ACC - AGM Information 2014 | FinancialReports.eu

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遠東集團

FAR EASTERN GROUP

Stock Code: 1102 http://emops.twse.com.tw

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ASIA CEMENT CORPORATION Handbook For

The 2014 Regular Shareholders’ Meeting

Meeting Time: 9:00 A.M., June 16, 2014

Meeting Venue: The Banquet Hall In Taipei Hero House No. 20, Sec. 1, Changsha St., Zhongzheng Dist., Taipei City

I MEETING AGENDA ..........................................................................................................................................1 II REPORTING EVENTS.....................................................................................................................................2 REPORT 1: 2013 BUSINESS REPORT ......................................................................................................................2 REPORT 2: 2013 FINANCIAL STATEMENTS .......................................................................................................... 15 REPORT 3: SUPERVISOR’S REVIEW REPORT ON THE 2013 FINANCIAL STATEMENTS ............................................ 35 REPORT 4: REPORT ON ISSUED CORPORATE BOND ............................................................................................. 36 REPORT 5: THE MEASUREMENTS OF INVESTMENT PROPERTIES OF THE COMPANY AND INVESTED COMPANIES RECOGNIZED UNDER EQUITY METHOD ALTERED TO FAIR VALUE MODEL EFFECTIVE FROM JANUARY 1, 2014. REPORT ON CHANGES IN ACCOUNTING POLICY AND THEIR IMPACT. .................................................................... 37 III RECOGNIZING EVENTS ............................................................................................................................ 38 PROPOSAL 1: ACCEPTANCE OF THE 2013 BUSINESS REPORT AND FINANCIAL STATEMENTS................................ 38 PROPOSAL 2: ACCEPTANCE OF THE PROPOSAL FOR DISTRIBUTION OF 2013 PROFITS ......................................... 39 IV DISCUSSING EVENTS AND ELECTIONS ............................................................................................... 41 PROPOSAL 1: PROPOSAL FOR NEW SHARE ISSUE THROUGH CAPITALIZATION OF EARNINGS............................... 41 PROPOSAL 2: AMENDMENT TO “THE WORKING PROCEDURES FOR THE ACQUISITION AND DISPOSAL OF ASSETS”42 PROPOSAL 3: TO ELECT DIRECTORS, INDEPENDENT DIRECTORS, AND SUPERVISORS. ........................................ 50 PROPOSAL 4: PROPOSAL FOR RELEASE THE PROHIBITION ON DIRECTORS FROM PARTICIPATION IN COMPETITIVE BUSINESS. .......................................................................................................................................................... 54 V QUESTIONS AND MOTIONS ....................................................................................................................... 55 RULES AND BYLAWS ....................................................................................................................................... 56 1. ARTICLES OF INCORPORATION OF ASIA CEMENT CORPORATION ..................................................................... 56 2. MEETING RULES OF SHAREHOLDERS FOR ASIA CEMENT CORPORATION ........................................................ 64 3. ELECTION RULES FOR DIRECTORS AND SUPERVISORS ................................................................................... 69 APPENDIX ........................................................................................................................................................... 71 1. SHAREHOLDING OF DIRECTORS AND SUPERVISORS ........................................................................................ 71 2. EFFECTS ON BUSINESS PERFORMANCE AND EPS RESULTING FROM 2014 STOCK DIVIDEND DISTRIBUTION .. 72 3. EMPLOYEES BONUS AND REMUNERATION OF DIRECTORS AND SUPERVISORS ................................................ 73

I Meeting Agenda

Asia Cement Corporation

Meeting Agenda of

The 2014 Regular Shareholders’ Meeting

Call the Meeting to Order

Chairperson Takes Chair

Chairperson Remarks

Guest Remarks

Reporting Events

Recognizing Events

Discussing Events and Election

Questions and Motions

Adjournment

II Reporting Events

Report 1: 2013 Business Report

Explanation:

The 2013 business report is attached as page 3-13.

2013 Business Report

1. 2013 Review

A. In 2013, due to major advanced countries in the U.S. and Europe adopt contractionary fiscal policy to improve fiscal deficit, the global economic growth rate dropped from 1.4% in 2012 to 1.3 % in 2013, the weakest since 2009.
i. The economic growth in the U.S. reached 1.9%. This could be regarded as a good performance in advanced countries.
ii. After recession in six consecutive quarters, the economic growth in Eurozone restore to growth in Q213. However, due to contractionary fiscal policy resulting in weak domestic demand, the economic growth rate still decline 0.4% in 2013, which is better than -0.7% in 2012.
iii. Japanese Prime Minister Abe launched the "Abe economics". Driven by fiscal spending and loose monetary policy, better performance in consumer confidence, stock market, consumption, and corporate earnings could be seen. Employment environment has also reached peak since 2007. This indicates that the Abe Government has successfully boosted the economy and fight against deflation.
iv. China finished its leadership rotation in 2013. The new leaders focus mainly on the adjustment and reform of economic structure, rather than short-term economic ups and downs. Despite the economic growth rate merely reached 7.7% in 2013 which is the lowest level in 14 years. Meanwhile, the production value of tertiary industrial sectors is higher than those of secondary industrial sectors for the first time.
v. Affected by China's economic slowdown, falling commodity prices, slowdown in exports, suspending economic stimulus measures, and the downsizing of the QE, the economic growth of the developing countries face a downturn. The growth rate dropped from 4.9% in 2012 to 4.7% in 2013, the worst of the past decade.
vi. Taiwan is an island economy which shall promote the economic development through the expansion of international trade. In 2013, Taiwan has poor performance in exports, investment and consumption. According to the statistics conducted by the Directorate General of Budget, Accounting and Statistics, the Taiwan’s economic growth rate is 2.11% in 2013, better than 1.48% in 2012. However, this is far less than the China, South Korea, Hong Kong, Singapore and Japan.
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B. Benefited from continued construction development, the overall cement consumption in 2013 amounted to 2.414 billion MT in China, compared to 2.181 billion MT in 2012 with 10.68% growth. In the same period, the Company’s subsidiaries in China produced 18.3 million MT clinker, increased 2.97% compared to 2012. The total sales of cement, clinker and slag powder in 2013 are 26.73 million MT, representing an increase of 8% compared to 2012. In 2013, the net income of the Company’s subsidiaries in China is NT $3,955,392 thousand. The Company and its subsidiaries recognized investment income NT $2,867,264 thousand.
C. For domestic cement industry in 2013, public works continues, while domestic real estate affected by the policy remains in upscale. The cement consumption increased slightly to 12,244,526 MT. According to a statistics conducted by the Taiwan cement manufacturers’ association, the 2013 total cement production volume in Taiwan is 16,575,744 MT, increased 4.95% compared to 2012. Among them, the domestic cement sales is 10,866,312 MT, and exported cement is 5,929,325 MT. Compared with those in 2012, domestic sales increased by 1.94%, exports increased by 17.47 percent. The 2013 per capita average cement consumption is about 524 kg, increased 1.55% from 516 kg in 2012. As a result, the cement industry in Taiwan still faced over capacity.
D. The 2013 consolidated operating revenue of the Company is NT $70,172,781 thousand, increased 10% from 2012. The consolidated profit from operations was NT $6,643,708 thousand, increased 62% from 2012. The Company enjoys an outstanding performance. Besides, the Company’s affiliates, Far Eastern New Century Corp., and U-Ming Marine Transport Corp., the Company recognized NT $3,208,725 thousand investment income from equity method. The consolidated net profit after tax reached NT $8,451,890 thousand. The net profit rate after tax was 12%. Consolidated net profit attributable to the Company is 6,805,830 thousand. The 12[th] meeting of the 24[th] Board of Directors proposed to distribute cash dividend NT $1.8 and stock dividend NT $ 0.2 per share.

2. Operating Performance of 2013

A. Production:

roduction:
				Unit: 1000 MT
Item Region	Cement	Difference Compared to 2012	Clinker (MT)	Difference Compared to 2012
ACC (Taiwan)	4,944	+818 (19.83%)	4,739	+531 (12.62%)

`＊` key performance indicator:

Actual aggregate cement output amounted to 4,944 thousand MT. Compared to estimated

output 4,753 thousand MT, the achievement rate is 104.02%.

Actual aggregate clinker output amounted to 4,739 thousand MT. Compared to estimated output 4,800 thousand MT, the achievement rate is 98.73%.

				Unit: 1000 MT
Item Region	Cement	Difference Compared to 2012	Clinker (MT)	Difference Compared to 2012
ACC (China)	25,974	+2,656 (11.39%)	18,300	+527 (2.97%)

`＊` key performance indicator:

Actual aggregate cement output amounted to 25,974 thousand MT. Compared to estimated output 25,830 thousand MT, the achievement rate is 100.56%.

Actual aggregate clinker output amounted to 18,300 thousand MT. Compared to estimated output 18,890 thousand MT, the achievement rate is 96.88%.

B. Sales

i. Taiwan area:

Unit: 1000 MT; NT$1,000

Volume & Value Product	2013	2013	2013	2013	Difference Compared to 2012	Difference Compared to 2012
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	Value
Cement & Clinker	3,438	7,698,465	2,058	3,655,611	+290 (5.57%)	+643,312 (6.01%)

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker amounted to 5,496 thousand MT. Compared to the estimated sales 5,383 thousand MT, achievement rate is 102.10%.

ii. China area:

Unit: 1000 MT; NT$1,000

					Unit: 1000 MT; NT$1,000	Unit: 1000 MT; NT$1,000
Volume & Value Product	2013				Difference Compared to 2012
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	Value
Cement & Clinker	26,580	32,082,688	0	0	+2,276 (9.36%)	+4,080,465 (14.57%)

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker amounted to 26,580 thousand MT. Compared to the estimated sales 26,074 thousand MT, achievement rate is 101.94%.

3. The Company’s Layout Strategy in China

i. Eighteen years ago, Asia Cement Corporation pioneered all domestic rivals to invest in cement business in China with Taiwan government’s permission.
ii. On may 20, 2008, the subsidiary of the Company, Asia Cement (China) Holdings Corporation 【 ACC (China) thereafter 】 was listed on the main board of Hong Kong Exchanges and Clearing Limited.
iii. Currently, the investments of ACC (China) are mainly based alone the Yangtze River in Jiangxi, Sichuan, Hubei, Yangzhou and Shanghai areas. The overall operating strategies are deployed through Jiangxi Yadong Cement (Southeast China), Sichuan Yadong Cement (Southwest China), Hubei Yadong Cement (Middle China), and Yangzhou Yadong Cement (East China) as core production bases. Besides, in collaboration with Huanggang Yadong Cement, Wuhan Yaxin cement, two grinding factories, six cement products companies, four transportation companies, four terminals, and eight sale offices, these constitute an efficient and solid network for production, transportation and sales.

4. Overview of The Company’s Investments in China

A. Jiangxi Yadong Cement Co., Ltd

The company originally planned four-stage construction of four kilns, each with annual clinker capacity of 1.65 million MT. The four stage construction projects have been completed and begun to operate in July 2000, September 2003, July 2007, and May 2010 respectively. Currently, the annual output of clinker reaches 6.6 million MT which can produce 8 million MT cement.

The 5th and 6th production line for cement and clinker of the company have been completed in September 2013 and January 2014. With these two production lines, the total production capacity can reach 11 million MT of clinker annually, which can produce 14 million MT cement. Jiangxi Yadong has become the largest cement plant in Jiangxi.

In addition, the waste heat recycling generators of the #1, #2, #3, and #4 kilns can produce 193 million kWh electricity annually. While, the waste heat recycling generators of the #5 and #6 kilns can produce 145 million kWh electricity annually. This substantially

reduces electricity costs and minimizes the dependence on external power supply.

B. Sichuan Yadong Cement Co., Ltd

The company planed three-stage construction of three kilns with annual clinker capacity of 1.65 million MT respectively. The three stage construction projects have been completed and begun to operate in September 2006, December 2008, and March 2010. Currently, the annual output of clinker reaches 4.95 million MT which can produce 6 million MT cement. The three-stage construction and production goal has been achieved to serve the demand from Chengdu areas and the public works.

In addition, the waste heat recycling generators of the #1, #2, and #3 kilns can produce 145 million kWh electricity annually. This substantially reduces electricity costs and minimizes the dependence on external power supply.

The company is now planning to extend the long conveyor belt from the limestone mine directly to the plant. This will enhance the transportation efficiency and lower raw-material cost.

C. Hubei Yadong Cement Co., Ltd

The company has two-stage construction plan of two kilns with annual clinker capacity of 1.65 million MT respectively. The two stage construction projects have been completed and begun to operate in March 2009 and October 2010. The annual output of clinker is amounted to 3.3 million MT which can produce 4 million MT cement. In addition, the waste heat recycling generators of the #1 and #2 kilns can produce 105 million kWh electricity annually. This substantially reduces electricity costs and minimizes the dependence on external power supply.

D. Huanggang Yadong Cement Co., Ltd

The company planned to construct one kiln. The construction has been completed and begun to operate in May 2010. The annual output of clinker amounts to 1.65 million MT which can produce 2 million MT cement.

E. Wuhan Yaxin Cement Co., Ltd

To enhance the market position and market share of the “Skyscraper” cement in Wuhan areas, Hubei Yadong Cement Co., Ltd acquired 70% shares of the Wuhan Xinlingyun Engineering Co., Ltd. The annual output of cement amounts to 1.2 million MT.

In the ended of 2013, the shareholding of Hubei Yadong Cement Co., Ltd to the company reaches 90%.

F. Yangzhou Yadong Cement Co., Ltd

The grinding factory can produce 2.7 million MT cement annually to supply the market in Yangzhou area. Besides, the mixer station can produce ready-mixed concrete for the market.

G. Wuhan Yadong Cement Co., Ltd

The company can produce 1.7 million MT cement and 0.6 million MT slag powder annually to supply the market in Wuhan area.

H. Nanchang Yadong Cement Co., Ltd

The company can produce 0.6 million MT slag powder and 1.2 million MT slag cement annually to supply the market in Nanchang area.

5. Outlook for 2014 international economic situation and political and economic situation in Taiwan

A. Outlook for 2014 international economic situation:
i. The economic growths in advanced countries accelerate significantly, in which the United States has the best performance.
ii. Inspired by German and UK, the economic growth in EU turns from negative to positive, and is expected to get rid of recession. European debt crisis in Spain, Portugal, Italy and Greece have also gradually moderated.
iii. Japan raised its consumption tax rate on April 2014 that might threaten private consumption. Meanwhile, the Abe Government releases 5 trillion yen to boost the economic. This could offset some negative impacts. But with the slow progress of economic reforms, the growth rate in 2014 will be slightly lower than 2013.
iv. China is currently undergoing economic restructuring which might inevitably hurt its economic growth. The 2014 economic growth rate of China is expected to be 7.8%.
v. Benefited from the advanced countries, developing countries increase their export. The World Bank forecasts that economic growth will be 5.3% in 2014, compared to 4.8% in 2013. The economy in emerging Asian countries will also improve.
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Overall, the 2014 global economy is more optimistic than 2013. The growth rate is expected to be 3.3%. However, the following potential economic risks shall not be ignored:

i. The impact of the end of U.S. QE may threaten the stability of international financial markets and emerging economies.
ii. Eurozone recovery still faces high unemployment and other problems.
iii. The effects of Japanese Prime Minister Abe's economic reform policies and increasing consumption tax remains to be seen.
iv. Debt problems of China’s local government and shadow banking problem are still unsolved. Slowing economic growth in China might threaten the global economy.
B. Political and economic situation in Taiwan

While leaders of China, Japan, and Korea have urgently promote their domestic economic growth policies, Taiwan’s President, Ma Ying-jeou, also focus on "economic revitalization", expressed in his New Year's message. He explained three financial and economic policies, including "Land activation and urban renewal", "encouraging public investment and venture Capital," and "promoting private investment", hoping these could let Taiwan's economy take a big step forward.

Despite of these bright pictures, the Ma’s Government faced the many political crises, such as food safety issues, controversial Cross-Strait Service Trade Agreement issue, suspending nuclear power plant issues. The Ma’s Government fails in communicating with the people and opposition party. Taiwan's economy becomes sluggish because of failure implement of financial and economic policies. Especially in facing the wave of regional economic integration, Taiwan still reacts in slow pace. The competitiveness of Taiwan firms will gradually be affected.

Furthermore, according the 2014 world competitiveness report conducted by Switzerland-based Institute of Management and Development in Lausanne, the overall ranking for Taiwan competitiveness step backward to 13th. The three consecutive year regression confirms the above said worries. The key factors for Taiwan's economic development might depend on the Government’s communication skills to build consensus with opposition forces.

6. Operating Prospects for cement industry across the Taiwan Strait

A. Cement industry in China

China is currently facing the challenge of economic slowdown. However, with the necessity of the economic structure reforms, even sacrifice of some economic growth is still needed. According to IMF estimates, China's economic growth rate is around 7.5% in the next five years. This indicates that there is still some potential for economic development in China. Hereby lists several important policies relevant to the cement industry.

i. The acceleration of urbanization is an important driving force for economic growth in China. The demand of cement for residential construction is expected to reach 720 million MT.
ii. The “Twelfth Five-Year Economic Plan” will invest RMB 4.3 trillion to key investment items, including infrastructure, railways, highways, airports, etc. This will have a stimulating effect on the economy, and increase cement demand for 830 million MT.
iii. In the period of "Twelfth Five-Year Economic Plan", the construction of 36 million housing units of affordable housing and shantytowns is expected to increase cement demand for 360 million MT.
iv. RMB 1.8 trillion investments in water facility construction will create cement demand for 100 million MT.
v. Land reform policies in rural area are also beneficial to the cement industry.

The above policies will be an important opportunity for the development of cement industry.

In the meanwhile, the China government has released several policies related to cement industries.

i. Promotes energy conservation policy and implementing the "air pollutant emission standards for cement industry ". It requires that the PM emission limit improves from 50 mg/m3 to 30 mg/m3 for cement kilns and from 30 mg/m3 to 20 mg/m3 for grinding mills. It also requires the NOx emission improves from 800 mg/m3 to 400 mg/m3.
ii. Encouraging mergers and acquisitions between large corporations. In the period of "Twelfth Five-Year Economic Plan", the concentration percentage of top ten cement
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corporations reaches more than 45%, in which 5~10 corporations have more than 100 million MT cement production capacity. In 2020, the concentration percentage of top ten cement corporations reaches 80%.

iii. Elimination of backward cement production capacity one year before the end of "Twelfth Five-Year Economic Plan". In 2015, the elimination of backward cement production capacity reaches 100 million MT. No new cement capacity projects shall be approved.
iv. Gradual reducing and cancelation the use of low standard PO 32.5 cement. This policy will enlarge the demand of high standard cement and reduce cement production capacity in China. It would be helpful for the oversupply condition in China’ cement industry.
v. Effective from July 1, 2014, backward cement production capacity will be imposed discriminatory pricing policy for electricity. Extra RMB 0.4 per kWh will be charged. This will increase RMB 16 cost for backward cement production per MT.

The above measures are useful to reduce the growth of cement supply and increase the demand for cement. These will be favorable to cement industry in China.

B. Cement industry in Taiwan

As major public construction projects accelerate, such as Suhua highway improvement projects, Linkou power plant expansion, intercontinental container terminal of the Kaohsiung port, Taichung Metro system, the circular line of Taipei metro system, the Gate of Taipei building, the railway electrification project between Hualien and Taitung, Hushan reservoir, athletes' village for 2017 Taipei Summer Universiade, west coast expressway, and the expansion of public construction plans, coupled with the housing market remains in boost this year, the cement consumption in Taiwan is expected to remain stable.

7. The 2014 outlook for the Company

A. Asia Cement Corp., Asia Cement (China) Holdings Corp., Anhui Conch Cement Corp. and Conch Venture Corp. signed a "strategic cooperation agreement" in January 2014. Contracting parties will cooperate in the field of production technology, operations management, marketing, logistics, green energy, new product development, information sharing, and international cooperation. This will create a win-win situation on both sides.
B. The subsidiary of Asia Cement (China) Holdings Corp., Sichuan Yadong Cement Co., Ltd
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acquired 100% shares of Sichuan Lanfeng Cement Corp. Lanfeng is located in Pengzhou City, Sichuan, China and owned two new dry process clinker production lines with total annual cement production capacity of 5 million MT. The waste heat recycling generators can produce 180 million kWh electricity annually. It also owned dry mix mortar plant with total annual production capacity of 1.5 million MT. After the acquisition, the cement production capacity of Sichuan Yadong reaches 11 million MT annually. This will enhance its market position. Besides, the total cement production capacity of Asia Cement (China) Holdings Corp. reaches 35 million MT

C. In 2014, this is the first time that Asia Cement (China) Holdings Corp. operates 15 production lines at the same time, while the terminal in Taizhou City, Jiangsu Province will be completed in October, 2014. This will allow Asia Cement (China) Holdings Corp. to step into overseas markets.
D. In addition to quick response to rapidly changing market, Asia Cement (China) Holdings Corp. will:
i. Be prepared for building new production capacity after 2018;
ii. Find suitable places for new mixing stations;
iii. Merger and acquire;
iv. Strategic cooperate with state-owned construction companies.

8. Business Goal For 2014

In highly competitive environment of both Taiwan and China, the Company will respond with its “three highs and one low” strategy which stands for “high quality, high efficiency, high environmental protection, and low cost” and exert the Company’s persistent principle, “fully sell out the estimated production volume”.

The Company has set the following goals for 2014. The estimated production volume in Taiwan is 4,750,000 MT clinker and 4,730,000 MT cement. The estimated sales volume in Taiwan is 5,370,000 MT clinker and cement. The estimated production volume in China is 22,480,000 MT clinker and 28,690,000 MT cement. The estimated sales volume in China is 28,710,000 MT clinker and cement.

7. The Operating Performance in the First Quarter of 2014

Contributing from high cement price and lower production cost in the first quarter of 2014, the consolidated operating income of the Company is NT $ 16,256,080 thousand, increasing 17% from NT $ 13,931,550 thousand in the same period of 2013. The consolidated net profit is NT $ 1,683,231 thousand, increased 22% from NT $1,377,467 thousand in the

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same period of 2013. Consolidated net profit attributable to the Company is 1,439,813 thousand, increased 18% from NT $1,219,360.

＊ Sources: Taiwan Institute of Economic Research,

Institute of Economics of Academia Sinica,

Chinese Economic Research Institute,

Development Committee of Ministry of Economic Affairs,

National Development Council,

Directorate-General of Budget, Accounting and Statistics,

Mega International Commercial Bank,

Taiwan Cement Manufacturers Association.

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Report 2: 2013 Financial Statements

Explanation:

The 2013 financial statements are attached as page 16-34.

Consolidated Balance Sheets (December 31, 2013)
Consolidated Statements of Comprehensive Income (Years Ended December 31, 2013)
Consolidated Statements of Changes in Equity (Years Ended December 31, 2013)
Consolidated Statements of Cash Flows (Years Ended December 31, 2013)
Balance Sheets (December 31, 2013)
Statements of Comprehensive Income (Years Ended December 31, 2013)
Statements of Changes in Equity (Years Ended December 31, 2013)
Statements of Cash Flows (Years Ended December 31, 2013)

Independent auditor’s report by Hsin Wei Tai and Li Wen Kuo of Deloitte & Touche is attached as page 24 and 34.

Complete financial reports can be downloaded at http://emops.twse.com.tw.

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Debt investments with no active market - current Notes receivable Related parties Third parties Accounts receivable Related parties Third parties Other receivables Current tax assets Inventories Prepayments Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for equity method Available-for-sale financial assets - noncurrent Held-to-maturity measured financial assets - non-current Financial assets at cost - noncurrent Debt investment with no active market - non-current Property, plant and equipment Investment properties Intangible assets Deferred tax assets Long-term notes receivables and other receivables Long-term prepayments for lease Other non-current assets Total non-current assets TOTAL		December 31, 2013 Amount % $ 19,184,742 9 760,570 - 9,074,555 4 6,731,406 3 24,029 - 7,049,301 3 532,567 - 9,861,131 5 2,470,991 1 11,774 - 7,863,420 4 1,238,867 1 533,880 - 65,337,233 30 45,986,267 21 13,664,054 6 - - 1,485,416 1 155,668 - 62,406,097 29 6,901,659 3 2,176,436 1 398,590 - 12,109,603 6 3,395,221 2 1,991,186 1 150,670,197 70 $ 216,007,430 100		December 31, 2012 Amount % $ 8,309,069 4 718,691 - 6,608,175 4 8,385,707 4 47,095 - 6,672,080 4 870,132 - 8,779,583 5 454,500 - - - 7,515,813 4 1,012,142 1 290,053 - 49,663,040 26 45,332,240 23 13,758,483 7 1,138,092 1 1,222,800 1 120,074 - 55,855,140 29 6,928,380 3 2,159,286 1 282,163 - 12,551,384 6 3,290,631 2 1,763,050 1 144,401,723 74 $ 194,064,763 100		January 1, 2012
						Amount % $ 10,943,684 5 1,430,339 1 3,598,694 2 7,101,857 4 62,449 - 9,745,472 5 728,210 - 8,813,516 5 459,399 - - - 7,541,248 4 1,025,779 - 140,123 - 51,590,770 26 46,446,872 24 12,638,322 6 - - 1,118,800 1 123,442 - 58,217,225 29 6,932,401 3 2,246,768 1 367,453 - 12,994,751 7 3,227,015 2 1,588,502 1 145,901,551 74 $ 197,492,321 100

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LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings Short-term bills payable Financial liabilities at fair value through profit or loss - current Accounts payable and accrued expenses - third parties Accounts payable and accrued expenses - related parties Dividends and bonuses payable Current tax liabilities Provisions - current Customers' deposits and advances Current portion of long-term liabilities Total current liabilities NON-CURRENT LIABILITIES Bonds payable Long-term borrowings Provisions - non-current Derivative financial liabilities for hedging - non-current Deferred tax liabilities Accrued pension liabilities Long-term deferred revenue Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Corporation NON-CONTROLLING INTERESTS Total equity TOTAL	$ 13,768,355 6 4,508,007 2 1,215,049 1 7,649,148 4 414,977 - 212,566 - 870,572 1 8,963 - 626,162 - 32,681,712 15 61,955,511 29 8,606,676 4 31,092,586 14 275,528 - 30,747 - 4,747,908 2 181,978 - 1,131,179 1 646,277 - 46,712,879 21 108,668,390 50 32,955,365 15 1,018,079 - 12,571,132 6 14,013,200 7 20,092,331 9 46,676,663 22 8,299,190 4 88,949,297 41 18,389,743 9 107,339,040 50 $ 216,007,430 100	$ 10,821,788 6 4,356,268 2 668,747 1 6,641,726 4 284,274 - 218,023 - 561,568 - 8,743 - 571,673 - 17,588,512 9 41,721,322 22 24,931,418 13 17,976,435 9 270,383 - 48,609 - 4,452,081 2 222,129 - 1,199,264 1 327,473 - 49,427,792 25 91,149,114 47 32,309,181 17 1,034,446 - 11,954,738 6 14,015,705 7 19,990,027 11 45,960,470 24 6,964,661 3 86,268,758 44 16,646,891 9 102,915,649 53 $ 194,064,763 100	$ 7,123,778 4 3,735,020 2 704,040 - 6,820,686 4 273,054 - 221,074 - 394,260 - 8,529 - 672,733 - 6,637,941 4 26,591,115 14 32,028,636 16 27,291,847 14 271,299 - 36,441 - 4,574,517 2 220,976 - 1,267,349 1 280,321 - 65,971,386 33 92,562,501 47 31,368,137 16 41,790 - 10,950,093 6 14,016,202 7 24,141,218 12 49,107,513 25 7,395,335 3 87,912,775 44 17,017,045 9 104,929,820 53 $ 197,492,321 100

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE OPERATING COSTS GROSS PROFIT UNREALIZED GROSS PROFIT REALIZED GROSS PROFIT OPERATING EXPENSES PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET Exchange differences on translating foreign operations Unrealized (loss) gain on available-for-sale financial assets Cash flow hedges Actuarial gain and loss arising from defined benefit plans		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 Amount % $ 70,172,781 100 61,158,946 87 9,013,835 13 (32) - 9,013,803 13 2,370,095 3 6,643,708 10 2,324,762 3 (259,150) - (1,640,205) (2) 3,208,725 4 3,634,132 5 10,277,840 15 1,825,950 3 8,451,890 12 2,532,355 4 (1,034,586) (2) 20,330 - 262,379 -		2012
				Amount % $ 63,793,183 100 57,652,085 91 6,141,098 9 (546) - 6,140,552 9 2,034,063 3 4,106,489 6 1,525,878 3 183,610 - (1,773,775) (3) 2,677,467 4 2,613,180 4 6,719,669 10 877,278 1 5,842,391 9 (1,629,504) (2) 1,033,409 2 (12,150) - 178,855 - (Continued)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of other comprehensive income of associates and joint ventures Income tax relating to components of other comprehensive income Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owner of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owner of the Company Non-controlling interests EARNINGS PER SHARE Basic Diluted		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2013 Amount % $ 573,480 1 (19,511) - 2,334,447 3 $ 10,786,337 15 $ 6,805,830 10 1,646,060 2 $ 8,451,890 12 $ 8,373,288 12 2,413,049 3 $ 10,786,337 15 $2.21 $2.12		2012
				Amount % $ (457,551) (1) (33,649) - (920,590) (1) $ 4,921,801 8 $ 5,082,381 8 760,010 1 $ 5,842,391 9 $ 4,649,295 7 272,506 1 $ 4,921,801 8 $1.65 $1.64

(Concluded)

19 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

BALANCE, JANUARY 1, 2012 Appropriation of 2011 earnings Legal reserve Cash dividends - $2.3 per share Stock dividends - $0.3 per share Cash dividends distributed by subsidiaries Change in capital surplus from investments in associates and joint ventures accounted for by using equity method Recognition of employee share options by the subsidiaries Additional acquisition of partially-owned subsidiaries Net profit for the year ended December 31, 2012 Other comprehensive income (loss) for the year ended December 31, 2012, net of income tax Issue of subsidiary ordinary shares for cash Other change in equity from investments in associates accounted for by using equity method BALANCE, DECEMBER 31, 2012 Appropriation of 2012 earnings Legal reserve Cash dividends - $1.7 per share Stock dividends - $0.2 per share Cash dividends distributed by subsidiaries Excess of the consideration paid over the carrying amount of the subsidiaries' net assets during acquisition Change in capital surplus from investments in associates and joint ventures accounted for by using equity method Recognition of employee share options by the subsidiaries Net profit for the year ended December 31, 2013 Other comprehensive income (loss) for the year ended December 31, 2013, net of income tax Issue of subsidiary ordinary shares for cash Other change in equity from investments in associates accounted for by using equity method BALANCE, DECEMBER 31, 2013		Capital Stock Issued Shares Amount Capital Surplus 3,136,814 $ 31,368,137 $ 41,790 - - - - - - 94,104 941,044 - - - - - - 992,656 - - - - - - - - - - - - - - - - - - 3,230,918 32,309,181 1,034,446 - - - - - - 64,618 646,184 - - - - - - - - - (16,367 ) - - - - - - - - - - - - - - - 3,295,536 $ 32,955,365 $ 1,018,079
		Shares 3,136,814 - - 94,104 - - - - - - - - 3,230,918 - - 64,618 - - - - - - - - 3,295,536

20 -

					Non-controlling Total Interests $ 87,912,775 $ 17,017,045 - - (7,214,672 ) - - - - (692,267 ) 992,656 - - 2,707 - (76,771 ) 5,082,381 760,010 (433,086 ) (487,504 ) - 123,671 (71,296) - 86,268,758 16,646,891 - - (5,492,561 ) - - - - (456,300 ) (172,936 ) (305,306 ) (16,367 ) - - 603 6,805,830 1,646,060 1,567,458 766,989 - 90,806 (10,885) - $ 88,949,297 $ 18,389,743	Total Equity $ 104,929,820 - (7,214,672 ) - (692,267 ) 992,656 2,707 (76,771 ) 5,842,391 (920,590 ) 123,671 (71,296) 102,915,649 - (5,492,561 ) - (456,300 ) (478,242 ) (16,367 ) 603 8,451,890 2,334,447 90,806 (10,885) $ 107,339,040
		Other Equity		Total Other Equity $ 7,395,335 - - - - - - - - (430,674 ) - - 6,964,661 - - - - - - - - 1,334,529 - - $ 8,299,190
	Exchange Differences on Translating Foreign Operations $ - - - - - - - - - (2,347,315 ) - - (2,347,315 ) - - - - - - - - 2,793,530 - - $ 446,215	Unrealized Gain (Loss) on Available- for-sale Financial Assets $ 7,421,599 - - - - - - - - 1,925,419 - - 9,347,018 - - - - - - - - (1,479,609 ) - - $ 7,867,409	Cash Flow Hedge $ (26,264 ) - - - - - - - - (8,778 ) - - (35,042 ) - - - - - - - - 20,608 - - $ (14,434)

21 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Share of profit of associates and joint ventures Interest expenses Interest income Dividend income Unrealized foreign exchange (gain) loss Effect of exchange rate of bonds payable Amortization expenses (including amortization of prepayments for lease) Loss on redemption of bonds payable Gain on disposal of investments Net (gain) loss on financial assets and liabilities at fair value through profit or loss Impairment loss recognized (reversal of impairment loss) on trade receivables Impairment loss recognized on financial assets (Reversal of) write-down of inventory Gain on disposal of property, plant and equipment Compensation cost of share-based payment Gain on disposal of associates Other items Changes in operating assets and liabilities Decrease in financial assets held for trading (Increase) decrease in notes receivables (Increase) decrease in trade receivables Decrease in other receivables Increase in inventories (Increase) decrease in prepayments Increase in other current assets Increase in accounts payable and accrued expenses Decrease in provisions Increase (decrease) in customers' deposits and advances Decrease in accrued pension liabilities Decrease in deferred revenue Cash generated from operations Interests received Dividends received Interests paid Income tax expenses paid Net cash generated from operating activities	For the Year Ended December 31
		2013 $ 10,277,840 4,624,877 (3,208,725) 1,640,205 (727,788) (700,889) (601,824) 463,723 176,239 116,382 (72,474) (47,155) 42,458 32,500 (23,718) (5,776) 603 - 2,237 76,829 (18,029) (31,366) 17,938 (182,005) (134,793) (224,048) 1,260,077 (126) 30,432 (20,073) (68,085) 12,695,466 737,830 4,058,444 (1,359,274) (1,351,200) 14,781,266	2012 $ 6,719,669 4,354,392 (2,677,467) 1,773,775 (630,972) (653,923) 169,541 (767,676) 160,237 - (151,904) 190,106 (42,375) 22,000 58,593 (8,983) 2,707 (161,708) 546 486,249 2,791,474 155,316 32,518 (145,599) 15,207 (149,930) 36,093 (1,916) (84,014) (4,276) (68,085) 11,419,595 613,229 4,314,531 (1,402,463) (777,437) 14,167,455 (Continued)

22 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)
- 23 - CASH FLOWS FROM INVESTING ACTIVITIES Acquisition property, plant and equipment Acquisition of available-for-sale financial assets Increase in other receivables-related parties Decrease (increase) in debt investments with no active market Proceeds on disposal of available-for-sale financial assets Acquisition of held-to-maturity financial assets Proceeds on disposal of held-to-maturity financial assets Acquisition of financial assets measured at cost Acquisition of investments accounted for equity method Proceeds from disposal of property, plant and equipment Increase in prepayments for lease Decrease in refundable deposits Acquisition of intangible assets Decrease (increase) in other non-current assets Acquisition of investment properties Proceeds from disposal of investment accounted for equity method Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of bonds Proceeds form issue of bonds Dividends paid Proceeds from short-term borrowings Change of non-controlling interests Proceeds from short-term bills payable (Decrease) increase in guarantee deposits received Increase (decrease) in other non-current liabilities Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR		For the Year Ended December 31
		2013 $ (8,522,673) (2,904,207) (1,922,790) 1,795,671 847,208 (409,624) 379,793 (297,321) (245,836) 123,912 (104,377) 7,667 (7,355) 5,811 (2,071) - (11,256,192) 47,419,563 (35,542,745) (6,814,707) 6,499,996 (5,492,251) 1,639,455 (934,542) 152,032 (32,506) 25,511 6,919,806 430,793 10,875,673 8,309,069 $ 19,184,742	2012 $ (3,821,418) (3,969,654) - (1,447,527) 1,224,324 (1,146,367) - (126,000) (56,253) 101,785 (299,434) 26,081 (46,794) (222) (23,951) 623,541 (8,961,889) 9,687,908 (13,500,088) - - (7,214,343) 3,698,010 (611,526) 621,248 7,450 (203,857) (7,515,198) (324,983) (2,634,615) 10,943,684 $ 8,309,069

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Asia Cement Corporation

We have audited the accompanying consolidated balance sheets of Asia Cement Corporation (the “Corporation”) and its subsidiaries (collectively referred to as the “Group”) as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2013, December 31, 2012 and January 1, 2012, and their consolidated financial performance and their consolidated cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed by the Financial Supervisory Commission of the Republic of China.

We have also audited the parent company only financial statements of Asia Cement Corporation as of and for the years ended December 31, 2013 and 2012 on which we have issued an unqualified report.

March 24, 2014

24 -

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

25 -

ASIA CEMENT CORPORATION

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION BALANCE SHEETS (In Thousands of New Taiwan Dollars)
ASSETS CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Debt investments with no active market - current Notes receivable Related parties Third parties Accounts receivable Related parties Third parties Other receivables Inventories Prepayments Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for using equity method Available-for-sale financial assets - non-current Financial assets measured at cost - non-current Property, plant and equipment Investment properties Intangible assets Deferred tax assets Long-term prepayments for lease Other non-current assets Total non-current assets TOTAL		December 31, 2013 Amount % $ 8,483,568 6 292,857 - 3,787,164 3 5,069,803 4 24,029 - 175,888 - 554,756 1 412,495 - 50,372 - 1,907,329 1 83,045 - 8,099 - 20,849,405 15 93,130,589 67 6,446,911 5 261,995 - 5,037,877 4 9,574,401 7 12,435 - 66,356 - 366,468 - 2,457,907 2 117,354,939 85 $ 138,204,344 100		December 31, 2012 Amount % $ 548,003 - 149,900 - 2,109,655 2 5,762,393 5 47,092 - 255,770 - 456,335 1 440,367 - 72,833 - 1,916,950 1 78,735 - 26,582 - 11,864,615 9 89,673,768 72 6,246,836 5 43,116 - 5,347,588 4 9,604,638 8 18,725 - 87,393 - 428,505 - 2,179,003 2 113,629,572 91 $ 125,494,187 100		January 1, 2012
						Amount % $ 707,784 1 503,188 - 1,619,964 1 5,033,983 4 62,449 - 128,247 - 525,903 1 470,864 - 66,964 - 1,976,712 2 186,385 - 9,914 - 11,292,357 9 90,533,005 72 6,291,287 5 59,116 - 4,877,797 4 9,612,510 8 13,815 - 51,909 - 462,625 - 2,009,322 2 113,911,386 91 $ 125,203,743 100

26 -

LIABILITIES AND EQUITY

CURRENT LIABILITIES Short-term debt Short-term bills payable Financial liabilities at fair value through profit or loss - current Accounts payable and accrued expenses Third parties Related parties Dividends and bonuses payable Current tax liabilities Customers’ deposits and advances Current portion of long-term liabilities Total current liabilities NON-CURRENT LIABILITIES Bonds payable Long-term loans Deferred income tax liabilities Deferred revenue - non-current Other non-current liabilities Total non-current liabilities Total liabilities EQUITY Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL	$ - - - - 1,215,049 1 1,524,298 1 277,821 - 203,927 - 85,572 - 146,297 - 20,476,354 15 23,929,318 17 8,606,676 6 11,479,763 9 4,044,676 3 1,131,179 1 63,435 - 25,325,729 19 49,255,047 36 32,955,365 24 1,018,079 - 12,571,132 9 14,013,200 10 20,092,331 15 46,676,663 34 8,299,190 6 88,949,297 64 $ 138,204,344 100	$ 300,000 - 699,748 1 668,747 1 1,555,033 1 201,666 - 203,617 - 373,276 - 136,041 - 6,640,329 5 10,778,457 8 22,207,713 18 1,199,416 1 3,788,635 3 1,199,264 1 51,944 - 28,446,972 23 39,225,429 31 32,309,181 26 1,034,446 1 11,954,738 10 14,015,705 11 19,990,027 16 45,960,470 37 6,964,661 5 86,268,758 69 $ 125,494,187 100	$ - - - - 704,040 1 1,464,362 1 200,692 - 203,288 - 51,341 - 218,031 - - - 2,841,754 2 29,217,632 24 - - 3,909,353 3 1,267,349 1 54,880 - 34,449,214 28 37,290,968 30 31,368,137 25 41,790 - 10,950,093 9 14,016,202 11 24,141,218 19 49,107,513 39 7,395,335 6 87,912,775 70 $ 125,203,743 100

27 -

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE OPERATING COSTS GROSS PROFIT UNREALIZED GAIN ON THE TRANSACTIONS WITH SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES REALIZED GAIN ON THE TRANSACTIONS WITH SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES REALIZED GROSS PROFIT OPERATING EXPENSES OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Other income Other gains and losses Finance costs Share of the profit or loss of subsidiaries and associates Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME OTHER COMPREHENSIVE INCOME Unrealized gain on available-for-sale financial assets Actuarial gain arising from defined benefit plans		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ 12,292,506 100 11,481,875 94 810,631 6 - - 3,631 - 814,262 6 612,046 5 202,216 1 676,811 5 (490,533) (4) (670,506) (5) 7,363,780 60 6,879,552 56 7,081,768 57 275,938 2 6,805,830 55 580,723 5 242,833 2		2012
				Amount % $ 11,758,818 100 11,078,235 94 680,583 6 (9,925) - - - 670,658 6 535,916 5 134,742 1 766,264 7 196,254 2 (661,447) (6) 4,829,971 41 5,131,042 44 5,265,784 45 183,403 2 5,082,381 43 445,239 4 180,834 2 (Continued)

28 -

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of the other comprehensive income (loss) of subsidiaries and associates Income tax relating to the components of other comprehensive income Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic Diluted		For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
		2013 Amount % $ 785,184 6 (41,282) - 1,567,458 13 $ 8,373,288 68 $ 2.21 $ 2.12		2012
				Amount % $ (1,028,417) (9) (30,742) - (433,086) (3) $ 4,649,295 40 $ 1.65 $ 1.64 (Concluded)

29 -

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

BALANCE AT JANUARY 1, 2012 Appropriation of 2011 earnings Legal reserve Cash dividends - $2.3 per share Stock dividends - $0.3 per share Change in capital surplus from investments in subsidiaries, associates and joint ventures accounted for by using equity method Net income in 2012 Other comprehensive income (loss) for the year ended December 31, 2012, net of income tax Other - change in equity from investments in associates accounted for by using equity method BALANCE AT DECEMBER 31, 2012 Appropriation of 2012 earnings Legal reserve Cash dividends - $1.7 per share Stock dividends - $0.2 per share Change in capital surplus from investments in subsidiaries, associates and joint ventures accounted for by using equity method Net income in 2013 Other comprehensive income (loss) for the year ended December 31, 2013, net of income tax Other - change in equity from investments in associates accounted for by using equity method BALANCE AT DECEMBER 31, 2013		Capital Stock Issued Shares Share Capital Capital Surplus 3,136,814 $ 31,368,137 $ 41,790 - - - - - - 94,104 941,044 - - - 992,656 - - - - - - - - - 3,230,918 32,309,181 1,034,446 - - - - - - 64,618 646,184 - - - (16,367) - - - - - - - - - 3,295,536 $ 32,955,365 $ 1,018,079

30 -

Other Equity	Other Equity	Total $ 7,395,335 - - - - - (430,674) - 6,964,661 - - - - - 1,334,529 - $ 8,299,190	Total Equity $ 87,912,775 - (7,214,672) - 992,656 5,082,381 (433,086) (71,296) 86,268,758 - (5,492,561) - (16,367) 6,805,830 1,567,458 (183,821) $ 88,949,297
Exchange Unrealized Differences on Gain (Loss) on Translating Available-for- Foreign sale Financial Operations Assets $ - $ 7,421,599 - - - - - - - - - - (2,347,315) 1,925,419 - - (2,347,315) 9,347,018 - - - - - - - - - - 2,793,530 (1,479,609) - - $ 446,215 $ 7,867,409	Cash Flow Hedges $ (26,264) - - - - - (8,778) - (35,042) - - - - - 20,608 - $ (14,434)

31 -

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Share of profit of associates and joint venture Depreciation expenses Interest expenses Effect of exchange rate of bonds payable Dividend income Interest income Unrealized (gain) loss on foreign currency exchange Loss on redemption of bonds payable Net (gain) loss on fair value change of financial assets and liabilities designated as at fair value through profit or loss Impairment loss recognized on financial assets Impairment loss recognized on trade receivables Amortization expenses (Realized) unrealized gain from inter-affiliate (Gain) loss on disposal of property, plant and equipment Gain on disposal of associates Write-down of inventories Other items Changes in operating assets and liabilities: Decrease (increase) in notes receivables (Increase) decrease in trade receivables Increase in other receivables (Increase) decrease in inventories Decrease in prepayments Decrease (increase) in other current assets Increase in prepaid pension Increase in accounts payable and accounted expenses Increase (decrease) in customers' advances Decrease in deferred income Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities		For the Years Ended December 31
		2013 2012 $ 7,081,768 $ 5,265,784 (7,363,780) (4,829,971) 690,107 491,682 670,506 661,447 463,723 (767,676) (319,398) (363,692) (286,744) (293,206) (242,273) 281,916 116,382 - (46,053) 317,995 23,500 16,000 6,369 49 6,290 5,128 (3,631) 9,925 (600) 8 - (162,126) - 39,640 2,273 - 102,945 (112,166) (76,918) 100,016 (3,526) (7,894) (20,568) 22,697 10,105 141,770 18,483 (16,668) (14,928) (13,696) 74,851 91,467 10,256 (81,990) (68,085) (68,085) 831,054 728,354 312,731 295,231 4,815,423 5,475,986 (280,586) (267,923) (327,846) (48,410) 5,350,776 6,183,238 (Continued)

32 -

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of available-for-sale financial assets Decrease (increase) in debt investments with no active market Purchase of property, plant and equipment Purchase of financial assets measured at cost (Increase) decrease in refundable deposits Purchase of investment properties Purchase of investments accounted for using equity method Proceeds from disposal of property, plant and equipment Proceeds from disposal of investments accounted for using equity method Purchase of intangible assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of bonds payable Proceeds from issue of bonds Cash dividends paid (Decrease) increase in short-term bills payable (Decrease) increase in short-term loans Increase (decrease) in other non-current liabilities Increase (decrease) in guarantee deposits received Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR		For the Years Ended December 31
		2013 $ (1,296,861) 854,764 (270,043) (244,584) (6,404) (2,071) (622) 606 115 - (965,100) 35,240,000 (24,960,000) (6,814,707) 6,499,996 (5,492,251) (700,000) (300,000) 9,430 2,061 3,484,529 65,360 7,935,565 548,003 $ 8,483,568	2012 $ - (972,118) (928,328) - 46,736 (23,952) - - 623,870 (10,038) (1,263,830) 1,200,000 - - - (7,214,343) 700,000 300,000 (1,236) (1,700) (5,017,279) (61,910) (159,781) 707,784 $ 548,003

33 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Asia Cement Corporation

We have audited the accompanying balance sheets of Asia Cement Corporation (the “Corporation”) as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2013 and 2012. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2013, December 31, 2012 and January 1, 2012, and its financial performance and its cash flows for the years ended December 31, 2013 and 2012, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

March 24, 2014

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent 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. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

34 -

Report 3: Supervisor’s Review Report on the 2013 Financial Statements

To: The 2014 Regular Shareholders’ Meeting

The undersigned has duly audited the business report, financial statements certified by CPA Mr. Hsin Wei Tai and Ms. Li Wen Kuo of the Deloitte & Touche, together with the schedule of earnings distribution prepared by the Board of Directors for the year of 2013, and found the same to be true and correct.

Therefore, in accordance with article 219 of the Company Act of the Republic of China, the undersigned takes pleasure in submitting this report for your perusal and acceptance.

Asia Cement Corporation

Supervisor: Siao Yi Wang

Champion Lee Kwan-Tao Li

Ting Yu Tung Li Te Chang

March 27, 2014

35 -

Report 4: Report on Issued Corporate Bond

Explanation:

The Company issued 2[nd] overseas unsecured convertible bonds in May 13, 2013. This report on issued corporate bonds is made in compliance with the Article 246 of the Company Act.

Company Act.	Company Act.
Type of bond issued Item		2ndOverseas Unsecured Convertible Bonds
Nominal amount		Us$ 220,000,000
Interest rate		0%
Term		Five years
Issuing reasons		Repayment of corporate bonds
Guaranty/guarantor		None
Approval date of Board of Directors		Aug. 20, 2012
Approval authority	Agency	Department of Foreign Exchange, Central Bank, ROC Financial Supervisory Commission Financial Supervisory Commission
	Date	Oct. 22, 2012 Nov. 14, 2012 Feb. 23, 2013
Status		Issued

36 -

Report 5: The measurements of investment properties of the Company and invested companies recognized under equity method altered to fair value model effective from January 1, 2014. Report on changes in accounting policy and their impact.

Explanation:

In accordance with the newly amended “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, the measurements of investment properties could apply either cost model or fair value model. In order to reflect the fair value of the Company’s investment properties, the Board of Directors of the Company held on March 24, 2014 resolved to alter the Company’s investment property measurements to fair value model effective from January 1, 2014.
Pursuant to the Article 6 of “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, wherever changes in accounting policy, the line items affected and the actual effect for the previous financial year shall be stated. Thus, the measurements of investment properties of the Company altered to fair value model since January 1, 2013. the opening balance of retained earnings for 2013 increased NT $41,780,934 thousand. Consolidated net income for 2013 increased NT $3,712,429 thousand. For balance sheet (December 31, 2013), asset increased NT $46,396,151 thousand in which investment property increased NT $24,615,683 thousand, investment under equity method increased NT $21,785,362 thousand, deferred tax assets decreased NT $4,894 thousand. Liability increased NT $892,989 thousand. Equity increased NT $45,503,162 thousand. Among the increased equity, the equity attributable to owners of the Company is NT $45,498,822 in which retained earnings increased NT $45,492,423 thousand, other equity increased NT $6,399 thousand. Net asset value per share increased NT $13.8.
The Financial Supervisory Commission, published on March 18, 2014, provides that once investment property measurement adopted fair value model, the net increased amount of fair value shall be transferred to retained earnings, while special reserve in the same amount shall be appropriated. In accordance with the regulation, the Company therefore appropriated special reserve NT $45,492,423 thousand on January 1, 2014.
Independent auditor, Hsin Wei Tai, of Deloitte & Touche has analyzed the reasonableness of the actual effect (please refer to Chinese version of the handbook for the submissions). This has been approved by the Board of Directors of the Company held on May 5, 2014, and recognized by Supervisors (please refer to Chinese version of the handbook for the report of Supervisors).
37 -

III Recognizing Events

Proposed by the Board

Proposal 1: Acceptance of the 2013 Business Report and Financial Statements

Explanation:

The 2013 business report and financial statements of Asia Cement Corporation, attached as page 16-34, were audited and approved by all supervisors.

The supervisor’s review report on the 2013 financial statements is attached as page 35.

Resolution:

38 -

Proposed by the Board

Proposal 2: Acceptance of the Proposal for Distribution of 2013 Profits

Explanation:

The Board of Directors has approved the following proposal for distribution of 2013 profits in accordance with the article 26 of the articles of incorporation of Asia Cement Corporation.

A. Opening undistributed profit Plus: adjustment with adoption of TIFRS Less: recognized special reserve with initial adoption of TIFRS Adjusted opening undistributed profit Plus: reversing recognized special reserve with initial adoption of TIFRS Less: adjustment of retained profit due to long term investment variation Plus: actuarial profit (loss) recognized into retained profit Adjusted undistributed profit Net income in 2013 Less: recognized legal reserve Subtotal Plus: adjusted undistributed profit Distributable profit Profit to be distributed in 2014 Closing undistributed profit B. Distributable items Dividend Shareholder bonus Note: Remuneration of directors and supervisors Employees cash bonus C. 2013 dividend distributed as below: Cash dividend: NT $1.8 per share Stock dividend: NT $0.2 per share Total	Unit: NT$
	$ 6,605,257,514
	20,560,812,243
	13,931,181,579
	13,234,888,178
	2,510,000
	183,825,807
	232,928,884
	$13,286,501,255
	$ 6,805,829,676 680,582,968
	$ 6,125,246,708 13,286,501,255
	19,411,747,963
	$ 6,591,072,938 $12,820,675,025
	$ 4,252,305,121 2,338,767,817
	$6,591,072,938
	$ 212,615,256 283,487,008
	$496,102,264
	$ 5,931,965,648 659,107,290
	$6,591,072,938

39 -
2013 net profit will be distributed with priority.
The proposed cash dividend is distributed on the distribution record date after the approval of 2014 Annual Shareholders' Meeting; capital increase by new shares is distributed on another distribution record date upon the application to competent authority takes effect. However, in the event that, before the distribution record date, in accordance with the article 28-2 of the Security Exchange Act, the proposed profit distribution is affected by a buyback of shares for transferring or a write off, it is proposed that the Board of Directors be authorized to adjust the cash and stock to be distributed to each share based on the number of actual shares outstanding on the record date for distribution.

Resolution:

40 -

IV Discussing Events and Elections

Proposed by the Board

Proposal 1: Proposal for New Share Issue through Capitalization of Earnings

Explanation:

The authorized capital of Asia Cement Corporation is NT $40,000,000,000, including convertible shares NT $3,500,000,000 and employee stock option NT$ 100,000,000. The authorized capital is divided into 4,000,000,000 shares. Par value per share is NT $10. Up to the end of 2013, the paid-in capital is NT$ 32,955,364,690, divided into 3,295,536,469 shares. The remaining unissued shares are 344,463,531 shares which equals to NT $3,444,635,310.
To strengthen working capital and financial structure, the Company proposes to withdraw NT$ 659,107,290 from distributable earnings to issue stock dividends, 65,910,729 shares. Par value per share is NT$10. Each shareholder will be entitled to receive a stock dividend of 20 shares per 1,000 shares held by such shareholder.
Upon the approval of the 2014 Regular Shareholders’ Meeting and the relevant government authority, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date, ex-rights date, and other relevant issues. For the fractional shares which cannot be pooled, the distribution will be made in the form of cash according to the Article 240 of C ompany A ct. Such fractional shares will be purchased by the employee trust fund of the Company.
The new shares will be issued in dematerialized form. Rights and obligations of the new issued shares are same as existing shares.
After this new share issue, the paid-in capital will be NT$ 33,614,471,980 which is equal to 3,361,447,198 shares. Par value per share is NT$10.

Resolution:

41 -

Proposed by the Board

Proposal 2: Amendment to “the Working Procedures for the Acquisition and Disposal of Assets”

Explanation:

The Board of Directors proposed to amend the Article 2, 3, 5, 6, 7, 8, 9, 10, and 12, of “the Working Procedures for the Acquisition and Disposal of Assets”. Please refer to page 43-49 for details.

Resolution:

42 -

Comparison Table For

“The Working Procedures for the Acquisition and Disposal of Assets”

Article2

After the Amendment

Article2

Before the Amendment

The term “Assets” used herein should mean: The term “Assets” used herein should mean: 2) Real estate (including land, properties and 3) Real estate and other fixed assets; buildings, investment properties, land-use rights) and equipment;
Article 3 Article 3

Definitions of terms in this Procedure:

2) “Assets acquired or disposed through merger, spin-off, acquisition or share transfer in accordance with the laws”: Refers to assets acquired or disposed through merger, spin-off or acquisition conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or shares transfer through issuance of new shares as the consideration payable by the Company to acquire shares of another company (hereinafter “share transfer ”) under Article 156, paragraph 8 of the Company Act.
3) "Related party & Subsidiary": As defined in Regulations Governing the Preparation of Financial Reports by Securities Issuers

Definitions of terms in this Procedure:

2) “Assets acquired or disposed through merger, spin-off, acquisition or share transfer in accordance with the laws”: Refers to assets acquired or disposed through merger, spin-off or acquisition conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institution Merger Act and other acts, or shares transfer through issuance of new shares as the consideration payable by the Company to acquire shares of another company (hereinafter “share transfer ”) under Article 156, paragraph 6 of the Company Act.
3) "Related party": As defined in Statement of Financial Accounting Standards No.6 published by ROC Accounting Research and Development Foundation (hereinafter "ARDF").
4) "Subsidiary": As defined in Statement of Financial Accounting Standards No.5 and No.7 published by the ARDF.
4) "Professional appraiser": Refers to real estate appraisers or other people duly authorized by acts of law to engage in the appraisal of real estate or equipment.
5) "Date of occurrence": Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other dates that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which
5) "Professional appraiser": Refers to real estate appraisers or other people duly authorized by acts of law to engage in the appraisal of real estate or other fixed assets.
6) "Date of occurrence": Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of boards of directors resolutions, or other dates that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which
43 -

After the Amendment

approval of the Competent Authorities is required, the earlier of the above dates or the date of approval by the Competent Authorities shall apply;
6) "Investments in Mainland China": Refers to investments in China approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in Mainland China.

Before the Amendment

approval of the Competent Authorities is required, the earlier of the above dates or the date of approval by the Competent Authorities shall apply;
7) "Investments in Mainland China": Refers to investments in China approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in Mainland China.

Article 5

non-operational real estate and equipment shall not exceed 50% of its shareholders' equity stated in the latest financial reports.

Article 5

The Company's total investment in securities shall not exceed 150% of its shareholders' equity stated in the latest financial reports; furthermore, individual securities in which it may invest shall not exceed 60% of its shareholders' equity stated in the latest financial reports, and investments in non-operational real estate and other fixed assets shall not exceed 50% of its shareholders' equity stated in the latest financial reports.

Article 6

Acquisition or Disposal of Securities

2) Acquiring Experts' opinions

Article 6

Acquisition or Disposal of Securities

2) Acquiring Experts' opinions
a. The Company acquiring or disposing of a. The Company acquiring or disposing of securities shall first obtain the latest securities shall first obtain the latest financial statements of the issuing financial statements of the issuing company, audited or reviewed by certified company, audited or reviewed by certified public accountants, for reference in public accountants, for reference in appraising the transaction price, and if the appraising the transaction price, and if the dollar amount of the transaction reaches dollar amount of the transaction reaches 20% of the Company's paid-in capital or 20% of the Company's paid-in capital or NT$300 million or more, the Company NT$300 million or more, the Company shall also engage a certified public shall also engage a certified public accountant to provide an opinion accountant to provide an opinion regarding the reasonableness of the regarding the reasonableness of the transaction price. Should the aforesaid transaction price. Should the aforesaid accountant needs to refer to experts’ accountant needs to refer to experts’ opinions, Auditing Standards No. 20 opinions, Auditing Standards No. 20 published by the ROC Accounting published by the Accounting Research
44 -
After the Amendment
Research and Development Foundation (ARDF) shall be abided by. This requirement does not apply, however, to securities having publicly quoted prices from an active market, or to those specified by the Financial Supervisory Commission (FSC).

Article 7

Acquisition or Disposal of Real Estate or Equipment

1) Evaluation procedures
a. For investments in real estate and equipment, the Accounting Department or other relevant units shall estimate the potential return and probable risks of the investment based on the current operation and financial conditions and future development plan.
c. The acquisition or disposal of equipment shall be carried out by way of any of the following: price inquiry, price comparison, price negotiation or tender offer.
2) Valuation reports for real estate or equipment
In the case of real estate or equipment acquired or disposed by the Company other than as a result of transactions with the government, entrusted construction on the Company's own property, entrusted construction on land leased by the Company, or acquisition or disposal of equipment for business operation purposes, where their transaction value reaches 20% of the Company's paid-in capital or NT$ 300 million or above, the Company shall, prior to the date of occurrence, acquire valuation report furnished by professional appraisers (the report shall specify the matters set out in Appendix herein); furthermore, the following provisions shall be complied with:
Before the Amendment
and Development Foundation (ARDF) shall be abided by. This requirement does not apply, however, to securities having publicly quoted prices from an active market, or to those specified by the Executive Yuan’s Financial Supervisory Commission (FSC).

Article 7

Acquisition or Disposal of Real Estate or Other Fixed Assets
1) Evaluation procedures
a. For investments in real estate and other fixed assets, the Accounting Department or other relevant units shall estimate the potential return and probable risks of the investment based on the current operation and financial conditions and future development plan.
c. The acquisition or disposal of other fixed assets shall be carried out by way of any of the following: price inquiry, price comparison, price negotiation or tender offer.
2) Valuation reports for real estate or other fixed assets
In the case of real estate or other fixed assets acquired or disposed by the Company other than as a result of transactions with the government, entrusted construction on the Company's own property, entrusted construction on land leased by the Company, or acquisition or disposal of equipment and facilities for business operation purposes, where their transaction value reaches 20% of the Company's paid-in capital or NT$ 300 million or above, the Company shall, prior to the date of occurrence, acquire valuation report furnished by professional appraisers (the report shall specify the matters set out in Appendix herein); furthermore, the following provisions shall be complied with:
45 -

After the Amendment

Before the Amendment

3) Procedures for determining authorized investment limit and responsible units Prior to the Company acquiring or disposing real estate or equipment, the Accounting Department shall submit the Board of Directors the relevant information for approval before undertaking the transaction. Where the urgency of the matter does not permit prior approval, the General Manager (or whom authorized by the General Manager) shall be authorized to approve the investments if the amount is below NT$ 10 million; the Chairman (or whom authorized by the Chairman) shall be authorized to approve investments if the amount is in excess of NT$ 10 million. In any case, the transactions shall be submitted to the following meeting of the Board of Directors for ratification.
3) Procedures for determining authorized investment limit and responsible units Prior to the Company acquiring or disposing real estate or other fixed assets, the Accounting Department shall submit the Board of Directors the relevant information for approval before undertaking the transaction. Where the urgency of the matter does not permit prior approval, the General Manager (or whom authorized by the General Manager) shall be authorized to approve the investments if the amount is below NT$ 10 million; the Chairman (or whom authorized by the Chairman) shall be authorized to approve investments if the amount is in excess of NT$ 10 million. In any case, the transactions shall be submitted to the following meeting of the Board of Directors for ratification.

Article 8

Procedures of Transactions with Related Parties Procedures of Transactions with Related Parties 2) Evaluation and operating procedures d. Evaluation and operating procedures If the Company acquires or disposes real estate If the Company acquires or disposes real estate from or to related parties, or acquires or disposes from or to related parties, or acquires or disposes other assets but real estate from or to related other assets but real estate from or to related parties and the transaction amount reaches 20% parties and the transaction amount reaches 20% of the paid-in capital of the Company, 10% of of the paid-in capital of the Company, 10% of the total assets of the Company, NT$300 million the total assets of the Company, NT$300 million or more, in addition to trading of government or more, the Company shall submit the bonds, bonds with repurchase or reverse sell following information to the Board of Directors agreement, purchase or redemption of domestic for approval and to the Supervisors for money market funds, the Company shall submit recognition prior to signing the transaction the following information to the Board of contract and making payments: Directors for approval and to the Supervisors for recognition prior to signing the transaction contract and making payments:
3) Evaluation of the fairness of transaction costs 3) Evaluation of the fairness of transaction costs d. Under any of the following circumstances d. Under any of the following circumstances in which the Company acquires real estate in which the Company acquires real estate from related parties, it shall only from related parties, it shall only undertake items i. and ii. herein; the undertake items i. and ii. herein; the
46 -

	After the Amendment		Before the Amendment
4) 5)	evaluation of fairness of transaction cost as provided in items a., b. and c. above shall not apply: iii. The Company obtaining the real estate by entering joint-developing contract with the related party, byentrusting construction on the Company's own property, or by entrusting construction on land leased by the Company Process in determining authorized investment limit and responsible units Prior to the Company acquiring or disposing equipment for operational purposes from or to its subsidiaries, the Accounting Department shall submit the relevant information to the Board of Directors for approval before undertaking the transaction. When the dollar amount of the transactions is below NT$300 million, the Chairman shall be authorized to approve/ disapprove the transactions, and the cases shall then be submitted to the following meeting of the Board of Directors for ratification. Regarding to 10% of the Company’s total assets in these Procedures, the total assets herein refers to the total assets stated in the latest standalone or individual financial report in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers.	4)	evaluation of fairness of transaction cost as provided in items a., b. and c. above shall not apply: iii. The Company obtaining the real estate by entering joint-developing contract with the related party. Process in determining authorized investment limit and responsible units Prior to the Company acquiring or disposing machineriesfor operational purposes from or to its subsidiaries, the Accounting Department shall submit the relevant information to the Board of Directors for approval before undertaking the transaction. When the dollar amount of the transactions is below NT$300 million, the Chairman shall be authorized to approve/ disapprove the transactions, and the cases shall then be submitted to the following meeting of the Board of Directors for ratification.
Article 9 Acquisition or Disposal of Club Membership or Intangible Assets 1) Evaluation and operating procedures b. In acquiring or disposing of intangible assets, the responsible units shall take expert's valuation report or fair market prices into consideration, propose the transaction conditions and prices, and compose an analysis report tothe General Manager for approval before submitting to		Article 9 Acquisition or Disposal of Club Membership or Intangible Assets 1) Evaluation and operating procedures b. In acquiring or disposing of intangible assets, the responsible units shall take expert's valuation report or fair market prices into consideration, propose the transaction conditions and prices, and compose an analysis report tothe Board of Directors for approval before proceed

47 -

	After the Amendment		Before the Amendment
the following meeting of the Board of Directors for review.Where the transaction is above NT$ 3 million, the approval of the Board of Directors shall be requisite before proceeding with the case. 2) Expert's valuation report on club membership or intangible assets. b. Where the transaction amount for acquisition or disposal of club membership or intangible assets reaches 20% of the Company’s paid-in capital or NT$300 million, in addition to the transactions with the government, accountants shall be engaged, prior to the date of occurrence, to provide an opinion with respect to the fairness of the transaction price; the accountants shall conduct in conformity with Auditing Standards No. 20 promulgated bythe ARDF.		with the case. 2) Expert's valuation report on club membership or intangible assets. b. Where the transaction amount for acquisition or disposal of club membership or intangible assets reaches 20% of the Company’s paid-in capital or NT$300 million, accountants shall be engaged, prior to the date of occurrence, to provide an opinion with respect to the fairness of the transaction price; the accountants shall conduct in conformity with Auditing Standards No. 20 promulgated by the ARDF.
Article10 Acquisition or Disposal of Derivative Products 1) Principles and policies for transactions f. Limit on losses ii. "For non-transactional purposes": Limits of losses from individual contractsshall be 25% of the contract amount; limit of losses from total contract shall be 25% of the total contract amount.		Article10 Acquisition or Disposal of Derivative Products 1) Principles and policies for transactions f. Limit on losses ii. "For non-transactional purposes":No limit is required as losses/profits shall have been mutually offset from the hedged positions.
Article12 Procedures for Information Disclosure 1) Items for public announcement and declaration and its standard a. Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of the Company’s paid-in capital, 10 % or more of the Company's total assets, NT$300 million or more; provided,this		Article12 Procedures for Information Disclosure 1) Items for public announcement and declaration and its standard a. Acquisition or disposal of real estate from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20% or more of the Company’s paid-in capital, 10 % or more of the Company's total assets, NT$300 million or more; provided,this

48 -

	After the Amendment	Before the Amendment
shall not apply to trading of government bonds or bonds with repurchase and reverse sell agreements,purchase or redemption of domestic money market funds. d. The amount of transactions, other than those stated in the preceding three subparagraphs or investment in Mainland China, reaches 20% of the Company’s paid-in capital or NTD0.3 billion. The following circumstances shall be excluded therein. i. Trade on government bonds ii. Trade on debentures with repurchase or reverse sell agreement,purchase or redemption of domestic money market funds iii. The assets acquired or disposed are equipment for business use, the counter parties of the transaction are not related party, and the amount thereof is under NTD 0.5 billion.		shall not apply to trading of government bonds or bonds with repurchase and reverse sell agreements. d. The amount of transactions, other than those stated in the preceding three subparagraphs or investment in Mainland China, reaches 20% of the Company’s paid-in capital or NTD0.3 billion. The following circumstances shall be excluded therein. i. Trade on government bonds ii. Trade on debentures with repurchase or reverse sell agreement. iii. The assets acquired or disposed are equipment ormachinesfor business use, the counter parties of the transaction are not related party, and the amount thereof is under NTD 0.5 billion.

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

49 -

Proposed by the Board

Proposal 3: To Elect Directors, Independent Directors, and Supervisors.

Explanation:

The three-year term of 24[th] directors and supervisors will be expired in June, 2014. Accordingly, the Board of Directors proposed to elect directors, independent directors, and supervisors at 2014 Regular Shareholders’ Meeting.

The 2014 Regular Shareholders’ Meeting shall elect 10 directors, 3 independent directors, and 5 supervisors. Their three-year term will start from June 16, 2014.

The Election Rules for Directors and Supervisors are attached as page 69-70.

Pursuant to Article 192-1 and 216-1 of “the Company Act” and Article 5 of “the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”, the election of directors, independent directors, and supervisors shall adopt candidate nomination system. Shareholders shall elect directors, independent directors, and supervisors from those who listed in the slate of candidates which has been reviewed by the 13[th] meeting of 24[th] Board of Directors held on May 5, 2014. The slate of candidates is attached as the following list.

Voting Results:

50 -

	The Slate of Candidates	The Slate of Candidates	The Slate of Candidates
Title	Name	Education	Experience	Current Position	Shareholding	Legal Entity Represent and its shareholding
Director	Douglas Tong Hsu	Master of Economics, Columbia University	Chairman, Far Eastern New Century Corp. Chairman, Asia Cement Corp. Chairman, Far Eastone Telecommunications Co.,Ltd	Chairman, Far Eastern New Century Corp. Chairman, Asia Cement Corp. Chairman, Far Eastone Telecommunications Co.,Ltd	22,821,897	None
Director	Tsai Hsiung Chang	Mechanical Technology Section, National Central Industrial College (Chongqing)	President, Asia Cement Corp. CEO, Asia Cement (China) Holdings Corp.	Vice Chairman, Asia Cement (China) Holdings Corp. Director, U-Ming Marine Transport Corp.	450,344	Far Eastern New Century Corp. 735,795,416
Director	C.V. Chen	S.J.D., Harvard University	Chairman and Managing Partner, Lee and Li Attorneys-At-Law Government Consultant, Executive Yuan Chairman, Taipei European School	Chairman and Managing Partner, Lee and Li Attorneys-At-Law Government Consultant, Executive Yuan Chairman, Taipei European School	331,794	Far Eastern New Century Corp. 735,795,416
Director	Johnny Shih	Master of Computer, Columbia University	President, Far Eastern New Century Corp. Vice Chairman, Oriental Union Chemical Corp.	Vice Chairman, Far Eastern New Century Corp. Vice Chairman, Oriental Union Chemical Corp.	787,986	Far Eastern New Century Corp. 735,795,416
Director	Connie Hsu	Bachelor of Biology, California State University	Vice Chairman, Oriental Institute of Technology Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	Director, Oriental Institute of Technology Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	13,985,034	Huey Kang Investment Corp. 4,742,585
Director	He Shan Ying	Pei Zhi High School (China)	President, Asia Cement Corp. Vice Chairman, Asia Cement Corp.	Chairman, X.Z. Ying-Chai Memorial Foundation Chairman, Y.G. Ying Memorial Foundation	10,498,873	X.Z. Ying-Chai Memorial Foundation 12,965,043

51 -

Title	Name	Education	Experience	Current Position	Shareholding	Legal Entity Represent and its shareholding
Director	Peter Hsu	Master of Operations Research, Stanford University; Master of Information Science, UCLA	Director, Far Eastern New Century Corp. Director, Far Eastone Telecommunications Co., Ltd	Vice Chairman, Far Eastern New Century Corp. Director, Far Eastone Telecommunications Co., Ltd	13,230,374	Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation 4,180,197
Director	Chen Kun Chang	Mechanical Section, National Taipei Institute of Technology	Chief Deputy Plant Manager, Hualien Plant of Asia Cement Corp. President, Hubei Yadong Cement Corp.	Vice CEO, Asia Cement (China) Holdings Corp. President, Jiangxi Yadong Cement Corp.	11,645	Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation 4,180,197
Director	Kun Yan Lee	Yi-Lan Elementary School	Director, Tamkang University Supervisor, Far Eastern New Century Corp.	President, Asia Cement Corp. Director, U-Ming Marine Transport Corp.	2,315,252	Yue Ding Industry Co., Ltd. 1,857,977
Director	Ruey Long Chen	Bachelor of Economics, National Chung Hsing University	Former Minister of Economic Affairs	Chairman, Sinocon Industrial Standards Foundation Chairman, Powerchip Technology Corp. Secretary General, Cross-Strait Entrepreneur Summit	0	Ta Chu Chemical Fiber Co., Ltd. 1,529,479
Independent Director	Ta-Chou Huang	PhD. in Agriculture, Cornell University	Former Mayor of Taipei	Honorary Professor, National Taiwan University Chairman, The Association of Parks And Open Space	0	None
Independent Director	Chi Schive	PhD. in Economics, Case Western Reserve University	Former Chairman, Taiwan Stock Exchange	Chair Professor, Shih Hsin University	0	None
Independent Director	Gordon S. Chen	PhD. in Business Administration, National Taiwan University	Chairman, Financial Supervisory Commission	Honorary Chair Professor	0	None

52 -

Title	Name	Education	Experience	Current Position	Shareholding	Legal Entity Represent and its shareholding
Supervisor	Siao Yi Wang	Bachelor of Business Administration, National Chung Hsing University	Chief Senior Vice President, Far Eastern New Century Corp. Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	CEO of Public Welfare, Far Eastern Group Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	151,803	Far Eastern Medical Foundation 178,006,664
Supervisor	Champion Lee	Master of Business Administration, Texas A&I University	Senior Vice President, Far Eastern New Century Corp. Director, U-Ming Marine Transport Corp.	Supervisor, Far Eastern New Century Corp. Director, U-Ming Marine Transport Corp.	0	Far Eastern Medical Foundation 178,006,664
Supervisor	Chin-Der Ou	PhD. of Engineering, Case Western Reserve University	Former Chairman, Taiwan High Speed Rail Corp.	Chairman, Nan Shan Life Charity Foundation Director, Taiwan Construction Research Institute	0	Bai-Yang Investment Holdings Corp. 3,773,989
Supervisor	Ting Yu Tung	PhD. of Engineering, Stanford University	President, Elite Material Co., Ltd. Supervisor, New Asia Construction & Development Corp.	President, Elite Material Co., Ltd. Supervisor, New Asia Construction & Development Corp.	2,122,041	Bai-Yang Investment Holdings Corp. 3,773,989
Supervisor	Kwan-Tao Li	LL.M., Graduate Division, Law School, New York University	Director, Asia Cement Corp. Director, Far Eastern New Century Corp. Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	Chief Senior Counselor, Lee and Li Attorneys-At-Law Director, Far Eastern New Century Corp. Director, Far Eastern Y.Z. Hsu Science and Technology Memorial Foundation	630,330	U-Ming Corp. 1,476,064

53 -

Proposed By The Board

Proposal 4: Proposal for Release the Prohibition on Directors From Participation in Competitive Business.

Explanation:

According to Section 1, Article 209 of the Company Act, any director who does anything for himself or on behalf of another person that is within the scope of the Company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
The new 25[th] directors may conduct same business within the scope of the Company's business. Thus, the Company proposes to release the prohibition on directors from participation in competitive business.

Resolution:

54 -

V Questions and Motions

55 -

Rules and Bylaws

1. Articles of Incorporation of Asia Cement Corporation

Chapter I – General Provisions

Article 1 The Company is duly incorporated under the provisions of the Company Act of the Republic of China, and shall be called “Asia Cement Corporation.”
Article 2 The Company's businesses are as follows:
C901030 cement manufacturing
C901040 ready-mixed concrete manufacturing
B601010 quarrying
C901050 cement and ready-mixed concrete products
C901990 non-metallic mineral products
F111090 whole sale of building materials
F211010 retail sale of building materials
F401010 international trade
Iz06010 tally and packing
A201010 afforestation business
H701010 developing, leasing, and selling residential and business buildings
H701020 developing, leasing, and selling industrial factories
H703100 real estate rental & leasing
H703090 real estate sale & purchase
Je01010 rental and leasing
G202010 parking-lot business
G801010 warehousing
I103060 business management consultation services
J101040 waste treatment

Except where permits are required, to run operations not forbidden or limited by laws and regulations.

Article 3 The Company may provide guarantee according to the procedures for endorsement & guarantee of Asia Cement Corporation.
Article 4 Where the Company invests in other companies and becomes a shareholder with limited liability, its total investment may exceed 40% of its paid-in capital as stipulated under article 13 of the Company Act, subject to approval of the Board of Directors.
56 -

Article 5 The Company shall have its principal business office in Taipei city, Taiwan and have its manufactories in Dadu village, Hengshan township, Hsinchu county and Sincheng village, Sincheng township, Hualian county. The Company may, depending on the circumstances of production and business, set up domestic and foreign branch offices and branch factories.

Chapter II– Shares

Article 6 The Company's total capital shall be forty billion new Taiwan dollars (NT $40,000,000,000) divided into 4,000,000,000 shares of NT $10 each. The Board of Directors is authorized to issue the un-issued shares in separate trenches.

Out of the above total capital amount, one hundred million new Taiwan dollars (NT $100,000,000) shall be divided into 10,000,000 shares of NT $10 each, to be issued as warrants for employees to subscribe.

Article 7 Shares issued by the Company are not required to be evidenced by share certificates, provided that they shall be recorded at the securities central depository enterprises.

The Company can issue preferred shares.

In the event that the Company mergers with another company, matters relating to the merger need not be approved by way of a resolution of the shareholders meeting of prefer shares.

Article 8 Matters relating to the Company's shares shall be dealt with according to the provisions of "Regulations Governing Handling of Stock Affairs by Public Companies" and the relevant laws and regulations.
Article 9 Registration of share transfer shall be closed within 60 days prior to the General Shareholders' Meeting, or within 30 days prior to an Extraordinary Shareholders' Meeting or within 5 days prior to the record date on which Company distributes the dividends or bonuses.

Chapter III - Shareholders' Meeting

Article 10 The Shareholders’ Meetings shall be general or extraordinary shareholders’ meetings.
General Shareholders’ Meetings shall be held once a year within 6 months of the end of the Company's financial year.
Extraordinary Shareholders’ Meeting shall be convened by the Board of Directors where it thinks necessary or by way of written request by shareholders who have held continuously the Company's shares for more than 1 year and whose shareholdings are greater than 3% of the Company's issued shares.

Other than where the Board of Directors has not convened or is unable to

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convene Shareholders’ Meeting, the supervisor may also convene Shareholders’ Meeting for the benefit of the Company.
Article 11 Notices of General Shareholders’ Meetings shall be in writing and delivered to the shareholders along with a public notice 30 days prior to the General Shareholders’ Meetings and 15 days prior to the Extraordinary Shareholders’ Meeting. The said notices shall specify the date, place and reasons for calling the Shareholders’ Meeting.
Article 12 Unless otherwise provided for in the Company act, a quorum shall be present at the Shareholders’ Meeting if shareholders representing more than half of the shares issued by the Company are in attendance, and resolutions at the said assembly shall be adopted if approved by a majority of the shareholders in attendance.
Article 13 Shareholders may by way of power of attorney appoint proxies to attend the Shareholders’ Meeting. Except for trust enterprises or share registration agencies approved by the securities authorities, when one shareholder is entrusted by two or more shareholders, the voting right represented by the said shareholder shall not exceed 3% of the voting rights of total shares issued. Where it has so exceeded, the voting right in excess shall not be included.
Unless otherwise stipulated by the Company Act, attendance of shareholder's proxies shall be in accordance with the provisions of "regulation governing the use of proxies for attendance of Shareholders’ Meeting of public companies".
Article 14 Unless otherwise provided for in the Company Act and the articles of incorporation, Shareholders’ Meeting shall be conducted in accordance with the Company's regulations for Shareholders’ Meeting.
Article 15 Minutes and resolutions of Shareholders’ Meeting shall be recorded and signed by or affixed with the seal of the chairperson of the meeting. The said minutes and resolutions shall specify the date and place of the Shareholders’ Meeting, number of shares represented by the shareholders (or proxies) present at the meeting; number of voting rights represented; name of the chairperson of the Shareholders’ Meeting; resolutions and the manner in which they are passed. The said minutes and resolutions shall be kept, together with the register of shareholders' attendance and the proxies' powers of attorney, in compliance with the law.
The preparation and distribution of the minutes of Shareholders’ Meeting as required in the preceding paragraph may be made by means of electronic transmission and posting in MOPS.
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Chapter IV – Directors, Supervisors And Managerial officers
Article 16 There shall be 13 directors and 5 supervisors of the Company, who are elected and appointed from the persons with legal capacity at the Shareholders’ Meeting. The total number of the registered shares of the Company held by all of the directors and supervisors shall be determined according to the provisions of "rules and review procedures for director and supervisor ownership ratios at public companies".

The term of office of directors and supervisors are for a period of 3 years. They may be reappointed following their re-election.

Independent directors shall not be less than two in number and shall not be less than one-fifth of the total number of directors.

Directors and supervisors shall be elected by adopting candidate nomination system in accordance with the article 192-1 of Company Act. A shareholder shall elect the directors, supervisors, and independent directors from the nominees listed in the roster of candidates. The election of independent directors, non-independent directors, and supervisors should be held together while elected quotas shall be calculated separately
Article 17 The Board of Directors of the Company shall comprise the directors to exercise the director’s power and authority. A chairman, who represents the Company, and a vice chairman shall be elected from and among the directors. Where the chairman is on leave or absent or cannot exercise his/her power and authority for any cause, the vice chairman shall act on his/her behalf. Where the vice chairman is also on leave or absent or cannot exercise his/her power and authority, the chairman of the Board of Directors shall designate one of the directors to act on his behalf. In the absence of such a designation, the directors shall elect from and among themselves an acting chairperson of the Board of Directors.
Article 18 Meetings of the Board of Directors shall be quarterly convened by the chairman. Unless otherwise provided for in the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the directors at a meeting attended by a majority of the directors. The chairperson may where necessary convene extraordinary meetings of the board at any time.

When a director is unable to attend the meeting of the Board of Directors in person, he/she may be represented by another director in accordance with laws.

The meeting notice of the Board of Directors could be made in hard copy, e-mail, or fax.

Article 19 The supervisors shall perform their duties of supervision in accordance with

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laws. Furthermore, supervisors may attend meetings of the Board of Directors and present their views, but may not have voting rights. Supervisors may elect from and among them a resident supervisor to perform the daily supervisory duty.

Article 20 The percentage for the remuneration of directors and supervisors shall be determined by the Shareholders’ Meeting.

The salaries of executive directors and supervisors might be paid as employees with reference to the standard of listed companies in cement industry. And the amount of such salaries shall be determined by the Board of Directors.

Article 21 The Company shall have a president, vice presidents, chief auditor, general plant manager, chief engineer, assistant vice presidents, deputy chief auditor, managers, and plant managers. The appointment and dismissal of the above staffs shall be approved by the resolutions of the Board of Directors and adopted by a majority of the directors at a meeting attended by a majority of the directors.
Article 22 The chairman, vice chairman and president shall handle the daily affairs of the Company in compliance with the resolutions of the Board of Directors. Chapter V – Accounting
Article 23 The Company's fiscal year shall commence on January 1st of each year, and ends on December 31st of the same year. The final accounts are settled at the end of the Company's fiscal year.
Article 24 The Board of Directors shall in accordance with laws furnish various documents and statements and forward the same to the supervisors for review no later than 30 days prior to the General Shareholders’ Meetings, following which the said statements reviewed by the supervisors and their reports shall be submitted for approval at the General Shareholders’ Meetings.
The appointment, dismissal and remuneration of the accountants, who audit and review the above documents and statements, shall be resolved at the meeting of the Board of Directors.
Article 25 The distribution of dividends shall take into consideration the changes in the outlook for the Company's businesses, the lifespan of the various products or services that have an impact on future capital needs and taxation. Dividends shall be distributed at the ratio as set forth in these articles of incorporation aimed at maintaining the stability of dividend distributions. When distributing dividends, the cash dividends shall not be less than 10% of the aggregate sum of dividends and bonus distributed in the same year.
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Article 26 Apart from paying all its income taxes in the case where there are net income at the end of the year, the Company shall make up for accumulated losses in past years. Where there is still balance, 10% of which shall be set aside by the Company as legal reserve and a special reserve as required by law shall be set aside. Subject to certain business conditions under which the Company may retain a portion of the remaining balance, the Company may distribute to the shareholders the remainder together with undistributed profits from previous years in the following manner:
60% as share interest, to be distributed based on the shareholding of each shareholder. However in the case of increase in the Company's share capital, unless otherwise provided by laws, the share interest to be distributed to the shareholders of increased shares for the year shall be decided by the Shareholders’ Meeting.
33% as shareholders' bonus to be distributed based on the shareholding of each shareholder. However in the case of increase in the Company's share capital, the shareholders' bonus to be distributed to the shareholders of increased shares for the year shall be decided by the Shareholders’ Meeting.
3% as remuneration for directors and supervisors.
4% as employees bonus.
Article 27 Allocation of surplus assets to prefer shares of the Company shall not exceed the par value.

Chapter VI – Supplementary Provisions

Article 28 The organizational rules and bylaws of the Company shall be drawn and amended additionally.
Article 29 All matters not covered herein shall be undertaken in accordance with the Company Act and the other relevant laws and regulations.
Article 30 At the close of each fiscal year, all the statements and records of accounts prepared by the Board of Directors shall be submitted to each shareholder after the ratification by the General Shareholders’ Meetings in accordance with paragraph 1, article 230 of the Company Act.
Article 31 These articles of incorporation were drafted on january 27, 1957, and came into effect following its approval by the competent authorities. Amendments shall take effect following their approval at the Shareholders’ Meetings.
First Amendment on March 5, 1958;
Second Amendment on February 5, 1960;
Third Amendment on October 20, 1961;
Fourth Amendment on April 11, 1962;
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Fifth Amendment on March 24, 1963; Sixth Amendment on October 22, 1963; Seventh Amendment on July 28, 1964; Eighth Amendment on October 22, 1965; Ninth Amendment on April 23, 1966; Tenth Amendment on April 15, 1967; Eleventh Amendment on April 22, 1968; Twelfth Amendment on April 30, 1969; Thirteenth Amendment on April 25, 1970; Fourteenth Amendment on July 8, 1970; Fifteenth Amendment on April 28, 1971; Sixteenth Amendment on April 27, 1973; Seventeenth Amendment on May 3, 1974; Eighteenth Amendment on April 28, 1975; Nineteenth Amendment on April 8, 1976; Twentieth Amendment on September 24, 1976; Twenty-First Amendment on April 15, 1977; Twenty-Second Amendment on April 21, 1978; Twenty-Third Amendment on April 26, 1979; Twenty-Fourth Amendment on April 21, 1980; Twenty-Fifth Amendment on April 24, 1981; Twenty-Sixth Amendment on April 28, 1982; Twenty-Seventh Amendment on April 28, 1983; Twenty-Eighth Amendment on April 25, 1984; Twenty-Ninth Amendment on April 29, 1985; Thirtieth Amendment on April 23, 1986; Thirty-First Amendment on April 16, 1987; Thirty-Second Amendment on April 12, 1988; Thirty-Third Amendment on April 12, 1990; Thirty-Fourth Amendment on April 12, 1991; Thirty-Fifth Amendment on May 7, 1992; Thirty-Sixth Amendment on May 7, 1993; Thirty-Seventh Amendment on May 6, 1994; Thirty-Eighth Amendment on April 28, 1995; Thirty-Ninth Amendment on May 17, 1996; Fortieth Amendment on May 14, 1997; Forty-First Amendment on May 13, 1998; Forty-Second Amendment on May 14, 1999;

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Forty-Third Amendment on May 12, 2000; Forty-Fourth Amendment on May 16, 2001; Forty-Fifth Amendment on June 7, 2002; Forty-Sixth Amendment on June 9, 2005; Forty-Seventh Amendment on June 7, 2006; Forty-Eighth Amendment on June 17, 2008. Forty-Ninth Amendment on June 22, 2011. Fiftieth Amendment on June 21, 2013.

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.
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2. Meeting Rules of Shareholders for Asia Cement Corporation

Take effect on March 24, 1963 First amended on May 23, 1997 Second amended on May 13, 1998 Third amended on June 7, 2002 Last amended on June 21, 2013

Article 1 The Shareholders’ Meeting of the Company shall be held according to the rules herein.
Article 2 The location for Shareholders’ Meeting shall be the Company’s place of business or a place convenient for attendance by shareholders (or by proxies) that is suitable for holding of this meeting. The meeting shall be held between 9:00am and 3:00pm. The shareholders (or proxies) when attending the meeting shall wear admission badge and hand in signed attendance form.
When convening Shareholders’ Meeting, the Company shall incorporate electronic vote casting as one of the alternative ways to cast the vote, and the procedure of electronic casting shall be written in the notice of Shareholders’ Meeting. Shareholders who vote via electronic casting is deemed as presented in person. With respect to extemporary motions, amendments of the original proposals, and substitute proposals raised in the Shareholders’ Meeting, those who vote via electronic casting shall be considered as abstain.
Number of shareholders in attendance shall be calculated based on the number of attending shares, which equals to the sum of number of shares shown on the signed attended forms and the number of voting shares via electronic casting.

The Company may appoint lawyers, accountants or related personnel to attend the Shareholders’ Meeting.

The personnel in charge of handling the affairs of the meeting shall wear identification badge or armband.

For a Shareholders’ Meeting convened by the Board of Directors, the chairperson of the Board of Directors shall preside at the meeting. If the chairperson of the Board of Directors is on leave or unable to exercise the rights, the vice-chairperson of the Board of Directors shall preside instead. If the position of vice-chairperson is vacant or the vice-chairperson is on leave or unable to exercise the rights, the chairperson of the Board of Directors shall designate a director to preside at the meeting. If no director is so designated, the chairperson of the meeting shall be elected by the Board of

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Directors from among themselves.

For a Shareholders’ Meeting convened by any other person having the convening right, he/she shall act as the chairperson of that meeting; if there are two or more persons having the convening right, the chairperson of the meeting shall be elected from among themselves.

The complete processes of the meeting shall be recorded by voice or video recorders and all the records shall be kept by the Company for a minimum period of at least one year.

Article 3 The chairperson shall announce starting of the meeting when the attending shareholders (or proxies) represent more than half of the total shares issued in public. The chairperson may announce postponement of meeting if the legal quorum is not present after the designated meeting time. Such postponement is limited to two times and the aggregated postponed time shall not exceed one hour. If quorum is still not present after two postponements but the attending shareholders (or proxies) represent more than one third of the total shares issued in public, tentative resolutions may be passed with respect to ordinary resolutions by a majority of those present.

After proceeding with the aforesaid tentative resolutions, the chairperson may put the tentative resolutions for re-voting over the meeting if and when the shares represented by the attending shareholders (or proxies) reached the legal quorum.

Article 4 If the Shareholders’ Meeting is convened by the Board of Directors, the agenda shall be designated by the Board of Directors. The meeting shall proceed in accordance with the designated agenda and shall not be amended without resolutions.

If the meeting is convened by person, other than the Board of Directors, having the convening right, the provision set out in the preceding paragraph shall apply mutatis mutandis.

Except with shareholders’ resolution, the chairperson shall not declare adjournment of the meeting before the completion of the meeting agenda (including motions) set forth according to the two sections above.

During the meeting, if the chairperson declares adjournment of the meeting in violation of the preceding rule, a new chairperson may be elected by a resolution passed by majority of the attending shareholders to continue the meeting.

When the meeting is adjourned by resolution, the shareholders shall not elect

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another chairperson to continue the meeting at the same location or another venue.

Article 5 The shareholders (or proxies) shall complete statement slip setting out the number of his/her attendance card, name and statement brief before speaking, and the chairperson will designate the order in which each person is to speak during the session.

The statement will be deemed to be invalid if the shareholder (or proxy) merely completes the statement slip without speaking at the meeting. If there is any discrepancy between the content of the statement slip and the speech, the speech content shall be adopted after confirmation.

Article 6 Any proposal for the agendas shall be submitted in written form. Except for the proposals set out in the agenda, any proposal by the shareholders (or proxies) to amend, substitute or to initiate extemporary motions with respect to the original proposal shall be seconded by other shareholders (or proxies). The same rule shall apply to any proposal to amend the agenda and motion to adjourn the meeting. The shares represented by the proponents and the seconders shall reach 100,000.
Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of inquiry and reply shall be limited to 3 minutes per person. The time may be extended for 3 minutes with the chairperson’s permission.
The chairperson may restrain shareholders (or proxies) from speaking if that shareholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal. When a shareholder (or proxy) is speaking, other shareholder (or proxy) shall not interrupt without consent of the chairperson and the speaking shareholder (or proxy). Any disobedient of the preceding rule shall be prohibited by the chairperson. Article 14 of this meeting rule shall apply if the disobedient do not follow the chairperson’s instructions.
Article 8 For the same proposal, each person shall not speak more than 2 times. Where a juristic person is authorized to attend a Shareholders’ Meeting, such juristic person shall appoint only one representative to attend the meeting.
Where a juristic person appoints more than two representatives to the meeting, only one representative is allowed to speak.
Article 9 After speaking by the attending shareholder (or proxy), the chairperson may reply in person or assign relevant officer to reply.
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Over the proposal discussion, the chairperson may conclude the discussion in a timely manner and where necessary announce discussion is closed.

Article 10 For proposal in which discussion has been concluded or closed, the chairperson shall submit it for voting. No discussion or voting shall proceed for matters unrelated to the proposals.

The poll-watchers and tally clerks shall be appointed by the chairperson with the consent of the shareholders (or proxies). The poll-watchers shall be limited to shareholders of the Company.

Article 11 In regards to the resolution of proposals, unless otherwise provided for in the relevant law and regulation or company’s articles of incorporation, resolution shall be passed by a majority of the voting rights represented by the shareholders (or proxies) attending the meeting.

The proposal for a resolution shall be deemed approved if no objection expressed by shareholders casting their votes via electronic casting, and if the chairperson inquires and receives no objection from shareholders in attendance in person. The validity of such approval has the same effect as if the resolution has been put to vote.

If any objection of a proposal being expressed, such proposal shall be put to vote. All proposals may be put to vote one after the other by its sequence, or may be put to vote together and numbers of votes for each proposal are counted separately. Whichever way of the voting procedures shall be decided by the chairperson.

If there are amendments or substitute proposals for the same proposal, the sequence of which to be put to vote shall be decided by the chairperson. If one of the two proposals has been approved, the other proposal shall be deemed rejected without requirement to put it to vote.

The results of voting shall be reported on the spot and kept for records.

Article 12 During the meeting, the chairperson may at his/her discretion declare time for break.
Article 13 The chairperson may maintain the meeting order by instructing the security guards. The security guards shall wear the armband for identification when helping maintaining the venue order.
Article 14 The shareholders (or proxies) shall obey the instructions of the chairperson and security guards in terms of maintaining the order. The chairperson or security guards may exclude the persons disturbing the Shareholders’
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Meeting from the meeting.

Article 15 For matters not governed by the rules specified herein, shall be governed according to the Company Act, Securities and Exchange Act and the other related laws and regulations.
Article 16 The rules herein take effect after approval at the Shareholders’ Meeting. The same provision applies for any amendments.
*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.
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3. Election Rules For Directors And Supervisors

Last Amended on June 21, 2013

Article 1 These rules shall apply to the election of directors and supervisors of the Company.
Article 2 The election of the Company’s directors/supervisors shall be on the basis of accumulation of votes. Ballot of the eligible voter shall be assigned with code of certificate of present voter. The ballots to be prepared by Board of Directors shall indicate serial number of present voter and the number of votes he represented.
Article 3 The election of directors and supervisors shall be pursued according to the number of position required and shall be held together; provided, however, that the independent and non-independent directors elected shall be calculated separately. The candidates that obtain more number of votes shall be elected. If there are two or more candidates obtaining the same number of vote but the number of position offered is limited, a draw shall be made amongst them to determine. The chairperson shall conduct the drawing for the candidate who is absent.
Directors and supervisors shall be elected by adopting the candidate nomination system specified in article 192-1 of Company Act. Moreover, the professional qualifications, the assessment of independence and other matters of the independent directors shall be in compliance with the “regulations governing appointment of independent directors and compliance matters for public companies” or other relevant regulations.
Article 4 In the beginning of the election, the chairman shall designate two poll-watchers and two tally clerks to carry out relevant missions. The poll-watchers shall be limited to shareholders of the Company.
Article 5 The poll-watcher shall perform the following missions:
(1) prior to casting of votes, open the vote box to the participants and have a seal attached onto the cover of box.
(2) maintain good order for vote casting and prevent any negligence or irregularities in voting.
(3) upon completion of voting, remove the seal from box cover, take out the ballots and count the number of ballots.
(4) check to see if there are any invalid votes and have the valid votes hand over to tally clerk.
(5) conduct supervision over the votes recorded by tally clerk and votes won by the eligible directors/supervisors.
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Article 6 Where a candidate is a natural person, the voters shall expressly enter the candidate’s account name and shareholder account number on the ballots if he is a shareholder, and shall expressly enter the candidate’s name and id document number on the ballots if he is not a shareholder.

Where a candidate is government or corporate shareholder, other than the shareholder account number, the voters shall enter the name of the government or corporate shareholder, and the name of its representative. In case of several representatives, the names of representatives shall be entered. A ballot is null and void if: Article 7 (1) not in the ballot form as required under the rules; (2) bearing two or more candidates on a same ballot; (3) remaining blank bearing no entries from the vote; (4) bearing entries not satisfactory to article 6 or bearing other irrelevant wording;

(5) bearing vague, illegible wording;

(6) bearing a candidate who proves nonconforming in qualifications.

Article 8 Two ballot boxes shall be provided each for the directors and supervisors, and shall be opened for ballot count separately.
Article 9 After all ballots are cast into ballot box, the poll-watcher shall join the tally clerk in opening of ballot box.
Article 10 The poll-watcher shall supervise over the count of ballots of tally clerk.
Article 11 In case of any doubts about the ballots, the poll-watcher shall be requested to conduct a verification to see the validity of the ballots. The invalid ballots shall be segregated from the valid ones and be certified as invalid ballots by the poll-watcher after having counted number of ballots and the voting rights.
Article 12 According to results of the votes, the poll-watcher shall conduct a check on the valid ballots and invalid ballots and produce a record indicating the number of valid ballots and voting rights, the invalid ballots and the voting rights and then the chairman shall announce the names of the elected directors and supervisors.
Article 13 Board of directors shall issue notice of the elected directors and supervisors. Article 14 The rules herein take effect after approval at the Shareholders’ Meeting. The same provision shall apply for any amendments.

*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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Appendix

1. Shareholding of Directors And Supervisors

Title	Name	Representative	Shareholdings	Ratio of Shareholding
Chairman	Douglas TongHsu		22,821,897	0.69%
Director	Far Eastern New Century Corporation	T.H. Chang Johnny Shih C.V. Chen Chin-Der Ou	735,795,416	22.33%
	X.Z.Ying-Chai Memorial Foundation	H.S Ying	12,965,043	0.39%
	U-DingCorporation	K.Y. Lee	1,857,977	0.06%
	Far Eastern Y.Z. Hsu Science And Technology Memorial Foundation	Peter Hsu C.K. Chang	4,180,197	0.13%
	Ta Chu Chemical Fiber Co.,Ltd	Sheng-Cheng Hu	1,529,479	0.05%
	Huey Kang Investment Corporation	Connie Hsu	4,742,585	0.14%
	Oriental Union Chemical Corporation	Kao Chao Lee RueyLongChen	15,587,917	0.47%
Shareholdingof All Directors			799,480,511	24.75%
Supervisor	Far Eastern Medical Foundation	S.Y. Wang Champion Lee	178,006,664	5.40%
	Bai-Yang Investment Holdings Corporation	L.T. Chang T.Y. Tung.	3,773,989	0.11%
	U-MingCorporation	K.T. Li	1,476,064	0.04%
Shareholdingof All Supervisors			183,256,717	5.67%

Note 1: The ratios above are calculated based on total issued shares (3,2 95 ,536,469

shares) on book closure date (april 18, 2014).

Note 2: The minimum required combined shareholding of all directors by law: 98,866,094 shares. The minimum required combined shareholding of all supervisors by law: 9,886,609 shares.

Note 3: The shareholding of all directors and supervisors meet the minimum required combined shareholding.
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2. Effects on Business Performance and EPS Resulting From 2014 Stock Dividend Distribution

Item	Year	Year	2014 Estimate
Paid-In Capital	(Beginningof The Year)		NT $32,955,364,690
Stock`＆`Cash Dividend Distribution	Cash Dividend Per Share		NT$1.80
	Stock Dividend From Retained Earnings Per Share		0.02 Share
	Stock Dividend From Capital Surplus Per Share		0.00 Share
Variance In Business Performance	OperatingIncome		Not Applicable*
	% Change In OperatingIncome		`〃`
	Net Income		`〃`
	% Change In Net Income		`〃`
	Earnings Per Share		`〃`
	% Change In EPS		`〃`
	Average Return on Investment (%) (Reciprocal of Average P/E Ratio)		`〃`
Pro Forma EPS & P/E Ratio	If Retained Earnings Distributed In Cash Dividend	Pro Forma Earnings Per Share	`〃`
		Pro Forma Average Yearly Return on Investment	`〃`
	If Capital Surplus Not Distributed In Stock Dividend	Pro Forma Earnings Per Share	`〃`
		Pro Forma Average Yearly Return on Investment	`〃`
	If Retained Earnings & Capital Surplus Distributed In Cash Dividend Rather Than Stock Dividend	Pro Forma Earnings Per Share	`〃`
		Pro Forma Average Yearly Return on Investment	`〃`

As the Company do not disclose its financial forecast information, in compliance with relevant governmental regulations, there is no need to provide this information.

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3. Employees Bonus and Remuneration of Directors and Supervisors

In accordance with regulations of the Financial Supervisory Commission, the Company hereby discloses the resolution by the Board of Directors about employees bonus and remuneration of directors and supervisors resolved on march 24, 2014.

Profit distribution:
A. Employees cash bonus: NT $ 283,487,008.
B. Employees stock bonus: none.
C. Remuneration of directors and supervisors: NT $ 212,615,256.
The employees bonus is more than the estimation of 2013 for NT $ 44,607,782. The remuneration of directors and supervisors are more than the estimation of 2013 for NT $ 33,455,839. After shareholders' meeting finalizes the actual distribution amount, the difference would be regarded as accounting estimation adjustment and recognized to the profit and loss of 2014.
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==> picture [62 x 63] intentionally omitted <==

ASIA CEMENT CORPORATION

AI assistant

ACC — AGM Information 2014

51736_rns_2014-07-02_c9636938-35b1-41b0-a360-5ef2be8febd0.pdf

遠東集團

FAR EASTERN GROUP

ASIA CEMENT CORPORATION Handbook For

The 2014 Regular Shareholders’ Meeting

Meeting Time: 9:00 A.M., June 16, 2014

Table of Contents

I Meeting Agenda

Asia Cement Corporation

Meeting Agenda of

The 2014 Regular Shareholders’ Meeting

II Reporting Events

Report 1: 2013 Business Report

Explanation:

2013 Business Report

1. 2013 Review

2. Operating Performance of 2013

A. Production:

＊ key performance indicator:

＊ key performance indicator:

B. Sales

＊ Key Performance Indicator:

ii. China area:

＊ Key Performance Indicator:

3. The Company’s Layout Strategy in China

4. Overview of The Company’s Investments in China

A. Jiangxi Yadong Cement Co., Ltd

B. Sichuan Yadong Cement Co., Ltd

C. Hubei Yadong Cement Co., Ltd

D. Huanggang Yadong Cement Co., Ltd

E. Wuhan Yaxin Cement Co., Ltd

5. Outlook for 2014 international economic situation and political and economic situation in Taiwan

6. Operating Prospects for cement industry across the Taiwan Strait

A. Cement industry in China

B. Cement industry in Taiwan

7. The 2014 outlook for the Company

8. Business Goal For 2014

7. The Operating Performance in the First Quarter of 2014

Report 2: 2013 Financial Statements

Explanation:

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

INDEPENDENT AUDITORS’ REPORT

Notice to Readers

ASIA CEMENT CORPORATION

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars, Except Per Share Amounts)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

ACC AGM Information 2014

`＊` key performance indicator:

`＊` key performance indicator:

`＊` Key Performance Indicator:

`＊` Key Performance Indicator: