-financial assets (amendments January 1, 2014 to IAS 36) Novation of derivatives and continuation of hedge accounting January 1, 2014 (amendments to IAS 39) IFRIC 21, ‗Levies‘ January 1, 2014 Improvements to IFRSs 2010-2012 July 1, 2014 Improvements to IFRSs 2011-2013 July 1, 2014 Improvements to IFRSs 2012-2014 January 1, 2016 The Group is assessing the potential impact of the new standards, interpretations and amendments above. The impact will be disclosed when the assessment is complete.

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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‖). (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)Available-for-sale financial assets measured at fair value. (c)Liabilities on cash-settled share-based payment arrangements measured at fair value. (d)Defined benefit liabilities recognised 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 IFRSs requires the use of certain critical accounting estimates. It also requires the management to exercise its judgment in the process of applying the Group‘s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5. (3) Basis of consolidation A.Basis for preparation of consolidated financial statements: (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 unrealized 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.

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(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)When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B.Subsidiaries included in the consolidated financial statements:

Ownership (%) Name of Investor Name of Subsidiary Main Business Activities December 31, 2015 December 31, 2014 January 1, 2014 Description CTCI Corp. Advanced Control Design and installation 48.76 49.04 49.80 Note 1 & System Inc. of software CTCI Corp. GRQ Investment Real estate and leasing 100.00 100.00 100.00 Corp. business CTCI Corp. Innovest Investment Investments 100.00 100.00 100.00 Corp. CTCI Corp. E&C Engineering Planning and design of 97.09 97.09 97.09 Corp. construction projects CTCI Corp. Resources Planning, design and 93.14 93.14 93.14 Engineering supervision of Service Inc. mechanical and electrical engineering projects CTCI Corp. CTCI Americas, Inc. Business development and 100.00 100.00 100.00 related engineering services and planning CTCI Corp. CTCI Singapore Planning and design of 100.00 100.00 100.00 Pte. Ltd. construction projects Innovest Investment CTCI Chemical Manufacturing of 75.49 75.49 75.49 Corp. Corp. chemical products GRQ Investment Corp. Sino Environmental Service Corp. E&C Engineering Corp. Resources Engineering Service Inc. CTCI Corp. KD Holding Corp. Investments 58.88 59.75 61.10 Innovest Investment Corp. GRQ Investment Corp. KD Holding Corp. Leading Energy Environmental engineering 100.00 100.00 100.00 Sino Environmental Corp. Service Corp. KD Holding Corp. HD Resources Environmental engineering 100.00 100.00 100.00 Management Corp. KD Holding Corp. Sino Environmental Environmental engineering 93.16 93.16 93.16 HD Resources Services Corp. Management Corp. KD Holding Corp. Fortune Energy Environmental engineering 75.00 75.00 75.00 Sino Environmental Corp. Service Corp. KD Holding Corp. Yuan Ding Environmental engineering 100.00 100.00 100.00 HD Resources Resources Management Corp. Management Corp. Sino Environmental Xiang Ding Environmental engineering 100.00 100.00 100.00 Services Corp. Environment Consultant (Shanghai) Co., Ltd.

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Ownership (%) Name of Investor Name of Subsidiary Main Business Activities December 31, 2015 December 31, 2014 January 1, 2014 Description CTCI Corp. Sinogal – Waste Environmental engineering 60.00 60.00 60.00 Sino Environmental Services Co., Ltd. Services Corp. CTCI Chemical Chung Ding Trading of chemical 100.00 100.00 100.00 Corp. Chemical Corp. materials Chung Ding Zhuhai Chung Ding Trading of chemical - 100.00 100.00 Note 6 Chemical Corp. Chemical Corp. materials CTCI Corp. CTCI Overseas Investment, planning and 100.00 100.00 100.00 (BVI) Corp. design of construction

CTCI Overseas CTCI Overseas Co., Planning and design of 100.00 100.00 100.00 (BVI) Corp. Ltd. Construction projects

CTCI Overseas Co., Jing Ding Planning and design of 100.00 100.00 100.00 Ltd. Engineering & Construction projects Construction Co., Ltd. CTCI Overseas Co., CIMAS Planning and design of 50.00 50.00 50.00 Note 1、2 Ltd. Engineering Construction projects Company CTCI Overseas Co., Universal Planning and design of 100.00 100.00 100.00 Ltd. Engineering (BVI) Construction projects Corp. CTCI Overseas Co., CIPEC Planning and design of 40.00 40.00 40.00 Note 1、2 Ltd. Construction Construction projects Company Inc. CTCI Overseas Co., CINDA Planning and design of 100.00 100.00 100.00 Note 2 Ltd. Engineering & Construction projects Construction Private Limited CTCI Corp. CTCI and Partners Planning and design of 100.00 100.00 100.00 Note 2 CTCI Overseas Co., Company Limited Construction projects Ltd. CTCI Corp. CTCI Arabia Ltd. Design and construction of 100.00 100.00 100.00 CTCI Overseas Co., chemical factories Ltd. E&C Engineering Shang Ding Consulting services for 100.00 100.00 100.00 Corp. Engineering & construction projects CTCI Overseas Co., Construction Co., Ltd. Ltd. Shang Ding Shanghai XuanLi General trade 100.00 100.00 100.00 Engineering & Trading Co., Ltd. Construction Co., Ltd. CTCI Corp. CTCI Engineering Planning and design of 100.00 100.00 100.00 Note 2 CTCI Overseas Co., & Construction Construction projects Ltd. Sdn. Bhd. CTCI Engineering & CTCI MALAYSIA Planning and design of 20.00 20.00 20.00 Note 1、2 Construction Sdn. Sdn. Bhd. Construction projects Bhd. CTCI Corp. CTCI (Thailand) Planning and design of 100.00 100.00 100.00 Superiority Co., Ltd. Construction projects (Thailand) Co., Ltd. Advanced Control & Century Ahead Ltd. Investments 100.00 100.00 100.00 System Inc. Century Ahead Ltd. Advanced Control Computer skills services 100.00 100.00 100.00 & Information Technologies Ltd.

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Ownership (%) Name of Investor Name of Subsidiary Main Business Activities December 31, 2015 December 31, 2014 January 1, 2014 Description E&C Engineering Synergy Planning and design of - - 100.00 Note 5 Corp. Engineering Corp. construction projects Universal Superiority Planning and design of 100.00 100.00 100.00 Engineering (BVI) (Thailand) Co.,Ltd construction projects Corp. CTCI Corp. CTCI Machinery Planning and design of 100.00 100.00 100.00 Corp. construction projects CTCI Corp. CCJV P1 Planning of construction 99.00 80.00 - Note 2、 Engineering & projects 3、4 Construction Sdn. Bhd. Note 1： Being the Company‘s controlled entities, these subsidiaries that were under 50% owned by the Company directly or indirectly were included in the consolidated financial statements. Note 2：The company was audited by other independent accountants for the year ended December 31, 2015. Note 3：Excluding Note 2, CTCI Qatar Branch and CTCI Abu Dhabi Branch were audited by other independent accountants. Note 4：Established as a new investment on September, 2014. Note 5：Liquidation procedures in 2014 and dissolution on January 28, 2015. Note 6：Disposal in August, 2015. 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, 2015, December 31, 2014, and January 1, 2014, the non-controlling interest amounted to $2,708,635, $2,565,206 and $2,447,496, respectively. The information of non-controlling interest and respective subsidiaries is as follows:

Non-controlling interest December 31, 2015 December 31, 2014 January 1, 2014 Principal Name of place of Ownership Ownership Ownership subsidiary business Amount (%) Amount (%) Amount (%) KD Holding Taiwan $ 2,256,737 41.12% $ 2,155,935 40.25% $ 2,032,857 38.90% Corp.

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Summarized financial information of the subsidiaries: Balance sheets KD Holding Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 3,883,204 $ 3,323,216 $ 3,218,309 Non-current assets 3,772,910 3,912,267 3,820,171 Current liabilities ( 1,949,874) ( 1,638,459) ( 1,479,002) Non-current liabilities ( 794,592) ( 912,233) ( 1,128,803) Total net assets $ 4,911,648 $ 4,684,791 $ 4,430,675 Statements of comprehensive income KD Holding Corp. Year ended December 31, Year ended December 31, 2015 2014 Revenue $ 4,078,753 $ 3,925,027 Profit before income tax 968,879 933,033 Income tax expense ( 130,320) ( 135,809) Profit for the period 838,559 797,224 Other comprehensive income, net of tax 5,678 32,935 Total comprehensive income $ 844,237 $ 830,159 for the period

Statements of cash flows KD Holding Corp. Year ended December 31, Year ended December 31, 2015 2014 Net cash provided by operating $ 1,221,033 $ 1,197,031 activities Net cash used in investing activities ( 107,034) ( 395,301) Net cash used in financing activities ( 784,920) ( 976,364) Increase (decrease) in cash and cash equivalents 329,079 ( 174,634) Cash and cash equivalents, beginning of period 1,830,051 2,004,685 Cash and cash equivalents, end of $ 2,159,130 $ 1,830,051 period (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.

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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) 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. (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 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 join 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 a foreign operation partially disposed of or sold is an associate or joint arrangements, 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 still retains partial interest in the former foreign associate or joint arrangements after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangements, such transactions should be accounted for as disposal of all interest in these foreign operations. (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;

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(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 pay off 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 paid off within the normal operating cycle; (b) Liabilities arising mainly from trading activities; (c) Liabilities that are to be paid off within twelve months from the balance sheet date; (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. (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 held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (a) Hybrid (combined) contracts; or (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. B. On a regular way of purchase or sale basis, financial assets held for trading are recognized and derecognized using trade date accounting.

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

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(8) Available-for-sale financial assets A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. B. On a regular way of purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting. C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‗financial assets measured at cost‘. (9) Accounts receivable Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial. (10) Impairment of financial assets A. 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. B. The criteria that the Group uses to determine whether there is objective evidence of impairment loss is as follows: (a)Significant financial difficulty of the issuer or debtor; (b)A breach of contract, such as a default or delinquency in interest or principal payments; (c)The 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; (d)It becomes probable that the borrower will enter bankruptcy or other financial reorganization; (e)The disappearance of an active market for that financial asset because of financial difficulties; (f)Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;

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(g)Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; (h)A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. C. 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: (a) Financial assets measured at amortized cost The amount of the impairment loss is measured as the difference between the asset‘s carrying amount and the present value of estimated future cash flows discounted at the financial asset‘s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset directly. (b) Financial assets measured at cost The amount of the impairment loss is measured as the difference between the asset‘s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account. (c) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset‘s acquisition cost (less any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from ‗other comprehensive income‘ to ‗profit or loss‘. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (11) Derecognition of financial assets The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

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(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) Construction contracts A.IAS 11, ‗Construction Contracts‘, defines a construction contract as a contract specifically negotiated for the construction of an asset. If the outcome of a construction contract can be estimated reliably and it is probable that this contract would make a profit, contract revenue should be recognized by reference to the stage of completion of the contract activity, using the percentage-of-completion method of accounting, over the contract term. Contract costs are expensed as incurred. The stage of completion of a contract is measured by the proportion of contract costs incurred for work performed to date to the estimated total costs for the contract. An expected loss where total contract costs will exceed total contract revenue on a construction contract should be recognized as an expense as soon as such loss is probable. If the outcome of a construction contract cannot be estimated reliably, contract revenue should be recognized only to the extent of contract costs incurred that it is probable will be recoverable. B.Contract revenue should include the revenue arising from variations from the original contract work, claims and incentive payments that are agreed by the customer and can be measured reliably. C.The excess of the cumulative costs incurred plus recognized profits (less recognized losses) over the progress billings on each construction contract is presented as an asset within ‗due from customers for contract work‘. While, the excess of the progress billings over the cumulative costs incurred plus recognized profits (less recognized losses) on each construction contract is presented as a liability within ‗due to customers for contract work‘. (14) 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.

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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. (15) 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. (16) 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.

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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 3 ~ 50 years Machinery 2 ~ 20 years Transportation equipment 2 ~ 10 years Office equipment 2 ~ 10 years (17) 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. (18) 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. (19) 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. (20) 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. (21) Notes and accounts payable Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(22) Financial liabilities at fair value through profit or loss A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges. B. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss. (23) 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. (24) 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. (25) Financial liabilities and equity instruments Bonds payable Convertible corporate bonds issued by the Group contain conversion options (that is, the bondholders have the right to convert the bonds into the Group‘s common shares by exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Group classifies the bonds payable and derivative features embedded in convertible corporate bonds on initial recognition as a financial asset, a financial liability or an equity instrument (‗capital surplus—stock warrants‘) in accordance with the substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument. Convertible corporate bonds are accounted for as follows: A.Call options and put options embedded in convertible corporate bonds are recognized initially at net fair value as ‗financial assets or financial liabilities at fair value through profit or loss‘. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as ‗gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss‘. B.Bonds payable of convertible corporate bonds is initially recognized at fair value and subsequently stated at amortized cost. Any difference between the proceeds and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortised in profit or loss as an adjustment to the ‗finance costs‘ over the period of bond circulation using the effective interest method. C.Conversion options embedded in convertible corporate bonds issued by the Group, which meet the definition of an equity instrument, are initially recognized in ‗capital surplus—stock warrants‘ at the residual amount of total issue price less amounts of ‗financial assets or financial liabilities at fair value through profit or loss‘ and ‗bonds payable—net‘ as stated above. Conversion options are not subsequently remeasured.

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D.Any transaction costs directly attributable to the issuance of convertible corporate bonds are allocated to the liability and equity components in proportion to the allocation of proceeds. E.When bondholders exercise conversion options, the liability component of the bonds (including ‗bonds payable‘ and ‗financial assets or financial liabilities at fair value through profit or loss‘) shall be remeasured on the conversion date. The book value of common shares issued due to the conversion shall be based on the adjusted book value of the above-mentioned liability component plus the book value of capital surplus - stock warrants. (26) Derivative financial instruments and hedging activities Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. (27) 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. (28) 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 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.

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iii)Past service costs are recognised immediately in profit or loss. C.Employees‘, directors‘ and supervisors‘ remuneration Employees‘ remuneration and directors‘ and supervisors‘ remuneration are recognised 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. (29) Employee share-based payment For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest. (30) Income tax A.The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity. B.The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings. C.Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the 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

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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 recognised for the carryforward of unused tax credits resulting from research and development expenditures, to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised. G.The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly. (31) 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. (32) 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. (33) Revenue recognition The Group provides construction services. Revenue from delivering services is recognized under the percentage-of-completion method when the outcome of services provided can be estimated reliably. The stage of completion of a service contract is measured by the proportion of contract costs incurred for services performed as of the financial reporting date to the estimated total costs for the service contract. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognized only to the extent that contract costs incurred are likely to be recoverable. (34) 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 11, ‗Construction Contracts‘, and IAS 18, ‗Revenue‘, respectively.

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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. (35) 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. (36) 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: Critical accounting estimates and assumptions A.Realisability of deferred tax assets Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any variations in global economic environment, industry environment, and laws and regulations might cause material adjustments to deferred tax assets. The Group‘s recognised deferred tax assets amounted to $517,930 as of December 31, 2015. B.Calculation of net defined benefit liabilities When calculating the present value of defined pension obligations, the Group must apply judgements and estimates to determine the actuarial assumptions on balance sheet date, including discount rates and future salary growth rate. Any changes in these assumptions could significantly impact the carrying amount of defined pension obligations. As of December 31, 2015, the carrying amount of net defined benefit liabilities was $ 2,522,092.

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C. Financial assets – impairment assessment of financial assets without active market The Group assesses the impairment of an investment of financial instruments as soon as there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Group assesses the recoverable amounts of financial assets without active market based on the present value of expected cash dividends receivable from the investee and future cash flows from the disposal of the investee, with present value of similar financial instruments at balance sheet date, and analyses the reasonableness of related assumptions. As of December 31, 2015, the Group recognised financial assets measured at cost, net of impairment loss, amounting to $543,670. 6. DETAILS OF SIGNIFICANT ACCOUNTS (1)Cash and cash equivalents December 31, 2015 December 31, 2014 January 1, 2014 Cash on hand and petty cash $ 102,741 $ 136,428 $ 323,018 Checking accounts and 2,455,114 3,030,915 2,233,221 demand deposits Time deposits 3,031,151 6,642,960 6,770,787 $ 5,589,006 $ 9,810,303 $ 9,327,026 A.The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. B.Details of the Group‘s cash and cash equivalents pledged to others as collateral are provided in Note 8. (2)Financial assets and liabilities at fair value through profit or loss – current Items December 31, 2015 December 31, 2014 January 1, 2014 Current items: Financial assets held for trading Mutual funds $ 780,610 $ 1,720,760 $ 805,250 Non-hedging derivatives 29,120 61,972 37,209 809,730 1,782,732 842,459 Valuation adjustment of financial assets ( 5,338) 843 756 held for trading Total $ 804,392 $ 1,783,575 $ 843,215 Financial liabilities held for trading non-hedging derivatives $ 9,469 $ 14,907 $ 20,061

A.The Group recognized net gain (loss) of $54,530 and ($6,864) for the years ended December 31, 2015 and 2014, respectively.

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B.As of December 31, 2015, December 31, 2014 and January 1, 2014, the trading items and contract information of derivatives are as follows: December 31, 2015 Contract Amount Contract Period Foreign exchange swap contract (6 items) JPY 550,000,000 2015.09.02~2016.06.23 Foreign exchange swap contract (1 item) THB 65,942,000 2015.06.02~2016.06.06 Non-delivery of forward exchange contract- USD 36,100,000 2015.07.31~2016.03.09 buy (3 items) Forward exchange contract-buy (1 item) CHF 1,000,000 2015.11.30~2016.01.07 Forward exchange contract-buy (3 items) EUR 8,000,000 2015.12.03~2016.01.07 Forward exchange contract-buy (1 item) SEK 8,687,000 2015.12.03~2016.01.07 Forward exchange contract-buy (7 items) MYR 94,391,000 2015.11.25~2016.08.11 December 31, 2014 Contract Amount Contract Period Forward exchange contract-buy (5 items) USD 5,300,000 2014.10.01~2015.05.22 Non-delivery of forward exchange contract- USD 50,207,000 2013.07.22~2015.05.26 sell (10 items) Non-delivery of forward exchange contract- USD 2,100,000 2014.07.01~2015.08.21 buy (4 items) Non-delivery of forward exchange contract- USD 3,500,000 2014.10.17~2015.03.20 buy (2 items) Foreign exchange swap contract (1 item) AUD 780,000 2014.06.18~2015.04.17 Foreign exchange swap contract (1 item) THB 65,140,000 2014.06.06~2015.06.10 Commodity swap contract (10 items) USD 5,842,000 2014.03.07~2015.04.22 January 1, 2014 Contract Amount Contract Period Non-delivery of forward exchange contract- USD 3,775,000 2013.07.22~2015.03.24 sell (5 items) Non-delivery of forward exchange contract- CHF 1,000,000 2013.10.22~2014.03.03 buy (1 item) Non-delivery of forward exchange contract- USD 3,600,000 2013.04.24~2014.07.18 buy (7 items) Non-delivery of forward exchange contract- MYR 3,509,000 2013.11.25~2014.04.21 buy (1 item) Forward exchange contract-buy (1 item) GBP 1,000,000 2013.09.13~2014.09.17 Forward exchange contract-buy (3 items) JPY 400,000,000 2013.11.21~2014.02.25 Forward exchange contract-sell (2 items) SGD 2,000,000 2013.07.18~2014.01.27 Forward exchange contract-buy (5 items) CHF 9,000,000 2013.07.10~2014.09.15 Forward exchange contract-sell (1 item) THB 64,100,000 2013.07.22~2014.06.16 Foreign exchange swap contract (4 items) USD 29,500,000 2013.09.24~2014.08.12 Commodity swap contract (11 items) USD 18,347,000 2013.04.02~2014.10.02

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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 adopting the hedging accounting because these do not conform to all the conditions. C.Due to the global financial crisis in year 2008, listed (TSE and OTC) stocks amounting to $165,417 which were initially classified as ―financial assets at fair value through profit or loss‖ were reclassified to ―available-for-sale financial assets‖ on July 1, 2008, in accordance with paragraph 50 (c) of IAS 39. The relevant information is set forth below: (a)The above reclassified assets which have not yet been disposed of were as follows: December 31, 2015 December 31, 2014 January 1, 2014 Book value/Fair value Book value/Fair value Book value/Fair value Listed (TSE or OTC) stocks $ 149,174 $ 221,786 $ 241,953 (b)The changes in fair value of the above listed stocks that were recognized in profit or loss and other comprehensive income were $0 and ($72,612), respectively, for the year ended December 31, 2015, were $0 and ($20,167), respectively, for year ended December 31, 2014. 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, 2014 were $0 and $76,536, respectively. (c)If the above listed stocks had not been reclassified to ―available-for-sale financial assets‖ on July 1, 2008, the gain (loss) from change in fair value of those assets should have been recognized for the following periods: For the year ended For the year ended December 31, 2015 December 31, 2014 Listed (TSE or OTC) stocks ($ 72,612) ($ 20,167) (3)Available-for-sale financial assets Items December 31, 2015 December 31, 2014 January 1, 2014 Current items: Listed (TSE or OTC) stocks $ 435,292 $ 435,491 $ 438,141 Bonds 241,141 163,935 - Valuation adjustment ( 1,517) 80,755 166,589 $ 674,916 $ 680,181 $ 604,730 The amounts that the Group recognized profit or loss in other comprehensive income due to the changes in fair value were ($101,322) and ($86,616) for the years ended December 31, 2015 and 2014, respectively.

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(4)Financial assets measured at cost Items December 31, 2015 December 31, 2014 January 1, 2014 Non-current items: Unlisted stocks $ 1,038,994 $ 1,044,914 $ 967,689 Accumulated impairment ( 495,324) ( 470,292) ( 383,536) $ 543,670 $ 574,622 $ 584,153

A.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‘. B.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 $30,733 and $86,756 were recognized for the years ended December 31, 2015 and 2014, respectively. C.As of December 31, 2015, December 31, 2014, and January 1, 2014, no financial assets measured at cost held by the Group were pledged to others. (5)Notes and accounts receivable December 31, 2015 December 31, 2014 January 1, 2014 Notes receivable $ 33,233 $ 11,781 $ 3,244,527 Accounts receivable 6,386,320 4,770,175 4,257,970 Long-term receivable due 247,257 237,678 228,507 in one year Less:Allowance for bad debts ( 54,505) ( 43,605) ( 118,607) $ 6,612,305 $ 4,976,029 $ 7,612,397 For the long-term receivables due in one year, please refer to Note 6 (11) for detailed information. (6)Construction in progress

December 31, 2015 December 31, 2014 January 1, 2014 Aggregate costs incurred $ 370,569,237 $ 337,599,930 $ 316,567,430 plus recognised profits (less recognised losses) Less: progress billings ( 352,555,580) ( 328,830,518) ( 309,622,385) Net balance sheet position for construction in progress $ 18,013,657 $ 8,769,412 $ 6,945,045 Presented as: Due from customers for $ 26,890,108 $ 18,758,973 $ 12,372,269 contract work Due to customers for contract work ( 8,876,451) ( 9,989,561) ( 5,427,224) $ 18,013,657 $ 8,769,412 $ 6,945,045

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As of December 31, 2015, December 31, 2014 and January 1, 2014, the retentions relating to construction contracts amounted to $0, $0, and $ 13,068, respectively; the advances received before the related construction work is performed amounted to $87,771, $998,183, and $0, respectively. (7)Prepayments December 31, 2015 December 31, 2014 January 1, 2014 Prepayment for materials $ 2,345,587 $ 2,801,490 $ 1,847,244 Prepayment for construction in progress 349,011 304,804 823,694 Others 692,591 526,545 332,053 $ 3,387,189 $ 3,632,839 $ 3,002,991

(8)Investments accounted for under the equity method Year ended December 31, 2015 Year ended December 31, 2014 At January 1 $ 2,065,874 $ 675,002 Addition of investments accounted 419,922 1,390,933 for under the equity method Share of profit or loss of investments 5,154 31,199 accounted for under the equity method Earnings distribution of investments ( 47,207) ( 63,802) accounted for under equity method Changes in capital surplus ( 9) ( 21) Changes in other equity items ( 6,998) 32,563 At December 31 $ 2,436,736 $ 2,065,874 Associates December 31, 2015 December 31, 2014 January 1, 2014 Pan Asia Corp. $ 558,796 $ 550,550 $ 565,307 GranSino Environmental Technology Co., Ltd. 6,339 10,711 18,007 TECA Engineering Pte. Ltd. 1,841 2,622 669 Powertec Energy Corp. 792,196 897,924 - Boretech Resource Recovery Engineering Co., Ltd. (Cayman) 492,872 500,714 - MIE Industrial SDN. BHD 370,649 - - Joint ventures G.D. Development Corp. 214,043 103,353 91,019 $ 2,436,736 $ 2,065,874 $ 675,002 A.Associates (a)The basic information of the associates that are material to the Group is as follows:

Shareholding ratio Principal place Nature of Methods of Company name of business December 31, 2015 December 31, 2014 January 1, 2014 relationship measurement Powertec Energy Corp. Taiwan 18.18% 18.18% - Associates Equity method

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(b)The summarized financial information of the associates that are material to the Group is as follows: Balance sheet Powertec Energy Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 301,436 $ 1,409,366 $ - Non-current assets 19,096,090 18,818,474 - Current liabilities ( 2,142,727) ( 2,434,128) - Non-current liabilities ( 9,963,985) ( 9,921,409) - Total net assets $ 7,290,814 $ 7,872,303 $ -

Share in associate's net assets $ 1,325,470 $ 1,431,185 $ - Carrying amount of $ 792,196 $ 897,924 $ - the associate Statement of comprehensive income Powertec Energy Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ - $ - Total comprehensive income ($ 581,489) ($ 385,158) (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, 2015, December 31, 2014 and January 1, 2014, the carrying amount of the Group‘s individually immaterial associates amounted to $1,430,497, $1,064,597, and $583,983, respectively. Year ended December 31, 2015 Year ended December 31, 2014 Total comprehensive income $ 223,972 $ 223,461 B.Joint venture (a)The basic information of the joint ventures that are material to the Group is as follows: Shareholding ratio Principal place Nature of Methods of Company name of business December 31, 2015 December 31, 2014 January 1, 2014 relationship measurement G.D. Development Corp. Taiwan 50.00% 50.00% 50.00% Joint ventures Equity method

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(b)The summarized financial information of the joint ventures that are material to the Group is as follows: Balance sheet G.D. Development Corp. December 31, 2015 December 31, 2014 January 1, 2014 Cash and cash equivalents $ 26,151 $ 12,182 $ 5,721 Other current assets 44,725 3,058 3,562 Current assets 70,876 15,240 9,283 Non-current assets 782,366 632,222 571,812 Total assets $ 853,242 $ 647,462 $ 581,095 Current financial liabilities $ 128,006 $ 172,709 $ 115,175 Other current liabilities 70,684 61,451 60,521 Current liabilities 198,690 234,160 175,696 Non-current liabilities 226,466 206,614 223,361 Total liabilities $ 425,156 $ 440,774 $ 399,057 Total net assets $ 428,086 $ 206,688 $ 182,038

Share in associate's net assets $ 214,043 $ 103,344 $ 91,019 Carrying amount of $ 214,043 $ 103,353 $ 91,019 the associate Statement of comprehensive income G.D. Development Corp. Year ended December 31, Year ended December 31, 2015 2014 Revenue $ 43,014 $ 34,862 Depreciation and amortisation ($ 14,900) ($ 12,716) Interest income $ 966 $ 548 Interest expense ($ 6,798) ($ 5,952) Profit before income tax $ 23,916 $ 13,066 Income tax expense ( 515) ( 882) Profit or loss for the period 23,401 12,184 Other comprehensive income - net of tax 13,767 12,466 Total comprehensive income $ 37,168 $ 24,650 Dividends received from $ 2,474 $ - joint venture C.The Group holds 50% equity in the joint venture – G.D. Development Corp. and its main activity is environmental engineering.

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D.The Group invested and owned 18.18% equity of the Powertec Energy Corp. amounting to $926,700 on July, 2014. E.The Board of Directors had resolved to invest in Boretech Resource Recovery Engineering Co., Ltd. (Cayman) in July, 2014. The Group invested and owned 30% equity of the Boretech Resource Recovery Engineering Co., Ltd. (Cayman) amounting to $464,233 (US$15,547,000). F. The Board of Director had resolved to invest in G.D. Development Corp. amounting to $94,500 in February, 2015. G. The Board of Directors had resolved to invest in MIE Industrial SDN.BHD. in May, 2015. The Group invested and owned 49% equity of MIE Industrial SDN. BHD. amounting to $325,422 (MYR $39,231,000). H.The above investments accounted for using the equity method, Pan Asia Corp., TECA Engineering Pte. Ltd., and Powertec Energy Corp. were recognized based on the financial statements which have been audited by other auditors as of December 31, 2014. The above investments accounted for using the equity method, Pan Asia Corp., TECA Engineering Pte. Ltd., Powertec Energy Corp., and MIE Industrial SDN. BHD. were recognized based on the financial statements which have been audited by other auditors as of December 31, 2015.

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(37) Property, plant and equipment (9)Property, plant and equipment Transportation Office Prepayments Land Buildings Machinery equipment equipment for equipment Others Total At January 1, 2015 Cost $ 3,197,216 $ 4,464,626 $ 855,243 $ 177,282 $ 229,960 $ 10,469 $ 388,719 $ 9,323,515 Accumulated depreciation - ( 1,088,925) ( 694,857) ( 135,724) ( 169,833) - ( 207,298) ( 2,296,637) $ 3,197,216 $ 3,375,701 $ 160,386 $ 41,558 $ 60,127 $ 10,469 $ 181,421 $ 7,026,878 2015 Opening net book amount $ 3,197,216 $ 3,375,701 $ 160,386 $ 41,558 $ 60,127 $ 10,469 $ 181,421 $ 7,026,878 Additions 13,245 17,000 48,484 17,664 1,941 97,789 160,386 356,509 Disposals - ( 11,786) ( 3,596) ( 3,799) ( 253) - ( 846) ( 20,280) Depreciation charge - ( 171,657) ( 63,519) ( 14,846) ( 25,233) - ( 53,013) ( 328,268) Net exchange differences ( 3,264) ( 34,665) 1,741 2,920 ( 621) ( 304) 1,030 ( 33,163) Closing net book amount $ 3,207,197 $ 3,174,593 $ 143,496 $ 43,497 $ 35,961 $ 107,954 $ 288,978 $ 7,001,676 At December 31, 2015 Cost $ 3,207,197 $ 4,422,811 $ 897,891 $ 189,506 $ 230,559 $ 107,954 $ 548,002 $ 9,603,920 Accumulated depreciation - ( 1,248,218) ( 754,395) ( 146,009) ( 194,598) - ( 259,024) ( 2,602,244) $ 3,207,197 $ 3,174,593 $ 143,496 $ 43,497 $ 35,961 $ 107,954 $ 288,978 $ 7,001,676

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Transportation Office Prepayments Land Buildings Machinery equipment equipment for equipment Others Total At January 1, 2014 Cost $ 3,194,122 $ 4,330,883 $ 676,097 $ 217,137 $ 259,150 $ 29,025 $ 295,027 $ 9,001,441 Accumulated depreciation - ( 870,237) ( 494,431) ( 177,521) ( 178,369) - ( 130,052) ( 1,850,610) $ 3,194,122 $ 3,460,646 $ 181,666 $ 39,616 $ 80,781 $ 29,025 $ 164,975 $ 7,150,831 2014 Opening net book amount $ 3,194,122 $ 3,460,646 $ 181,666 $ 39,616 $ 80,781 $ 29,025 $ 164,975 $ 7,150,831 Additions - 21,974 53,500 21,848 3,148 8,586 30,404 139,460 Disposals - - ( 4,016) ( 1,137) ( 4,127) - ( 2,549) ( 11,829) Depreciation charge - ( 175,537) ( 66,332) ( 21,028) ( 25,770) - ( 31,132) ( 319,799) Reclassifications - 12,036 - - - ( 27,142) 15,106 - Net exchange differences 3,094 56,582 ( 4,432) 2,259 6,095 - 4,617 68,215 Closing net book amount $ 3,197,216 $ 3,375,701 $ 160,386 $ 41,558 $ 60,127 $ 10,469 $ 181,421 $ 7,026,878

At December 31, 2014 Cost $ 3,197,216 $ 4,464,626 $ 855,243 $ 177,282 $ 229,960 $ 10,469 $ 388,719 $ 9,323,515 Accumulated depreciation - ( 1,088,925) ( 694,857) ( 135,724) ( 169,833) - ( 207,298) ( 2,296,637) $ 3,197,216 $ 3,375,701 $ 160,386 $ 41,558 $ 60,127 $ 10,469 $ 181,421 $ 7,026,878

A.The Group had no borrowing costs capitalized for the years ended December 31, 2015 and 2014. B.Please refer to Note 8 for the details of pledged property, plant and equipment.

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(10)Investment property Land Buildings Total At January 1, 2015 Cost $ 718,428 $ 126,572 $ 845,000 Accumulated depreciation - ( 17,365) ( 17,365) $ 718,428 $ 109,207 $ 827,635 2015 Opening net book amount $ 718,428 $ 109,207 $ 827,635 Depreciation charge - ( 5,243) ( 5,243) Closing net book amount $ 718,428 $ 103,964 $ 822,392

At December 31, 2015 Cost $ 718,428 $ 126,572 $ 845,000 Accumulated depreciation - ( 22,608) ( 22,608) $ 718,428 $ 103,964 $ 822,392

Land Buildings Total At January 1, 2014 Cost $ 718,428 $ 126,572 $ 845,000 Accumulated depreciation - ( 11,859) ( 11,859) $ 718,428 $ 114,713 $ 833,141 2014 Opening net book amount $ 718,428 $ 114,713 $ 833,141 Depreciation charge - ( 5,506) ( 5,506) Closing net book amount $ 718,428 $ 109,207 $ 827,635

At December 31, 2014 Cost $ 718,428 $ 126,572 $ 845,000 Accumulated depreciation - ( 17,365) ( 17,365) $ 718,428 $ 109,207 $ 827,635 A.Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below:

Year Ended Year Ended December 31, 2015 December 31, 2014 Rental income from investment property $ 16,610 $ 16,923 Direct operating expenses arising from the investment property that generated rental income in the period $ 2,568 $ 2,698 Direct operating expenses arising from the investment property that did not $ 2,674 $ 2,808 generate rental income in the period

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B.The fair value of the investment property held by the Group as at December 31, 2015 and 2014 was both $920,000, which was valued by independent appraisers. Valuations were made using the income approach with key assumptions as follows: December 31, 2015 December 31, 2014 Gross margin 2.59% 2.58% Growth rate 12.22% 11.00% Discount rate 3.50% 3.63% C.Information about the investment property that was pledged to others as collaterals is provided in Note 8. (11)Other non-current assets December 31, 2015 December 31, 2014 January 1, 2014 Long-term receivables $ 3,187,165 $ 3,424,843 $ 3,653,350 Less: Long-term receivable due in one year ( 247,257) ( 237,678) ( 228,507) 2,939,908 3,187,165 3,424,843 Long-term prepaid rents 55,250 63,919 69,877 Restricted bank deposits 181,687 110,696 107,868 Refundable deposits 143,724 131,812 119,866 Others 167,337 144,577 174,871 $ 3,487,906 $ 3,638,169 $ 3,897,325

A.Long-term receivables: The Group contracted with the government (grantor) a service concession arrangement. The consideration receivable from the grantor in respect of the service concession arrangement is recognized at its fair value. Such consideration is recognized as a financial asset based on the way of the consideration from the grantor to the operator being made as specified in the arrangement. The consideration receivable from the grantor is recognized as accounts receivable if it is expected to be realized within 12 months after the balance sheet date (please refer to Note 6(5)), and is recognized as long-term 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, Leading 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 Leading 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‖, Leading Energy Corp. obtained the land-use right that has continued for 20 years since the plant began operation.

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(b)The subsidiary, Fortune 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 Fortune 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‖, Fortune 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)Leading 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 Leading Energy Corp. and Fortune 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. (12)Short-term borrowings Type of borrowings December 31, 2015 Interest rate range Collateral Unsecured borrowings Citibank $ 898,557 0.92%~4.21% - HSBC 700,000 0.85% - Bank SinoPac 536,000 0.87%~1.08% - The Bank of Tokyo-Mitsubishi UFJ 527,000 0.88% - Mega International Commercial Bank 455,600 2.63% - Mizuho Bank, Ltd. 373,014 0.88%~8.80% - Taipei Fubon Commercial Bank 350,000 0.85%~1.12% - First Bank 295,000 1.12%~1.14% - DBS Bank 71,581 0.68%~1.67% - Sumitomo Mitsui Banking Corporation 65,746 1.04% - Ctbcbank 12,336 9.10% - $ 4,284,834 Type of borrowings December 31, 2014 Interest rate range Collateral Unsecured borrowings Citibank $ 105,401 1.43%~4.47% - Mizuho Bank, Ltd. 248,217 9.65% - $ 353,618

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Type of borrowings January 1, 2014 Interest rate range Collateral Unsecured borrowings Sumitomo Mitsui Banking Corporation $ 74,625 0.87% - Citibank 815,790 0.85%~4.14% - Mizuho Bank, Ltd. 101,550 9.65% - $ 991,965

(13)Accounts payable

December 31, 2015 December 31, 2014 January 1, 2014 Materials payable $ 7,123,433 $ 9,134,190 $ 8,463,885 Sub-contract costs payable 7,267,602 5,731,710 4,432,621 Maintenance costs payable 540,243 397,927 278,086 Equipment burying costs payable 43,519 37,639 31,436 Others 44,426 152,587 142,128 $ 15,019,223 $ 15,454,053 $ 13,348,156 (14)Other payables December 31, 2015 December 31, 2014 January 1, 2014 Accrued payroll $ 1,622,375 $ 1,590,641 $ 1,462,643 Accrued employee bonuses, directors' and supervisors' remuneration 110,282 100,423 115,441 Accrued insurance 70,192 86,391 80,905 Accrued pension 38,977 41,457 36,771 Accrued building costs - - 238,609 Others 744,575 704,732 754,438 $ 2,586,401 $ 2,523,644 $ 2,688,807

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(15)Other current liabilities/Bonds payable December 31, 2015 December 31, 2014 January 1, 2014 Current items: Long-term liability- current $ 314,400 $ 314,400 $ 498,282 portion Receipt in advance 201,862 160,722 90,544 Adjustment of electricity sales 580,336 411,804 256,220 Joint venture 969,913 1,096,463 - Others 163,706 111,171 109,143 2,230,217 2,094,560 954,189 Unsecured convertible bonds payable - 19,500 34,200 Less: Discount of bonds payable - ( 276) ( 1,000) $ 2,230,217 $ 2,113,784 $ 987,389 A.KD Holding Corp. issued unsecured convertible bonds in November, 2010. Relevant information is as follows: The Company issued zero-coupon, five-year unsecured convertible bond with the principal amount of $500,000. The outstanding period of the bond is from November 15, 2010 to November 15, 2015. The bonds were listed on the GreTai Securities Market. (a)Conversion right and objectives: The bonds shall be converted using the conversion price at the conversion time. (b)Conversion periods: The bonds are convertible at anytime from December 15, 2010 to November 5, 2015. (c)Conversion price adjustment: The initial conversion price per share was set at NT$135.58 (in dollars). After the issuance of the bonds, the conversion price can be adjusted downward based on the terms of the contract. As of November 5, 2015, the conversion price of the convertible bond is adjusted to NT$103.06 (in dollars). (d)Redemption: i. Redemption at maturity: The bonds will be redeemed at the principal amount. ii. Redemption at the option of the Company: The Company may redeem the bonds, in whole but not in part, on or after December 16, 2010 to October 6, 2015 at the principal amount, provided that the bonds may not be so redeemed, unless (i) the closing price of the shares on the Taiwan Over-The-Counter Securities Exchange, for a period of 30 consecutive trading days, is at least 30% of the conversion price or (ii) at least 90% in principal amount of the bonds has already been converted, redeemed or purchased and cancelled. iii.Redemption at the option of bondholders: The Company will redeem the bonds, in whole or in part, at the option of the holder of any bond on November 15, 2013. (e)Under the terms of the bonds, the rights and obligations of the new shares converted from convertible bonds are the same as the issued and outstanding common stock.

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(f)The fair value of convertible option was separated from bonds payable, while related transaction costs were proportionately allocated into the debt and equity element of such bonds payable based on the amount initially recognized in accordance with IAS No. 32. The fair value of put options and call options due to market value change of conversion object embedded in bonds payable was separated from bonds payable, and was recognized in ―financial assets/liabilities as fair value through profit or loss‖ in net amount in accordance with IAS No. 39, because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts. The effective interest rate of bonds payable was 1.57% after separation. B.As of December 31, 2015, December 31, 2014, and January 1, 2014, the fair value of put and call options embedded in bonds payable was recognized in“Financial assets at fair value through profit or loss - current‖ amounting to $0, $176 and $520, respectively. C.Adjustments of electricity sales of KD Holding Corp. is the amount of revenue deduction for electricity sales determined by the project price calculation and the related index under the subcontract of Provision of Services for Operation and Maintenance of the Macao Refuse Incineration Plant to SINOGAL – Waste Service Co., Ltd. D.As of December 31, 2015, due to the accumulated cost was greater than the accumulated capital injection, the joint venture was recognized in ―other current liabilities‖.

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(16)Long-term loans Borrowing periodperiod Interest Financing Actual usingusing Type of borrowings and repayment term rate range Collateral amount amount December 31, 2015 December 31, 2014 January 1, 2014 Note Mega International Borrowing period is 1.50% Machineries $ 550,000 $ 466,640 $ - $ - $ 211,094 Leading Energy Corp. commits to maintain the Commercial Bank from November, and other following financial ratios and criteria during the secured borrowings 2012 to November, equipment period of the contract when the refuse incineration 2015; interest is constructed plant has been already operating successfully for 2 repayable monthly. or acquired years since the operating period: i) Current ratio is above 100%, ii) Debt ratio is under 190%, iii) Time interest earned is above 120%. Borrowing period is 1.50% Machineries $ 681,600 $ 681,600 523,200 681,600 840,000 Fortune Energy Corp. committed to maintain the from September , and other following financial ratios and criteria during the 2010 to April, equipment period of the contract: 2019; interest is constructed i) Current ratio is above 100%, repayable monthly. or acquired ii) Debt ratio is under 190%, and time iii) Time interest earned is above 150%. deposits The Shanghai Borrowing period is 1.481% Buildings and USD 4,000,000 USD 4,000,000 - - 28,335 Shang Ding Engineering & Construction Co., Ltd. Commercial and from December 22, equipment commits to maintain the following financial ratios Savings Bank 2009 to December and criteria during the continuing period of the secured borrowings 22, 2014; interest is contract: repayable monthly. i) Current ratio is above 100%, ii) Financial debt ratio is under 190%, iii) Net asset value is above RMB$100 million. Taiwan Cooperative Borrowing period is 1.5085%~1.5811% Land and $ 3,600,000 $ 3,433,150 2,403,150 2,559,150 2,715,150 Bank secured from April 23, 2009 Buildings borrowings to April 23, 2029; interest is repayable monthly. 2,926,350 3,240,750 3,794,579 Less: Current portion ( 314,400) ( 314,400) ( 498,282) $ 2,611,950 $ 2,926,350 $ 3,296,297

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(17)Other non-current liabilities December 31, 2015 December 31, 2014 January 1, 2014 Net defined benefit liabilities $ 2,522,092 $ 2,550,962 $ 2,862,006 Deposits received 337,616 273,146 207,538 Accrued recovery costs 110,895 104,406 98,405 Others 33,404 70,349 6,540 $ 3,004,007 $ 2,998,863 $ 3,174,489

(18)Pensions A.Defined benefit pension plan (a)The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees‘ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees‘ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March. (b)The amounts recognised in the balance sheet are as follows: December 31, 2015 December 31, 2014 January 1, 2014 Present value of defined $ 4,664,105 $ 4,648,944 $ 4,882,811 benefit obligations Fair value of plan assets ( 2,142,013) ( 2,097,982) ( 2,020,805) Net defined benefit liability $ 2,522,092 $ 2,550,962 $ 2,862,006

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(c)Movements in net defined benefit liabilities are as follows: Present value of defined benefit Fair value of Net defined obligations plan assets benefit liability Year ended December 31, 2015 Balance at January 1 $ 4,648,944 ($ 2,097,982) $ 2,550,962 Current service cost 52,491 - 52,491 Interest expense (income) 88,538 ( 40,073) 48,465 4,789,973 ( 2,138,055) 2,651,918 Remeasurements: Return on plan assets - ( 10,490) ( 10,490) Change in financial assumptions 76,050 - 76,050 Experience adjustments 82,937 ( 3,158) 79,779 158,987 ( 13,648) 145,339 Pension fund contribution - ( 127,847) ( 127,847) Paid pension ( 284,855) 137,537 ( 147,318) Balance at December 31 $ 4,664,105 ($ 2,142,013) $ 2,522,092 Present value of defined benefit Fair value of Net defined obligations plan assets benefit liability Year ended December 31, 2014 Balance at January 1 $ 4,882,811 ($ 2,020,805) $ 2,862,006 Current service cost 59,104 - 59,104 Interest expense (income) 93,506 ( 39,006) 54,500 5,035,421 ( 2,059,811) 2,975,610 Remeasurements: Return on plan assets - ( 5,398) ( 5,398) Change in financial assumptions ( 83,371) - ( 83,371) Experience adjustments ( 46,644) ( 1,349) ( 47,993) ( 130,015) ( 6,747) ( 136,762) Pension fund contribution - ( 148,636) ( 148,636) Paid pension ( 256,462) 117,212 ( 139,250) Balance at December 31 $ 4,648,944 ($ 2,097,982) $ 2,550,962 (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

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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 earning is less than aforementioned rates, government shall make payment for the deficit after authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The constitution of fair value of plan assets as of December 31, 2015 and 2014 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government. (e)The principal actuarial assumptions used were as follows: Year ended December 31, 2015 Year ended December 31, 2014 Discount rate 1.70% 1.90%~2.00% Future salary increases 1.50%~3.00% 1.50%~3.00% 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: Discount rate Future salary increases Increase 1% Decrease 1% Increase 1% Decrease 1% December 31, 2015 Effect on present value of ($ 350,112) 396,008 337,376 ($ 306,105) defined benefit obligation The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculate net pension liability in the balance sheet are the same. (f)Expected contributions to the defined benefit pension plans of the Group for the year ended December 31, 2016 amounts to $134, 276. 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, 2015 and 2014 were $196,535 and $201,618, 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, 2015 and 2014 were $72,366 and $81,347, respectively.

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(19)Share-based payment-employee compensation A.The Company (a) As of December 31, 2015 and 2014, the Company‘s share-based payment arrangements were as follows: Quantity Contract Vesting Type of arrangement Grant date granted period conditions First plan of employee 2007.09.28 16,000 6 years Service of 2 years stock options units Second plan of employee 2008.08.27 21,000 6 years Service of 2 years stock options units Third plan of employee 2009.07.08 21,000 6 years Service of 2 years stock options units Fourth plan of employee 2010.06.18 22,000 6 years Service of 2 years stock options units (b)The above employee stock options are set forth below: i.The first plan of employee stock options was already complete . ii.Details of the second plan of employee stock options outstanding as of Dcember 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period - - 1,071.00 NT$14.60 Options waived - - ( 80.00) - Options exercised - - ( 991.00) NT$14.30 Options revoked - - - - Options outstanding at end of period - - - NT$14.00 Options exercisable at end of period - - - NT$14.00 As a result of employee stock options exercised based on the exercise price of NT$14.30, the outstanding capital stock increase amounted to 991,000 shares and capital surplus-common stock amounted to $4,266 for the year ended December 31, 2014. Each warrant could subscribe to 1,000 shares of common stock.

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iii.Details of the third plan of employee stock options outstanding as of Dcember 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 1,703.75 NT$20.60 4,713.75 NT$21.50 Options waived ( 161.50) - ( 10.75) - Options exercised ( 1,542.25) NT$20.60 ( 2,999.25) NT$21.30 Options revoked - - - - Options outstanding at end of period - - 1,703.75 NT$20.60 Options exercisable - - 1,703.25 NT$20.60 at end of period As a result of employee stock options exercised based on the exercise price of NT$20.60 and NT$21.30, the outstanding capital stock increase amounted to 1,542,250 shares and 2,999,250 shares and capital surplus-common stock amounted to $16,348 and $33,759 for the years ended December 31, 2015 and 2014, respectively. Each warrant could subscribe to 1,000 shares of common stock. iv.Details of the fourth plan of employee stock options outstanding as of Dcember 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 4,869.75 NT$25.00 11,012.55 NT$26.00 Options waived ( 18.25) - ( 37.00) - Options exercised ( 2,035.00) NT$24.56 ( 6,105.80) NT$25.60 Options revoked - - - - Options outstanding at end of period 2,816.50 NT$23.90 4,869.75 NT$25.00 Options exercisable 2,814.50 NT$23.90 4,854.25 NT$25.00 at end of period As a result of employee stock options exercised based on the exercise price of NT$24.56 and NT$25.60, the outstanding capital stock increase amounted to 2,035,000 shares and 6,105,800 shares and capital surplus-common stock amounted to $29,635 and $95,035 for the years ended December 31, 2015 and 2014, respectively. Each warrant could subscribe to 1,000 shares of common stock. (c)The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2015 and 2014 was NT$46.80 and NT$59.60, respectively.

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(d)As of December 31, 2015, December 31, 2014 and January 1, 2014, the range of exercise prices of stock options outstanding was NT$20.60～NT$24.56, NT$14.00～NT$25.60, and NT$14.60～NT$26.00, respectively; the weighted-average remaining contractual period was as follows: Type of arrangement December 31, 2015 December 31, 2014 January 1, 2014 Second plan of employee - - 0.66 year stock options Third plan of employee - 0.50 year 1.50 years stock options Fourth plan of employee 0.50 year 1.50 years 2.50 years stock options (e)For the stock options granted after January 1, 2008 with compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The information was as follows: Expected Expected price Expected dividend Risk free Type of Grant Stock Exercise volatility vesting yield interest Fair value arrangement date price price rate period rate rate per unit Second plan of 2008.8.27 NT$ 21.9 NT$ 21.9 36.05% 4.5 years 0% 2.41% NT$ 7.37 employee stock options Third plan of 2009.7.08 NT$ 28.9 NT$ 28.9 36.45% 4.5 years 0% 0.94% NT$ 9.13 employee stock options Fourth plan of 2010.6.18 NT$ 32.8 NT$ 32.8 36.22% 4.5 years 0% 0.93% NT$ 10.30 employee stock options (f)Expenses incurred on share-based payment transactions are shown below: For the year ended For the year ended December 31, 2015 December 31, 2014 Equity-settled $ - $ 5,266 B.Subsidiary – Advanced Control & System Inc. (a)As of December 31, 2015 and 2014, the subsidiary‘s share-based payment transactions are set forth below: Quantity Contract Vesting Type of arrangement Grant date granted period conditions Second plan of employee 2008.10.17 600 units 6 years Service of stock options 2 to 4 years Third plan of employee 2009.08.14 600 units 6 years Service of stock options 2 to 4 years Fourth plan of employee 2010.06.23 600 units 6 years Service of stock options 2 to 4 years Fifth plan of employee 2011.06.22 600 units 6 years Service of stock options 2 to 4 years

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(b)The above employee stock options are set forth below: i.The first plan of employee stock options was already complete. ii.Details of the second plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period - - 8.75 NT$11.20 Options waived - - - - Options exercised - - ( 8.75) NT$10.70 Options revoked - - - - Options outstanding at - - - NT$10.50 end of period Options exercisable at - - - NT$10.50 end of period

ii.Details of the third plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 46.50 NT$18.30 109.00 NT$19.60 Options waived ( 3.50) - - - Options exercised ( 43.00) NT$18.30 ( 62.50) NT$19.20 Options revoked - - - - Options outstanding at - - 46.50 NT$18.30 end of period Options exercisable at - - 46.50 NT$18.30 end of period

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iii.Details of the fourth plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below:

For the years ended December 31, 2015 2014 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 period 242.75 NT$41.50 384.00 NT$44.50 Options waived ( 6.00) - ( 6.50) - Options exercised ( 43.75) NT$41.50 ( 134.75) NT$42.80 Options revoked - - - - Options outstanding at 193.00 NT$41.50 242.75 NT$41.50 end of period Options exercisable at 193.00 NT$41.50 242.75 NT$41.50 end of period

iv.Details of the fifth plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 421.75 NT$47.50 515.50 NT$50.90 Options waived ( 14.50) - ( 10.25) - Options exercised ( 9.25) NT$46.80 ( 83.50) NT$49.90 Options revoked - - - - Options outstanding at 398.00 NT$44.90 421.75 NT$47.50 end of period Options exercisable at 398.00 NT$44.90 235.75 NT$47.50 end of period (c)The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2015 and 2014 were NT$47.71 and NT$58.40, respectively.

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(d)As of December 31, 2015, December 31, 2014, and January 1, 2014, the range of exercise prices of stock options outstanding were NT$41.50～NT$47.50, NT$18.30～NT$47.50, and NT$11.20 ～ NT$50.90, respectively; the weighted-average remaining contractual period was as follows: Type of arrangement December 31, 2015 December 31, 2014 January 1, 2014 Second plan of employee - - 0.67 year stock options Third plan of employee - 0.58 years 1.58 years stock options Fourth plan of employee 0.50 years 1.50 years 2.50 years stock options Fifth plan of employee 1.50 years 2.50 years 3.50 years stock options (e)For the stock options granted after January 1, 2008 with compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The information is as follows: Expected Expected Risk price Expected dividend free Type of Exercise volatility vesting yield interest Fair value arrangement Grant date Stock price price rate period rate rate per unit Second plan of 2008.10.17 NT$ 15.20 NT$ 15.20 43.75% 4.55 years 0% 1.86% NT$ 5.88 employee stock options

Third plan of 2009.08.14 NT$26.55 NT$ 26.55 43.64% 4.55 years 0% 0.84% NT$ 9.84 employee stock options

Fourth plan of 2010.06.23 NT$58.10 NT$ 58.10 45.68% 4.55 years 0% 0.93% NT$ 22.49 employee stock options

Fifth plan of 2011.06.22 NT$63.40 NT$ 63.40 44.41% 4.50 years 0% 1.07% NT$ 23.95 employee stock options (f)Expenses incurred on share-based payment transactions are shown below: For the year ended For the year ended December 31, 2015 December 31, 2014 Equity-settled $ 547 $ 2,503

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C.Subsidiary – KD Holding Corp. (a)As of December 31, 2015 and 2014, the subsidiary‘s share-based payment transactions are set forth below: Vesting Type of arrangement Grant date Quantity granted Contract period conditions First plan of employee 2008.9.12 1200 units 6 years Service of stock options 2 years Second plan of employee 2009.7.16 1200 units 6 years Service of stock options 2 years Third plan of employee 2010.6.18 1200 units 6 years Service of stock options 2 years Fourth plan of employee 2011.6.17 1200 units 6 years Service of stock options 2 years Fifth plan of employee 2012.6.28 1200 units 6 years Service of stock options 2 years (b)The above employee stock options are set forth below: i.Details of the first plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period - - 32.25 NT$33.20 Options waived - - - - Options exercised - - ( 32.25) NT$32.90 Options revoked - - - - Options outstanding at - end of period - - NT$31.50 Options exercisable at - - - end of period NT$31.50

214 ii.Details of the second plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 75.75 NT$53.90 189.50 NT$56.80 Options waived - - - - Options exercised ( 75.75) NT$53.90 ( 113.75) NT$55.90 Options revoked - - - - Options outstanding at end of period - NT$53.90 75.75 NT$53.90 Options exercisable at - NT$53.90 75.75 NT$53.90 end of period iii.Details of the third plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 220.75 NT$71.40 592.25 NT$75.20 Options waived - - ( 9.50) - Options exercised ( 89.00) NT$70.90 ( 362.00) NT$74.20 Options revoked - - - - Options outstanding at end of period 131.75 NT$67.50 220.75 NT$71.40 Options exercisable at 131.75 NT$67.50 220.75 NT$71.40 end of period

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iv.Details of the fourth plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 699.00 NT$118.70 911.75 NT$125.10 Options waived ( 1.50) - ( 15.75) - Options exercised ( 284.25) NT$117.50 ( 197.00) NT$122.90 Options revoked - - - - Options outstanding at end of period 413.25 NT$112.30 699.00 NT$118.70 Options exercisable at end of period 413.25 NT$112.30 274.75 NT$118.70

v.Details of the fifth plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 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 period 974.00 NT$122.80 1,189.00 NT$129.40 Options waived ( 6.75) - ( 28.00) - Options exercised ( 253.75) NT$121.60 ( 187.00) NT$126.10 Options revoked - - - - Options outstanding at end of period 713.50 NT$116.20 974.00 NT$122.80 Options exercisable at end of period 280.00 NT$116.20 246.25 NT$122.80 (c)The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2015 and 2014 was NT$165.80 and NT$175.11, respectively.

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(d)As of December 31, 2015, December 31, 2014, and January 1, 2014, the range of exercise prices of stock options outstanding was NT$53.90～NT$116.20, NT$31.50～NT$122.80, and NT$33.20～NT$129.40, respectively; the weighted-average remaining contractual period was as follows: Type of arrangement December 31, 2015 December 31, 2014 January 1, 2014 First plan of employee - - 0.75 year stock options Second plan of employee - 0.58 year 1.58 years stock options Third plan of employee 0.50 year 1.50 years 2.50 years stock options Fourth plan of employee 1.50 years 2.50 years 3.50 years stock options Fifth plan of employee 2.50 years 3.50 years 4.50 years stock options (e)For the stock options granted after January 1, 2008 with compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The information is as follows: Expected Expected price Expected dividend Risk free Type of Exercise volatility vesting yield interest Fair value arrangement Grant date Stock price price rate period rate rate per unit First plan of 2008.9.12 NT$91.5 NT$41.5 33.68% 2.58 0% 0.49% NT$51.50 employee stock years options Second plan of 2009.7.16 NT$91.5 NT$ 71.0 33.68% 3.42 0% 0.67% NT$ 32.56 employee stock years options Third plan of 2010.6.18 NT$94.0 NT$ 94.0 33.68% 4.50 0% 0.93% NT$ 27.66 employee stock years options Fourth plan of 2011.6.17 NT$146.0 NT$146.0 38.65% 4.50 0% 1.05% NT$48.82 employee stock years options Fifth plan of 2012.06.28 NT$145.0 NT$ 145.0 33.63% 4.60 0% 1.00% NT$42.79 employee stock years options Note: Subsidiary – KD Holding 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.

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(f)Expenses incurred on share-based payment transactions are shown below: For the year ended For the year ended December 31, 2015 December 31, 2014 Equity-settled $ 8,712 $ 20,738 (20)Share capital A.As of December 31, 2015, the Company‘s authorized capital was $9,000,000, (including 800,000 thousand shares reserved for employee stock options), the paid-in capital was $7,611,076 consisting of 761,107,598 shares with a par value of NT$10 per share. Movements in the number of the Company‘s ordinary shares outstanding are as follows: For the year ended For the year ended December 31, 2015 (Note) December 31, 2014 (Note) At January 1 757,530,348 747,434,298 Employee stock options exercised 3,577,250 10,096,050 761,107,598 757,530,348 At December 31 Note: The number of the Company‘s ordinary shares outstanding which was held by its subsidiaries had not been reduced. B.Treasury shares (a)Reason for share reacquisition and movements in the number of the Company‘s treasury shares are as follows: December 31, 2015 Name of company holding Number of the shares Reason for reacquisition shares Carrying amount Subsidiary-Sino Environmental To maintain 1,028 $ 10 Services Corp. stockholders' equity Subsidiary-Innovest Investment " 344,436 3,241 Corp. Subsidiary-GRQ Investment Corp. " 912,170 8,584 December 31, 2014 Name of company holding Number of the shares Reason for reacquisition shares Carrying amount Subsidiary-Sino Environmental To maintain 1,028 $ 10 Services Corp. stockholders' equity Subsidiary-Innovest Investment " 344,436 3,241 Corp. Subsidiary-GRQ Investment Corp. " 912,170 8,584

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January 1, 2014 Name of company holding Number of the shares Reason for reacquisition shares Carrying amount Subsidiary-Sino Environmental To maintain 1,028 $ 10 Services Corp. stockholders' equity Subsidiary-Innovest Investment " 344,436 3,241 Corp. Subsidiary-GRQ Investment Corp. " 912,170 8,584 (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 realised 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. (21)Capital surplus A.Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

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(22)Retained earnings 2015 2014 At January 1 $ 2,432,925 $ 1,910,722 Profit for the period 2,040,610 2,092,199 Set aside as legal reserve ( 188,212) ( 164,173) Cash dividends ( 1,698,089) ( 1,498,449) Reversal of special reserve 9,876 - Remeasurement of post-employment benefit obligations, net of tax ( 119,418) 92,626 At December 31 $ 2,477,692 $ 2,432,925

A.In accordance with the Company‘s Articles of Incorporation, 10% of the Company‘s annual net income, after paying all taxes and dues and deducting losses of prior years, if any, should be set aside as legal reserve, except when the legal reserve is over total assets. Subsequently, when the reduction in equity is reversed, the Company may return the special reserve to undistributed earnings in the current year. The remaining balance and the cumulative undistributed earnings from prior years are called disposable cumulative undistributed earnings. The net income after legal reserve shall be allocated as follows: (a)At least 2% of the balance as employees‘ bonus; (b)2% of the balance as remuneration to directors and supervisors; and (c)After paying employees‘ bonus and remuneration to directors and supervisors, the remaining balance may be distributed as stockholders‘ dividends. (d)No less than 50% of the remaining balance and the cumulative undistributed earnings from prior years may be distributed as stockholders‘ dividends, of which at least 20% shall be in the form of cash dividends, upon the approval of the stockholders. B.Legal reserve can only be used to cover the losses and issue new stocks or cash dividends proportionately according to the stock ratio. The latter should be by an amount under 25% of legal reserve exceeding issued and outstanding capital. C.The new Taiwan imputation tax system requires that any undistributed current earnings derived on or after January 1, 1998 of the Company are subject to an additional 10% corporate income tax if the earnings are not distributed in the following year. 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.

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E.The appropriaton of 2014 and 2013 earnings had been resolved at the stockholders meeting on June 22, 2015 and June 26, 2014, respectively. Details are summarized below: 2014 2013 Dividends Dividends per share per share Amount (in NT dollars) Amount (in NT dollars) Set aside as legal reserve $ 188,212 $ - $ 164,173 $ - Reversal of special reserve ( 9,876) - - - Cash dividends 1,698,089 2.24 1,498,449 2.00 $ 1,876,425 2.24 $ 1,662,622 2.00 F.The Company appropriation of 2015 earnings had been resolved at the Board of Directors‘ meeting on March 18, 2016. Details are summarized below: 2015 Dividends per share Amount (in NT dollars) Set aside as legal reserve $ 204,061 $ - Reversal of special reserve ( 166) - Cash dividends 1,828,815 2.40 $ 2,032,710 2.40 As of March 18, 2016, the abovementioned appropriation of 2015 earnings has not been approved by the stockholders. G. On June 22, 2015, the abovementioned 2014 earnings appropriation and capitalization of capital surplus was approved by the Board of Directors with the issue date on August 3, 2015. In addition, during the Board of Directors‘ meeting in July 13, 2015, since outstanding stocks will be influenced by convertible bonds and employees‘ share rights, the stockholders approved the adjustment of the rate of distributed dividends from NT$2.24 per share to NT$2.2334469 per share. H. For information relating to employees‘ remuneration (bonuses) and directors‘ and supervisors‘ remuneration, please refer to Note 6(25). (23)Operating revenue For the year ended For the year ended December 31, 2015 December 31, 2014 Construction contract revenue $ 62,985,942 $ 53,685,122 Service revenue 3,628,146 3,535,332 Other operating revenue 443,552 471,483 Total $ 67,057,640 $ 57,691,937

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(24)Expenses by nature For the year ended For the year ended December 31, 2015 December 31, 2014 Subcontract costs $ 21,466,285 $ 20,188,292 Materials 21,663,659 18,428,565 Employee benefit expense 9,628,934 8,876,038 Amortisation charges on buried equipment 340,852 366,993 Temporary equipment 929,057 517,834 Depreciation charges on property plant and equipment 333,511 325,305 Amortisation on intangible 147,740 153,205 Joint ventures 4,685,483 2,698,449 Others 4,860,207 3,434,925 Total $ 64,055,728 $ 54,989,606 (25)Employee benefit expense For the year ended For the year ended December 31, 2015 December 31, 2014 Salaries and wages $ 8,227,015 $ 7,420,347 Employee stock options 9,259 28,507 Labor and health insurance fees 683,915 671,879 Pension costs 369,857 396,569 Other personnel expenses 338,888 358,736 $ 9,628,934 $ 8,876,038 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 and supervisors that should be 1.5% to 5% and not be higher than 1.5%, respectively, of the total distributed amount. However, in accordance with the Company Act amended in May 20, 2015, a company shall distribute employee compensation, based on the profit of the current year distributable, in a fixed amount or a ratio of profits. If a company has accumulated deficit, earnings should be channeled to cover losses. A company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation. The Board of Directors of the Company has approved the amended Articles of Incorporation of the Company on March 18, 2016. According to the amended articles, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees' compensation and directors‘ and supervisors‘ remuneration. The ratio shall be 1.5% to 5% for employees‘ compensation and shall not be higher than 1.5% for directors‘ and supervisors‘ remuneration. The amended articles will be resolved at the shareholders‘ meeting in 2016.

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B.For the years ended December 31, 2015 and 2014, employees‘ bonus was accrued at $55,111 and $51,092, respectively; directors‘ and supervisors‘ remuneration was accrued at $15,000 and $13,752, respectively. The aforementioned amounts were recognized in salary expenses. The employees‘ compensation and directors‘ and supervisors‘ remuneration were estimated and accrued based on an amount 1.5% to 5% and not higher than 1.5% of distributable profit of current year for the year ended December 31, 2015. The employees‘ compensation and the directors‘ and supervisors‘ remuneration have not been resolved at the shareholders‘ meeting. The employees‘ compensation will be distributed in the form of shares or cash. The expenses recognized for the year of 2014 were accrued based on the net income of 2014 for employees‘ compensation of $51,092 and directors‘ and supervisors‘ remuneration of $13,752, taking into account other factors such as legal reserve. The employees‘ compensation and directors‘ and supervisors‘ remuneration resolved at the shareholders‘ meeting were $51,092 and $15,000, respectively. The difference between employees‘ bonus (directors‘ and supervisors‘ remuneration) as resolved at the shareholders‘ meeting and the amount recognized in the 2014 financial statements by $1,248, mainly caused by estimate adjustment, had been adjusted in the profit or loss of 2015. Information about employees‘ compensation and directors‘ and supervisors‘ remuneration of the Company as resolved at the Board of Directors‘ meeting will be posted in the ―Market Observation Post System‖ at the website of the Taiwan Stock Exchange. (26)Income tax A.Components of income tax expense: For the year ended For the year ended December 31, 2015 December 31, 2014 Current tax: Current tax on profits for the period $ 679,853 $ 599,919 Prior year income tax (overestimation) underestimation ( 36,346) 13,906 Total current tax $ 643,507 $ 613,825 Deferred tax: Origination and reversal of temporary differences 104,594 15,050 Impact of change in tax rate 2,408 ( 439) Total deferred tax 107,002 14,611 Income tax expense $ 750,509 $ 628,436

B.Reconciliation between income tax expense and accounting profit: For the year ended For the year ended December 31, 2015 December 31, 2014 Tax calculated based on profit before tax and statutory tax rate $ 869,817 $ 703,582 Effects from items disallowed by tax regulation ( 48,605) ( 52,186) Prior year income tax (overestimation) underestimation ( 36,346) 13,906 Tax-exempt income ( 25,078) ( 28,683) Reduction of expense for R&D investments ( 9,279) ( 8,183) Income tax expense $ 750,509 $ 628,436

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C.Amounts of deferred tax assets or liabilities as a result of temporary difference, loss carryforward and investment tax credit are as follows: For the year ended December 31, 2015 Recognised other in Recognised in comprehensive January 1 profit or loss income December 31 Temporary differences: -Deferred tax assets: Unrealized (gain) loss on financial instruments $ 6,464 ($ 10,145) $ - ($ 3,681) Unrealized construction loss 44,869 ( 6,641) - 38,228 Unrealized bad debts 24,063 - - 24,063 Short-term paid absences (holiday leave) 32,527 2,441 - 34,968 Unrealized repair cost 9,609 672 - 10,281 Unrealized loss for market price decline and slow- moving inventories 241 17 - 258 Unrealized membership fees of the golf club 918 - - 918 Unrealized accrued expense 10,579 ( 8,891) - 1,688 Pension provision 388,276 ( 35,356) 24,708 377,628 Others 23,378 10,201 - 33,579 Subtotal 540,924 ( 47,702) 24,708 517,930 -Deferred tax liabilities: Unrealized exchange (gain) loss ($ 18,091) $ 9,281 $ - ($ 8,810) Unrealized investment income from foreign equity investments ( 234,708) ( 46,475) - ( 281,183) Unrealized gain on concession ( 152,021) ( 3,493) - ( 155,514) Others ( 35,229) ( 16,205) - ( 51,434) Subtotal ( 440,049) ( 56,892) - ( 496,941) Total $ 100,875 ($ 104,594) $ 24,708 $ 20,989

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For the year ended December 31, 2014 Recognised other in Recognised in comprehensive January 1 profit or loss income December 31 Temporary differences: -Deferred tax assets: Unrealized loss on financial instruments $ 510 $ 5,954 $ - $ 6,464 Unrealized construction loss 18,223 26,646 - 44,869 Unrealized bad debts 17,321 6,742 - 24,063 Short-term paid absences (holiday leave) 36,281 ( 3,754) - 32,527 Unrealized repair cost 8,935 674 - 9,609 Unrealized impairment loss 3,606 ( 3,606) - - Unrealized labor contract loss 9,029 ( 9,029) - - Unrealized loss for market price decline and slow- moving inventories 591 ( 350) - 241 Unrealized membership fees of the golf club 918 - - 918 Unrealized accrued expense 9,505 1,074 - 10,579 Pension provision 439,794 ( 28,268) ( 23,250) 388,276 Others 17,115 6,263 - 23,378 Subtotal 561,828 2,346 ( 23,250) 540,924 -Deferred tax liabilities: Unrealized exchange gain ($ 8,848) ($ 9,243) $ - ($ 18,091) Unrealized investment income from foreign equity investments ( 253,643) 18,935 - ( 234,708) Unrealized gain on concession ( 146,870) ( 5,151) - ( 152,021) Others ( 13,292) ( 21,937) - ( 35,229) Subtotal ( 422,653) ( 17,396) - ( 440,049) Total $ 139,175 ($ 15,050) ($ 23,250) $ 100,875 D.Expiration dates of unused taxable loss and amounts of unrecognised deferred tax assets are as follows: For the year ended December 31, 2015 Amount filed/ Unrecognised Year incurred assessed Unused amount deferred tax assets Usable until year 2012 $ 34,223 $ 23,408 $ 23,408 2022 2013 154,975 154,975 154,975 2023 2014 98,149 98,149 98,149 2024 $ 287,347 $ 276,532 $ 276,532

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For the year ended December 31, 2014 Amount filed/ Unrecognised Year incurred assessed Unused amount deferred tax assets Usable until year 2010 $ 2,342 $ 144 $ 144 2020 2012 34,617 29,529 29,529 2022 2013 154,975 154,975 154,975 2023 2014 101,219 101,219 101,219 2024 $ 293,153 $ 285,867 $ 285,867 For the year ended January 1, 2014 Amount filed/ Unrecognised Year incurred assessed Unused amount deferred tax assets Usable until year 2010 $ 2,342 $ 144 $ 144 2020 2012 34,617 32,784 32,784 2022 2013 154,975 154,975 154,975 2023 $ 191,934 $ 187,903 $ 187,903

E.The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows: December 31, 2015 December 31, 2014 January 1, 2014 Deductible temporary $ 67,949 $ 69,793 $ 45,042 Differences F.As of December, 2015, the Company‘s income tax returns through 2013 have been assessed and approved by the Tax Authority. G.The Company and its subsidiaries obtained income tax exemption as follows: Tax exemption amount Period of tax for the years ended December 31, Applicable laws exemption 2015 2014 The Company Regulations governing the application 2011.01.01~ $ 23,277 $ 32,048 of the incentive for a five-year 2015.12.31 exemption from profit- seeking enterprise income tax to the investments made by enterprise in the manufacturing industry and the technical service industry between July 1, 2008 and December 31, 2009

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Tax exemption amount Period of tax for the years ended December 31, Applicable laws exemption 2015 2014 Fortune Energy Regulations Governing Application of 2011.01.01~ $ 167,751 $ 172,118 Corp. Profit-seeking Enterprise Income Tax 2015.12.31 Exemption to Private Institutions Participation in Public Infrastructure Projects Advance Control Regulations for Encouraging 2011.01.01~ - 6,829 & System Inc. Manufacturing Enterprises and 2015.12.31 Technical Service Enterprises in the Newly Emerging, Important and Strategic Industries

H.Unappropriated retained earnings: December 31, 2015 December 31, 2014 January 1, 2014 Earnings generated in $ 47,819 $ 47,819 $ 47,819 and before 1997 Earnings generated in and after 1998 2,429,873 2,385,106 1,862,903 I.As of December 31, 2015, December 31, 2014 and January 1, 2014, the balance of the imputation tax credit account was $186,080, $203,969 and $301,536, respectively. The creditable tax rate was 18.47% for 2014 and is estimated to be 20.88% for 2015.

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(27) Earnings per share For the year ended December 31, 2015 Weighted-average Amount number of ordinary shares Earnings per share after tax outstanding (share in thousands) (in dollars) Basic earnings per share Profit attributable to the ordinary shareholders of the parent $ 2,040,610 758,195 NT$ 2.69 Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employee bonus - 1,443 Employee stock options - 2,225

Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 2,040,610 761,863 NT$ 2.68

For the year ended December 31, 2014 Weighted-average Amount number of ordinary shares Earnings per share after tax outstanding (share in thousands) (in dollars) Basic earnings per share Profit attributable to the ordinary shareholders of the parent $ 2,092,199 750,959 NT$ 2.79 Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employee bonus - 1,056 Employee stock options - 5,968

Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 2,092,199 757,983 NT$ 2.76

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(28) Operating leases The Group‘s future aggregate minimum lease payments under non-cancellable operating leases are as follows: December 31, 2015 December 31, 2014 January 1, 2014 Not later than one year $ 76,181 $ 65,825 $ 38,026 Later than one year but not 97,727 109,418 142,103 later than five years Later than five years 66,056 148,407 134,103 $ 239,964 $ 323,650 $ 314,232 7. RELATED PARTY TRANSACTIONS Significant transactions and balances with related parties (1) Sales of services For the year ended For the year ended December 31, 2015 December 31, 2014 Associates $ 177,208 $ 86,524 Entities with significant influence over the entity 12,153 1,773 Other related parties 10,990 ( 85) Joint ventures 880 - $ 201,231 $ 88,212 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 on August, 2014. As of December 31, 2015 and 2014, the Company recognized total operating revenue amounting to $9,776,664 and $9,624,895, respectively. As of December 31, 2015 and 2014, notes receivable amounted to $586,246 and $1,411,400, which had been reduced by allowance for doubtful accounts of $800,000 and $13,288, respectively, and accounts receivable amounted to $17,328 and $186. For the years ended December 31, 2015 and 2014, the bad debt expenses were $786,712 and $13,288, respectively. (2) Purchases of services For the year ended For the year ended December 31, 2015 December 31, 2014 Associates $ 2,279,207 $ 664,821 Entities with significant influence over the entity 1,262 - $ 2,280,469 $ 664,821 A.The terms of sub-contracting projects with related parties were approximately the same as those with third parties.

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B.The subsidiaries, Innovest Investment Corp. and CTCI MALAYSIA SDN. BHD., invested in MIE Industrial SDN. BHD. in May, 2015. The sub-contracting projects with of MIE Industrial SDN. BHD. was included in the above related party transactions after May 1, 2015. (3) Accounts receivable December 31, 2015 December 31, 2014 January 1, 2014 Other related parties $ 6,426 - - Associates 22,053 2,656 3,448 Entities with significant influence over the entity 4,200 1,271 688 $ 32,679 $ 3,927 $ 4,136 (4) Accounts payable December 31, 2015 December 31, 2014 January 1, 2014 Associates $ 1,030,827 $ 189,299 $ 16,134 (5) Other receivables December 31, 2015 December 31, 2014 January 1, 2014 Joint ventures (Note 1) $ 3,001 $ - $ - Associates (Note 2) 439 8,990 38,199 $ 3,440 $ 8,990 $ 38,199 Note 1 : Other receivables-related parties consist of dividend receivable. Note 2 : Other receivables-related parties consist of due from personnel transfer and system usage. (6) Loans to related parties A.Receivables from related parties December 31, 2015 December 31, 2014 January 1, 2014 Joint ventures $ 29,010 $ 29,018 $ 29,036 B.Interest income For the year ended For the year ended December 31, 2015 December 31, 2014 Joint ventures $ 455 $ 464 The loans to associates are repayable monthly and carry interest at 1.6% per annum for the years ended December 31, 2015 and 2014, respectively. (7) Rental expense Lessor Leased assets Rental amount For the years ended December 31, Entities with significant Land / Buildings $698/month/ 2015 2014 influence over the entity semiannual payment $ 8,372 $ 8,372 (8) Provision for endorsements and guarantees December 31, 2015 December 31, 2014 January 1, 2014 Joint ventures $ 629,076 $ 248,253 $ 254,853

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(9) Key management compensation For the years ended December 31, 2015 2014 Salaries and other short-term $ 232,640 $ 247,250 employee benefits Post-employment benefits 3,633 7,389 Share-based payments 2,581 7,324 Other long-term benefits 771 322 $ 239,625 $ 262,285

8. PLEDGED ASSETS Book value Pledged assets December 31, 2015 December 31, 2014 January 1, 2014 Purpose Other current assets Pledged bank deposits $ - $ - $ 981 Guarantee for oil expense, bank guarantee, construction contracts and tender bonds Guarantee for wages 18,962 24,515 57,383 Guarantee for wages Other non-current assets Pledged time deposits 100,762 52,448 50,300 Guarantee for oil expense, long-term borrowings and litigation deposits Refundable deposits 143,724 131,812 119,866 Guarantee for oil expense, rent, golf certificates, tender bonds, construction contracts, and wages Long-term prepaid rent 23,450 25,756 67,201 Guarantee for long-term borrowings Property, plant and Guarantee for construction equipment 3,885,128 3,941,007 4,341,544 contracts, tender bond, short-term and long-term borrowings Investment property 822,393 827,635 833,141 Guarantee for long-term borrowings $ 4,994,419 $ 5,003,173 $ 5,470,416 9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS In addition to those items which have been disclosed in Note 6 (16), (28), the significant contingent liabilities and unrecognised contract commitments of the Group as of December 31, 2015 were as follows: (1)Guarantee A.The Group had outstanding notes payable for security deposits under various construction projects amounting to $8,356,043. B.The Group had outstanding notes payable for bank financing amounting to $67,245,582. (2)The Group had unused and outstanding letters of credit of $2,191,744. (3)The Group had outstanding commitments for construction subcontracts and services contracts amounting to $14,359,851. (4)The Group had issued contracts for acquisition of inventory amounting to $827,838. (5)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

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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 $117 and damage loss of $2,421. The case was reverted back to the Taiwan High Court after being handled by the Supreme Court. The Taiwan High Court then reverted the case the case back again to the Supreme Court to the Supreme Court. Thus, the case is currently pending with the Supreme Court as of December 31, 2015. 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. (6)The subsidiary, E&C Engineering Corp. (E&C), has entered into an electrical and mechanical contract with RPTI International Ltd. (RPTI) on behalf of the joint venture by RSEA Engineering Corporation and E&C Engineering Corp. for partial permanent work of electrical and mechanical engineering. However, as RPTI International Ltd. was far behind the schedule, it agreed that E&C to hire others to carry out the pending construction. Also, both E&C and RPTI agreed to terminate partial contract and to hire JEHNG LONG ENGINEERING CO., LTD. to work on the terminated work because RPTI was unable to perform the air conditioning construction as stated the contract. The aforementioned construction expenses for hiring others and for working on the terminated construction were expected to be paid using RPTI‘s estimated assessment amount and retention payment. Surprisingly, RPTI filed a lawsuit to Taiwan Taipei District Court, alleging improper deduction by E&C 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 at trial and E&C 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 judgment (Year 2008, Zian-Zi No. 21, Civil case) that E&C 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 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 E&C‘s counter-claim were refuted. E&C disagreed with the verdict and filed an appeal to 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 $52,219 along with an interest at 5% per annum from August 9, 2008 until the date of repayment. RPTI filed an incidental appeal for requesting E&C to pay another amount of $7,092 along with an interest at 5% per annum from November 28, 2007 until the date of repayment. According to the Company‘s appointed lawyers, the case is under the judgment of Taiwan High Court, and the case number is Year 2015, Chong-Shang-Zi No. 518. 10. SIGNIFICANT DISASTER LOSS None.

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11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE Please see Note 6 (22) F. for detailed information on the apporopriation of 2015 earnings that had been resolved at the Board of Directors‘meeting on March 18, 2016. 12. OTHERS (1) Capital risk management The Group‘s objectives of 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. Net debt is calculated as total borrowings (including ‗current and non-current borrowings‘ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‗equity‘ as shown in the consolidated balance sheet. The gearing ratios as of December 31, 2015, December 31, 2014, and January 1, 2014, were as follows: December 31, 2015 December 31, 2014 January 1, 2014 Total borrowings $ 7,211,184 $ 3,613,592 $ 4,819,744 Total equity $ 19,728,083 $ 19,484,155 $ 18,398,136 Gearing ratio 36.55% 18.55% 26.20%

(2) Financial instruments A.Fair value information of financial instruments Except for those listed in the table below, the carrying amounts of the Group‘s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term loans, notes payable, accounts payable and other payables) are approximate to their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(3). B.Financial 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. The Group‘s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group‘s financial position and financial performance. (b)Risk management is carried out by a 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.

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C.Significant financial risks and degrees of financial risks (a)Market risk Foreign exchange risk A.The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD and EUR. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. B.Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. To manage their foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group transact with Group treasury by using forward foreign exchange contracts, transacted with Group treasury. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity‘s functional currency. C.The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. D.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, RMB, etc.). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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December 31, 2015 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 55,455 32.8950 $ 1,824,192 EUR：NTD 8,173 35.9378 293,720 JPY：NTD 112,563 0.2731 30,741 THB：NTD 2,227 0.9112 2,029 MOP：NTD 15,630 4.1193 64,385 SGD：NTD 732 23.2613 17,027 AUD：NTD 184 24.0035 4,417 RMB : NTD 23,831 4.9947 119,029 SEK : NTD 413 3.9084 1,614 JYP：USD 3,595 0.0083 982 THB：USD 454 0.0277 414 USD：RMB 1,811 6.5860 59,573 USD：VND 1,535 21,930.0000 50,494 USD：THB 1,427 36.1007 46,941 USD：SAR 612 3.7525 20,132 USD：MYR 28,197 4.2895 927,540 Financial liabilities Monetary items USD：NTD 13,897 32.8950 457,142 EUR：NTD 3,719 35.9378 133,653 JPY：NTD 54,233 0.2731 14,811 THB：NTD 4,193 0.9112 3,821 EUR：USD 2,772 1.0925 99,620 CHF：USD 1,620 1.0112 53,885 SEK：THB 1,590 4.2893 6,214 EUR：THB 1,902 39.4401 68,354 USD：MYR 25,474 4.2895 837,967 USD：VND 204 21,930.0000 6,711 USD：SGD 2,638 1.4142 86,777 USD：PHP 542 46.9124 17,829 USD：INR 6,580 66.4680 216,449 NTD：THB 396 1.0975 396

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December 31, 2014 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 80,843 31.6200 $ 2,556,256 EUR：NTD 8,374 38.5500 322,818 JPY：NTD 490,183 0.2653 130,046 THB：NTD 4,191 0.9650 4,044 SGD：NTD 1,580 23.9900 37,904 HKD：NTD 465 4.0900 1,902 RMB : NTD 531,747 5.1010 2,712,441 SEK : NTD 898 4.0900 3,673 CHF：NTD 113 32.0600 3,623 CAD：NTD 6,188 27.3300 169,118 THB：USD 66,213 0.0305 63,896 RMB：USD 14,683 0.1613 74,898 USD：THB 1,723 32.7668 54,481 USD：SAR 1,877 3.7500 59,351 USD：MYR 25,310 3.4948 800,302 Financial liabilities Monetary items USD：NTD 9,788 31.6200 309,497 EUR：NTD 277 38.5500 10,678 JPY：NTD 14,866 0.2653 3,944 THB：NTD 959 0.9650 925 MOP：NTD 153 3.9050 597 CHF：NTD 369 1.0139 11,830 GBP : USD 186 1.5610 9,181 USD：THB 2,840 32.7668 89,801 EUR : THB 1,072 39.9482 41,326 USD：SAR 17,000 3.7500 537,540

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January 1, 2014 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 41,330 29.8500 $ 1,233,701 EUR：NTD 10,698 41.2600 441,399 JPY：NTD 501,549 0.2852 143,042 GBP：NTD 64 49.4500 3,165 THB：NTD 49,555 0.9140 45,293 MOP：NTD 8,564 3.6810 31,524 HKD：NTD 705 3.8600 2,721 SGD：NTD 2,365 23.6700 55,980 CAD：NTD 71 28.1200 1,997 RMB : NTD 345,611 4.9380 1,706,627 SEK : NTD 554 4.5800 2,537 CHF：NTD 2,099 33.6600 70,652 EUR：USD 1,764 1.3822 72,783 USD：VND 8,261 23,514.2857 271,952 USD：RMB 1,396 6.0450 41,671 USD：THB 152 32.6586 4,537 USD：SAR 4,534 3.7500 135,340 USD：SGD 3,034 1.2611 90,565 USD：MYR 244 3.2788 7,283 EUR： SAR 54 5.1834 2,228 Financial liabilities Monetary items USD：NTD 11,869 29.8500 354,290 EUR：NTD 1,122 41.2600 46,294 JPY：NTD 53,940 0.2852 15,384 SAR：NTD 286 7.8987 2,259 THB：NTD 2,612 0.9140 2,387 CHF：NTD 47 33.6600 1,582 USD：RMB 3,000 6.0450 89,550 E.The unrealised exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2015 and 2014 amounted to $62,079 and $203,939, respectively.

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F.Analysis of foreign currency market risk arising from significant foreign exchange variation: December 31, 2015 Sensitivity Analysis Effect on Other Degree of Effect on Profit Comprehensive Variation or Loss Income (Foreign currency: functional currency) Financial assets Monetary items USD：NTD 1% $ 18,242 $ - EUR：NTD 1% 2,937 - JPY：NTD 1% 307 - THB：NTD 1% 20 - MOP：NTD 1% 644 - SGD：NTD 1% 170 - AUD：NTD 1% 44 - RMB : NTD 1% 1,190 - SEK : NTD 1% 16 - JYP：USD 1% 10 - THB：USD 1% 4 - USD：RMB 1% 596 - USD：VND 1% 505 - USD：THB 1% 469 - USD：SAR 1% 201 - USD：MYR 1% 9,275 - Financial liabilities Monetary items USD：NTD 1% 4,571 - EUR：NTD 1% 1,337 - JPY：NTD 1% 148 - THB：NTD 1% 38 - EUR：USD 1% 996 - CHF：USD 1% 539 - SEK：THB 1% 62 - EUR：THB 1% 684 - USD：MYR 1% 8,380 - USD：VND 1% 67 - USD：SGD 1% 868 - USD：PHP 1% 178 - USD：INR 1% 2,164 - NTD：THB 1% 4 -

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December 31, 2014 Sensitivity Analysis Effect on Other Degree of Effect on Profit Comprehensive Variation or Loss Income (Foreign currency: functional currency) Financial assets Monetary items USD：NTD 1% $ 25,563 $ - EUR：NTD 1% 3,228 - JPY：NTD 1% 1,300 - THB：NTD 1% 40 - SGD：NTD 1% 379 - HKD：NTD 1% 19 - RMB : NTD 1% 27,124 - SEK : NTD 1% 37 - CHF：NTD 1% 36 - CAD：NTD 1% 1,691 - THB：USD 1% 639 - RMB：USD 1% 749 - USD：THB 1% 545 - USD：SAR 1% 594 - USD：MYR 1% 8,003 - Financial liabilities Monetary items USD：NTD 1% 3,095 - EUR：NTD 1% 107 - JPY：NTD 1% 39 - THB：NTD 1% 9 - MOP：NTD 1% 6 - CHF：NTD 1% 118 - GBP : USD 1% 92 - USD：THB 1% 898 - EUR : THB 1% 413 - USD：SAR 1% 5,375 -

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January 1, 2014 Sensitivity Analysis Effect on Other Degree of Effect on Profit Comprehensive Variation or Loss Income (Foreign currency: functional currency) Financial assets Monetary items USD：NTD 1% $ 12,337 $ - EUR：NTD 1% 4,414 - JPY：NTD 1% 1,430 - GBP：NTD 1% 32 - THB：NTD 1% 453 - MOP：NTD 1% 315 - HKD：NTD 1% 27 - SGD：NTD 1% 560 - CAD：NTD 1% 20 - RMB：NTD 1% 17,066 - SEK：NTD 1% 25 - CHF：NTD 1% 707 - EUR：USD 1% 728 - USD：VND 1% 2,720 - USD：RMB 1% 417 - USD：THB 1% 45 - USD：SAR 1% 1,353 - USD：SGD 1% 906 - USD：MYR 1% 73 - EUR：SAR 1% 22 - Financial liabilities Monetary items USD：NTD 1% 3,543 - EUR：NTD 1% 463 - JPY：NTD 1% 154 - SAR：NTD 1% 23 - THB：NTD 1% 24 - CHF：NTD 1% 16 - USD：RMB 1% 896 -

240

Price risk The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. The Group is not exposed to commodity price risk. 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. 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. As of December 31, 2015 and 2014, 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 analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. ii.The credit quality information of financial assets that are neither past due nor impaired is as follows: December 31, 2015 Group 1 Group 2 Group 3 Notes and accounts receivable $ 3,213,443 $ 768,300 $ 2,064,167

December 31, 2014 Group 1 Group 2 Group 3 Notes and accounts receivable $ 2,012,785 $ 411,270 $ 1,176,605 January 1, 2014 Group 1 Group 2 Group 3 Notes and accounts receivable $ 1,097,614 $ 648,407 $ 1,958,909

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.

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iii.Movements on the Group‘s provision for impairment of accounts receivable are as follows:

2015 2014 At January 1 $ 56,893 $ 118,607 Reversal of impairment ( 2,291) ( 108,564) Provision for impairment 799,903 46,850 At December 31 $ 854,505 $ 56,893 iv.The ageing analysis of financial assets that were past due but not impaired is as follows:

December 31, 2015 December 31, 2014 January 1, 2014 Notes and accounts receivable Up to 30 days $ 48,637 $ 6,024 $ 821,836 31 to 90 days 236,991 68,118 2,702,545 91 to 180 days 68,398 13,707 14,882 Over 181 days 831,294 2,702,847 372,340 $ 1,185,320 $ 2,790,696 $ 3,911,603 (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. Non-derivative financial liabilities: December 31, 2015 Less than 1 year More than 1 year Short-term borrowings $ 4,284,834 $ - Notes payable 21,306 - Accounts payable (including related parties) 16,050,050 - Other payables (including related parties) 2,586,401 - Long-term borrowings 314,400 2,611,950 (including current portion)

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Non-derivative financial liabilities: December 31, 2014 Less than 1 year More than 1 year Short-term borrowings $ 353,618 $ - Notes payable 19,397 - Accounts payable (including related parties) 15,643,352 - Other payables (including related parties) 2,523,644 - Bonds payable 19,224 - Long-term borrowings 314,400 2,926,350 (including current portion)

Non-derivative financial liabilities: January 1, 2014 Less than 1 year More than 1 year Short-term borrowings $ 991,965 $ - Notes payable 5,518 - Accounts payable (including related parties) 13,324,589 39,701 Other payables (including related parties) 2,688,807 - Bonds payable 33,200 - Long-term borrowings 498,282 3,296,297 (including current portion)

Derivative financial liabilities: Less than Between 3 months December 31, 2015 3 months and 1 year Interest rate swaps (net-settled) $ 1,575 $ 119 Forward exchange contracts - 7,775 Derivative financial liabilities: Less than Between 3 months December 31, 2014 3 months and 1 year Interest rate swaps (net-settled) $ 401 $ - Forward exchange contracts 295 15 Commodity swap contracts 7,756 6,440

Derivative financial liabilities: Less than Between 3 months January 1, 2014 3 months and 1 year Interest rate swaps (net-settled) $ - $ 11,151 Forward exchange contracts 3,423 673 Commodity swap contracts - 4,814

(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.

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(3)Fair value information A.Details of the fair value of the Group‘s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. B.The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active if it meets all the following conditions: the items traded in the market are homogeneous; willing buyers and sellers can normally be found at any time; and prices are available to the public. The fair value of the 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. C.The following table presents the Group‘s financial assets and liabilities that are measured at fair value as of December 31, 2015, December 31, 2014, and January 1, 2014. December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 775,272 $ - $ - $ 775,272 Derivative financial - 29,120 - 29,120 assets Available-for-sale financial assets Equity securities 438,508 - - 438,508 Bond securities - 236,408 - 236,408 Total $ 1,213,780 $ 265,528 $ - $ 1,479,308

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial $ - $ 9,469 $ - $ 9,469 liabilities

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December 31, 2014 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 1,721,603 $ - $ - $ 1,721,603 Derivative financial - 61,796 176 61,972 assets Available-for-sale financial assets Equity securities 510,663 - - 510,663 Bond securities - 169,518 - 169,518 Total $ 2,232,266 $ 231,314 $ 176 $ 2,463,756

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial $ - $ 14,907 $ - $ 14,907 liabilities January 1, 2014 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 806,006 $ - $ - $ 806,006 Derivative financial - 36,689 520 37,209 assets Available-for-sale financial assets Equity securities 604,730 - - 604,730 Total $ 1,410,736 $ 36,689 $ 520 $ 1,447,945

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial $ - $ 20,061 $ - $ 20,061 liabilities

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D.The methods and assumptions the Group used to measure fair value are as follows: (a)The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics: Listed shares Open-end fund Market quoted price Closing price Net asset value (b)Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be refer to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters). E.If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. F.Specific valuation techniques used to value financial instruments include: (a)Quoted market prices or dealer quotes for similar instruments. (b)The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value. (c)Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. 13.SUPPLEMENTARY DISCLOSURES (1) Significant transactions information A. Loans to others: Please refer to table 1. B. Provision of endorsements and guarantees to others: Please refer to table 2. C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3. D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company‘s paid-in capital: Please refer to table 4. E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None. F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None. G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5. H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 6.

246

I. Derivative financial instruments undertaken during the reporting periods: Please refer to Notes 6(2), 6(15) and 12(2). J. Significant inter-company transactions during the reporting periods: Please refer to table 7. (2) Information on investees Names, locations and other information of investee companies (not including investees in Mainland China)：Please refer to table 8. (3) Information on investments in Mainland China A. Basic information: Please refer to table 9. B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None. 14.SEGMENTAL FINANCIAL INFORMATION (1) General information A.The Company 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:

For the year ended December 31, 2015 Construction Environmental Other Engineering Resource Sales Operating Department Department Department Departments Total External revenues $ 62,985,942 $ 3,628,146 $ 155,446 $ 288,106 $ 67,057,640 Internal revenues 4,121,842 1,638,066 - 471,740 6,231,648 Segmental revenues $ 67,107,784 $ 5,266,212 $ 155,446 $ 759,846 $ 73,289,288 Segmental income $ 1,763,056 $ 894,115 $ 18,934 $ 282,179 $ 2,958,284 Depreciation and amortization $ 337,908 $ 30,744 $ 498 $ 112,101 $ 481,251

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For the year ended December 31, 2014 Construction Environmental Other Engineering Resource Sales Operating Department Department Department Departments Total

External revenues $ 53,685,122 $ 3,535,332 $ 155,664 $ 315,819 $ 57,691,937 Internal revenues 3,057,398 1,496,022 - 426,086 4,979,506 Segmental revenues $ 56,742,520 $ 5,031,354 $ 155,664 $ 741,905 $ 62,671,443 Segmental income $ 1,556,831 $ 862,831 $ 18,493 $ 239,142 $ 2,677,297 Depreciation and amortization $ 323,667 $ 31,253 $ 486 $ 123,104 $ 478,510

(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:

For the year ended For the year ended December 31, 2015 December 31, 2014 Segmental income $ 2,958,284 $ 2,677,297 Adjustment and elimination 43,628 25,034 Investment income accounted for under the equity method 5,154 31,199 Interest income 121,013 149,180 Foreign exchange gain 109,098 274,536 Interest expense ( 89,468) ( 89,005) Others 172,943 96,591 Income from continuing operations before income tax $ 3,320,652 $ 3,164,832

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(5) Financial information by product and service Detail of the revenue is as follows: For the year ended For the year ended December 31, 2015 December 31, 2014 Construction engineering service revenue $ 62,985,942 $ 53,685,122 Environmental resource service revenue 3,628,146 3,535,332 Sales revenue 155,446 155,664 Other operating revenue 288,106 315,819 Total $ 67,057,640 $ 57,691,937 (6) Financial information by geographic area The geographic area information of 2015 and 2014 is as follows: For the year ended December 31, 2015 For the year ended December 31, 2014 Revenue Non-current asset Revenue Non-current asset Areas $ 56,479,074 $ 9,219,696 $ 47,521,094 $ 10,531,777 Asia 10,549,704 2,213,584 10,156,299 1,079,253 America 28,862 163 14,544 290 Total $ 67,057,640 $ 11,433,443 $ 57,691,937 $ 11,611,320 (7) Major customers‘ information The customers accounting for more than 10% of the Company‘s operationg revenues for the years ended December 31, 2015 and 2014 are as follows: For the year ended December 31, 2015 For the year ended December 31, 2014 Customer Revenue Segment Revenue Segment Construction Construction F $ 19,864,146 Engineering $ 17,788,270 Engineering Department Department

249 CTCI Corporation and its subsidiaries Loans to others December 31, 2015 Table 1 Expressed in thousands of NTD (Except as otherwise indicated)

Maximum outstanding balance during Amount of General the year ended Balance at transactions Reason Allowance Limit on loans Ceiling on Collateral ledger Is a December 31, December 31, Nature of with the for short-term for granted to total loans No. account related 2015 2015 Actual amount Interest loan borrower financing doubtful a single party granted （Note 1） Creditor Borrower （Note 2） party （Note 3）（Note 8） drawn down rate （Note 4）（Note 5）（Note 6） accounts Item Value （Note 7）（Note 7） Footnote 0 CTCI Corp. CTCI Other Yes 315,800$ 213,818$ -$ - 2 -$ For -$ - -$ 3,403,890$ 6,807,779$ - (Thailand) receivables- operational CO., Ltd. related need parties

0 CTCI Corp. CTCI Arabia Other Yes 1,024,075 986,850 986,850 0.82%-0.881% 2 - For - - - 3,403,890 6,807,779 - Ltd. receivables- operational related need parties

0 CTCI Corp. CTCI Other Yes 1,250,000 700,000 541,000 0.88%-1% 2 - For - - - 3,403,890 6,807,779 - Machinery receivables- operational Corp. related need parties

0 CTCI Corp. E & C Other Yes 200,000 200,000 - - 2 - For - - - 3,403,890 6,807,779 - Engineering receivables- operational Corp. related need parties

0 CTCI Corp. Resources Other Yes 400,000 400,000 - - 2 - For - - - 3,403,890 6,807,779 - Engineering receivables- operational Service Inc. related need parties

0 CTCI Corp. ShangDing Other Yes 98,685 98,685 - - 2 - For - - - 3,403,890 6,807,779 - Engineering & receivables- operational Construction related need Co., Ltd. parties

1 CTCI Overseas ShangDing Other Yes 384,506 384,214 230,265 0.919%-0.983% 2 - For - - - 964,929 964,929 - Co., Ltd. Engineering & receivables- operational Construction related need Co., Ltd. parties

~250~ Maximum outstanding balance during Amount of General the year ended Balance at transactions Reason Allowance Limit on loans Ceiling on Collateral ledger Is a December 31, December 31, Nature of with the for short-term for granted to total loans No. account related 2015 2015 Actual amount Interest loan borrower financing doubtful a single party granted （Note 1） Creditor Borrower （Note 2） party （Note 3）（Note 8） drawn down rate （Note 4）（Note 5）（Note 6） accounts Item Value （Note 7）（Note 7） Footnote 1 CTCI Overseas Superiority Other Yes 63,407$ 60,086$ 60,086$ 0.929% 2 -$ For -$ - -$ 964,929$ 964,929$ - Co., Ltd. (Thailand) receivables- operational Co., Ltd related need parties

1 CTCI Overseas CIPEC Other Yes 17,852 17,838 17,838 0.936% 2 - For - - - 964,929 964,929 - Co., Ltd. Construction receivables- operational Inc. related need parties

1 CTCI Overseas CTCI Americas, Other Yes 39,474 39,474 - - 2 - For - - - 964,929 964,929 - Co., Ltd. Inc. receivables- operational related need parties

2 KD Holding Corp. G.D. Other Yes 30,000 30,000 29,000 1.60% 2 - For - - - 443,895 1,775,582 - Development receivables- operational Corporation related need parties

3 Jing Ding Shanghai XuanLi Other Yes 119,002 114,878 114,878 1.755%-2.1% 2 - For - - - 694,500 694,500 - Engineering & Trading Co., receivables- operational Construction Ltd. related need Co., Ltd. parties

~251~ 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, 2015. 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.

~252~ CTCI Corporation and its subsidiaries Provision of endorsements and guarantees to others December 31, 2015 Table 2 Expressed in thousands of NTD

(Except as otherwise indicated)

Ratio of Maximum accumulated Party being outstanding Outstanding endorsement/ Provision of Provision of Provision of endorsed/guaranteed Limit on endorsement/ endorsement/ guarantee Ceiling on endorsements/ endorsements/ endorsements/ Relationship endorsements/ guarantee guarantees Amount of amount to net total amount of guarantees by guarantees by guarantees to with the guarantees amount as of amount at endorsements/ asset value of endorsements/ parent subsidiary to the party in endorser/ provided for a December 31, December 31, Actual amount guarantees the endorser/ guarantees company to parent Mainland Number Endorser/ guarantor single party 2015 2015 drawn down secured with guarantor provided subsidiary company China （Note 1） guarantor Company name （Note 2）（Note 3）（Note 4）（Note 5）（Note 6） collateral company （Note 3）（Note 7）（Note 7）（Note 7） Footnote 0 CTCI Corp. CTCI (Thailand) 3 51,058,344$ 3,143,897$ 3,138,420$ 1,067,364$ -$ 18.44% 102,116,688$ Y N N - Co., Ltd.

0 CTCI Corp. CTCI Overseas 3 51,058,344 5,698,729 4,514,222 1,154,307 - 26.52% 102,116,688 Y N N - Co., Ltd.

0 CTCI Corp. Jing Ding 3 51,058,344 843,615 703,023 79,766 - 4.13% 102,116,688 Y N Y - Engineering & Construction Co., Ltd.

0 CTCI Corp. CINDA Engineering 3 51,058,344 2,290,673 2,231,320 503,800 - 13.11% 102,116,688 Y N N - & Construction Private Limited. 0 CTCI Corp. ShangDing 3 51,058,344 577,492 561,708 18,847 - 3.30% 102,116,688 Y N Y - Engineering & Construction Co., Ltd.

0 CTCI Corp. CTCI Arabia Ltd. 3 51,058,344 5,503,573 5,416,968 4,172,703 - 31.83% 102,116,688 Y N N -

0 CTCI Corp. CTCI Singapore Pte. 2 51,058,344 1,743,479 1,743,479 868,599 - 10.24% 102,116,688 Y N N - Ltd. 0 CTCI Corp. CTCI Machinery 2 51,058,344 371,497 371,497 292,752 - 2.18% 102,116,688 Y N N - Corp.

0 CTCI Corp. CIMAS Engineering 3 51,058,344 409,630 32,895 6 - 0.19% 102,116,688 Y N N - Co., Ltd. 0 CTCI Corp. CTCI Chemical 3 51,058,344 22,128 21,563 1,797 - 0.13% 102,116,688 Y N N - Corp.

~253~ Ratio of Maximum accumulated Party being outstanding Outstanding endorsement/ Provision of Provision of Provision of endorsed/guaranteed Limit on endorsement/ endorsement/ guarantee Ceiling on endorsements/ endorsements/ endorsements/ Relationship endorsements/ guarantee guarantees Amount of amount to net total amount of guarantees by guarantees by guarantees to with the guarantees amount as of amount at endorsements/ asset value of endorsements/ parent subsidiary to the party in endorser/ provided for a December 31, December 31, Actual amount guarantees the endorser/ guarantees company to parent Mainland Number Endorser/ guarantor single party 2015 2015 drawn down secured with guarantor provided subsidiary company China （Note 1） guarantor Company name （Note 2）（Note 3）（Note 4）（Note 5）（Note 6） collateral company （Note 3）（Note 7）（Note 7）（Note 7） Footnote 0 CTCI Corp. E&C Engineering 2 51,058,344$ 31,431$ 31,431$ -$ -$ 0.18% 102,116,688$ Y N N - Corp.

0 CTCI Corp. Universal 3 51,058,344 32,920 32,895 - - 0.19% 102,116,688 Y N N - Engineering (BVI) Corporation 0 CTCI Corp. CTCI Malaysia Sdn. 3 51,058,344 1,607,010 1,381,590 90,491 - 8.12% 102,116,688 Y N N - Bhd. 0 CTCI Corp. CCJV P1 E&C Sdn. 2 51,058,344 657,900 657,900 120,615 - 3.87% 102,116,688 Y N N - Bhd. 0 CTCI Corp. CB&I-CTCI B.V. 6 51,058,344 253,771 253,771 253,771 - 1.49% 102,116,688 N N N -

1 Advanced Century Ahead 2 516,391 19,752 19,737 - - 3.82% 1,032,782 N N N - Control & Ltd. System Inc.

2 E&C CTCI Machinery 5 2,460,642 1,230,407 1,230,407 1,230,407 - 150.01% 4,921,284 N N N - Engineering Corp. Corp.

2 E&C Shanghai XuanLi 5 2,460,642 64,168 61,944 61,944 - 7.55% 4,921,284 N N Y - Engineering Trading Co., Corp. Ltd.

2 E&C ShangDing 5 2,460,642 130,978 117,765 117,765 - 14.36% 4,921,284 N N Y - Engineering Engineering & Corp. Construction Co., Ltd.

2 E&C Resources 5 2,460,642 22,803 - - - 0.00% 4,921,284 N N N - Engineering Engineering Corp. Service Inc.

3 CTCI Machinery E&C Engineering 5 1,373,331 426,323 426,323 426,323 - 93.13% 2,746,662 N N N - Corp. Corp.

4 CTCI Chemical CTCI Corp. 4 629,211 18,817 18,817 18,817 - 8.97% 1,258,422 N Y N - Corp.

~254~ Ratio of Maximum accumulated Party being outstanding Outstanding endorsement/ Provision of Provision of Provision of endorsed/guaranteed Limit on endorsement/ endorsement/ guarantee Ceiling on endorsements/ endorsements/ endorsements/ Relationship endorsements/ guarantee guarantees Amount of amount to net total amount of guarantees by guarantees by guarantees to with the guarantees amount as of amount at endorsements/ asset value of endorsements/ parent subsidiary to the party in endorser/ provided for a December 31, December 31, Actual amount guarantees the endorser/ guarantees company to parent Mainland Number Endorser/ guarantor single party 2015 2015 drawn down secured with guarantor provided subsidiary company China （Note 1） guarantor Company name （Note 2）（Note 3）（Note 4）（Note 5）（Note 6） collateral company （Note 3）（Note 7）（Note 7）（Note 7） Footnote 4 CTCI Chemical Resources 5 629,211$ 12,766$ -$ -$ -$ 0.00% 1,258,422$ N N N - Corp. Engineering Service Inc.

4 CTCI Chemical CTCI Machinery 5 629,211 230,473 - - - 0.00% 1,258,422 N N N - Corp. Corp.

5 ShangDing Shanghai XuanLi 2 1,314,047 276,051 108,554 - - 24.78% 2,628,094 N N Y - Engineering & Trading Co., Construction Ltd. Co., Ltd.

6 KD Holding G.D. 6 8,877,908 640,017 629,076 395,612 - 14.17% 26,633,724 N N N - Corp. Development Corporation

7 Resources E&C Engineering 5 920,926 1,760 1,760 1,760 - 0.57% 1,841,852 N N N - Engineering Corp. Service Inc.

8 CTCI Overseas CTCI Americas, Inc. 3 7,236,967 50,941 50,941 50,941 - 2.12% 14,473,934 N N N - Co., Ltd. 8 CTCI Overseas CTCI Singapore Pte. 3 7,236,967 37,160 13,836 11,069 - 0.57% 14,473,934 N N N - Co., Ltd. Ltd.

~255~ 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 50% 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 reviewed or 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 reviewed or 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 reviewed or 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 reviewed or 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.

~256~ CTCI Corporation and its subsidiaries Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2015 Table 3 Expressed in thousands of NTD (Except as otherwise indicated)

(Note 1) As of December 31, 2015

CTCI Corp. Fund BlackRock Global Fund - US N/A Financial assets at fair 13,372 31,421 - 30,496 - Basic Value Fund value through profit or loss-current

CTCI Corp. Fund MIRAE ASSET ASIA N/A Financial assets at fair 67,708 31,346 - 28,999 - GREAT CONSUMER value through profit or EQUITY FUND loss-current

CTCI Corp. Fund Aberdeen Global-Japanese N/A Financial assets at fair 40,236 21,532 - 21,141 - Smaller Companies Fund A2 value through profit or Base Currency Exposure USD loss-current

CTCI Corp. Fund BlackRock Global Fund - N/A Financial assets at fair 24,876 9,204 - 9,206 - European Value Fund A2 value through profit or USD Hedged loss-current

CTCI Corp. Fund Janus Global Life Sciences A N/A Financial assets at fair 16,680 16,372 - 15,797 - USD value through profit or loss-current

CTCI Corp. Fund Fidelity America A-USD N/A Financial assets at fair 23,403 6,580 - 6,934 - value through profit or loss-current

CTCI Corp. Fund Allianz Global Investors N/A Financial assets at fair 1,000,000 10,000 - 9,614 - Target IncA TWD value through profit or loss-current

136,455 130,927$ Adjustment 5,528)( 130,927$

~257~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） CTCI Corp. Bonds GUOSEN SECURITIES N/A Available-for-sale 5,000,000 25,220$ - 24,991$ Note 5 OVERSEAS CO. LTD. financial assets-current CTCI Corp. Bonds BP Capital PLC. N/A Available-for-sale 2,000,000 10,132 - 9,716 Note 5 financial assets-current CTCI Corp. Bonds BOC Aviation PTE. LTD. N/A Available-for-sale 2,000,000 9,973 - 9,804 Note 5 financial assets-current CTCI Corp. Bonds Cayman Ton Yi Industrial N/A Available-for-sale 15,000,000 75,540 - 75,126 Note 5 financial assets-current 120,865 119,637$ Adjustment 1,228)( 119,637$ CTCI Corp. Common Stock China Steel Chemical Corp. The Company's Available-for-sale 1,776,916 100,615$ - 189,242$ - President is the financial assets-current supervisor

CTCI Corp. Common Stock Gintech Energy Corporation. The Company's Available-for-sale 1,827,629 82,206 - 58,575 - President is financial assets-current the director

CTCI Corp. Common Stock CHIYODA The subsidiary is the Available-for-sale 38,000 12,607 - 9,579 - Board of director financial assets-current

195,428 257,396$ Adjustment 61,968 257,396$ CTCI Corp. Common Stock Core Pacific City Co., Ltd. N/A Financial assets 36,000,000 360,000$ 2.26 190,000$ - measured at cost - non-current CTCI Corp. Common Stock Utech Solar Corp. The Company is the Financial assets 31,920,000 409,200 14.51 96,980 - Board of director measured at cost - non-current CTCI Corp. Common Stock CDIB & Partners The Company is the Financial assets 27,000,000 250,000 2.48 250,000 - Investment Holding Board of director measured at cost Corp. - non-current

CTCI Corp. Common Stock Metro-consultant Co., The Company is the Financial assets 300,000 3,000 6.00 3,000 - Ltd. Board of director measured at cost - non-current CTCI Corp. Common Stock Heng Keng Corp. N/A Financial assets 20,000 3,000 5.12 - - measured at cost - non-current Less: Accumulated 485,220)( 539,980$ impairment 539,980$

~258~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） Sino Environmental Fund Mega Diamond Money N/A Financial assets at fair 407,439 5,043$ - 5,043$ - Services Corp. Market Fund value through profit or loss-current

Sino Environmental Fund Jih Sun Money Market Fund N/A Financial assets at fair 7,047,945 103,052 - 103,052 - Services Corp. value through profit or loss-current

Sino Environmental Fund Capital Money Market Fund N/A Financial assets at fair 1,255,209 20,000 - 20,000 - Services Corp. value through profit or loss-current

Sino Environmental Common Stock CTCI Corp. The Company Available-for-sale 1,028 37 - 37 - Services Corp. financial assets-current

Sino Environmental Common Stock Taiwan Cement Corp. The president is Available-for-sale 438,156 11,962 - 11,962 - Services Corp. the Company's financial assets-current director

Sino Environmental Common Stock Gintech Energy Corporation. The Company's Available-for-sale 575,000 18,428 - 18,428 - Services Corp. President is financial assets-current the director

Sino Environmental Bonds BP Capital PLC N/A Available-for-sale 6,000,000 29,147 - 29,147 Note 5 Services Corp. financial assets-current

Sino Environmental Bonds BOC Aviation PTE LTD N/A Available-for-sale 6,000,000 29,414 - 29,414 Note 5 Services Corp. financial assets-current

Advanced Control & Fund FSITC Taiwan Money Market N/A Financial assets at fair 2,650,762 40,019 - 40,019 - System Inc. value through profit or loss-current

Advanced Control & Fund Capital Money Market Fund N/A Financial assets at fair 1,192,755 19,005 - 19,005 - System Inc. value through profit or loss-current

Advanced Control & Fund Allianz Global Investors N/A Financial assets at fair 3,243,957 40,127 - 40,127 - System Inc. Taiwan Money Market Fund value through profit or loss-current

Advanced Control & Common Stock Taiwan Cement Corp. The president is Available-for-sale 825,980 22,549 - 22,549 - System Inc. the Company's financial assets-current director

~259~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） Advanced Control & Common Stock Gintech Energy Corporation. The Company's Available-for-sale 737,000 23,621$ - 23,621$ - System Inc. President is financial assets-current the director

Advanced Control & Bonds BANK OF CHINA LTD N/A Available-for-sale 6,000,000 28,864 - 28,864 Note 5 System Inc. PARIS financial assets-current

Advanced Control & Bonds SINOCHEM OFFSHORE N/A Available-for-sale 6,000,000 29,346 - 29,346 Note 5 System Inc. CAPITA financial assets-current

E&C Engineering Corp. Fund Capital Money Market Fund N/A Financial assets at fair 9,413,950 150,000 - 150,000 - value through profit or loss-current

Innovest Investment Corp. Common Stock Gintech Energy Corporation. The Company's Available-for-sale 277,000 8,878 - 8,878 - President is financial assets-current the director

Innovest Investment Corp. Common Stock CTCI Corp. The Company Available-for-sale 344,436 12,348 0.05 12,348 - financial assets-non-current

Innovest Investment Corp. Common Stock Global Strategic Investment N/A Financial assets 283,500 962 0.65 962 - Inc. measured at cost - non-current GRQ Investment Corp. Common Stock CTCI Corp. The Company Available-for-sale 912,170 32,701 0.12 32,701 - financial assets-non-current

GRQ Investment Corp. Common Stock Advanced Control & Subsidiary Available-for-sale 324,417 13,301 1.42 13,301 - System Inc. financial assets-non-current

GRQ Investment Corp. Common Stock Gintech Energy Corporation. The Company's Available-for-sale 759,000 24,326 - 24,326 - President is financial assets-current the director

GRQ Investment Corp. Fund JPMorgan Investment Funds - N/A Financial assets at fair 2,800 14,574 - 14,574 - Global Income Fund value through profit or loss-current

GRQ Investment Corp. Fund Schroder ISF Global Dividend N/A Financial assets at fair 46,374 14,461 - 14,461 - value through profit or loss-current

~260~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） GRQ Investment Corp. Fund Fidelity Funds - Global N/A Financial assets at fair 18,265 6,531$ - 6,531$ - Financial Services Fund value through profit or loss-current

GRQ Investment Corp. Fund Invesco Global Leisure Fund N/A Financial assets at fair 5,419 6,531 - 6,531 - value through profit or loss-current

GRQ Investment Corp. Fund BlackRock Global Fund - N/A Financial assets at fair 5,500 6,385 - 6,385 - World Healthscience Fund value through profit or loss-current

GRQ Investment Corp. Fund Taishin 1699 Money Market N/A Financial assets at fair 374,378 5,000 - 5,000 - value through profit or loss-current

HD Resources Fund Mega Diamond Money Market N/A Financial assets at fair 1,705,065 21,103 - 21,103 - Management Fund value through profit or Corp. loss-current

HD Resources Fund Jih Sun Money Market Fund N/A Financial assets at fair 685,443 10,022 - 10,022 - Management value through profit or Corp. loss-current

HD Resources Fund Capital Money Market Fund N/A Financial assets at fair 1,066,928 17,000 - 17,000 - Management value through profit or Corp. loss-current

HD Resources Common Stock Taiwan Cement Corp. The president is Available-for-sale 435,310 11,884 - 11,884 - Management the Company's financial assets-current Corp. director

Resources Engineering Common Stock Gintech Energy Corporation. The Company's Available-for-sale 872,000 27,948 - 27,948 - Service Inc. president is the financial assets-current director

Resources Engineering Common Stock Global Strategic Investment N/A Financial assets measured at 567,000 1,924 1.29 1,924 - Service Inc. Inc. cost - non-current

~261~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） Leading Energy Corp. Fund Mega Diamond Money N/A Financial assets at fair 1,431,550 17,718$ - 17,718$ - Market Fund value through profit or loss-current

Leading Energy Corp. Fund Prudential Financial Money N/A Financial assets at fair 3,013,752 47,043 - 47,043 - Market value through profit or loss-current

Leading Energy Corp. Common Stock Taiwan Cement Corp. The president is Available-for-sale financial 432,280 11,801 - 11,801 - the Company's assets-current director

KD Holding Corp. Fund Capital Money Market Fund N/A Financial assets at fair 343,472 5,473 - 5,473 - value through profit or loss-current

KD Holding Corp. Fund Nomura Taiwan Money N/A Financial assets at fair 440,732 7,102 - 7,102 - Market value through profit or loss-current

KD Holding Corp. Fund CTBC Hwa-win Money N/A Financial assets at fair 3,640,476 39,615 - 39,615 - Market Fund value through profit or loss-current

KD Holding Corp. Common Stock Taiwan Cement Corp. The president is Available-for-sale 179,780 4,908 - 4,908 - the Company's financial assets-current director

KD Holding Corp. Common Stock Gintech Energy Corporation. The Company's Available-for-sale 462,000 14,807 - 14,807 - president is the financial assets-current director

KD Holding Corp. Common Stock TSC Venture Management. N/A Financial assets 270,000 - 5.88 - - Inc. measured at cost - non-current KD Holding Corp. Common Stock TeamWIN Opto-Electronics N/A Financial assets 150,000 475 2.46 475 - Co., Ltd. measured at cost - non-current Fortune Energy Corp. Fund FSITC Taiwan Money Market N/A Financial assets at fair 232,614 3,512 - 3,512 - value through profit or loss-current

~262~ (Note 1) As of December 31, 2015

Relationship with the Type of marketable securities issuer General Number of shares/ Book value Footnote Securities held by securities Name of Investee company (Note 2) ledger account denominations (Note 3) Ownership (%) Market value （Note 4） Fortune Energy Corp. Fund Prudential Financial Money - Financial assets at fair 1,089,848 17,012$ - 17,012$ - Market value through profit or loss-current

Fortune Energy Corp. Fund Taishin 1699 Money Market - Financial assets at fair 524,440 7,005 - 7,005 - value through profit or loss-current

CTCI Chemical Fund FSITC Taiwan Money Market - Financial assets at fair 530,353 8,007 - 8,007 - Corp. value through profit or loss-current

CTCI Chemical Fund Allianz Global Investors - Financial assets at fair 646,904 8,002 - 8,002 - Corp. Taiwan Money Market Fund value through profit or loss-current

CTCI Chemical Fund CTBC Hwa-win Money - Financial assets at fair 459,626 5,003 - 5,003 - Corp. Market Fund value through profit or loss-current

CTCI (Thailand) Co., Ltd. Common Stock CHIYODA (Thailand) Co. - Financial assets 3,600 329 9.00 329 - Ltd. measured at cost - non-current

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. 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.

~263~ 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, 2015 Table 4 Expressed in thousands of NTD (Except as otherwise indicated)

Relationship Balance as at December 31, Marketable with Balance as at January 1, 2015 Addition（Note 3） Disposal（Note 3） Current changes 2015 securities General Counterparty the investor Proceeds Investor （Note 1） ledger account （Note 2）（Note 2） Shares Amounts Shares Amounts Shares Amounts Book value on disposal Amount Shares Amounts CTCI Corp. Jih Sun Money Financial assets at fair - N/A - $ - 81,698,302 $ 1,190,000 81,698,302 $ 1,190,477 $ 1,190,000 $ 477 $ - - $ - Market Fund value through profit or loss-current

CTCI Corp. Paradigm Pion Financial assets at fair - N/A - - 87,502,570 995,000 87,502,570 995,368 995,000 368 - - - Money Market value through profit or Fund loss-current

CTCI Corp. Allianz Global Financial assets at fair - N/A 53,455,504 657,406 93,347,970 1,150,000 146,803,474 1,808,227 1,807,406 821 - - - Investors value through profit or Taiwan loss-current Money Market CTCI Corp. Franklin Financial assets at fair - N/A 42,632,155 432,091 78,772,958 800,000 121,405,113 1,233,004 1,232,091 913 - - - Templeton value through profit or Sinoam Money loss-current Market Fund CTCI Corp. Capital Money Financial assets at fair - N/A - - 37,806,792 600,000 37,806,792 600,118 600,000 118 - - - Market Fund value through profit or loss-current

KD Holding CTBC Hwa-win Financial assets at fair - N/A - - 38,389,048 416,900 34,748,572 377,481 377,300 181 - 3,640,476 39,600 Corp. Money Market value through profit or Fund loss-current

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.

~264~ 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, 2015 Table 5 Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transaction terms compared to third party Transaction transaction（Note 1） Notes/accounts receivable (payable) Relationship Percentage of with the Purchases Percentage of total total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount purchases (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote CTCI Corp. CTCI Overseas Co., Ltd. Subsidiary Purchases 850,921$ 2.17% Standards Negotiated by No significant 319,871)($ ( 3.12%) - selling price both parties difference and collection terms CTCI Corp. Advanced Control Subsidiary Purchases 788,023 2.01% Standards Negotiated by No significant 378,421)( ( 3.69%) - & System Inc. selling price both parties difference and collection terms CTCI Corp. CTCI Machinery Corp. Subsidiary Purchases 773,507 1.97% Standards Negotiated by No significant 370,237)( ( 3.61%) - selling price both parties difference and collection terms CTCI Corp. Sino Environmental Subsidiary Purchases 431,272 1.10% Standards Negotiated by No significant 145,670)( ( 1.42%) - Services Corp. selling price both parties difference and collection terms HD Resources Sino Environmental Subsidiary Purchases 413,198 1.05% Standards Negotiated by No significant 84,369)( ( 0.82%) - Management Corp. Services Corp. selling price both parties difference and collection terms HD Resources LeadingEnergyCorp. Subsidiary Purchases 287,941 0.73% Standards Negotiated by No significant 49,997)( ( 0.49%) - Management Corp. selling price both parties difference and collection terms Leading Energy Corp. Sino Environmental Subsidiary Purchases 226,302 0.58% Standards Negotiated by No significant 58,531)( ( 0.57%) - Services Corp. selling price both parties difference and collection terms Fortune Energy Corp. Sino Environmental Subsidiary Purchases 157,987 0.40% Standards Negotiated by No significant 28,713)( ( 0.28%) - Services Corp. selling price both parties difference and collection terms

~265~ Differences in transaction terms compared to third party Transaction transaction（Note 1） Notes/accounts receivable (payable) Relationship Percentage of with the Purchases Percentage of total total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount purchases (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote Sino Environmental CTCI Chemical Subsidiary Purchases 114,460$ 0.29% Standards Negotiated by No significant 22,512)($ ( 0.22%) Services Corp. Corp. selling price both parties difference and collection terms CTCI Overseas Co., Ltd. CTCI Corp. The Company (Sales) 850,921)( ( 2.02%) Standards Negotiated by No significant 319,871 8.58% - selling price both parties difference and collection terms Advanced Control CTCI Corp. The Company (Sales) 788,023)( ( 1.87%) Standards Negotiated by No significant 378,421 10.15% - & System Inc. selling price both parties difference and collection terms CTCI Machinery Corp. CTCI Corp. The Company (Sales) 773,507)( ( 1.84%) Standards Negotiated by No significant 370,237 9.93% - selling price both parties difference and collection terms Sino Environmental CTCI Corp. The Company (Sales) 431,272)( ( 1.03%) Standards Negotiated by No significant 145,670 3.91% - Services Corp. selling price both parties difference and collection terms LeadingEnergyCorp. HDResources Subsidiary (Sales) 287,941)( ( 0.68%) Standards Negotiated by No significant 49,997 1.34% - Management Corp. selling price both parties difference and collection terms Sino Environmental HD Resources Subsidiary (Sales) 413,198)( ( 0.98%) Standards Negotiated by No significant 84,369 2.26% - Services Corp. Management Corp. selling price both parties difference and collection terms Sino Environmental Leading Energy Corp. Subsidiary (Sales) 226,302)( ( 0.54%) Standards Negotiated by No significant 58,531 1.57% - Services Corp. selling price both parties difference and collection terms Sino Environmental Fortune Energy Corp. Subsidiary (Sales) 157,987)( ( 0.38%) Standards Negotiated by No significant 28,713 0.77% - Services Corp. selling price both parties difference and collection terms CTCI Chemical Sino Environmental Subsidiary (Sales) 114,460)( ( 0.27%) Standards Negotiated by No significant 22,512 0.60% Corp. Services Corp. selling price both parties difference and collection terms

~266~ 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, 2015 Table 6 Expressed in thousands of NTD (Except as otherwise indicated)

Amount collected Relationship Balance as at December 31, Overdue receivables subsequent to the Allowance for Creditor Counterparty with the counterparty 2015（Note 1） Turnover rate Amount Action taken balance sheet date doubtful accounts CTCI Corp. CTCI Arabia Ltd. Subsidiary 988,619$ Note 1 -$ - -$ -$ CTCI Corp. CTCI Machinery Corp. Subsidiary 541,396 Note 1 - - - - Sino Environmental Services Corp. CTCI Corp. The Company 145,670 3.53 14,598 Active Collection 34,477 - Advanced Control & System Inc. CTCI Corp. The Company 378,421 2.27 - - 2,578 - CTCI Machinery Corp. CTCI Corp. The Company 370,237 2.52 - - - - CTCI Overseas Co., Ltd. Shang Ding Engineering & Subsidiary 230,631 Note 1 - - - - Construction Co., Ltd. CTCI Overseas Co., Ltd. CTCI Corp. The Company 319,871 3.67 - - - - Jing Ding Engineering & Shanghai XuanLi Trading Subsidiary 114,878 Note 1 - - - - Construction Co., Ltd. Co., Ltd.

Note 1：Other accounts receivable arise from lending capital.

~267~ CTCI Corporation and its subsidiaries Significant inter-company transactions during the reporting years For the year ended December 31, 2015 Table 7 Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

2 CTCIMachineryCorp. 〃 2 〃 773,507 〃 1.84% 3 CTCI Overseas Co., Ltd. 〃 2 〃 850,921 〃 2.02% 4 Sino Environmental Services Corp. HD Resources Management 3 〃 413,198 〃 0.98% Corp. 4 〃 Leading Energy Corp. 3 〃 226,302 〃 0.54% 4 〃 Fortune Energy Corp. 3 〃 157,987 〃 0.38% 5 Leading Energy Corp. HD Resources Management 3 〃 287,941 〃 0.68% Corp. 4 Sino Environmental Services Corp. CTCI Corp. 2 〃 431,272 〃 1.03% 1 Advanced Control & System Inc. 〃 2 Accounts 378,421 〃 0.92% receivable 2 CTCIMachineryCorp. 〃 2 〃 370,237 〃 0.90% 4 Sino Environmental Services Corp. 〃 2 〃 145,670 〃 0.35% 3 CTCI Overseas Co., Ltd. 〃 2 〃 319,871 〃 0.78% 0 CTCICorp. CTCIArabiaLtd. 1 Other 988,619 〃 2.40% receivables 0 〃 CTCIMachineryCorp. 1 〃 541,396 〃 1.32% 3 CTCI Overseas Co., Ltd. Shang Ding Engineering 3 〃 230,631 〃 0.56% & Construction Co., Ltd. 6 JingDingEngineering& Shanghai XuanLi Trading 3 〃 114,878 〃 0.28% Construction Co., Ltd. Co., Ltd.

0 CTCI Corp. CTCI Overseas (BVI) Corp. 1 Progress billings 3,309,692 〃 8.05% and its subsidiaries. 2 CTCIMachineryCorp. CTCICorp. 2 〃 2,803,170 〃 6.82% 7 Resources Engineering Service Inc. 〃 2 〃 358,170 〃 0.87% 0 CTCICorp. CTCIMachineryCorp. 1 〃 109,894 〃 0.27% 0 〃 GRQ Investment Corp. 1 Refundable 128,300 〃 0.31% deposits

~268~ Transaction

Number Relationship Percentage of consolidated total operating (Note 1) Company name Counterparty (Note 2) General ledger account Amount Transaction terms revenues or total assets (Note 3) 0 CTCICorp. CTCI(Thailand)Co.,Ltd. 1 Guarantee 3,138,420$ Notapplicable Notapplicable 0 〃 CCJV P1 E&C SDN. BHD. 1 〃 657,900 〃〃 0 〃 CTCI Overseas Co., Ltd. 1 〃 4,514,222 〃〃 0 〃 Jind Ding Engineering & 1 〃 703,023 〃〃 Construction Co., Ltd. 0 〃 CINDA Engineering & 1 〃 2,231,320 〃〃 Construction Private Limited 0 〃 Shang Ding Engineering 1 〃 561,708 〃〃 & Construction Co., Ltd. 0 〃 CTCIArabiaLtd. 1 〃 5,416,968 〃〃 0 〃 CTCI Singapore Pte. Ltd. 1 〃 1,743,479 〃〃 0 〃 CTCIMachineryCorp. 1 〃 371,497 〃〃 0 〃 CTCIMalaysiaSdn.Bhd. 1 〃 1,381,590 〃〃 0 〃 CB&I-CTCI B.V. 1 〃 253,771 〃〃 2 CTCIMachineryCorp. E&C Engineering Corp. 3 〃 426,323 〃〃 8 ShangDingEngineering Shanghai XuanLi Trading 3 〃 108,554 〃〃 & Construction Co., Ltd. Co., Ltd.

9 E&C Engineering Corp. Shang Ding Engineering 3 〃 117,765 〃〃 & Construction Co., Ltd. 9 〃 CTCIMachineryCorp. 3 〃 1,230,407 〃〃 10 KD Holding Corp. G.D. Development Company 3 〃 629,076 〃〃

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.

~269~ CTCI Corporation and its subsidiaries Information on investees (not including investees in Mainland China) For the year ended December 31, 2015 Table 8 Expressed in thousands of NTD (Except as otherwise indicated)

Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote CTCI Corp. E&C Taiwan Design, management, $ 456,251 $ 456,251 59,098,624 97.09 $ 797,452 $ 135,937 $ 131,978 A subsidiary Engineering and building of nuclear Corp. power, thermal power, fire pumped storage power generation and others related to engineering. CTCI Corp. Resources Taiwan Mining of geology, sea oil 15,957 15,957 16,765,048 93.14 285,891 627 584 A subsidiary Engineering and gas, marbal and Service Inc. rare；planning, design, monitor of civil, traffic environment and various mechanical and electrical equipment. CTCI Corp. Advanced Taiwan Systems planning, design, 44,409 44,409 11,444,842 48.76 251,792 79,749 38,891 A subsidiary Control & integration, and System Inc. engineering for various IT systems etc. CTCI Corp. GRQ Investment Taiwan General investment. 1,690,000 1,690,000 169,000,000 100.00 2,486,323 110,579 110,076 A subsidiary Corp. CTCI Corp. Innovest Taiwan General investment. 1,140,000 1,100,000 114,000,000 100.00 1,060,390 ( 55,825) ( 71,498) A subsidiary Investment Corp. CTCI Corp. KD Holding Corp. Taiwan General investment. 938,889 938,889 38,457,105 58.46 2,595,013 710,370 416,278 A subsidiary CTCI Corp. CTCI (Thailand) Thailand Design and building of 116,894 116,894 1,249,500 49.00 122,884 16,965 8,313 A subsidiary Co., Ltd. petrochemical plant. CTCI Corp. CTCI Machinery Taiwan Secondary processing 293,800 293,800 20,000,000 100.00 438,862 69,347 68,203 A subsidiary Corp. of steel, piping, heat treatment, manufacture of pollution control equipment and non- destructive testing etc.

~270~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote CTCI Corp. CTCI Arabia Ltd. Arabia Construction and $ 23,312 $ 23,312 500 50.00 ($ 679,584) $ 71,562 $ 35,781 A subsidiary maintenance of refinery, storage tanks and chemical plant. CTCI Corp. Sinogal-Waste Macao Management of waste 4,958 4,958 - 30.00 34,550 86,392 25,918 A subsidiary Services Corp. recycling site and maintenance of related mechanical and equipment etc. CTCI Corp. CTCI Singapore Pte. Singapore Investment and planning 152,254 152,254 5,100,000 100.00 ( 87,179) ( 253,000) ( 253,000) A subsidiary Ltd. of related engineering. CTCI Corp. CTCI and Partners Arabia Construction and 15,755 15,755 - 40.00 11,664 ( 5,501) ( 2,200) A subsidiary Company Limited maintenance of refinery, storage tanks and chemical plant. CTCI Corp. CTCI Overseas BVI Investment and planning 308,554 308,554 6,740,000 100.00 2,525,557 306,893 306,893 A subsidiary (BVI) Corp. of related engineering. CTCI Corp. CTCI Engineering Malaysia Wholesale and retail of 4,118 4,118 450,000 60.00 48,266 62,782 37,669 A subsidiary & Construction information software; Sdn. Bhd. computer equipment installation and information processing etc. CTCI Corp. CTCI Americas, Inc. USA Business development, and 3,217 3,217 100,000 100.00 7,597 208 208 A subsidiary related engineering and planning of construction projects.

CTCI Corp. CCJV P1 Malaysia Construction planning. 2,259 1,899 247,500 99.00 199,105 176,894 141,515 A subsidiary Engineering & Construction Sdn. Bhd.

~271~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote CTCI Corp. Pan Asia Corp. Taiwan Input of foreign labor $ 71,543 $ 71,543 39,219,509 34.27 $ 558,796 $ 120,783 $ 41,393 An investee under and technologies, equity method technical cooperation with foreign construction business, and construction of engineering construction etc. $ 10,657,379 $ 1,037,002 GRQ CTCI Chemical Taiwan Manufacture wholesale, 13,522 13,522 480,661 6.77 $ 14,199 72,451 $ 4,905 A subsidiary Investment Corp. and retail of industrial Corp. chemicals. GRQ KD Holding Corp. Taiwan General investment. 11,270 11,270 243,918 0.37 16,439 710,370 2,448 A subsidiary Investment Corp. GRQ Resources Taiwan Mining of geology, sea oil 23 23 1,000 0.01 17 627 ( 13) A subsidiary Investment Engineering and gas, marbal and rare, Corp. Service Inc. planning, design, monitor of civil, traffic environment and various mechanical and electrical Innovest CTCI Chemical Corp. Taiwan Manufacture,equipment. wholesale, 32,153 32,153 1,657,207 23.34 48,955 72,451 16,913 A subsidiary Investment and retail of industrial Corp. chemicals. Innovest KD Holding Corp. Taiwan General investment. 1,374 1,374 32,132 0.05 2,166 710,370 325 A subsidiary Investment Corp. Innovest E&C Taiwan Design, management, 11 11 1,000 0.002 13 135,937 4 A subsidiary Investment Engineering Corp. and building of nuclear Corp. power,thermal power, fire pumped storage power generation and others related to engineering. Innovest Powertec Energy Taiwan Basically chemical 926,700 926,700 308,900,005 18.18 792,196 ( 581,489) ( 105,728) An investee under Investment Corp. industry equity method Corp. power generation, rotation electric, machinery manufacturing of electric power and services of

~272~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote Innovest MIE INDUSTRIAL Malaysia Equipment & Instrument, $ 139,885 $ - 9,450,000 21.00 $ 150,277 $ 138,374 $ 18,974 An investee under Investment SDN. BHD. Procurement & equity method Corp. Contruction & Panel CTCI Machinery Boretech Cayman Share holding and 154,744 154,744 6,666,667 10.00 151,501 ( 23,834) ( 858) An investee under Corp. Resource Island investment. equity method Recovery Engineering Co., Ltd. (Cayman) KD Holding HD Resources Taiwan International trade and 20,000 20,000 2,000,000 100.00 74,389 26,338 26,338 A subsidiary Corp. Management environmental service of Corp. waste disposal, equipment installation and mechanical installation etc. KD Holding Leading Energy Taiwan Environmental service of 797,485 993,485 66,640,000 98.00 1,504,251 251,011 245,991 A subsidiary Corp. Corp. waste disposal device installation, steam power cogeneration etc. KD Holding Sino Taiwan Management of waste 339,921 339,921 14,065,936 93.15 780,216 338,612 315,423 A subsidiary Corp. Environmental recycling site and Services Corp. maintenance of related mechanical and equipment etc. KD Holding Fortune Energy Taiwan Environmental service of 1,012,483 1,012,483 56,249,000 74.999 1,004,303 178,088 133,564 A subsidiary Corp. Corp. waste disposal device installation, steam power cogeneration etc. KD Holding G.D. Development Taiwan Energy technology service 189,991 95,491 18,999,000 49.997 214,032 23,401 11,699 An investee which Corp. Company and related components has a 50% interest manufacturing. in a joint venture KD Holding Yuan Ding Taiwan Waste service, waste clear 27,000 27,000 2,700,000 60.00 23,399 1,029 617 A subsidiary Corp. Resources other environmental Management Corp. service, and environmental pollution service etc.

~273~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote KD Holding Boretech Cayman Share holding and $ 309,489 $ 309,489 13,333,333 20.00 $ 341,371 ($ 23,834) ($ 1,715) An investee under Corp. Resource Island investment. equity method Recovery Engineering Co., Ltd. (Cayman) Sino Leading Energy Taiwan Environmental service of 13,600 17,600 1,360,000 2.00 30,699 251,011 5,020 A subsidiary Environmental Corp. waste disposal device Services Corp. installation, steam power cogeneration etc. Sino CTCI Chemical Taiwan Manufacture, wholesale, 24,581 24,581 1,910,241 26.90 56,430 72,451 19,493 A subsidiary Environmental Corp. and retail of industrial Services Corp. chemicals.

Sino Sinogal-Waste Macao Management of waste 4,964 4,964 - 30.00 34,550 86,392 25,918 A subsidiary Environmental Services Corp. recycling site and Services Corp. maintenance of related mechanical and equipment etc. Sino Fortune Energy Taiwan Environmental service of 13 13 1,000 0.001 18 178,088 2 A subsidiary Environmental Corp. waste disposal device Services Corp. installation, steam power cogeneration etc. Sino G.D. Development Taiwan Energy technology service 8 8 1,000 0.01 11 23,401 1 An investee which Environmental Company and related components has a 50% interest Services Corp. manufacturing. in a joint venture

HD Resources Sino Taiwan Management of waste 53 53 1,000 0.01 56 338,612 ( 6) A subsidiary Management Environmental recycling site and Corp. Services Corp. maintenance of related mechanical and equipment etc. HD Resources Yuan Ding Resources Taiwan Waste service, waste clear 18,000 18,000 1,800,000 40.00 15,599 1,029 412 A subsidiary Management Management other environmental Corp. Corp. service, and environmental pollution service etc.

~274~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote CTCI Chemical Chung Ding Samoa Manufacture participation $ 314 $ 45,084 10,000 100.00 $ 322 $ 26,107 $ 26,107 A subsidiary Corp. Chemical Corp. and sale of chemicals etc. CTCI Overseas CTCI Overseas Hong Investment and planning 276,815 276,815 6,740,000 100.00 2,412,322 307,287 307,287 A subsidiary (BVI) Corp. Co., Ltd. Kong of related engineering.

CTCI Overseas CTCI Arabia Ltd. Arabia Construction and 22,610 22,610 500 50.00 ( 679,609) 71,562 35,781 A subsidiary Co., Ltd. maintenance of refinery, storage tanks and chemical plant. CTCI Overseas Universal Engineering BVI Investment and planning 1,694 1,694 50,000 100.00 112,403 ( 20,215) ( 20,215) A subsidiary Co., Ltd. (BVI) Corp. of related engineering.

CTCI Overseas CIPEC Philippines Construction and 663 663 10,000 40.00 ( 897) ( 2,497) ( 999) A subsidiary Co., Ltd. Construction Inc. maintenance of refinery, storage tanks and chemical plant. CTCI Overseas CIMAS Vietnam Chemical, petrochemical, 26,330 26,330 - 50.00 62,807 11,547 5,774 A subsidiary Co., Ltd. Engineering Corp. feasibility study & planning, engineering design, procurement & fabrication, erection, construction & commissioning. CTCI Overseas CTCI Engineering & Malaysia Investment and building of 2,879 2,879 300,000 40.00 32,174 62,782 25,113 A subsidiary Co., Ltd. Construction Sdn. related engineering. Bhd. CTCI Overseas CTCI and Partners Arabia Construction and 25,585 25,585 3,000,000 60.00 17,497 ( 5,501) ( 3,301) A subsidiary Co., Ltd. Company Limited maintenance of refinery, storage tanks and chemical plant. CTCI Overseas CINDA India Chemical, petrochemical, 31,022 31,022 8,000,000 100.00 202,896 90 90 A subsidiary Co., Ltd. Engineering & feasibility atudy & Construction planning, engineering Private Limited design, procurement & fabrication, erection, construction & commissioning. Universal Superiority Thailand Investment and building of 151 151 2,156 49.00 (7,381) 7,889 7,889 A subsidiary Engineering (Thailand) Co., Ltd. related engineering. (BVI) Corp.

~275~ Net profit (loss) Investment income(loss) Initial investment amount Shares held as at December 31, 2015 of the investee for the year recognised by the Company for Investee Balance as at Balance as at ended December 31, 2015 the year ended December 31, Investor (Notes 1 and 2) Location Main business activities December 31, 2015 December 31, 2014 Number of shares Ownership (%) Book value (Note 2(2)) 2015（Note 2(3)） Footnote Superiority CTCI Thailand Thailand Design and planting of $ 12,628 $ 12,628 1,300,500 51.00 $ 52,552 $ 16,965 $ 8,652 A subsidiary (Thailand) Co., Co., Ltd. petrochemical plant. Ltd. Advanced Century Ahead Ltd. Samoa Professional investment 25,097 25,097 750,000 100.00 29,551 6,166 6,166 A subsidiary Control & company. System Inc. E&C CTCI Chemical Taiwan Manufacture, wholesale, 7,354 7,354 656,360 9.24 18,423 72,451 6,695 A subsidiary Engineering Corp. and retail of industrial Corp. chemicals. Shang Ding Shanghai XuanLi China General trade. 23,748 23,748 - 100.00 33,238 4,836 4,836 A subsidiary Engineering & Trading Corp. Construction Co., Ltd. Resources CTCI Chemical Taiwan Manufacture, wholesale, 7,354 7,354 656,360 9.24 18,650 72,451 6,695 A subsidiary Engineering Corp. and retail of industrial Service Inc. chemicals.

CTCI Singapore TECA Engineering Singapore Design and planning of 5,968 5,968 250,000 25.00 1,841 ( 2,798) ( 699) An investee under Pte. Ltd. Pte. Ltd. engineeing projects. equity method

CTCI Engineering CTCI Malaysia SDN. Malaysia Investment and building of 1,357 1,357 150,000 20.00 14,067 48,638 13,739 A subsidiary & Construction BHD. related engineering. SDN. BHD. CTCI Malaysia MIE INDUSTRIAL Malaysia Equipment & Instrument, 185,537 - 12,600,000 28.00 220,372 138,374 46,279 An investee under SDN. BHD. SDN. BHD. Procurement & equity method Construction, Panel 結束列資料

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, 2015’ 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, 2015’ column should fill in amount of net profit (loss) of the investee for this period. (3)The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2015’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

~276~ CTCI Corporation and its subsidiaries Information on investments in Mainland China For the year ended December 31, 2015 Table 9 Expressed in thousands of NTD (Except as otherwise indicated)

Amount remitted from Taiwan to Accumulated Accumulated Mainland China/ Accumulated amount amount of Amount remitted back amount Ownership Investment income of investment remittance from to Taiwan for the year ended of remittance held by (loss) recognised Book value of income Taiwan to December 31, 2015 from Taiwan to Net income of the by the Company investments in remitted back to Mainland China Mainland China investee as of Company for the year ended Mainland China Taiwan as of Investee in Investment method as of January 1, Remitted to Remitted back as of December December 31, (direct or December 31, 2015 as of December December 31, Mainland China Main business activities Paid-in capital （Note 1） 2015 Mainland China to Taiwan 31, 2015 2015 indirect) （Note 2(2)B） 31, 2015 2015 Footnote Jing Ding Design, survey, construction $ 342,115 2 $ 313,998$ -$ -$ 313,998$ 113,572 100.00 $ 113,572$ 1,735,818$ 3,302 Note3 Engineering & and inspection of various Construction Co., engineering and construction Ltd. projects, plants, machinery and equipment, and environmental protection projects.

Shang Ding Design, survey, construction and 592,787 2 534,974 - - 534,974 3,212 99.44 3,194 475,141 23,530 " Engineering & inspection of various engineering Construction Co., and construction projects. Ltd. Zhuhai Chung Trading of chemical materials. 46,218 2 46,218 - (43,849) - - - - - 47,941 Note 5、6 Ding Chemical Corp. Advanced Control Computertechnologyservices. 24,675 2 24,675 - - 24,675 6,172 48.76 3,009 28,171 - Note4 & Information Technologies Ltd. GranSino Consultation and development of 22,193 1 10,874 - - 10,874 (8,553) 26.88 (2,299) 6,016 3,377 - Environmental sanitation technology, maintenance Technology Co., of environmental pollution disposal Ltd. equipment, management of construction, and retail business, etc. Xiang Ding Technical development, advisory 4,147 1 4,147 - - 4,147 2,155 54.85 1,182 8,078 - - Environment and service in environmental field; Consultant environmental pollution control (Shanghai) Co., equipment and related parts Ltd. wholesale, import and export, etc.

~277~ Investment amount approved by the Investment Ceiling on investments in Accumulated amount of remittance Commission of the Ministry Mainland China imposed from Taiwan to Mainland China of Economic Affairs by the Investment Company name as of December 31, 2015 (MOEA) (Note 6) Commission of MOEA CTCICorp. $ 888,668$ 953,715$ 10,211,669

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, 2015’ column: (1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period. (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 international accounting firm which has cooperative relationship with accounting firm in R.O.C. B.The financial statements that are audited and attested by parent company's accounting firm in R.O.C. C.Others ( it is recognised based on the financial statements which is not reviewed by independent accountants of Investee Company as the same period). Note 3: Invested by CTCI Overseas Co., Ltd. Note 4: Invested by Century Ahead Ltd. Note 5: Sold in August, 2015. Note 6: The accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2015 is US $27,231,000 The investment amount approved by the Investment Commission of the Ministry of Economic Affairs is US $28,561,000.

~278~ Appendix 2

CTCI CORPORATION

STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS DECEMBER 31, 2015 AND 2014

------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.

279

280

281 CTCI CORPORATION BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(Adjusted) (Adjusted) December 31, 2015 December 31, 2014 January 1, 2014 Assets Notes AMOUNT % AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) $ 1,182,557 3 $ 4,579,282 11 $ 4,685,629 14 1110 Financial assets at fair value 6(2) through profit or loss - current 154,276 - 1,174,481 3 463,231 2 1125 Available-for-sale financial 6(3) assets - current 377,033 1 371,518 1 370,594 1 1150 Notes receivable, net 6(5) - - 21 - 3,202,568 10 1160 Notes receivable - related 7 parties 586,246 1 1,411,400 4 - - 1170 Accounts receivable, net 6(5) 3,110,998 8 2,044,749 5 1,130,606 3 1180 Accounts receivable - related 7 parties 30,524 - 21,252 - 285,310 1 1190 Due from customers for 6(6) contract work 18,543,107 45 13,957,407 34 5,906,355 18 1200 Other receivables 52,707 - 68,057 - 40,900 - 1210 Other receivables - related 7 parties 1,551,595 4 1,605,558 4 2,802,721 8 1220 Current income tax assets - - 113,187 - 120,067 - 1410 Prepayments 6(7) 2,094,025 5 2,601,246 6 2,043,470 6 1470 Other current assets - - - - 672,388 2 11XX Current Assets 27,683,068 67 27,948,158 68 21,723,839 65 Non-current assets 1543 Financial assets measured at 6(4) cost - non-current 539,980 1 570,556 2 572,877 2 1550 Investments accounted for 6(8) under equity method 11,424,142 28 11,064,278 27 9,474,692 28 1600 Property, plant and equipment 6(9) 344,367 1 354,847 1 376,216 1 1760 Investment property 6(10) 155,582 1 156,904 - 158,226 1 1780 Intangible assets 112,131 - 108,317 - 99,555 - 1840 Deferred income tax assets 6(25) 437,647 1 456,332 1 469,035 1 1900 Other non-current assets 6(11), 7 and 8 426,352 1 473,348 1 786,878 2 15XX Non-current assets 13,440,201 33 13,184,582 32 11,937,479 35 1XXX Total assets $ 41,123,269 100 $ 41,132,740 100 $ 33,661,318 100

(Continued)

282 CTCI CORPORATION BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(Adjusted) (Adjusted) December 31, 2015 December 31, 2014 January 1, 2014 Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT % Current liabilities 2100 Short-term borrowings 6(12) $ 2,126,000 5 $ - - $ - - 2120 Financial liabilities at fair value 6(2) through profit or loss - current 1,694 - 14,437 - 19,503 - 2150 Notes payable 8,190 - 5,083 - 2,100 - 2170 Accounts payable 6(13) 8,378,251 20 10,356,196 25 9,207,734 28 2180 Accounts payable - related 7 parties 1,858,564 5 1,522,114 4 896,032 3 2190 Due to customers for contract 6(6) work 5,307,238 13 6,082,764 15 2,674,825 8 2200 Other payables 6(14) 1,425,482 4 1,298,698 3 1,286,278 4 2220 Other payables - related parties 7 57,533 - 18,555 - 87,843 - 2230 Current income tax liabilities 185,969 - 210,156 - - - 2300 Other current liabilities 6(15) 1,144,895 3 1,205,130 3 104,062 - 21XX Current Liabilities 20,493,816 50 20,713,133 50 14,278,377 43 Non-current liabilities 2570 Deferred income tax liabilities 6(25) 289,322 1 245,922 1 246,355 1 2600 Other non-current liabilities 6(8)(16)(1 7) 3,320,683 8 3,254,736 8 3,185,946 9 25XX Non-current liabilities 3,610,005 9 3,500,658 9 3,432,301 10 2XXX Total Liabilities 24,103,821 59 24,213,791 59 17,710,678 53 Equity Share capital 6(19) 3110 Common stock 7,611,076 18 7,575,303 18 7,474,343 22 Capital surplus 6(18)(20) 3200 Capital surplus 3,297,703 8 3,230,033 8 3,070,085 9 Retained earnings 6(21)(25) 3310 Legal reserve 2,852,010 7 2,663,798 7 2,499,625 7 3320 Special reserve 768,286 2 778,162 2 778,162 2 3350 Unappropriated retained earnings 2,477,692 6 2,432,925 6 1,910,722 6 Other equity interest 3400 Other equity interest 24,516 - 250,563 - 229,538 1 3500 Treasury stocks 6(19) ( 11,835 ) - ( 11,835 ) - ( 11,835 ) - 3XXX Total equity 17,019,448 41 16,918,949 41 15,950,640 47 Significant Contigent Liabilities 9 and Unrecognised Contract Commitments Significant Events After the 11 Balance Sheet Date 3X2X Total liabilities and equity $ 41,123,269 100 $ 41,132,740 100 $ 33,661,318 100

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 18, 2016.

283 CTCI CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE AMOUNTS)

For the years ended December 31 2015 2014 (adjusted) Items Notes AMOUNT % AMOUNT % 4000 Operating revenue 6(22) and 7 $ 42,049,227 100 $ 38,060,203 100 5000 Operating costs 6(23)(24) and 7 ( 39,224,105 ) ( 93 ) ( 35,993,997 ) ( 95 ) 5900 Net operating margin 2,825,122 7 2,066,206 5 5920 Realized profit on sales 1,980 - 1,937 - 5950 Gross profit 2,827,102 7 2,068,143 5 Operating expenses 6(23)(24) and 7 6200 General and administrative expenses ( 1,552,885 ) ( 4 ) ( 703,666 ) ( 2 ) 6300 Research and development expenses ( 81,217 ) - ( 81,630 ) - 6000 Total operating expenses ( 1,634,102 ) ( 4 ) ( 785,296 ) ( 2 ) 6900 Operating profit 1,193,000 3 1,282,847 3 Non-operating income and expenses 7010 Other income 7 181,612 - 275,691 1 7020 Other gains and losses 6(4) 57,559 - 61,097 - 7050 Finance costs ( 5,016 ) - ( 118 ) - 7070 Share of profit of associates and joint 6(8) ventures accounted for under equity method 1,037,002 3 747,892 2 7000 Total non-operating income and expenses 1,271,157 3 1,084,562 3 7900 Profit before income tax 2,464,157 6 2,367,409 6 7950 Income tax expense 6(25) ( 423,547 ) ( 1 ) ( 275,210 ) - 8200 Profit for the year $ 2,040,610 5 $ 2,092,199 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 (losses) gains on defined benefit plans ( $ 137,721 ) - $ 94,315 - 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 18,303 - ( 1,689 ) - Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations ( 135,403 ) ( 1 ) 95,209 - 8362 Unrealized loss on valuation of available-for-sale financial assets ( 125,306 ) - ( 59,613 ) - 8380 Total share of other comprehensive income (loss) of associates and joint ventures accounted for under equity method 34,662 - ( 14,571 ) - 8300 Other comprehensive (loss) income for the year ( $ 345,465 ) ( 1 ) $ 113,651 - 8500 Total comprehensive income for the year $ 1,695,145 4 $ 2,205,850 6

Basic earnings per share 6(26) $ 2.69 $ 2.79

Diluted earnings per share 6(26) $ 2.68 $ 2.76

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 18, 2016.

284 CTCI CORPORATION STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Retained Earnings Other equity interest Cumulative Unrealized gain or loss translation on valuation of Unappropriated differences of foreign available-for-sale Treasury Notes Common stock Capital surplus Legal reserve Special reserve earnings operations financial assets stocks Total equity

For the year ended December 31, 2014 Balance at January 1, 2014 $ 7,474,343 $ 3,070,085 $ 2,499,625 $ 778,162 $ 2,432,195 $ 7,178 $ 222,360 ( $ 11,835 ) $ 16,472,113 The effects of retrospective application and restatement - - - - ( 521,473 ) - - - ( 521,473 ) Restated balance at January 1, 2014 7,474,343 3,070,085 2,499,625 778,162 1,910,722 7,178 222,360 ( 11,835 ) 15,950,640 Appropriation of 2013 earnings (Note 1) 6(21) Legal reserve - - 164,173 - ( 164,173 ) - - - - Cash dividends - - - - ( 1,498,449 ) - - - ( 1,498,449 ) Profit for the year - - - - 2,092,199 - - - 2,092,199 Employee stock options excercised by 6(20) subsidiary - 11,961 ------11,961 Convertible bonds transferred to common 6(20) stock by subsidiary - ( 683 ) ------( 683 ) Share-based payment transactions - 15,610 ------15,610 Employee stock options exercised 6(18)(19) 100,960 133,060 ------234,020 Cumulative translation differences of foreign operations - - - - - 95,209 - - 95,209 Unrealized loss on valuation of 6(3) available-for-sale financial assets ------( 74,184 ) - ( 74,184 ) Other comprehensive income for the year - - - - 92,626 - - - 92,626 Balance at December 31, 2014 $ 7,575,303 $ 3,230,033 $ 2,663,798 $ 778,162 $ 2,432,925 $ 102,387 $ 148,176 ( $ 11,835 ) $ 16,918,949 For the year ended December 31, 2015 Balance at January 1, 2015 (adjusted) $ 7,575,303 $ 3,230,033 $ 2,663,798 $ 778,162 $ 2,432,925 $ 102,387 $ 148,176 ( $ 11,835 ) $ 16,918,949 Appropriation of 2014 earnings (Note 2) 6(21) Legal reserve - - 188,212 - ( 188,212 ) - - - - Special reserve - - - ( 9,876 ) 9,876 - - - - Cash dividends - - - - ( 1,698,089 ) - - - ( 1,698,089 ) Profit for the year - - - - 2,040,610 - - - 2,040,610 Employee stock options excercised by 6(20) subsidiary - 19,556 ------19,556 Convertible bonds transferred to common 6(20) stock by subsidiary - ( 819 ) ------( 819 ) Share-based payment transactions - 2,950 ------2,950 Employee stock options exercised 6(18)(19) 35,773 45,983 ------81,756 Cumulative translation differences of foreign operations - - - - - ( 135,403 ) - - ( 135,403 ) Unrealized loss on valuation of 6(3) available-for-sale financial assets ------( 90,644 ) - ( 90,644 ) Other comprehensive income for the year - - - - ( 119,418 ) - - - ( 119,418 ) Balance at December 31, 2015 $ 7,611,076 $ 3,297,703 $ 2,852,010 $ 768,286 $ 2,477,692 ( $ 33,016 ) $ 57,532 ( $ 11,835 ) $ 17,019,448

Note1: The directors' and supervisors' remuneration of $15,000 and the employees' bonus of $88,815 for the year ended December 31, 2013 has been deducted from the statement of comprehensive income. Note2: The directors' and supervisors' remuneration of $15,000 and the employees' bonus of $51,092 for the year ended December 31, 2014 has been deducted from the statement of comprehensive income.

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 18, 2016.

285 CTCI CORPORATION STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the years ended December 31, Notes 2015 2014

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax for the year $ 2,464,157 $ 2,367,409 Adjustments to reconcile profit before income tax to net cash provided by operating activities Income and expenses having no effect on cash flows Impairment losses 6(4) 30,576 81,521 Depreciation 6(22) 53,940 56,281 Amortization 6(22) 111,929 105,544 Provision for (reversal of ) allowance for doubtful accounts 787,005 ( 87,570 ) (Gain) loss on valuation of financial assets 6(2) ( 52,928 ) 7,737 Gain on disposal of property, plant and equipment ( 12 ) ( 155 ) Compensation costs for employee stock options 6(23) - 5,266 Gain on disposal of investments - ( 1,156 ) Share of profit of associates and joint ventures accounted for 6(8) under equity method ( 1,037,002 ) ( 747,892 ) Realized gain from intercompany transactions ( 1,980 ) ( 1,937 ) Dividends income ( 27,139 ) ( 27,185 ) Interest income ( 69,426 ) ( 107,365 ) Interest expense 5,016 - Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets at fair value through profit or loss 1,133,907 ( 750,670 ) Notes receivable, net (including related parties) 38,463 1,826,206 Accounts receivable, net (including related parties) ( 1,075,814 ) ( 597,573 ) Other receivables 6,963 ( 18,586 ) Other receivables - related parties 34,249 55,958 Due from customers for contract work ( 4,585,700 ) ( 8,051,052 ) Prepayments 507,221 ( 557,776 ) Other current assets - 672,388 Other non-current assets 10,605 323,416 Net changes in liabilities relating to operating activities Notes payable 3,107 2,983 Accounts payable ( 1,977,945 ) 1,148,462 Accounts payable - related parties 336,450 626,082 Due to customers for contract work ( 775,526 ) 3,407,939 Other payables 125,740 12,420 Other payables - related parties 38,978 ( 69,288 ) Net defined benefit liabilities ( 147,344 ) ( 133,691 ) Other current liabilities ( 60,235 ) 1,101,068 Cash (used in) generated from operations ( 4,122,745 ) 648,784 Interest received 63,754 77,568 Interest paid ( 4,495 ) - Dividends received 699,600 700,205 Income tax paid ( 367,348 ) ( 47,592 ) Net cash (used in) provided by operating activities ( 3,731,234 ) 1,378,965

(Continued)

286 CTCI CORPORATION STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the years ended December 31, Notes 2015 2014

CASH FLOWS FROM INVESTING ACTIVITIES Decrease in other receivables - related parties $ 19,690 $ 1,141,093

Interest received-related parties 14,083 21,338

Increase in available-for-sale financial assets ( 77,769 ) ( 41,155 )

Decrease in financial assets measured at cost - ( 79,200 )

Increase in long-term investments - subsidiaries 6(8) ( 40,360 ) ( 1,175,699 )

Acquisition of property, plant and equipment 6(9) ( 42,165 ) ( 33,616 )

Proceeds from disposal of property, plant and equipment 39 181

Increase in intangible assets ( 75,529 ) ( 76,881 )

Increase in refundable deposits (shown in other non-current assets) ( 3,823 ) ( 9,176 )

Net cash used in investing activities ( 205,834 ) ( 253,115 )

CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 2,126,000 -

Increase in other payables 522 -

Increase in deposits received 30,154 32,232

Cash dividends paid ( 1,698,089 ) ( 1,498,449 )

Proceeds from employee stock options exercised 81,756 234,020

Net cash provided by (used in) financing activities 540,343 ( 1,232,197 )

Decrease in cash and cash equivalents ( 3,396,725 ) ( 106,347 )

Cash and cash equivalents at beginning of year 4,579,282 4,685,629

Cash and cash equivalents at end of year $ 1,182,557 $ 4,579,282

The accompanying notes are an integral part of these financial statements. See report of independent accountants dated March 18, 2016.

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CTCI CORPORATION NOTES TO THE FINANCIAL STATEMENTS (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 NON-CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION These non-consolidated financial statements were authorized for issuance by the Board of Directors on March 18, 2016. 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‖) According to Financial-Supervisory-Securities-Auditing No. 1030010325 issued by FSC on April 3, 2014, commencing 2015, companies with shares listed on the TWSE or traded on the Taipei Exchange or Emerging Stock Market shall adopt the 2013 version of IFRS (not including IFRS 9, ‗Financial instruments‘) as endorsed by the FSC and Regulations Governing the Preparation of Financial Reports by Securities Issuers effective January 1, 2015 (collectively referred herein as the ―2013 version of IFRS‖) in preparing the consolidated financial statements. The impact of adopting the 2013 version of IFRS is listed below: IAS 19 (revised), ‗Employee benefits‘ The revised standard makes amendments that net interest amount, calculated by applying the discount rate to the net defined benefit asset or liability, replaces the finance charge and expected return on plan assets. The revised standard eliminates the accounting policy choice that the actuarial gains and losses could be recognized based on corridor approach or recognized in profit or loss. The revised standard requires that the actuarial gains and losses can only be recognized immediately in other comprehensive income when incurred. Past service cost will be recognized immediately in the period incurred and will no longer be amortized using straight-line basis over the average period until the benefits become vested. An entity is required to recognize termination benefits at the earlier of when the entity can no longer withdraw an offer of those benefits and when it recognizes any related restructuring costs, rather than when the entity is demonstrably committed to a termination. Additional disclosures are required for defined benefit plans. Based on the Company‘s assessment, the impact of the standard is in the following table.

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Significant effects of applying the 2013 version of IFRS to the non-consolidated financial statements are summarized in the following table: Non-consolidated balance sheet 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark January 1, 2014 Investments accounted for under equity method $ 9,635,377 ($ 160,685) $ 9,474,692 (1) Deferred income tax assets 395,139 73,896 469,035 (1) Others 23,717,591 - 23,717,591 Total assets $ 33,748,107 ($ 86,789) $ 33,661,318 Other non-current liabilities $ 2,751,262 $ 434,684 $ 3,185,946 (1) Others 14,524,732 - 14,524,732 Total liabilities 17,275,994 434,684 17,710,678 Retained earnings 2,432,195 ( 521,473) 1,910,722 (1) Others 14,039,918 - 14,039,918 Total equity 16,472,113 ( 521,473) 15,950,640 Total equity and liabilities $ 33,748,107 ($ 86,789) $ 33,661,318

Non-consolidated balance sheet 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark December 31, 2014 Investments accounted for under equity method $ 11,110,900 ($ 46,622) $ 11,064,278 (1) Deferred income tax assets 421,073 35,259 456,332 (1) Others 29,612,130 - 29,612,130 Total assets $ 41,144,103 ($ 11,363) $ 41,132,740 Other non-current liabilities $ 3,047,332 $ 207,404 $ 3,254,736 (1) Others 20,959,055 - 20,959,055 Total liabilities 24,006,387 207,404 24,213,791 Retained earnings 2,651,692 ( 218,767) 2,432,925 (1) Others 14,486,024 - 14,486,024 Total equity 17,137,716 ( 218,767) 16,918,949 Total equity and liabilities $ 41,144,103 ($ 11,363) $ 41,132,740

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Non-consolidated statement of comprehensive income 2010 version Effect of 2013 version Affected items IFRSs amount transition IFRSs amount Remark Year ended December 31, 2014 Operating revenue $ 38,060,203 $ - $ 38,060,203 Operating costs ( 36,167,599) 175,539 ( 35,992,060) (1) Operating expenses ( 827,099) 41,803 ( 785,296) (1) Non-operating income and expenses 1,054,875 29,687 1,084,562 (1) Net income before tax 2,120,380 247,029 2,367,409 Income tax expense ( 238,261) ( 36,949) ( 275,210) (1) Profit for the period 1,882,119 210,080 2,092,199 Other comprehensive income, net of tax 21,025 92,626 113,651 (1) Total comprehensive income for the period $ 1,903,144 $ 302,706 $ 2,205,850 Earnings per share: Basic $ 2.51 $ 0.28 $ 2.79 Diluted $ 2.48 $ 0.28 $ 2.76 Remark: (a) The Company is expected to recognize previously unrecognized past service cost and as a consequence of elimination of the corridor approach to recognize prior unrecognized actuarial losses by increasing deferred income tax assets by $73,896, and net defined benefit liabilities by $434,684, and decreasing investments accounted for under equity method by $160,685, and retained earnings by $521,473 as at January 1, 2014, respectively; investments accounted for under equity method, non-operating revenue, income tax expense, and retained earnings were increased by $114,063, $29,687, $36,949 and $92,626 as at December 31, 2014, respectively, and deferred income tax assets, net defined benefit liabilities, operating costs and operating expenses were decreased by $38,637, $,227,280, $175,539, and $41,803, respectively. (b) IAS 1, ‗Presentation of financial statements‘ The amendment requires entities to separate items presented in OCI classified by nature into two groups on the basis of whether they are potentially reclassifiable to profit or loss subsequently when specific conditions are met. If the items are presented before tax then the tax related to each of the two groups of OCI items (those that might be reclassified and those that will not be reclassified) must be shown separately. Accordingly, the Company will adjust its presentation of the statement of comprehensive income. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company None.

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(3) IFRSs issued by IASB but not yet endorsed by the FSC The following are the assessment of new standards, interpretations and amendments issued by IASB but not yet endorsed by the FSC: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board IFRS 9, ‗Financial instruments' January 1, 2018 Sale or contribution of assets between an investor and its associate or To be determined by joint venture (amendments to IFRS 10 and IAS 28) International Accounting Standards Board Investment entities: applying the consolidation exception (amendments January 1, 2016 to IFRS 10, IFRS 12 and IAS 28) Accounting for acquisition of interests in joint operations January 1, 2016 (amendments to IFRS 11) IFRS 14, 'Regulatory deferral accounts' January 1, 2016 IFRS 15, ‗Revenue from contracts with customers' January 1, 2018 IFRS 16, 'Leases' January 1, 2019 Disclosure initiative (amendments to IAS 1) January 1, 2016 Disclosure initiative (amendments to IAS 7) January 1, 2017 Recognition of deferred tax assets for unrealised losses (amendments to January 1, 2017 IAS 12) Clarification of acceptable methods of depreciation and amortisation January 1, 2016 (amendments to IAS 16 and IAS 38) Agriculture: bearer plants (amendments to IAS 16 and IAS 41) January 1, 2016 Defined benefit plans: employee contributions (amendments to IAS July 1, 2014 19R) Equity method in separate financial statements (amendments to IAS 27) January 1, 2016 Recoverable amount disclosures for non-financial assets (amendments January 1, 2014 to IAS 36) Novation of derivatives and continuation of hedge accounting January 1, 2014 (amendments to IAS 39) IFRIC 21, ‗Levies‘ January 1, 2014 Improvements to IFRSs 2010-2012 July 1, 2014 Improvements to IFRSs 2011-2013 July 1, 2014 Improvements to IFRSs 2012-2014 January 1, 2016 The Company is assessing the potential impact of the new standards, interpretations and amendments above. The impact will be disclosed when the assessment is complete. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these non-consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement This non-consolidated financial statement of the Company have been prepared in accordance with the ―Regulations Governing the Preparation of Financial Reports by Securities Issuers‖, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the ―IFRSs‖). (2) Basis of preparation A. Except for the following items, the non-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) Available-for-sale financial assets measured at fair value. (c) Liabilities on cash-settled share-based payment arrangements measured at fair value. (d) 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 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 non-consolidated financial statements are disclosed in Note 5. (3) Foreign currency translation Items included in the financial statements of each of the Company‘s entities are measured using the currency of the primary economic environment in which the entity operates (the ―functional currency‖). The non-consolidated financial statements are presented in New Taiwan Dollars, which is the Company‘s functional. 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) 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. (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 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.

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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 a foreign operation partially disposed of or sold is an associate or joint arrangements, 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 arrangements after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangements, 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 pay off 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 paid off within the normal operating cycle; (b) Liabilities arising mainly from trading activities; (c) Liabilities that are to be paid off within twelve months from the balance sheet date; (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. (5) Cash and cash equivalents Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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(6) Financial assets at fair value through profit or loss A. Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (a) Hybrid (combined) contracts; or (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting. C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss. (7) Available-for-sale financial assets A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting. C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‗financial assets measured at cost‘. (8) Accounts receivable Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial. (9) Impairment of financial assets A. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‗loss event‘) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

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B. The criteria that the Company uses to determine whether there is objective evidence of impairment loss is as follows: (a) Significant financial difficulty of the issuer or debtor; (b) A breach of contract, such as a default or delinquency in interest or principal payments; (c) The Company, for economic or legal reasons relating to the borrower‘s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (d) It becomes probable that the borrower will enter bankruptcy or other financial reorganization; (e) The disappearance of an active market for that financial asset because of financial difficulties; (f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group; (g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or (h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. C. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets: (a) Financial assets measured at amortized cost The amount of the impairment loss is measured as the difference between the asset‘s carrying amount and the present value of estimated future cash flows discounted at the financial asset‘s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset directly. (b) Financial assets measured at cost The amount of the impairment loss is measured as the difference between the asset‘s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account. (c) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset‘s acquisition cost (less any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is

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reclassified from ‗other comprehensive income‘ to ‗profit or loss‘. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (10) Derecognition of financial assets The Company derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire. (11) Construction contracts A. IAS 11, ‗Construction Contracts‘, defines a construction contract as a contract specifically negotiated for the construction of an asset. If the outcome of a construction contract can be estimated reliably and it is probable that this contract would make a profit, contract revenue should be recognized by reference to the stage of completion of the contract activity, using the percentage-of-completion method of accounting, over the contract term. Contract costs are expensed as incurred. The stage of completion of a contract is measured by the proportion of contract costs incurred for work performed to date to the estimated total costs for the contract. An expected loss where total contract costs will exceed total contract revenue on a construction contract should be recognized as an expense as soon as such loss is probable. If the outcome of a construction contract cannot be estimated reliably, contract revenue should be recognized only to the extent of contract costs incurred that it is probable will be recoverable. B. Contract revenue should include the revenue arising from variations from the original contract work, claims and incentive payments that are agreed by the customer and can be measured reliably. C. The excess of the cumulative costs incurred plus recognized profits (less recognized losses) over the progress billings on each construction contract is presented as an asset within ‗due from customers for contract work‘. While, the excess of the progress billings over the cumulative costs incurred plus recognized profits (less recognized losses) on each construction contract is presented as a liability within ‗due to customers for contract work‘. (12) Investments accounted for under the equity method / subsidiary and associates A. Subsidiaries are all entities (including special purpose entities) over which the Company has the power to govern the financial and operating policies. In general, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. The Company accounts for investments in subsidiaries under the equity method in the non-consolidated financial statements. B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies and subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company. C. The Company‘s share of its subsidiary‘ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company‘s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company recognizes losses in ownership interests.

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D. 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. E. 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. F. When changes in an associate‘s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes not affecting the Company‘s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in ‗capital surplus‘ in proportion to its ownership. G. 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. H. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company‘s ownership percentage of the associate but maintains significant influence on the associate, then ‗capital surplus‘ and ‗investments accounted for under the equity method‘ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company‘s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of. I. In accordance with the ―Rules Governing the Preparation of Financial Statements by Securities Issuers‖, the period‘s income and other comprehensive income in the non-consolidated financial statements should be the same to the allocation amount of the period‘s income and comprehensive income attributable to the owners of the parent company‘s in the consolidated financial statements. The owners‘ equity in the non-consolidated financial statements should be the same as the owners‘ equity attributable to the owners of the parent company in the consolidated financial statements. (13) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized. B. Subsequent costs are included in the asset‘s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

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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 (14) Investment property An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 years. (15) Intangible assets Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years. (16) Impairment of non-financial assets The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset‘s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset‘s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized. (17) Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method. (18) Notes and accounts payable Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial. (19) Financial liabilities at fair value through profit or loss A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.

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B. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss. (20) Derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires. (21) Offsetting financial instruments Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. (22) Financial guarantee contracts A financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. A financial guarantee contract is initially recognized at its fair value adjusted for transaction costs on the trade date. After initial recognition, the financial guarantee is measured at the higher of the initial fair value less cumulative amortization and the best estimate of the amount required to settle the present obligation on each balance sheet date. (23) Derivative financial instruments and hedging activities Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. (24) Employee benefits A. Short-term employee benefits Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service. B. Pensions (a) Defined contribution plans For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments. (b) Defined benefit plans i) Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead. ii) Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings. iii) Past service costs are recognized immediately in profit or loss.

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C. Employees‘ bonus and directors‘ and supervisors‘ remuneration Employees‘ bonus and directors‘ and supervisors‘ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. (25) Employee share-based payment For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest. (26) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity. B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings. C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the non-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.

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F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures, to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised. (27) 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. (28) 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. (29) Revenue recognition The Company provides construction services. Revenue from delivering services is recognized under the percentage-of-completion method when the outcome of services provided can be estimated reliably. The stage of completion of a service contract is measured by the proportion of contract costs incurred for services performed as of the financial reporting date to the estimated total costs for the service contract. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognized only to the extent that contract costs incurred are likely to be recoverable. 5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these non-consolidated financial statements requires management to make critical judgments in applying the Company‘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: Critical accounting estimates and assumptions A. Realisability of deferred tax assets Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any variations in global economic environment, industry environment, and laws and regulations might cause material adjustments to deferred tax assets. The Company‘s recognized deferred tax assets amounted to $437,647 as of December 31, 2015.

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B. Calculation of net defined benefit liabilities When calculating the present value of defined pension obligations, the Company must apply judgements and estimates to determine the actuarial assumptions on balance sheet date, including discount rates and future salary growth rate. Any changes in these assumptions could significantly impact the carrying amount of defined pension obligations. As of December 31, 2015, the carrying amount of net defined benefit liabilities was $2,362,122. C. Financial assets—fair value measurement of unlisted stocks without active market The Company assesses the impairment of an investment of financial instruments as soon as there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Company assesses the recoverable amounts of financial assets without active market based on the present value of expected cash dividends receivable from the investee and future cash flows from the disposal of the investee, with present value of similar financial instruments at balance sheet date, and analyses the reasonableness of related assumptions. As of December 31, 2015, the Company recognized financial assets measured at cost, net of impairment loss, amounting to $539,980. 6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents December 31, 2015 December 31, 2014 January 1, 2014 Cash on hand and petty cash $ 23,849 $ 20,462 $ 21,637 Checking accounts and demand deposits 1,071,107 2,012,618 941,740 Time deposits 87,601 2,546,202 3,722,252 $ 1,182,557 $ 4,579,282 $ 4,685,629

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. B. Details of the Company‘s cash and cash equivalents pledged to others as collateral are provided in Note 8. (2) Financial assets at fair value through profit or loss – current Items December 31, 2015 December 31, 2014 January 1, 2014 Current items: Financial assets held for trading Mutual funds $ 136,455 $ 1,118,986 $ 431,674 Non-hedging derivatives 23,349 55,191 31,086 159,804 1,174,177 462,760 Valuation adjustment of financial assets ( 5,528) 304 471 held for trading Total $ 154,276 $ 1,174,481 $ 463,231 Finacial liablities held for trading Non-hedging derivatives $ 1,694 $ 14,437 $ 19,503 A. The Company recognized, net gain (loss) of $52,928 and ($7,737) for the years ended December 31, 2015 and 2014, respectively.

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B. As of December 31, 2015, December 31, 2014, and January 1, 2014, the trading items and contract information of derivatives are as follows: December 31, 2015 Contract Amount Contract Period Foreign exchange swap contract (6 items) JPY 550,000,000 2015.09.02~2016.06.23 Non-delivery of forward exchange contract- USD 35,000,000 2015.11.30~2016.03.02 buy (2 items) Forward exchange contract-buy (1 item) CHF 1,000,000 2015.11.30~2016.01.07 Forward exchange contract-buy (3 items) EUR 8,000,000 2015.12.03~2016.01.07

December 31, 2014 Contract Amount Contract Period Non-delivery of forward exchange contract- USD 50,207,000 2013.07.22~2015.05.26 sell (10 items) Foreign exchange swap contract (1 item) AUD 780,000 2014.06.18~2015.04.17 Commodity swap contract (10 items) USD 5,842,000 2014.03.07~2015.04.22

January 1, 2014 Contract Amount Contract Period Forward exchange contract-buy (1 item) GBP 1,000,000 2013.09.13~2014.09.17 Forward exchange contract-buy (3 items) JPY 400,000,000 2013.11.21~2014.02.25 Forward exchange contract-sell (2 items) SGD 2,000,000 2013.07.18~2014.01.27 Forward exchange contract-buy (5 items) CHF 9,000,000 2013.07.10~2014.09.15 Non-delivery of forward exchange contract- USD 3,775,000 2013.07.22~2015.03.24 sell (5 items) Non-delivery of forward exchange contract- CHF 1,000,000 2013.10.22~2014.03.03 buy (1 item) Foreign exchange swap contract (4 items) USD 29,500,000 2013.09.24~2014.08.12 Commodity swap contract (11 items) USD 18,347,000 2013.04.02~2014.10.02

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 adopting the hedging accounting because these do not conform to all the conditions. C. Due to the global financial crisis in year 2008, listed (TSE and OTC) stocks amounting to $68,651 which were initially classified as ―financial assets at fair value through profit or loss‖ were reclassified to ―available-for-sale financial assets‖ on July 1, 2008, in accordance with paragraph 50 (c) of IAS 39. The relevant information is set forth below: (a) The above reclassified assets which have not yet been disposed of were as follows: December 31, 2015 December 31, 2014 January 1, 2014 Book value/Fair value Book value/Fair value Book value/Fair value Listed (TSE or OTC) $ 86,070 $ 121,467 $ 135,046 stocks

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(b) The changes in fair value of the above listed stocks that were recognized in profit or loss and other comprehensive income were $0 and ($35,397), respectively, for the year ended December 31, 2015, and were $0 and ($13,579), respectively, for year ended December 31, 2014. And the accumulated total changes in fair value of the above listed stocks that were recognized in profit or loss and other comprehensive income before January 1, 2014 were $0 and $66,395, respectively. (c) If the above listed stocks had not been reclassified to ―available-for-sale financial assets‖ on July 1, 2008, the gain (loss) from change in fair value of those assets should have been recognized for the following periods: For the year ended For the year ended December 31, 2015 December 31, 2014 ($ 35,397) ($ 13,579) Listed (TSE or OTC) stocks (3) Available-for-sale financial assets Items December 31, 2015 December 31, 2014 January 1, 2014 Current items: Listed (TSE or OTC) stocks $ 195,428 $ 193,199 $ 196,213 Foreign bonds 120,865 45,325 - Valuation adjustment 60,740 132,994 174,381 $ 377,033 $ 371,518 $ 370,594 The amounts that the Company recognized profit or loss in other comprehensive income due to the changes in fair value were ($90,644) and ($74,184) for the years ended December 31, 2015 and 2014, respectively. (4) Financial assets measured at cost Items December 31, 2015 December 31, 2014 January 1, 2014 Non-current items: Unlisted stocks $ 1,025,200 $ 1,025,200 $ 946,000 Accumulated impairment ( 485,220) ( 454,644) ( 373,123) $ 539,980 $ 570,556 $ 572,877 A. According to the Company‘s intention, its investment in stocks should be classified as available-for-sale financial assets. However, as these investments are not traded in active markets, the fair value of the investment cannot be measured reliably. The Company classified those stocks as ‗financial assets measured at cost‘. B. As the operating results of investee companies accounted for under the cost method had deteriorated, their net worth has declined significantly. The Company expects that the probability of a recovery in its net worth is remote. As a result, loss on decline in market value of $30,576 and $81,521 were recognized for the years ended December 31, 2015 and 2014, respectively, which shown in non-consolidated statements of comprehensive income are as follows: Year ended December 31, 2015 Year ended December 31, 2014 Other gains and losses Impairment loss $ 30,576 $ 81,521 C. As of December 31, 2015, December 31, 2014 and January 1, 2014, no financial assets measured at cost held by the Company were pledged to others.

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(5) Notes and accounts receivable December 31, 2015 December 31, 2014 January 1, 2014 Notes receivable $ - $ 21 $ 3,250,915 Accounts receivable 3,111,333 2,044,791 1,183,159 Less: Allowance for bad debts ( 335) ( 42) ( 100,900) $ 3,110,998 $ 2,044,770 $ 4,333,174 (6) Construction in progress December 31, 2015 December 31, 2014 January 1, 2014 Aggregate costs incurred $ 245,744,358 $ 211,267,523 $ 198,894,104 plus recognised profits (less recognised losses) Less: progress billings ( 232,508,489) ( 203,392,880) ( 195,662,574) Net balance sheet position $ 13,235,869 $ 7,874,643 $ 3,231,530 for construction in progress Presented as: Due from customers for $ 18,543,107 $ 13,957,407 $ 5,906,355 contracts work Due to customers for contracts work ( 5,307,238) ( 6,082,764) ( 2,674,825) $ 13,235,869 $ 7,874,643 $ 3,231,530 As of December 31, 2015, December 31, 2014, and January 1, 2014, the retentions relating to construction contracts amounted to $0, $0 and $0, respectively; the advances received before the related construction work is performed amounted to $0, $398,817 and $0, respectively. (7) Prepayments December 31, 2015 December 31, 2014 January 1, 2014 Prepayment for materials $ 1,446,858 $ 2,150,524 $ 1,292,652 Prepayment for construction in progress 69,464 170,864 615,522 Overpaid sales tax 312,829 144,002 60,464 Others 264,874 135,856 74,832 $ 2,094,025 $ 2,601,246 $ 2,043,470

(8) Investments accounted for under the equity method 2015 2014 At January 1 $ 11,064,278 $ 9,474,692 Addition of investments accounted 40,360 1,175,699 for under equity method Share of profit or loss of investments 1,037,002 747,892 accounted for under equity method Earnings distribution of investments ( 672,461) ( 673,019) accounted for under equity method Changes in capital surplus 21,687 21,621 Changes in other equity items ( 66,724) 317,393 $ 11,424,142 $ 11,064,278 At December 31

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Investments under equity method December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries E&C Engineering Corp. $ 797,452 $ 761,356 $ 625,626 Resources Engineering Service Inc. 285,891 293,884 277,616 Advanced Control & System Inc. 251,792 248,803 248,310 GRQ Investments Corp. 2,486,323 2,471,455 2,465,249 Innovest Investment Corp. 1,060,390 1,103,048 132,494 KD Holding Corp. 2,595,013 2,509,932 2,420,767 CTCI(Thailand) Co., Ltd. 122,884 121,518 99,837 CTCI Machinery Corp. 438,862 444,575 262,455 Sinogal-waste Services Co., Ltd. 34,550 29,414 28,740 CTCI Singapore Pte. Ltd. - 172,269 173,101 CTCI and Partners Company Limited 11,664 13,538 14,413 CTCI Overseas (BVI) Co., Ltd. 2,525,557 2,288,814 2,141,154 CTCI Engineering & Construction Sdn. Bhd. 48,266 15,164 13,383 CTCI Americas, Inc. 7,597 7,096 6,240 CCJV P1 Engineering & Construction Sdn. Bhd. 199,105 32,862 - Associates Pan Asia Corp. 558,796 550,550 565,307 $ 11,424,142 $ 11,064,278 $ 9,474,692 Other non-current liabilities Subsidiaries CTCI Arabia Ltd. ($ 679,584) ($ 689,310) ($ 507,187) CTCI Singapore Pte. Ltd. ( 87,179) - - ($ 766,763) ($ 689,310) ($ 507,187)

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

Principal place Shareholding ratio Nature of Methods of Company name of business December 31, 2015 December 31, 2014 January 1, 2014 relationship measurement E&C Engineering Corp. Taiwan 97.09% 97.09% 97.09% Subsidiaries Equity method GRQ Investments Corp. " 100.00% 100.00% 100.00% " " Innovest Investment Corp. " 100.00% 100.00% 100.00% " " KD Holding Corp. " 58.46% 59.32% 60.67% " " CTCI Machinery Corp. " 100.00% 100.00% 100.00% " " CTCI Overseas (BVI) Co., BVI 100.00% 100.00% 100.00% " " Ltd. CTCI Arabia Ltd. Arabia 50.00% 50.00% 50.00% " "

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(b) The summarized financial information of the subsidiaries that are material to the Company is as follows: Balance sheet E&C Engineering Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 2,978,289 $ 2,595,553 $ 2,432,909 Non-current assets 339,874 306,591 326,687 Current liabilities ( 2,263,482) ( 1,874,192) ( 1,917,663) Non-current liabilities ( 234,467) ( 244,916) ( 202,536) Total net assets $ 820,214 $ 783,036 $ 639,397

Share in associate's net assets $ 796,346 $ 760,250 $ 620,791 Carrying amount of the associate $ 797,452 $ 761,356 $ 625,626

GRQ Investments Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 157,174 $ 174,537 $ 198,092 Non-current assets 4,920,636 5,043,926 5,159,721 Current liabilities ( 178,151) ( 176,583) ( 172,540) Non-current liabilities ( 2,391,620) ( 2,548,729) ( 2,705,563) Total net assets $ 2,508,039 $ 2,493,151 $ 2,479,710

Share in associate's net assets $ 2,508,039 $ 2,493,151 $ 2,479,710 Carrying amount of the associate $ 2,486,323 $ 2,471,455 $ 2,465,249

Innovest Investment Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 64,767 $ 147,607 $ 77,079 Non-current assets 1,023,096 961,247 61,036 Current liabilities ( 94) ( 94) ( 233) Non-current liabilities ( 5,901) - - Total net assets $ 1,081,868 $ 1,108,760 $ 137,882

Share in associate's net assets $ 1,081,868 $ 1,108,760 $ 137,882 Carrying amount of the associate $ 1,060,390 $ 1,103,048 $ 132,494

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KD Holding Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 514,494 $ 331,043 $ 633,275 Non-current assets 3,943,102 3,942,182 3,416,084 Current liabilities ( 18,276) ( 40,554) ( 53,266) Non-current liabilities ( 366) ( 1,195) ( 3,846) Total net assets $ 4,438,954 $ 4,231,476 $ 3,992,247

Share in associate's net assets $ 2,595,013 $ 2,510,112 $ 2,422,096 Carrying amount of the associate $ 2,595,013 $ 2,509,932 $ 2,420,767

CTCI Machinery Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 1,591,301 $ 1,733,144 $ 1,572,101 Non-current assets 240,406 252,953 105,150 Current liabilities ( 1,355,092) ( 1,526,129) ( 1,398,418) Non-current liabilities ( 18,838) ( 16,806) ( 16,264) Total net assets $ 457,777 $ 443,162 $ 262,569

Share in associate's net assets $ 457,777 $ 443,162 $ 262,569 $ 438,862 $ 444,575 $ 262,455 Carrying amount of the associate

CTCI Overseas (BVI) Co., Ltd. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 26,219 $ 25,560 $ 24,230 Non-current assets 2,412,329 2,176,206 2,029,837 Current liabilities ( 128) ( 89) ( 50) Total net assets $ 2,438,420 $ 2,201,677 $ 2,054,017

Share in associate's net assets $ 2,438,420 $ 2,201,677 $ 2,054,017 Carrying amount of the associate $ 2,525,557 $ 2,288,814 $ 2,141,154

CTCI Arabia Ltd. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 2,037,003 $ 650,224 $ 1,853,107 Non-current assets 7,936 1,977 11,270 Current liabilities ( 3,402,578) ( 2,029,780) ( 2,877,707) Non-current liabilities ( 1,530) ( 1,040) ( 1,044) Total net assets ($ 1,359,169) ($ 1,378,619) ($ 1,014,374)

Share in associate's net assets ($ 679,584) ($ 689,310) ($ 507,187) ($ 679,584) ($ 689,310) ($ 507,187) Carrying amount of the associate

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Statement of comprehensive income E&C Engineering Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 4,344,867 $ 3,784,999 Profit for the period from continuing operations 135,937 114,348 Other comprehensive income, net of tax ( 13,487) 35,379 Total comprehensive income $ 122,450 $ 149,727 Dividends received from associates $ 80,672 $ 6,892

GRQ Investments Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 329,380 $ 319,804 Profit for the period from continuing operations 110,579 94,332 Other comprehensive income, net of tax ( 10,969) ( 6,022) Total comprehensive income $ 99,610 $ 88,310 $ 84,876 $ 74,919 Dividends received from associates

Innovest Investment Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue ($ 53,008) ($ 15,639) Profit for the period from continuing operations ( 55,825) ( 16,598) Other comprehensive income, net of tax ( 11,087) ( 1,381) Total comprehensive income ($ 66,912) ($ 17,979) $ - $ 11,166 Dividends received from associates

KD Holding Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 731,917 $ 710,984 Profit for the period from continuing operations 710,370 679,358 Other comprehensive income, net of tax 3,763 25,837 Total comprehensive income $ 714,133 $ 705,195 $ 355,994 $ 346,662 Dividends received from associates

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CTCI Machinery Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 2,328,074 $ 2,083,696 Profit for the period from continuing operations 69,347 71,995 Other comprehensive income, net of tax 9,830 8,737 Total comprehensive income $ 79,177 $ 80,732 $ 64,561 $ 74,326 Dividends received from associates

CTCI Overseas (BVI) Co. Ltd. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ - $ - Total comprehensive income $ 306,893 $ 68,882

CTCI Arabia Ltd. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 2,548,590 $ 970,807 $ 71,562 ($ 291,413) Total comprehensive income (loss)

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

Principal place Shareholding ratio Nature of Methods of Company name of business December 31, 2015 December 31, 2014 January 1, 2014 relationship measurement Pan Asia Corp. Taiwan 34.27% 34.27% 34.27% Associates Equity method (b) The summarized financial information of the associates that are material to the Company is as follows: Balance sheet Pan Asia Corp. December 31, 2015 December 31, 2014 January 1, 2014 Current assets $ 3,321,154 $ 2,744,321 $ 2,786,280 Non-current assets 270,871 291,986 308,023 Current liabilities ( 1,833,201) ( 1,306,044) ( 1,350,237) Non-current liabilities ( 128,255) ( 126,011) ( 72,552) Total net assets $ 1,630,569 $ 1,604,252 $ 1,671,514

Share in associate's net assets $ 558,796 $ 549,777 $ 572,828 Carrying amount of the associate $ 558,796 $ 550,550 $ 565,307

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Statement of comprehensive income Pan Asia Corp. Year ended December 31, 2015 Year ended December 31, 2014 Revenue $ 5,395,210 $ 5,393,763 Profit for the period from continuing operations 120,783 146,364 Other comprehensive income, net of tax ( 14,520) ( 1,779) Total comprehensive income $ 106,263 $ 144,585 $ 27,397 $ 63,802 Dividends received from associates 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, 2015. D. Under the equity method, the Company recognized investment income and other comprehensive income of $68,661 for the year ended December 31, 2014, from Pan Asia Corp., CTCI Engineering & Construction Co., Ltd., CTCI and Partners Company Limited, CCJV P1 Engineering & Construction Sdn. Bhd. and CTCI Overseas (BVI) Corp., and its subsidiaries. Under the equity method, the Company recognized investment income and other comprehensive income of $180,597 for the year ended December 31, 2015, from Pan Asia Corp., CTCI Engineering & Construction Co., Ltd., CTCI and Partners Company Limited, CCJV P1 Engineering & Construction Sdn. Bhd., MIEI Industrial Sdn. Bhd. that invest by Innovest Investment Corp. and CTCI Malaysia Sdn. Bhd. and CTCI Overseas (BVI) Corp., and its subsidiaries. The amounts are recognized according to the financial statements audited by other independent accountants.

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(9) Property, plant and equipment

Transportation Office Land Buildings Machinery equipment equipment Others Total At January 1, 2015 Cost $ 127,228 $ 124,799 $ 347,313 $ 48,229 $ 54,808 $ 139,057 $ 841,434 Accumulated depreciation - ( 60,897) ( 284,847) ( 36,703) ( 48,911) ( 55,229) ( 486,587) $ 127,228 $ 63,902 $ 62,466 $ 11,526 $ 5,897 $ 83,828 $ 354,847 2015 Opening net book $ 127,228 $ 63,902 $ 62,466 $ 11,526 $ 5,897 $ 83,828 $ 354,847 amount Additions - - 27,619 8,931 575 5,040 42,165 Disposals - - ( 27) - - - ( 27) Depreciation charge - ( 2,388) ( 32,430) ( 5,404) ( 3,336) ( 9,060) ( 52,618) Closing net book amount $ 127,228 $ 61,514 $ 57,628 $ 15,053 $ 3,136 $ 79,808 $ 344,367

At December 31, 2015 Cost $ 127,228 $ 124,799 $ 357,303 $ 56,830 $ 53,378 $ 141,437 $ 860,975 Accumulated depreciation - ( 63,285) ( 299,675) ( 41,777) ( 50,242) ( 61,629) ( 516,608) $ 127,228 $ 61,514 $ 57,628 $ 15,053 $ 3,136 $ 79,808 $ 344,367

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Transportation Office Land Buildings Machinery equipment equipment Others Total At January 1, 2014 Cost $ 127,228 $ 124,799 $ 334,122 $ 47,282 $ 54,308 $ 139,057 $ 826,796 Accumulated depreciation - ( 58,509) ( 267,219) ( 33,352) ( 45,566) ( 45,934) ( 450,580) $ 127,228 $ 66,290 $ 66,903 $ 13,930 $ 8,742 $ 93,123 $ 376,216 2014 Opening net book $ 127,228 $ 66,290 $ 66,903 $ 13,930 $ 8,742 $ 93,123 $ 376,216 amount Additions - - 31,186 1,930 500 - 33,616 Disposals - - ( 26) - - - ( 26) Depreciation charge - ( 2,388) ( 35,597) ( 4,334) ( 3,345) ( 9,295) ( 54,959) Closing net book amount $ 127,228 $ 63,902 $ 62,466 $ 11,526 $ 5,897 $ 83,828 $ 354,847

At December 31, 2014 Cost $ 127,228 $ 124,799 $ 347,313 $ 48,229 $ 54,808 $ 139,057 $ 841,434 Accumulated depreciation - ( 60,897) ( 284,847) ( 36,703) ( 48,911) ( 55,229) ( 486,587) $ 127,228 $ 63,902 $ 62,466 $ 11,526 $ 5,897 $ 83,828 $ 354,847

1. The Company‘s buildings include major building components which are depreciated over 35~50 years. 2. No capitalization of borrowing interests attributable to the property, plant and equipment for the years ended December 31, 2015 and 2014. 3. No property, plant and equipment were pledged to others as collaterals for the years ended December 31, 2015 and 2014.

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(10) Investment property Land Buildings Total At January 1, 2015 Cost $ 115,692 $ 75,983 $ 191,675 Accumulated depreciation - ( 34,771) ( 34,771) $ 115,692 $ 41,212 $ 156,904 2015 Opening net book amount $ 115,692 $ 41,212 $ 156,904 Depreciation charge - ( 1,322) ( 1,322) Closing net book amount $ 115,692 $ 39,890 $ 155,582

At December 31, 2015 Cost $ 115,692 $ 75,983 $ 191,675 Accumulated depreciation - ( 36,093) ( 36,093) $ 115,692 $ 39,890 $ 155,582

Land Buildings Total At January 1, 2014 Cost $ 115,692 $ 75,983 $ 191,675 Accumulated depreciation - ( 33,449) ( 33,449) $ 115,692 $ 42,534 $ 158,226 2014 Opening net book amount $ 115,692 $ 42,534 $ 158,226 Depreciation charge - ( 1,322) ( 1,322) Closing net book amount $ 115,692 $ 41,212 $ 156,904

At December 31, 2014 Cost $ 115,692 $ 75,983 $ 191,675 Accumulated depreciation - ( 34,771) ( 34,771) $ 115,692 $ 41,212 $ 156,904 A. Rental income from the lease of the investment property and direct operating expenses arising from the investment property are shown below: For the year ended For the year ended December 31, 2015 December 31, 2014 Rental revenue from the lease of the investment property $ 6,392 $ 6,392 Direct operating expenses arising from the investment property that generated rental income in the period $ 2,131 $ 2,131 Direct operating expenses arising from the investment property that did not $ - $ - generate rental income in the period

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B. The fair value of the investment property held by the Company as of December 31, 2015 and 2014 were $708,946 and $783,792, respectively. The above fair values are based on the valuation of market trading prices of similar property belonging to close proximities. (11) Other non-current assets December 31, 2015 December 31, 2014 January 1, 2014 Long-term receivables $ 48,460 $ 150,727 $ 476,923 Restricted bank deposits 88,951 59,795 57,015 Refundable deposits 203,283 199,460 190,284 Others 85,658 63,366 62,656 $ 426,352 $ 473,348 $ 786,878 (12) Short-term borrowings Type of borrowings December 31, 2015 Interest rate range Collateral Unsecured borrowings Mizuho Bank, Ltd. $ 299,000 0.86% - The Bank of Tokyo-Mitsubishi UFJ 527,000 0.88% - Bank SinoPac 300,000 0.87% - Taipei Fubon Commercial Bank 300,000 0.85% - HSBC 700,000 0.83%~0.86% - $ 2,126,000 (13) Accounts payable December 31, 2015 December 31, 2014 January 1, 2014 Materials payable $ 4,677,119 $ 7,269,937 $ 7,204,924 Sub-contract costs payable 3,701,132 3,086,259 2,002,810 $ 8,378,251 $ 10,356,196 $ 9,207,734

(14) Other payables December 31, 2015 December 31, 2014 January 1, 2014 Accrued payroll $ 982,411 $ 933,653 $ 866,181 Accrued employee bonuses, directors' and supervisors' remuneration 70,111 64,844 103,815 Accrued insurance 50,198 51,055 50,736 Accrued pension 20,418 21,648 21,951 Accrued temporary equipment - - 75,587 Others 302,344 227,498 168,008 $ 1,425,482 $ 1,298,698 $ 1,286,278

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(15) Other current liabilities December 31, 2015 December 31, 2014 January 1, 2014 Joint venture $ 969,912 $ 1,096,463 $ - Receipt in advance 155,868 107,016 103,457 Others 19,115 1,651 605 $ 1,144,895 $ 1,205,130 $ 104,062 As of December 31, 2015, due to the accumulated cost was greater than the accumulated capital injection, the joint venture was recognized in ―other current liabilities‖. (16) Other non-current liabilities December 31, 2015 December 31, 2014 January 1, 2014 Net defined benefit liabilities $ 2,362,122 $ 2,401,801 $ 2,545,430 Deposits received 108,090 77,936 45,704 Investment accounted for 766,763 689,310 507,187 under equity method (Credit) Others 83,708 85,689 87,625 $ 3,320,683 $ 3,254,736 $ 3,185,946 (17) Pensions A. Defined benefit pension plan (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees‘ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees‘ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March. (b) The amounts recognized in the balance sheet are as follows: December 31, 2015 December 31, 2014 January 1, 2014 Present value of defined $ 3,583,229 $ 3,589,763 $ 3,698,515 benefit obligations Fair value of plan assets ( 1,221,107) ( 1,187,962) ( 1,153,085) $ 2,362,122 $ 2,401,801 $ 2,545,430 Net defined benefit liability

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Present value of defined benefit Fair value of Net defined obligations plan assets benefit liability Year ended December 31, 2014 Balance at January 1 $ 3,698,515 ($ 1,153,085) $ 2,545,430 Current service cost 27,925 - 27,925 Interest expense (income) 70,272 ( 21,909) 48,363 3,796,712 ( 1,174,994) 2,621,718 Remeasurements: Experience adjustments ( 4,542) ( 5,396) ( 9,938) Pension fund contribution - ( 74,098) ( 74,098) Paid pension ( 202,407) 66,526 ( 135,881) $ 3,589,763 ($ 1,187,962) $ 2,401,801 Balance at December 31 (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 earning is less than aforementioned rates, government shall make payment for the deficit after authorized by the Regulator. The Company has no right to participate in managing and operating that fund and

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hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The constitution of fair value of plan assets as of December 31, 2015 and 2014 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government. (e) The principal actuarial assumptions used were as follows:

Year ended December 31, 2015 Year ended December 31, 2014 Discount rate 1.70% 1.90% Future salary increases 3.00% 3.00% 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: Discount rate Future salary increases Increase 1% Decrease 1% Increase 1% Decrease 1% December 31, 2015 Effect on present value of defined benefit obligation ($ 262,210) $ 295,567 $ 251,530 ($ 229,046) December 31, 2014 Effect on present value of ($ 274,122) $ 310,440 $ 266,336 ($ 241,360) defined benefit obligation The sensitivity analysis above is based on other conditions that are unchanged but only one assumption is changed. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculate net pension liability in the balance sheet are the same. (f) Expected contributions to the defined benefit pension plans of the Company for the year ended December 31, 2016 amounts to $72,405. B. Defined contribution pension plan (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the ―New Plan‖) under the Labor Pension Act (the ―Act‖), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees‘ monthly salaries and wages to the employees‘ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. (b) The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2015 and 2014 were $115,601 and $112,697, respectively.

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(18) Share-based payment-employee compensation A. As of December 31, 2015 and 2014, the Company‘s share-based payment arrangements were as follows: Quantity Contract Vesting Type of arrangement Grant date granted period conditions First plan of employee 2007.09.28 16,000 6 years Service of 2 years stock options units Second plan of employee 2008.08.27 21,000 6 years Service of 2 years stock options units Third plan of employee 2009.07.08 21,000 6 years Service of 2 years stock options units Fourth plan of employee 2010.06.18 22,000 6 years Service of 2 years stock options units B. The above employee stock options are set forth below: (a) The first plan of employee stock options was already complete. (b) The second plan of employee stock options was already complete.

For the years ended December 31, 2015 2014 Weighted-average Weighted-average No. of exercise price No. of exercise price Stock options units (in dollars) units (in dollars) Options outstanding at beginning of period - - 1,071.00 NT$14.60 Options waived - - ( 80.00) - Options exercised - - ( 991.00) NT$14.30 Options revoked - - - - Options outstanding at end of period - - - NT$14.00 Options exercisable - - - NT$14.00 at end of period As a result of employee stock options exercised based on the exercise price of NT$14.30, the outstanding capital stock increase amounted to 991,000 shares and capital surplus-common stock amounted to $4,266 for the year ended December 31, 2014. Each warrant could subscribe to 1,000 shares of common stock.

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(c) The third plan of employee stock options was already complete. For the years ended December 31, 2015 2014 Weighted-average Weighted-average No. of exercise price No. of exercise price Stock options units (in dollars) units (in dollars) Options outstanding at beginning of period 1,703.75 NT$20.60 4,713.75 NT$21.50 Options waived ( 161.50) - ( 10.75) - Options exercised ( 1,542.25) NT$20.60 ( 2,999.25) NT$21.30 Options revoked - - - - Options outstanding at end of period - - 1,703.75 NT$20.60 Options exercisable - - 1,703.25 NT$20.60 at end of period As a result of employee stock options exercised based on the exercise price of NT$20.60 and NT$21.30, the outstanding capital stock increase amounted to 1,542,250 shares and 2,999,250 shares and capital surplus-common stock amounted to $16,348 and $33,759 for the years ended December 31, 2015 and 2014, respectively. Each warrant could subscribe to 1,000 shares of common stock. (d) Details of the fourth plan of employee stock options outstanding as of December 31, 2015 and 2014 are set forth below: For the years ended December 31, 2015 2014 Weighted-average Weighted-average No. of exercise price No. of exercise price Stock options units (in dollars) units (in dollars) Options outstanding at beginning of period 4,869.75 NT$25.00 11,012.55 NT$26.00 Options waived ( 18.25) - ( 37.00) - Options exercised ( 2,035.00) NT$24.56 ( 6,105.80) NT$25.60 Options revoked - - - - Options outstanding at end of period 2,816.50 NT$23.90 4,869.75 NT$25.00 Options exercisable 2,814.50 NT$23.90 4,854.25 NT$25.00 at end of period As a result of employee stock options exercised based on the exercise price of NT$24.56 and NT$25.60, the outstanding capital stock increase amounted to 2,035,000 shares and 6,105,800 shares and capital surplus-common stock amounted to $29,635 and $95,035 for the years ended December 31, 2015 and 2014, respectively. Each warrant could subscribe to 1,000 shares of common stock.

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C. The weighted-average stock price of stock options at exercise dates for the years ended December 31, 2015 and 2014 was NT$46.80 and NT$59.60, respectively. D. As of December 31, 2015, December 31, 2014 and January 1, 2014, the range of exercise prices of stock options outstanding was NT$20.60～NT$24.56, NT$14.00～NT$25.60, and NT$14.60～NT$26.00, respectively; the weighted-average remaining contractual period was as follows: Type of arrangement December 31, 2015 December 31, 2014 January 1, 2014 First plan of employee - - - stock options Second plan of - - 0.66 years employee stock Third plan of employee - 0.50 years 1.50 years stock options Fourth plan of 0.50 years 1.50 years 2.50 years employee stock E. For the stock options granted before January 1, 2008 with compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The information is as follows: Expected Expected price Expected dividend Risk free Type of Exercise volatility vesting yield interest Fair value arrangement Grant date Stock price price rate period rate rate per unit First plan of 2007.9.28 NT$ 25.3 NT$ 25.3 37.04% 4.5 years 0% 2.57% NT$ 8.77 employee stock options F. For the stock options granted after January 1, 2008 with compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The information is as follows: Expected Expected price Expected dividend Risk free Type of Grant Stock Exercise volatility vesting yield interest Fair value arrangement date price price rate period rate rate per unit Second plan of 2008.8.27 NT$ 21.9 NT$ 21.9 36.05% 4.5 years 0% 2.41% NT$ 7.37 employee stock options Third plan of 2009.7.08 NT$ 28.9 NT$ 28.9 36.45% 4.5 years 0% 0.94% NT$ 9.13 employee stock options Fourth plan of 2010.6.18 NT$ 32.8 NT$ 32.8 36.22% 4.5 years 0% 0.93% NT$ 10.30 employee stock options

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G. Expenses incurred on share-based payment transactions are shown below: For the year ended For the year ended December 31, 2015 December 31, 2014 $ - $ 5,266 Equity-settled (19) Share capital A. As of December 31, 2015 and 2014, the Company‘s authorized capital was $9,000,000, (including 800,000 thousand shares reserved for employee stock options), and the paid-in capital was $7,611,076 consisting of 761,107,598 shares with a par value of NT$10 per share. All proceeds from shares issued have been collected. Movements in the number of the Company‘s ordinary shares outstanding are as follows: For the year ended For the year ended December 31, 2015 (Note) December 31, 2014 (Note) At January 1 757,530,348 747,434,298 Employee stock options exercised 3,577,250 10,096,050 At December 31 761,107,598 757,530,348 Note: The number of the Company‘s ordinary shares outstanding which was held by its subsidiaries had not been reduced. B. Treasury shares December 31, 2015 Name of investors Reason for reacquisition Number of shares Book value Subsidiary-Sino Environmental Services To maintain 1,028 $ 10 Corp. stockholders' equity Subsidiary-Innovest Investment Corp. " 344,436 3,241 Subsidiary-GRQ Investment Corp. " 912,170 8,584 December 31, 2014 Name of investors Reason for reacquisition Number of shares Book value Subsidiary-Sino Environmental Services To maintain 1,028 $ 10 Corp. stockholders' equity Subsidiary-Innovest Investment Corp. " 344,436 3,241 Subsidiary-GRQ Investment Corp. " 912,170 8,584 January 1, 2014 Name of investors Reason for reacquisition Number of shares Book value Subsidiary-Sino Environmental Services To maintain 1,028 $ 10 Corp. stockholders' equity Subsidiary-Innovest Investment Corp. " 344,436 3,241 Subsidiary-GRQ Investment Corp. " 912,170 8,584 (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

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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. Change of Capital surplus is as follows:

Difference between proceeds on Treasury share acquisition of disposal of equity interest Employee stock Stock Share premium transactions in a subsidiary and its carrying amount options options Others Total At January 1, 2015 $ 2,737,464 $ 5,043 $ 184,615 $ 296,048 $ 3,303 $ 3,560 $ 3,230,033 Employee stock options exercised by - - 19,556 - - - 19,556 subsidiary Convertible bonds transferred to - - - - ( 819) - ( 819) common stock Employee stock options granted - - - 2,950 - - 2,950 Employee stock options exercised 78,021 - - ( 32,038) - - 45,983 Employee stock options revoked - - - ( 1,296) - 1,296 - At December 31, 2015 $ 2,815,485 $ 5,043 $ 204,171 $ 265,664 $ 2,484 $ 4,856 $ 3,297,703 Difference between proceeds on Treasury share acquisition of disposal of equity interest Employee stock Stock Share premium transactions in a subsidiary and its carrying amount options options Others Total At January 1, 2014 $ 2,488,469 $ 5,043 $ 172,654 $ 397,019 $ 3,986 $ 2,914 $ 3,070,085 Employee stock options exercised by - - 11,961 - - - 11,961 subsidiary Convertible bonds transferred to - - - - ( 683) - ( 683) common stock Employee stock options granted - - - 15,610 - - 15,610 Employee stock options exercised 248,995 - - ( 115,935) - - 133,060 Employee stock options revoked - - - ( 646) - 646 - At December 31, 2014 $ 2,737,464 $ 5,043 $ 184,615 $ 296,048 $ 3,303 $ 3,560 $ 3,230,033 C. Please refer to Note 6 (18) for the capital reserve – employee stock options. (21) Retained earnings 2015 2014 At January 1 $ 2,432,925 $ 1,910,722 Profit for the period 2,040,610 2,092,199 Set aside as legal reserve ( 188,212) ( 164,173) Cash dividends ( 1,698,089) ( 1,498,449) Reversal of special reserve 9,876 - Remeasurement on post employment benefit obligations, net of tax ( 119,418) 92,626 $ 2,477,692 $ 2,432,925 At December 31 A. In accordance with the Company‘s Articles of Incorporation, 10% of the Company‘s annual net income, after paying all taxes and dues and deducting losses of prior years, if any, should be set aside as legal reserve, except when the legal reserve is over total assets. Subsequently, when the reduction in equity is reversed, the Company may return the special reserve to undistributed earnings in the current year. The remaining balance and the cumulative undistributed earnings from prior years are called disposable cumulative undistributed earnings. The net income after legal reserve shall be allocated as follows: (a) At least 2% of the balance as employees‘ bonus; (b) 2% of the balance as remuneration to directors and supervisors; and (c) After paying employees‘ bonus and remuneration to directors and supervisors, the remaining balance may be distributed as stockholders‘ dividends.

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(d) No less than 50% of the remaining balance and the cumulative undistributed earnings from prior years may be distributed as stockholders‘ dividends, of which at least 20% shall be in the form of cash dividends, upon the approval of the stockholders. B. Legal reserve only can be used to cover the losses and issue new stocks or cash dividends proportionately according to the stock ratio. The latter should be by an amount under 25% of legal reserve exceeding issued and outstanding capital. C. The new Taiwan imputation tax system requires that any undistributed current earnings derived on or after January 1, 1998 of the Company are subject to an additional 10% corporate income tax if the earnings are not distributed in the following year. 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 appropriaton of 2014 and 2013 earnings had been resolved at the stockholders‘ meeting on June 22, 2015 and June 26, 2014, respectively. Details are summarized below:

2014 2013 Dividends Dividends per share per share Amount (in NT dollars) Amount (in NT dollars) Legal reserve $ 188,212 NT$ - $ 164,173 NT$ - Reversal of ( 9,876) - - - special reserve Cash dividends 1,698,089 2.24 1,498,449 2.00 Total $ 1,876,425 NT$ 2.24 $ 1,662,622 NT$ 2.00

T F. The appropriation of 2015 earnings had been proposed at the Board of Directors meeting on March 18, 2016. Details are summarized below: 2015 Dividends per share Amounts (in NT dollars) Legal reserve $ 204,061 NT$ - Reversal of special reserve ( 166) - Cash dividends 1,828,815 2.40 $ 2,032,710 NT$ 2.40 Total The appropriation of 2015 earnings had not been resolved at the stockholders‘ meeting until March 18, 2016.

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G. On June 22, 2015, the abovementioned 2014 earnings appropriation and capitalization of capital surplus was approved by the Board of Directors with the issue date on August 3, 2015. In addition, during the Board of Directors in July 13, 2015, since outstanding stocks will be influenced by convertible bonds and employees‘ share rights, the stockholders approved the adjustment of the rate of distributed dividends from NT$2.24 per share to NT$2.2334469 per share. H. For information relating to employees‘ remuneration (bonuses) and directors‘ and supervisors‘ remuneration, please refer to Note 6(24). (22) Operating revenue For the year ended For the year ended December 31, 2015 December 31, 2014 Construction contract revenue $ 41,534,145 $ 37,563,575 Other operating revenue 515,082 496,628 Total $ 42,049,227 $ 38,060,203

(23) Expense by nature For the year ended For the year ended December 31, 2015 December 31, 2014 Materials $ 14,352,688 $ 14,339,988 Subcontract costs 11,359,628 11,044,812 Employee benefit expense 4,780,105 4,328,844 Temporary equipment 693,756 517,438 Rental expenses 599,560 491,961 Insurance expenses 44,678 28,304 Travel expenses 264,015 257,770 Depreciation charges on property, plant and equipment 53,940 56,281 Amortisation on intangible assets 111,929 105,544 Joint ventures 4,213,376 2,309,904 Others 4,384,532 3,298,447 Total $ 40,858,207 $ 36,779,293

(24) Employee benefit expense For the year ended December 31, 2015 For operating costs For operating expenses Total Salaries and wages $ 3,622,137 $ 543,317 $ 4,165,454 Labor and health insurance fees 259,311 36,274 295,585 Pension costs 156,731 30,245 186,976 Other personnel expenses 118,382 13,708 132,090 $ 4,156,561 $ 623,544 $ 4,780,105

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For the year ended December 31, 2014 For operating costs For operating expenses Total Salaries and wages $ 3,224,330 $ 525,208 $ 3,749,538 Employee stock options 5,266 - 5,266 Labor and health insurance fees 229,892 37,060 266,952 Pension costs 164,030 24,955 188,985 Other personnel expenses 106,591 11,512 118,103 $ 3,730,109 $ 598,735 $ 4,328,844 As of December 31, 2015 and 2014, Company had 2,780 and 2,777 employees, respectively. A. According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute bonus to the employees and pay remuneration to the directors and supervisors that should be 1.5% to 5% and not be higher than 1.5%, respectively, of the total distributed amount. However, in accordance with the Company Act amended in May 20, 2015, a company shall distribute employee compensation, based on the profit of the current year distributable, in a fixed amount or a ratio of profits. If a company has accumulated deficit, earnings should be channeled to cover losses. A company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders' meeting. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation. The Board of Directors of the Company has approved the amended Articles of Incorporation of the Company on March 18, 2016. According to the amended articles, a ratio of profit of the current year distributable, after covering accumulated losses, shall be distributed as employees' compensation and directors‘ and supervisors‘ remuneration. The ratio shall be 1.5% to 5% for employees‘ compensation and shall not be higher than 1.5% for directors‘ and supervisors‘ remuneration. The amended articles will be resolved at the shareholders‘ meeting in 2016. B. For the years ended December 31, 2015 and 2014, employees‘ bonus was accrued at $55,111 and $51,092, respectively; directors‘ and supervisors‘ remuneration was accrued at $15,000 and $13,752, respectively. The aforementioned amounts were recognized in salary expenses. The employees‘ compensation and directors‘ and supervisors‘ remuneration were estimated and accrued based on an amount 1.5% to 5% and not higher than 1.5% of distributable profit of current year for the year ended December 31, 2015. The employees‘ compensation and the directors‘ and supervisors‘ remuneration have not been resolved at the shareholders‘ meeting. The employees‘ compensation will be distributed in the form of shares or cash. The expenses recognized for the year of 2014 were accrued based on the net income of 2014 for employees‘ compensation of $51,092 and directors‘ and supervisors‘ remuneration of $13,752, taking into account other factors such as legal reserve. The employees‘ compensation and directors‘ and supervisors‘ remuneration resolved at the shareholders‘ meeting were $51,092 and $15,000, respectively. The difference between employees‘ bonus (directors‘ and supervisors‘ remuneration) as resolved at the shareholders‘ meeting and the amount recognized in the 2014 financial statements by $1,248, mainly caused by estimate adjustment, had been adjusted in the profit or loss of 2015.

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Information about employees‘ compensation and directors‘ and supervisors‘ remuneration of the Company as resolved at the Board of Directors‘ meeting will be posted in the ―Market Observation Post System‖ at the website of the Taiwan Stock Exchange. (25) Income tax A. Components of income tax expense: For the year ended For the year ended December 31, 2015 December 31, 2014 Current tax : Current tax on profits for the period $ 338,818 $ 265,444 Adjustments in respect of prior years 12,739 6,880 Total current tax 351,557 272,324 Deferred tax: Origination and reversal of temporary differences 80,388 10,581 Tax credit of investment ( 8,398) ( 7,695) Total deferred tax 71,990 2,886 Income tax expense $ 423,547 $ 275,210

B. Reconciliation of differences between financial income and taxable income: For the year ended For the year ended December 31, 2015 December 31, 2014 Net income before tax calculated by the legal tax rate $ 419,038 $ 397,413 Effects from items disallowed by tax regulation 64,261 ( 60,833) Prior year income tax underestimate 12,739 6,880 Tax-exempt income ( 3,957) ( 5,448) Reduction of expense for R&D investments ( 8,398) ( 7,695) Others ( 60,136) ( 55,107) $ 423,547 $ 275,210 Income tax expense

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C. Amounts of deferred tax assets or liabilities as a result of temporary difference are as follows: For the year ended December 31, 2015

Recognised in Recognised in other January 1 profit or loss comprehensive income December 31 Temporary differences: Deferred tax assets: Unrealized construction loss $ 16,350 $ 1,946 $ - $ 18,296 Unrealized bad debts 17,170 - - 17,170 Short-term paid absences (holiday leave) 21,358 364 - 21,722 Unrealized exchange loss 3,728 ( 3,325) - 403 Unrealized loss on financial instruments 510 - - 510 Unrealized membership fees of the golf club 918 - - 918 Unrealized labor pension 373,786 ( 25,025) 18,303 367,064 Others 22,512 ( 10,948) - 11,564 Subtotal $ 456,332 ($ 36,988) $ 18,303 $ 437,647 Deferred tax liabilities: Unrealized exchange gain ($ 15,253) $ 7,786 $ - ($ 7,467) Unrealized investment income from foreign equity investments ( 224,098) ( 51,186) - ( 275,284) Others ( 6,571) - - ( 6,571)

Subtotal ($ 245,922) ($ 43,400) $ - ($ 289,322) Total $ 210,410 ($ 80,388) $ 18,303 $ 148,325

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For the year ended December 31, 2014 Recognised in Recognised in other January 1 profit or loss comprehensive income December 31 Temporary differences: Deferred tax assets: Unrealized construction loss $ 10,852 $ 5,498 $ - $ 16,350 Unrealized bad debts 17,170 - - 17,170 Short-term paid absences (holiday leave) 21,306 52 - 21,358 Unrealized exchange loss 4,193 ( 465) - 3,728 Unrealized loss on financial instruments 510 - - 510 Unrealized membership fees of the golf club 918 - - 918 Unrealized labor pension 398,173 ( 22,698) ( 1,689) 373,786 Others 15,913 6,599 - 22,512 Subtotal $ 469,035 ($ 11,014) ($ 1,689) $ 456,332 Deferred tax liabilities: Unrealized exchange gain ($ 11,922) ($ 3,331) $ - ($ 15,253) Unrealized investment income from foreign equity investments ( 225,892) 1,794 - ( 224,098) Others ( 8,541) 1,970 - ( 6,571)

Subtotal ($ 246,355) $ 433 $ - ($ 245,922) Total $ 222,680 ($ 10,581) ($ 1,689) $ 210,410 D. As of December 31, 2015, the Company‘s income tax returns through 2013 have been assessed and approved by the Tax Authority. E. The Company obtained income tax exemption as follows:

Tax exemption amount Period of for the years ended December 31, Applicable laws tax exemption 2015 2014 The Company Regulations governing the application of the 2011.01.01~ $ 23,277 $ 32,048 incentive for a five- year exemption from profit- 2015.12.31 seeking enterprise income tax to the investments made by enterprise in the manufacturing industry and the technical service industry between July 1, 2008 and December 31, 2009

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F. Unappropriated retained earnings: December 31, 2015 December 31, 2014 January 1, 2014 Earnings generated in $ 47,819 $ 47,819 $ 47,819 and before 1997 Earnings generated in 2,429,873 2,385,106 1,862,903 and after 1998 As of December 31, 2015, December 31, 2014 and January 1, 2014, the balance of the imputation tax credit account was $186,080, $203,969 and $301,536 respectively. The creditable tax rate was 18.47% for 2014 and is estimated to be 20.88% for 2015. (26) Earnings per share For the year ended December 31, 2015 Weighted-average Amount number of ordinary shares Earnings per share after tax outstanding (share in thousands) (in dollars) Basic earnings per share Profit attributable to the ordinary shareholders of the parent $ 2,040,610 758,195 $ 2.69

Diluted earnings per share Effects of dilutive potential ordinary shares Employee bonus - 1,443 Employee stock options - 2,225 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 2,040,610 761,863 $ 2.68

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For the year ended December 31, 2014 Weighted-average Amount number of ordinary shares Earnings per share after tax outstanding (share in thousands) (in dollars) Basic earnings per share

Profit attributable to the ordinary shareholders of the parent $ 2,092,199 750,959 $ 2.79

Diluted earnings per share Effects of dilutive potential ordinary shares Employee bonus - 1,056 Employee stock options - 5,968 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares $ 2,092,199 757,983 $ 2.76

(27) Operating leases The Company leases land and buildings under operating lease agreements. These leases have terms expiring between 2007 and 2029. The lease expenses recognized for the years ended December 31, 2015 and 2014 were $599,560 and $491,961, respectively.

The Company‘s future aggregate minimum lease payments under non-cancellable operating leases are as follows: December 31, 2015 December 31, 2014 January 1, 2014 Not later than one year $ 279,302 $ 279,302 $ 279,302 Later than one year but not 1,396,510 1,396,510 1,396,510 later than five years Later than five years 2,031,219 2,310,521 2,589,823 $ 3,707,031 $ 3,986,333 $ 4,265,635

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7. RELATED PARTY TRANSACTIONS Significant transactions and balances with related parties (1) Sales of services: For the year ended For the year ended December 31, 2015 December 31, 2014 Associates $ 151,769 $ 70,628 Subsidiaries 34,701 88,306 Entities with significant influence over the entity 2,256 1,773 Other related parties - ( 85) $ 188,726 $ 160,622

A. The rate on the construction 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. B. Innovest Investment Corporation, the subsidiary, invested in Powertec Energy Corporation which became an associated enterprise on August, 2014. Due to its contracted engineering with Powertec Energy Corporation, the Company recognized operating revenue of $126,566 for the seven-month period ended July 31, 2014. As of December 31, 2015 and 2014, the Company recognized total operating revenue amounting to $9,776,664 and $9,624,895, respectively, notes receivable amounted to $586,246 and $1,411,400 (less doubtful accounts amounting to $800,000 and $13,288), respectively, and accounts receivable amounted to $17,328 and $186, respectively. (2) Other operating revenue For the year ended For the year ended December 31, 2015 December 31, 2014 Subsidiaries $ 38,777 $ 49,357 Associates 7,577 2,682 $ 46,354 $ 52,039 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. (3) Purchases of services:

For the year ended For the year ended December 31, 2015 December 31, 2014 Subsidiaries $ 3,179,959 $ 2,991,439 Associates 292,916 664,821 Entities with significant influence over the entity 1,221 - $ 3,474,096 $ 3,656,260 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.

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(4) Other operating costs For the year ended For the year ended December 31, 2015 December 31, 2014 $ 375,699 Subsidiaries $ 431,272 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. (5) Accounts receivable

December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 11,842 $ 19,990 $ 284,622 Associates 17,989 621 - Entities with significant influence over the entity 693 641 688 $ 30,524 $ 21,252 $ 285,310 (6) Other receivables-related parties (Reclassified from accounts receivable):

December 31, 2015 December 31, 2014 January 1, 2014

Subsidiaries $ 10,904 $ 50,605 $ 93,090 As of December 31, 2015, certain accounts receivable from related parties which are not on regular collection terms, was reclassified to ―other receivables-related parties‖ whose aging is from 90 to 360 days. (7) Other receivables-related parties:

December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 12,841 $ 7,409 $ 20,990 Associates - 4 8 $ 12,841 $ 7,413 $ 20,998 Includes advances to related parties for engineering and business travel, etc. (8) Loans to related parties (shown in other receivables - related parties): A. Receivables from related parties

December 31, 2015 December 31, 2014 January 1, 2014 $ 1,527,850 $ 1,547,540 $ 2,688,633 Subsidiaries B. Interest income For the year ended For the year ended December 31, 2015 December 31, 2014 Subsidiaries $ 14,059 $ 20,765 The loans to subsidiaries are repayable within one year and carry interest at 0.765%~1.00% per annum for the years ended December 31, 2015 and 2014, respectively.

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(9) Other non-current assets- related parties (Reclassified from accounts receivable):

December 31, 2015 December 31, 2014 January 1, 2014

Subsidiaries $ 48,089 $ 150,076 $ 476,213 As of December 31, 2015, certain accounts receivable from related parties which are not on regular collection terms, was reclassified to ―other non-current assets‖ whose aging is over 360 days. (10) Accounts payable

December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 1,684,036 $ 1,332,815 $ 879,898 Associates 174,528 189,299 16,134 $ 1,858,564 $ 1,522,114 $ 896,032 (11) Other payables

December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 56,991 $ 18,555 $ 87,843 Entities with significant influence over the entity 542 - - $ 57,533 $ 18,555 $ 87,843

Includes advances to CTCI‘s customs duty. (12) Progress billings December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 3,502,293 $ 18,433,165 $ 11,710,753 Associates 10,237,446 9,998,703 - Entities with significant influence over the entity 2,229 1,743 3,303 $ 13,741,968 $ 28,433,611 $ 11,714,056 (13) Rental income A. Assets leased to related parties are as follows: Leased assets Lessee December 31, 2015 December 31, 2014 January 1, 2014 Land and buidings Subsidiaries $ 155,582 $ 156,904 $ 158,226 B. Rental income For the year ended For the year ended Lessee Rental amount December 31, 2015 December 31, 2014 Subsidiaries-A $268/month/quarterly collection $ 3,217 $ 3,217 Subsidiaries-B $265/month/quarterly collection 3,175 3,175 Subsidiaries-C $1,135/month/quarterly collection 13,616 13,616 $ 20,008 $ 20,008

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(14) Rental expense For the years ended December 31 Lessor Leased assets Rental amount 2015 2014 Entities with significant Land / Buildings $698/month/ $ 8,372 $ 8,372 influence over the entity semiannual payment $23,772/month/ monthly payment Subsidiaries-D Land / Buildings 285,257 275,707 Refundable deposit of $128,300 $46/month/ half Subsidiaries-C Land / Buildings/Cars - 296 year payment $ 293,629 $ 284,375 (15) Guarantees for related parties December 31, 2015 December 31, 2014 January 1, 2014 Subsidiaries $ 21,092,682 $ 22,654,977 $ 22,837,069 As of December 31, 2015, December 31, 2014, and January 1, 2014 the Company had used guarantees in the amount of $8,624,818, $7,643,205 and $7,771,979, respectively, for related parties, and guarantees under various construction contracts amounting to $5,977,873, $7,134,633 and $6,855,989, respectively. (16) Key management compensation For the years ended December 31, 2015 2014 Salaries and other short-term $ 84,894 $ 92,214 employee benefits Post-employment benefits 500 2,133 Share-based payments - 1,027 Other long-term benefits 196 322 $ 85,590 $ 95,696 8. PLEDGED ASSETS Book value Pledged assets December 31, 2015 December 31, 2014 January 1, 2014 Purpose Other non-current assets Pledged bank deposits $ 8,025 $ 1,547 $ 300 Guarantee for oil expense, bank guarantee Guarantee for oil expense, rent, Refundable deposits 203,283 199,460 190,284 construction contracts $ 211,308 $ 201,007 $ 190,584

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS In addition to those items which have been disclosed in Note 6(27), 7, the significant contingent liabilities and unrecognized contract commitments of the Company as of December 31, 2015 were as follows: (1) Guarantee A. The Company had outstanding notes payable for security deposits various construction projects amounting to $1,593,247. B. The Company had outstanding notes payable for bank financing amounting to $55,786,127. (2) The Company had unused and outstanding letters of credit of approximately $1,463,626. (3) The Company had outstanding commitments for construction subcontracts amounting to $11,543,464. (4) The Company had a joint procurement project with Mitsubishi Heavy Industries, Ltd. in 1996. The construction was completed on February 19, 2000 and accepted by the Environmental Protection Administration (the ―EPA‖) on May 16, 2000. According to the contract, the Company provided warranty deposit amounting to $141,690 on the materials of the equipment. As the Kaohsiung County government, the user of the incineration, had a dispute with the operating manufacturer, the EPB rejected to repay the deposit. The EPA availed of the warranty deposit on February 4, 2009. As a result, the Company had to remit $73,253 to the procurement department of Bank of Taiwan Co., Ltd. Consequently, the Company took action to cancel the deposit of $141,690 and filed a lawsuit requiring EPA to repay the $73,253. 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 $117 and damage loss of $2,421. The case was reverted back to the Taiwan High Court after being handled by the Supreme Court. The Taiwan High Court reverted the case back again to the Supreme Court. Thus, the case is currently pending with the Supreme Court as of December 31, 2015. 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. 10. SIGNIFICANT DISASTER LOSS None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE Please see Note 6(21)F for detailed information about the appropriation of 2015 earnings that had been resolved at the Board of Directors‘meeting on March 18, 2016. 12. OTHERS (1) Capital risk management The Company‘s objectives when managing capital are to safeguard the Company‘s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‗current and non-current borrowings‘ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‗equity‘ as shown in the consolidated balance sheet.

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The gearing ratios as of December 31, 2015, December 31, 2014 and January 1, 2014 were as follows: December 31, 2015 December 31, 2014 January 1, 2014 Total borrowings $ 2,126,000 $ - $ - Total equity $ 17,019,448 $ 17,137,716 $ 16,472,113 Gearing ratio 12.49% - -

(2) Financial instruments A. Fair value information of financial instruments Except for those listed in the table below, the carrying amounts of the Company‘s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, accounts payable, other payables and long-term borrowings which was included current portion) approximate their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(3). B. Financial risk management policies (a) The Company‘s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company‘s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company‘s financial position and financial performance. (b) Risk management is carried out by a treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company‘s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. C. Significant financial risks and degrees of financial risks (a) Market risk Foreign exchange risk i) The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD and EUR. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. ii) Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The group companies are required to hedge their entire foreign exchange risk exposure with the Company treasury. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, entities in the Company use forward foreign exchange contracts, transacted with Company treasury. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity‘s functional currency. iii) The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk.

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iv) The Company‘s businesses involve some non-functional currency operations (the Company‘s and certain subsidiaries‘ functional currency: NTD; other certain subsidiaries‘ functional currency: USD, RMB, etc.). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2015 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 41,869 32.90 $ 1,377,490 EUR：NTD 8,144 35.94 292,695 JPY：NTD 111,051 0.27 29,984 THB：NTD 1,996 0.91 1,816 RMB：NTD 15,496 4.99 77,325 SEK：NTD 413 3.90 1,611 AUD：NTD 184 24.00 4,416 SGD：NTD 731 23.26 17,003 Financial liabilities Monetary items USD：NTD 4,008 32.90 131,863 EUR：NTD 3,577 35.94 128,557 JPY：NTD 51,727 0.27 13,966 GBP：NTD 12 48.74 585 THB：NTD 4,193 0.91 3,816 SGD：NTD 12 23.26 279

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December 31, 2014 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 57,459 31.62 $ 1,816,854 EUR：NTD 8,349 38.55 321,854 JPY：NTD 486,926 0.26 126,601 GBP：NTD 75 49.36 3,702 THB：NTD 4,191 0.97 4,065 RMB：NTD 426,123 5.10 2,173,227 SEK：NTD 898 4.09 3,673 CHF：NTD 113 32.06 3,623 AUD：NTD 7 25.96 182 SGD：NTD 1,580 23.99 37,904 CAD：NTD 20 27.33 547 Financial liabilities Monetary items USD：NTD 2,600 31.62 82,212 EUR：NTD 159 38.55 6,129 JPY：NTD 2,668 0.26 694 THB：NTD 959 0.97 930

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January 1, 2014 Foreign Currency Amount (In Thousands) Exchange Rate Book Value (Foreign currency: functional currency) Financial assets Monetary items USD：NTD $ 151,835 29.85 $ 4,532,275 EUR：NTD 10,641 41.26 439,048 JPY：NTD 498,193 0.29 144,476 GBP：NTD 64 49.45 3,165 THB：NTD 53,875 0.91 49,242 RMB：NTD 303,874 4.94 1,500,530 SEK：NTD 554 4.66 2,582 CHF：NTD 2,099 33.66 70,652 AUD：NTD 3 26.69 80 SGD：NTD 2,365 23.67 55,980 CAD：NTD 71 28.12 1,997 Financial liabilities Monetary items USD：NTD 7,259 29.85 216,681 EUR：NTD 1,122 41.26 46,294 JPY：NTD 53,940 0.29 15,384 CHF：NTD 47 33.66 1,582 THB：NTD 2,612 0.91 2,387 SGD：NTD 10 23.67 237 SAR：NTD 286 7.96 2,277 v) The unrealised exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2015 and 2014 amounted to $2,635, and $175,301, respectively.

340 vi) Analysis of foreign currency market risk arising from significant foreign exchange variation: December 31, 2015 Sensitivity Analysis Effect on Other Degree of Effect on Profit Comprehensive Variation or Loss Income (Foreign currency: functional currency) Financial assets Monetary items USD：NTD 1% $ 13,775 $ - EUR：NTD 1% 2,927 - JPY：NTD 1% 300 - THB：NTD 1% 18 - RMB：NTD 1% 773 - SEK：NTD 1% 16 - AUD：NTD 1% 44 - SGD：NTD 1% 170 - Financial liabilities Monetary items USD：NTD 1% 1,319 - EUR：NTD 1% 1,286 - JPY：NTD 1% 140 - GBP：NTD 1% 6 - THB：NTD 1% 38 - SGD：NTD 1% 3 -

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December 31, 2014 Sensitivity Analysis Effect on Other Degree of Effect on Profit Comprehensive Variation or Loss Income (Foreign currency: functional currency) Financial assets Monetary items USD：NTD 1% $ 18,169 $ - EUR：NTD 1% 3,219 - JPY：NTD 1% 1,266 - GBP：NTD 1% 37 - THB：NTD 1% 41 - RMB：NTD 1% 21,732 - SEK：NTD 1% 37 - CHF：NTD 1% 36 - AUD：NTD 1% 2 - SGD：NTD 1% 379 - CAD：NTD 1% 5 - Financial liabilities Monetary items USD：NTD 1% 822 - EUR：NTD 1% 61 - JPY：NTD 1% 7 - THB：NTD 1% 9 -

Price risk The Company is exposed to equity securities price risk because of investments held by the Company and classified on the non-consolidated balance sheet either as available-for-sale or at fair value through profit or loss. The Company is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company. Interest rate risk The Company‘s interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During the years ended December 31, 2015 and 2014, the Company‘s borrowings at variable rate were denominated in NTD.

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(b) Credit risk i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company‘s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. ii. The credit quality information of financial assets that are neither past due nor impaired is as follows: December 31, 2015 Group 1 Group 2 Group 3 Notes and accounts receivable $ 2,274,105 $ 119,316 $ 714,907

December 31, 2014 Group 1 Group 2 Group 3 Notes and accounts receivable $ 361,162 $ 137,830 $ 436,493

January 1, 2014 Group 1 Group 2 Group 3 Notes and accounts receivable $ 85,295 $ 99,715 $ 1,148,185

Group 1：Government or state- owned enterprise. Group 2：Listed companies. Group 3：The company does not belong to group 1 or group 2. iii. The ageing analysis of financial assets that were past due but not impaired is as follows: December 31, 2015 December 31, 2014 January 1, 2014 Notes and accounts receivable Up to 30 days $ 15,884 $ 1,987 $ 753,540 31 to 90 days 1,526 - 2,531,749 91 to 180 days 14,060 - - Over 181 days 587,970 2,539,950 - $ 619,440 $ 2,541,937 $ 3,285,289 iv. Movements on the Company‘s provision for impairment of accounts receivable are as follows: i) As of December 31, 2015 and 2014, the Company‘s accounts receivable that were impaired amounted to $800,335 and $13,330, respectively.

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ii) Movements on the Company‘s provision for impairment of accounts receivable are as follows: 2015 2014 At January 1 $ 13,330 $ 100,900 Reversal of impairment - ( 87,570) Provision for impairment 787,005 - At December 31 $ 800,335 $ 13,330

(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. Non-derivative financial liabilities: December 31, 2015 Less than 1 year More than 1 year Short-term borrowings $ 2,126,000 $ - Notes payable 8,190 - Accounts payable 10,236,815 - Other payables 1,483,015 -

Non-derivative financial liabilities: December 31, 2014 Less than 1 year More than 1 year Notes payable $ 5,083 $ - Accounts payable 11,878,310 - Other payables 1,317,253 -

Non-derivative financial liabilities: January 1, 2014 Less than 1 year More than 1 year Notes payable $ 2,100 $ - Accounts payable 10,103,766 - Other payables 1,374,121 -

Derivative financial liabilities: Between 3 months December 31, 2015 Less than 3 months and 1 year Commodity swap contracts $ 1,575 $ 119

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Derivative financial liabilities: Between 3 months December 31, 2014 Less than 3 months and 1 year Forward exchange contracts $ 241 $ - Commodity swap contracts 7,756 6,440

Derivative financial liabilities: Between 3 months January 1, 2014 Less than 3 months and 1 year Interest rate swaps (net-settled) $ - $ 11,151 Forward exchange contracts 3,423 115 Commodity swap contracts - 4,814 (d) Cash flow risk from variations of rates There is no significant cash flow risk from variations of rates since accounts payable are due less than one year. (3)Fair value information A. Details of the fair value of the Company‘s financial assets and financial liabilities not measured at fair value are provided in Note 12(2)A. B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company‘s investment in listed stocks and beneficiary certificates 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 is not based on observable market data.

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C. The following table presents the Company‘s financial assets and liabilities that are measured at fair value as of December 31, 2015, December 31, 2014, and January 1, 2014. December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 130,927 $ - $ - $ 130,927 Derivative financial - 23,349 - 23,349 assets Available-for-sale financial assets Equity securities 377,033 - - 377,033 Total $ 507,960 $ 23,349 $ - $ 531,309

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial liabilities $ - $ 1,694 $ - $ 1,694

December 31, 2014 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 1,119,290 $ - $ - $ 1,119,290 Derivative financial - 55,191 - 55,191 assets Available-for-sale financial assets Equity securities 371,518 - - 371,518 Total $ 1,490,808 $ 55,191 $ - $ 1,545,999

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial $ - $ 14,437 $ - $ 14,437 liabilities

346

January 1, 2014 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Mutual funds $ 432,145 $ - $ - $ 432,145 Derivative financial - 31,086 - 31,086 assets Available-for-sale financial assets Equity securities 370,594 - - 370,594 Total $ 802,739 $ 31,086 $ - $ 833,825

Financial liabilities: Financial liabilities at fair value through profit or loss Derivative financial $ - $ 19,503 $ - $ 19,503 liabilities D. The methods and assumptions the Company used to measure fair value are as follows: (a) The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics: Listed shares Open-end fund Market quoted price Closing price Net asset value (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters). E. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. F. Specific valuation techniques used to value financial instruments include: (a) Quoted market prices or dealer quotes for similar instruments. (b) The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value. (c) Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

347

13. SUPPLEMENTARY DISCLOSURES (1) Significant transactions information A. Loans to others: Please refer to table 1. B. Provision of endorsements and guarantees to others: Please refer to table 2. C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3. D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company‘s paid-in capital: Please refer to table 4. E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None. F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None. G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 5. H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 6. I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2) and 12(2). J. Significant inter-company transactions during the reporting periods: Please refer to table 7. (2) Information on investees Names, locations and other information of investee companies (not including investees in Mainland China)：Please refer to table 8. (3) Information on investments in Mainland China A. Basic information: Please refer to table 9. B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

348 CTCI Corporation Loans to others December 31, 2015 Table 1 Expressed in thousands of NTD (Except as otherwise indicated)

0 CTCI Corp. CTCI Arabia Other Yes 1,024,075 986,850 986,850 0.82%-0.881% 2 - For - - - 3,403,890 6,807,779 - Ltd. receivables- operational related need parties

0 CTCI Corp. CTCI Other Yes 1,250,000 700,000 541,000 0.88%-1% 2 - For - - - 3,403,890 6,807,779 - Machinery receivables- operational Corp. related need parties

0 CTCI Corp. E & C Other Yes 200,000 200,000 - - 2 - For - - - 3,403,890 6,807,779 - Engineering receivables- operational Corp. related need parties

0 CTCI Corp. Resources Other Yes 400,000 400,000 - - 2 - For - - - 3,403,890 6,807,779 - Engineering receivables- operational Service Inc. related need parties

0 CTCI Corp. ShangDing Other Yes 98,685 98,685 - - 2 - For - - - 3,403,890 6,807,779 - Engineering & receivables- operational Construction related need Co., Ltd. parties

1 CTCI Overseas ShangDing Other Yes 384,506 384,214 230,265 0.919%-0.983% 2 - For - - - 964,929 964,929 - Co., Ltd. Engineering & receivables- operational Construction related need Co., Ltd. parties

~349~ Maximum outstanding balance during Amount of General the year ended Balance at transactions Reason Allowance Limit on loans Ceiling on Collateral ledger Is a December 31, December 31, Nature of with the for short-term for granted to total loans No. account related 2015 2015 Actual amount Interest loan borrower financing doubtful a single party granted （Note 1） Creditor Borrower （Note 2） party （Note 3）（Note 8） drawn down rate （Note 4）（Note 5）（Note 6） accounts Item Value （Note 7）（Note 7） Footnote 1 CTCI Overseas Superiority Other Yes 63,407$ 60,086$ 60,086$ 0.929% 2 -$ For -$ - -$ 964,929$ 964,929$ - Co., Ltd. (Thailand) receivables- operational Co., Ltd related need parties

1 CTCI Overseas CIPEC Other Yes 17,852 17,838 17,838 0.936% 2 - For - - - 964,929 964,929 - Co., Ltd. Construction receivables- operational Inc. related need parties

1 CTCI Overseas CTCI Americas, Other Yes 39,474 39,474 - - 2 - For - - - 964,929 964,929 - Co., Ltd. Inc. receivables- operational related need parties

2 KD Holding Corp. G.D. Other Yes 30,000 30,000 29,000 1.60% 2 - For - - - 443,895 1,775,582 - Development receivables- operational Corporation related need parties

~350~ 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, 2015. 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.

~351~ CTCI Corporation Provision of endorsements and guarantees to others December 31, 2015 Table 2 Expressed in thousands of NTD

(Except as otherwise indicated)

0 CTCI Corp. CTCI Overseas 3 51,058,344 5,698,729 4,514,222 1,154,307 - 26.52% 102,116,688 Y N N - Co., Ltd.

0 CTCI Corp. Jing Ding 3 51,058,344 843,615 703,023 79,766 - 4.13% 102,116,688 Y N Y - Engineering & Construction Co., Ltd.

0 CTCI Corp. CTCI Arabia Ltd. 3 51,058,344 5,503,573 5,416,968 4,172,703 - 31.83% 102,116,688 Y N N -

0 CTCI Corp. CIMAS Engineering 3 51,058,344 409,630 32,895 6 - 0.19% 102,116,688 Y N N - Co., Ltd. 0 CTCI Corp. CTCI Chemical 3 51,058,344 22,128 21,563 1,797 - 0.13% 102,116,688 Y N N - Corp.

~352~ Ratio of Maximum accumulated Party being outstanding Outstanding endorsement/ Provision of Provision of Provision of endorsed/guaranteed Limit on endorsement/ endorsement/ guarantee Ceiling on endorsements/ endorsements/ endorsements/ Relationship endorsements/ guarantee guarantees Amount of amount to net total amount of guarantees by guarantees by guarantees to with the guarantees amount as of amount at endorsements/ asset value of endorsements/ parent subsidiary to the party in endorser/ provided for a December 31, December 31, Actual amount guarantees the endorser/ guarantees company to parent Mainland Number Endorser/ guarantor single party 2015 2015 drawn down secured with guarantor provided subsidiary company China （Note 1） guarantor Company name （Note 2）（Note 3）（Note 4）（Note 5）（Note 6） collateral company （Note 3）（Note 7）（Note 7）（Note 7） Footnote 0 CTCI Corp. E&C Engineering 2 51,058,344$ 31,431$ 31,431$ -$ -$ 0.18% 102,116,688$ Y N N - Corp.

1 Advanced Century Ahead 2 516,391 19,752 19,737 - - 3.82% 1,032,782 N N N - Control & Ltd. System Inc.

2 E&C CTCI Machinery 5 2,460,642 1,230,407 1,230,407 1,230,407 - 150.01% 4,921,284 N N N - Engineering Corp. Corp.

2 E&C Shanghai XuanLi 5 2,460,642 64,168 61,944 61,944 - 7.55% 4,921,284 N N Y - Engineering Trading Co., Corp. Ltd.

2 E&C ShangDing 5 2,460,642 130,978 117,765 117,765 - 14.36% 4,921,284 N N Y - Engineering Engineering & Corp. Construction Co., Ltd.

2 E&C Resources 5 2,460,642 22,803 - - - 0.00% 4,921,284 N N N - Engineering Engineering Corp. Service Inc.

3 CTCI Machinery E&C Engineering 5 1,373,331 426,323 426,323 426,323 - 93.13% 2,746,662 N N N - Corp. Corp.

4 CTCI Chemical CTCI Corp. 4 629,211 18,817 18,817 18,817 - 8.97% 1,258,422 N Y N - Corp.

~353~ Ratio of Maximum accumulated Party being outstanding Outstanding endorsement/ Provision of Provision of Provision of endorsed/guaranteed Limit on endorsement/ endorsement/ guarantee Ceiling on endorsements/ endorsements/ endorsements/ Relationship endorsements/ guarantee guarantees Amount of amount to net total amount of guarantees by guarantees by guarantees to with the guarantees amount as of amount at endorsements/ asset value of endorsements/ parent subsidiary to the party in endorser/ provided for a December 31, December 31, Actual amount guarantees the endorser/ guarantees company to parent Mainland Number Endorser/ guarantor single party 2015 2015 drawn down secured with guarantor provided subsidiary company China （Note 1） guarantor Company name （Note 2）（Note 3）（Note 4）（Note 5）（Note 6） collateral company （Note 3）（Note 7）（Note 7）（Note 7） Footnote 4 CTCI Chemical Resources 5 629,211$ 12,766$ -$ -$ -$ 0.00% 1,258,422$ N N N - Corp. Engineering Service Inc.

4 CTCI Chemical CTCI Machinery 5 629,211 230,473 - - - 0.00% 1,258,422 N N N - Corp. Corp.

5 ShangDing Shanghai XuanLi 2 1,314,047 276,051 108,554 - - 24.78% 2,628,094 N N Y - Engineering & Trading Co., Construction Ltd. Co., Ltd.

6 KD Holding G.D. 6 8,877,908 640,017 629,076 395,612 - 14.17% 26,633,724 N N N - Corp. Development Corporation

7 Resources E&C Engineering 5 920,926 1,760 1,760 1,760 - 0.57% 1,841,852 N N N - Engineering Corp. Service Inc.

~354~ 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 50% 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 reviewed or 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 reviewed or 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 reviewed or 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 reviewed or 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.

~355~ CTCI Corporation Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2015 Table 3 Expressed in thousands of NTD (Except as otherwise indicated)

(Note 1) As of December 31, 2015

CTCI Corp. Fund BlackRock Global Fund - US N/A Financial assets at fair 13,372 31,421 - 30,496 - Basic Value Fund value through profit or loss-current

CTCI Corp. Fund MIRAE ASSET ASIA N/A Financial assets at fair 67,708 31,346 - 28,999 - GREAT CONSUMER value through profit or EQUITY FUND loss-current

CTCI Corp. Fund Aberdeen Global-Japanese N/A Financial assets at fair 40,236 21,532 - 21,141 - Smaller Companies Fund A2 value through profit or Base Currency Exposure USD loss-current

CTCI Corp. Fund BlackRock Global Fund - N/A Financial assets at fair 24,876 9,204 - 9,206 - European Value Fund A2 value through profit or USD Hedged loss-current

CTCI Corp. Fund Janus Global Life Sciences A N/A Financial assets at fair 16,680 16,372 - 15,797 - USD value through profit or loss-current

CTCI Corp. Fund Fidelity America A-USD N/A Financial assets at fair 23,403 6,580 - 6,934 - value through profit or loss-current

CTCI Corp. Fund Allianz Global Investors N/A Financial assets at fair 1,000,000 10,000 - 9,614 - Target IncA TWD value through profit or loss-current

136,455 130,927$ Adjustment 5,528)( 130,927$

~356~ (Note 1) As of December 31, 2015

CTCI Corp. Common Stock Gintech Energy Corporation. The Company's Available-for-sale 1,827,629 82,206 - 58,575 - President is financial assets-current the director

CTCI Corp. Common Stock CHIYODA The subsidiary is the Available-for-sale 38,000 12,607 - 9,579 - Board of director financial assets-current

~357~ (Note 1) As of December 31, 2015