ACC - AGM Information 2019 | FinancialReports.eu

==> picture [46 x 47] intentionally omitted <==

遠東集團

FAR EASTERN GROUP

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

==> picture [74 x 75] intentionally omitted <==

ASIA CEMENT CORPORATION Handbook For

The 2019 Regular Shareholders’ Meeting

Meeting Time: 9:00 A.M., June 24, 2019 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: 2018 BUSINESS REPORT ...................................................................................................................... 2 REPORT 2: 2018 FINANCIAL STATEMENTS .......................................................................................................... 14 REPORT 3: AUDIT COMMITTEE’S REVIEW REPORT ON THE 2018 FINANCIAL STATEMENTS ................................. 41 REPORT 4: REPORT ON THE 2018 EMPLOYEES’ COMPENSATION AND DIRECTORS’ REMUNERATION.................... 42 REPORT 5: REPORT ON ISSUED CORPORATE BOND.............................................................................................. 43 II RECOGNIZING EVENTS ............................................................................................................................. 44 PROPOSAL 1: ACCEPTANCE OF THE 2018 BUSINESS REPORT AND FINANCIAL STATEMENTS ................................ 44 PROPOSAL 2: ACCEPTANCE OF THE PROPOSAL FOR DISTRIBUTION OF 2018 PROFITS ......................................... 45 III DISCUSSING EVENTS ................................................................................................................................. 47 PROPOSAL 1: AMENDMENT TO “ARTICLES OF INCORPORATION OF ASIA CEMENT CORPORATION” ..................... 47 PROPOSAL 2: AMENDMENT TO “PROCEDURE FOR ACQUISITION AND DISPOSAL OF ASSETS”. ............................. 49 PROPOSAL 3: AMENDMENT TO “PROCEDURE FOR MAKING ENDORSEMENTS AND GUARANTEES”. ..................... 59 PROPOSAL 4: AMENDMENT TO “PROCEDURE FOR LOAN TO OTHERS”. ............................................................... 61 V QUESTIONS AND MOTIONS ....................................................................................................................... 64 RULES AND BYLAWS ....................................................................................................................................... 65 1. ARTICLES OF INCORPORATION OF ASIA CEMENT CORPORATION ..................................................................... 65 2. MEETING RULES OF SHAREHOLDERS FOR ASIA CEMENT CORPORATION ........................................................ 73 APPENDIX ........................................................................................................................................................... 77 1. SHAREHOLDING OF DIRECTORS ...................................................................................................................... 77 2. EFFECTS ON BUSINESS PERFORMANCE AND EPS RESULTING FROM 2018 STOCK DIVIDEND DISTRIBUTION .. 78

I Meeting Agenda

Asia Cement Corporation

Meeting Agenda of

The 2019 Regular Shareholders’ Meeting

Call the Meeting to Order Chairperson Takes Chair Chairperson Remarks Guest Remarks Reporting Events

Recognizing Events Discussing Events Questions and Motions Adjournment

II Reporting Events

Report 1: 2018 Business Report

Explanation:

The 2018 business report is attached as the following pages.

2018 Business Report

1. Review of the Year 2018

Review of the international economic situation in 2018

Looking back at the international changes in 2018, a series of events had happened from the beginning of the year in 2018. Trump met Kim Jong-un. The Federal Reserve raised interest rates which triggered international hot money returning to US dollar assets, and emerging markets faced pressure of capital withdrawal. The OPEC reached a deal to reduce oil production which pushed up oil prices to a nearly four-year high. Four major stock indexes of the US stocks pulled back steeply for corrections, etc.

The global economy had maintained its growth trend in 2017 for the first three quarters. The main growth momentum came from the rapid economic growth performance of the United States and the performance of developing countries and emerging markets that gained more income from raw material exports as raw material prices rose. However, the growth in the fourth quarter began to slow down significantly, mainly due to the gradual escalation of the US-China trade dispute.

Observing differences in performances among major economies, the United States has continued to expand its economic growth due to tax cuts and increased spending to stimulate demand, and the overall recovery in Europe has slowed down. Subject to the economic transformation policies, China’s performance has declined quarter by quarter, while Japan has shown a flat performance owing to natural disasters and weak consumer and corporate spending. According to estimates by the International Monetary Fund (IMF), the global economic growth rate in 2018 was 3.7%, which was relatively flat compared to that in 2017.

Review of the Domestic Economic Situation in 2018

In 2018, Taiwan has maintained a certain recovery momentum thanks to the global economic growth trend. In the first half of the year, Taiwan maintained economic growth at a rate more than 3%. However, since the third quarter, Taiwan’s export orders have continued to show negative growth due to the global economic downturn caused by the escalation of US-China trade disputes and the economic slowdown of China as its largest export trading partner.

In terms of exports, on the one hand, the demand for international branded smart phones is not as good as expected, resulting in a year-on-year decline in the annual growth rate of export orders for information and communication products. On the other hand, as the United States wages the trade war around the globe, the export orders of domestic traditional products have declined. In particular, orders for related traditional products from mainland

China have been significantly reduced, resulting in a significant decline in Taiwan's exports.

Domestic demand mainly relies on equipment investment, expansion and construction, green energy investment and public works construction in the domestic semiconductor industry and electronics industry to maintain a certain level of investment demand momentum. According to the statistics of the Directorate-General of Budget, Accounting and Statistics of Executive Yuan, the overall economic growth rate in 2018 reached the target of 2 or above at 2.63%.

The Company's business performance in 2018

A. In 2018, the overall cement consumption in China amounted to about 2.21 billion MT, decreasing 5.3% compared with 2017. In the same period, the clinker production volume of the Company in China is 24.80 million MT, increasing 2.63% compared with 2017. The total sales of cement, clinker and slag powder are 30.95 million MT, increasing 2.48% compared with 2017.

In 2018, the net income of Asia Cement (China) Holdings Corp. is NT$ 11,000,630 thousand. The Company and its subsidiaries recognized a total investment profit of NT $7,920,454 thousand.

B. For domestic cement industry, according to a statistics conducted by the Taiwan Cement Manufacturers’ Association, the 2018 total cement production volume in Taiwan was 10,938,847 MT, increasing 0.57% compared with 2017. Among them, the domestic cement sales was 8,574,458 MT, and exported cement was 2,378,790 MT. Compared with those in 2017, domestic sales increased by 3.3%, exports decreased by 6.85%.

The total sales of cement in Taiwan of the Company was 2,546,181 MT which is equivalent to 29.69% of the total production volume in Taiwan, or 23.90% of the overall cement consumption in Taiwan. In 2018, the domestic real estate economy was stable, showing a slight increase in volume and decrease in price compared with 2017. The cement consumption increased to 10,653,984 MT, by 4.72%. The 2018 per capita average cement consumption is about 435 kg, increased 0.69% from 432kg in 2017. As a result, the cement market in Taiwan is still showing oversupply.

C. The 2018 consolidated operating revenue of the Company is NT $82,741,004 thousand, increased 27.49% from 2017. The consolidated profit from operations was NT $18,153,110 thousand, increased 144.10% from 2017. From the Company’s affiliates, Far Eastern New Century Corp., and U-Ming Marine Transport Corp., the Company recognized NT $4,144,156 thousand investment income from equity method. The consolidated net profit after tax reached NT $14,889,197 thousand. The net profit rate after tax was 17.99%. Consolidated net profit attributable to the Company is $11,117,094
4 -

thousand. The 8[th] meeting of the 26[th] Board of Directors proposed to distribute cash dividend NT $2.8 per share.

2. Operating Performance of 2018

A. Production:

Unit: 1000 MT

Item Region	Cement	Difference Compared to 2017	%	Clinker	Difference Compared to 2017	%
ACC (Taiwan)	3,460	(100)	(2.81)	3,317	(18)	(0.54)

`＊` key performance indicator:

Actual aggregate cement output amounted to 3,460 thousand MT. Compared to estimated output 3,640 thousand MT, the achievement rate is 95.05%.

Actual aggregate clinker output amounted to 3,317 thousand MT. Compared to estimated output 3,455 thousand MT, the achievement rate is 96.01%.

Unit: 1000 MT

Item Region	Cement	Difference Compared to 2017	%	Clinker	Difference Compared to 2017	%
ACC (China)	29,043	622	2.19	24,801	635	2.63

`＊` key performance indicator:

Actual aggregate cement output amounted to 29,043 thousand MT. Compared to estimated output 28,611 thousand MT, the achievement rate is 101.51%.

Actual aggregate clinker output amounted to 24,801 thousand MT. Compared to estimated output 22,945 thousand MT, the achievement rate is 108.09%.

B. Sales

i. Taiwan area:

Unit: 1000 MT; NT$1,000

					Unit: 1000 MT; NT$1,000	Unit: 1000 MT; NT$1,000	Unit: 1000 MT; NT$1,000	Unit: 1000 MT; NT$1,000
Volume & Value Product	2018				Difference Compared to 2017
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	%	Value	%
Cement & Clinker	2,584	5,754,142	928	1,481,856	(87)	(2.42)	(15,419)	(0.21)

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker produced by ACC amounted to 3,512 thousand

MT. Compared to the estimated sales 3,690 thousand MT, the achievement rate is 95.18%. ii. China area:

Unit: 1000 MT; NT$1,000

Volume & Value Product	2018	2018	2018	2018	Difference Compared to 2017	Difference Compared to 2017	Difference Compared to 2017	Difference Compared to 2017
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	%	Value	%
Cement & Clinker	30,676	46,803,136	219	242,168	716	2.37	13,617,653	40.74

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker produced by ACC (China) amounted to 30,895 thousand MT. Compared to the estimated sales 29,478 thousand MT, the achievement rate is 104.81%.

3. The Company’s Layout Strategy in China

Asia Cement Corporation pioneered all domestic rivals to invest in cement business in China with Taiwan government’s permission since 1997.

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. Total assets reach RMB 20 billion.

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. In addition to Sichuan Lanfeng Cement Corp., Huanggang Yadong Cement, and Wuhan Yaxin Cement, there are two grinding factories, five cement products companies, three transportation companies, Wuhan Asia Shipping Co., Ltd (joint-venture), Tai Zhou Oriental Construction Co., Ltd., three terminals, and twelve 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 has six kilns with annual output of clinker 11 million MT of clinker, which can produce 14 million MT cement. Jiangxi Yadong has become one of the largest cement plants in China. The waste heat recycling generators can produce 338

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 has three kilns with annual output of clinker 4.95 million MT which can produce 6 million MT cement. In addition, the waste heat recycling generators can produce 145 million kWh electricity annually. This substantially reduces electricity costs and minimizes the dependence on external power supply.

The conveyor belt transporting the limestone from quarry directly to the plant has been completed on April 2016. This will enhance the transportation efficiency and lower raw-material cost and also completely prevent interfering with surrounding environments, roads, and living of residents (such as noise, dust).

C. Hubei Yadong Cement Co., Ltd

The company has two kilns with annual output of clinker 3.3 million MT which can produce 4 million MT cement. In addition, the waste heat recycling generators 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 has one kiln. 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 Wuhan Xinlingyun Engineering Co., Ltd on July 2010. The annual output of cement amounts to 1.2 million MT.

F. Sichuan Lanfeng Cement Corp.

To enhance the market position and market share in Chengdu area, Sichuan Yadong Cement Co., Ltd acquired 100% shares of Sichuan Lanfeng Cement Corp. Lanfeng 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 130 million kWh electricity annually.

G. 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.

H. 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.

I. 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. International and Domestic Economic Situations in 2019

A. Prospects for the international economic situation in 2019

Looking forward to 2019, the global economy in the fourth quarter of 2018 will not show a trend of concurrent recovery on an extensive scale, and the US-China trade friction will continue. The political situation in Europe will be turbulent, the Brexit will be deadlocked. China’s economy may slow down further. Meanwhile, the international oil price trend and other factors may become the major uncertain factors affecting economic growth. In order to stimulate the economy, the major economies such as the United States, will undoubtedly slow down or suspend the pace of interest rate hikes. And the Federal Reserve (Fed) will transform its monetary policy from normalization to supporting. Major central banks in various countries will also adopt quantitative easing policies, while China will introduce policies for tax reductions and strengthening the infrastructure to stabilize its economy. On the whole, due to the rising global risks, the economic growth momentum has shown a weak trend, but the degree of recession is limited. International Monetary Fund (IMF) estimate that the global economic growth rate in 2019 will be 3.3%, which is lower than that in 2018.

B. Prospects for the domestic economic situation in 2019

Looking forward to 2019, the uncertainty in global economic growth will increase, which will affect the performance of Taiwan’s domestic and foreign demand. Among others, the global economic slowdown has affected the buying power and the trade protectionism has escalated, resulting in a slowdown in Taiwan's export expansion. However, domestic semiconductor manufacturers have industry-leading advantages in terms of the advanced manufacturing processes and emerging technologies such as big data, Internet of Things, AI,

5G, etc. are gradually expanding, which should help Taiwan’s exports to regain momentum. Affected by the policies implemented by mainland China and the US-China trade war, many Taiwanese companies have successively returned to Taiwan to set up factories. Domestic semiconductor manufacturers have continued to invest in advanced processes. Investments in green energy such as solar energy and offshore wind power have also been pushed forward, showing that private investment momentum remains sufficient. Meanwhile, as the government-led Forward-Looking Infrastructure Development Program and new industries development program have been continuously implemented, it is foreseeable that domestic demand will become the main force for economic growth in 2019, and the economy will move forward in a slow and stable manner.

In addition, 2019 will be the hot year of the presidential election and the re-election of the Legislative Yuan. The primary election effect of the political parties and the uncertainty in future politics among the civic societies may also affect the effective operation of the economy.

The Directorate-General of Budget, Accounting and Statistics of Executive Yuan forecasts that the economic growth rate in 2019 will be 2.27%, which is lower than 2.63% in 2018.

6. Prospects for the cement industry on both sides across the Taiwan Straits

A. Cement industry in China

In 2019, the China's economy continued to develop towards high quality production. The annual economic growth rate is estimated at around 6%. Compared with 2.21 billion metric tons in 2018, cement demand is expected to fall slightly by 2%-4% and fluctuate at around 2.1 billion metric tons.

In 2019, except for the coal market, which will be reach an overall balance between supply and demand, the price fluctuation range will be narrower and the oil price will remain at higher levels. The prospects of the cement industry in mainland China are as follows:

i. Environmental protection is getting more and more serious:

With the full implementation of the Environmental Protection Tax Law, corporate environmental protection expenditures will be increased. Actively promoted "Three-Year Plan on Defending the Blue sky." 2019 is a crucial year. The environmental protection supervision continued to be implemented. The plans to protect clear water and pure land continued to deepen. The pollutant discharge permit will cover all key industries involved in pollution prevention and control, accelerate the rectification of “scattering

pollution” enterprises, and promote green development in relevant industries.

ii. The cement supply end continues to tighten:

a. Strictly control new capacity and accelerate the elimination of backward production capacity: In 2019, it is planned to reduce the clinker production capacity by 116.4 million metric tons, and shut down 150 enterprises that operate cement grinding stations. The degree of de-capacity is more stringent than that in 2018.
The concentration of clinker production capacity among the top 10 large enterprises over the entire country has reached 62%, and the concentration of cement production capacity has reached 50% or more to further limit production capacity and effectively reduce supply.

On 2019/10/1, the composite silicate cement with the intensity level of PC32.5 was abolished, and the production capacity was controlled from the production source to alleviate the pressure of overcapacity.

b. Strictly control the replacement of production capacity: Seriously deal with capacity replacement and standardize the capacity replacement behavior. It is strictly forbidden to approve the cement industry in 13 provinces and cities such as Sichuan and Hubei or those provinces and cities shall step by step abolish the cement industry. In order to prevent enterprises from building new capacity via the implementation of capacity replacement, the future capacity replacement policy will be more stringent.
c. Staggering peak production: The staggering peak production continues to expand, the scope of regions and time continue to expand, and the standard for exempting staggering peak production in 2019 will be more stringent, as the implementation will be strengthened to cover even the entire nation. Enterprises that fail to meet low emission standards will either need to implement the dynamic staggering peak production policy, or face the situation where production cannot be conducted normally in the whole year. The cement inventory may continue to decline to push up the cement market price and improve the industry's profits.

iii. Infrastructure investment boosts cement demand:

a. Capital investment is still an important support for cement demand. In 2019, the investment in railway, highway and water transport projects will reach 2.6 trillion
10 -

RMBs, and the investment growth rate will gradually stabilize and rise. It is expected that the growth rate of infrastructure investment will rebound to more than 10% in 2019, thus stimulating cement demand. The renovation of shanty towns will continue to advance From 2018 to 2020, China will renovate 15 million sets of shanty towns. It is expected that real estate investment will remain a stable cement demand pull.

b. Deepen the promotion of new-style urbanization, actively promote the regional integration in the Yangtze River Delta, coordinate the development of Beijing-Tianjin-Hebei, the development of the Yangtze River Economic Belt, and the construction of the Greater Bay Area of Guangdong, Hong Kong and Macao, and insist on the construction of the “One Belt, One Road” to open a new round of opening up and pull the demand for cement and other building materials.
iv. Mergers and acquisitions are strengthened, and overseas layout is accelerated:

Large enterprises have accelerated the pace of mergers and acquisitions and continuously increased industry concentration. Due to the overcapacity of the overall cement industry, the government in mainland China has shifted its overcapacity to overseas by means of policy support. The major cement groups have taken advantage of the overseas layout of “One Belt, One Road” and actively participated in the construction of large-scale projects and infrastructure in the countries along the route (Silk Road) to accelerate realize the internalization of cement companies.

v. E-commerce is widespread, and regional platform is upgraded:

Although the cement industry is a traditional industry, it still needs to closely contact e-commerce, launch an e-commerce platform, control the export of cement companies, concentrate on superior resources, explore new paths for joint development of mining and sales, and promote the upgrading of the traditional industry. Create intelligent factories and use big data to form a high-performance supply chain collaboration network to improve efficiency indicators.

vi. The industry chain continues to expand:

The environmental protection situation is becoming more and more serious, and the value of mine resources is gradually being discovered. The construction of green mines has become the top priority of the industry. In the future, large enterprises will integrate mine resources, extend the industrial chain of cement mines, accelerate the layout of aggregates of sand and gravel, and create more space for profits.

11 -
vii. It is becoming regular that the cement industry participates in the coordinated disposal of hazardous waste:

The hazard waste management project in 13th Five-Year Plan will be incorporated into the local municipal infrastructure plan to further strengthen the local hazardous waste management. With the maturity of co-processing technology, more and more clinker production lines have participated in collaborative disposal. The cement kiln co-processing of solid wastes has begun to rise, further moving towards green environmental protection and sustainable development.

B. Cement industry in Taiwan

The Directorate-General of Budget, Accounting and Statistics of Executive Yuan pointed out that in order to achieve the policy focus of strengthening domestic demand, the general budget will cover more public construction and expand investment. The total budget for public construction in 2019 is 167.9 billion NTDs. If special budgets for such as the Comprehensive Management Plan of River Basin and the Forward-Looking Infrastructure Development Program are considered, the total budget would reach 263.3 billion NTDs, showing an increase of 24.1 billion NTDs or approximately 10.1% compared to that in 2018 to reach a record high since 2012. If the business and non-business special funds are included, the total budget would reach 129.4 billion NTDs, and the overall scale could reach 392.7 billion NTDs, showing an increase of 7.7% compared to that in 2018.

According to the overall economic forecast of the Taiwan Institute of Economic Research, although Taiwan’s economy in 2019 exhibits a rebound, but if the US-China trade dispute continues to escalate, it will not only hurt the trade itself, but also the investment and manufacturing activities in the long run. Moreover, as the major central banks implement the tightening monetary policies at a pace faster than expected, the strengthening of the US dollar and the increase in borrowing costs have made some of the emerging markets affected, and it is feared that the capital flights will occur to intensify financial market volatility, which is not unfavorable to Taiwan’s consumption performance, making the annual economic growth in 2019 slightly lower than that in 2018. According to the forecast published by the Taiwan Institute of Economic Research in November 2018, the GDP growth rate in 2019 is 2.20%, which is 0.37 percentage points lower than the 2.57% in 2018.

In terms of real estate, the number of houses sold in the housing market in 2018 was 280,000, an increase of 4% compared to 270,000 in 2017. However, the price gap between buyers and sellers is still large, and the housing market has not significantly reversed upwards. So, the follow-up still needs to be observed. Overall, the number of civil construction sites is

12 -

estimated to decrease in 2019, and the number of public works is increasing. The total cement demand in Taiwan will increase slightly compared to that last year.

7. Business Outlook of the Company in 2019

The cement industry in Taiwan is in an environment of oversupply and fierce competition. However, China's cement industry is expected to maintain high price and profitability since 2018. The Company will continue its coherent production and marketing strategies and consistently adhere to the policy of “high quality, high efficiency, high environmental protection and low cost” as a response.

The Company has set the following goals for 2019. The estimated production volume in Taiwan is 3,549 thousand MT clinker and 3,630 thousand MT cement. The estimated sales volume in Taiwan is 3,800 thousand MT clinker and cement. The estimated production volume in China is 24,170 thousand MT clinker and 28,624 thousand MT cement. The estimated sales volume in China is 29,572 thousand MT clinker and cement.

8. The Company's Operating Status in the First Quarter of 2019

In the first quarter of 2019, the consolidated operating income of the Company is NT $ 19,385,675 thousand, increasing 17% from NT $ 16,573,882 thousand in the same period of 2018. The consolidated net profit is NT $ 3,810,086 thousand, increased 58 % from NT $ 2,415,347 thousand in the same period of 2018. Net profit attributable to owners of the Company is NT$ 2,929,272 thousand.

13 -

Report 2: 2018 Financial Statements

Explanation:

The 2018 financial statements are attached as the following pages.

Consolidated Balance Sheets (December 31, 2018)
Consolidated Statements of Comprehensive Income (Years Ended December 31, 2018)
Consolidated Statements of Changes in Equity (Years Ended December 31, 2018)
Consolidated Statements of Cash Flows (Years Ended December 31, 2018)
Balance Sheets (December 31, 2018)
Statements of Comprehensive Income (Years Ended December 31, 2018)
Statements of Changes in Equity (Years Ended December 31, 2018)
Statements of Cash Flows (Years Ended December 31, 2018)

Independent auditor’s report by Li Wen Kuo and Yu Wei Fan of Deloitte & Touche is attached.

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

14 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 38) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Notes 8 and 40) Available-for-sale financial assets - current (Notes 9 and 40) Financial assets at amortized cost - current (Notes 6, 11, 38 and 40) Contract assets - current (Note 33) Debt investments with no active market - current (Notes 6, 12, 38 and 40) Notes receivable Third parties Trade receivables Third parties (Notes 13 and 14) Related parties (Notes 13 and 38) Other receivables (Notes 15 and 38) Current tax assets (Note 33) Inventories (Note 16) Prepayments (Note 23) Other current assets (Note 24) Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 18 and 40) Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 40) Available-for-sale financial assets - non-current (Notes 9 and 40) Financial assets at amortized cost - non-current (Notes 6, 11, 38 and 40) Financial assets measured at cost - non-current (Note 10) Debt investments with no active market - non-current (Notes 6, 12, 38 and 40) Property, plant and equipment (Notes 19 and 40) Investment properties (Notes 20 and 40) Intangible assets (Notes 21 and 22) Deferred tax assets (Note 33) Finance lease receivables - non-current (Note 14) Long-term prepayments for leases (Note 23) Other non-current assets (Notes 24 and 38) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 25 and 38) Short-term bills payable (Note 26) Financial liabilities at fair value through profit or loss - current (Note 7) Contract liabilities - current (Note 33) Accounts payable and accrued expenses Third parties Related parties (Note 38) Dividends and bonuses payable Other payable - other (Note 27) Current tax liabilities (Note 33) Provisions - current (Note 30) Customers' deposits and advances (Note 28) Deferred revenue - current (Note 29) Current portion of long-term liabilities (Notes 28 and 38) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 28) Long-term borrowings (Notes 28 and 38) Provisions - non-current (Notes 24, 30 and 41) Deferred tax liabilities (Note 33) Net defined benefit liabilities -non-current Deferred revenue - non-current (Note 29) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 32) 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 (Note 32) Total equity TOTAL		2018 Amount % $ 14,929,411 5 9,046,583 3 3,800,923 2 - - 14,322,874 5 147,528 - - - 12,928,203 5 9,251,854 3 976,266 - 2,964,751 1 15,901 - 9,804,276 4 1,684,612 1 485,324 - 80,358,506 29 78,846,276 28 9,784,743 4 - - 14,642 - - - - - 52,549,341 19 35,965,203 13 3,694,783 1 436,238 - 8,894,355 3 3,779,353 1 4,864,558 2 198,829,492 71 $ 279,187,998 100 $ 24,805,239 9 18,564,469 7 268,218 - 731,015 - 8,028,077 3 250,857 - 231,722 - 334,305 - 2,181,268 1 48,200 - - - 75,912 - 7,285,012 2 62,804,294 22 12,192,567 5 33,593,896 12 679,377 - 9,365,429 4 185,107 - 923,805 - 395,177 - 57,335,358 21 120,139,652 43 33,614,472 12 1,362,554 - 15,615,380 6 63,945,145 23 20,358,461 7 99,918,986 36 2,996,214 1 137,892,226 49 21,156,120 8 159,048,346 57 $ 279,187,998 100		2017
				Amount % $ 7,739,492 3 322,080 - - - 7,805,406 3 - - - - 4,380,928 2 8,328,652 3 9,348,386 4 589,265 - 3,042,831 1 23,145 - 6,572,982 3 1,675,449 1 434,086 - 50,262,702 20 64,859,378 26 - - 18,072,678 7 - - 1,300,668 1 150,549 - 53,738,838 22 35,745,411 14 4,552,561 2 564,185 - 9,566,585 4 3,814,315 2 4,436,478 2 196,801,646 80 $ 247,064,348 100 $ 18,410,863 7 16,124,918 7 - - - - 7,386,877 3 272,360 - 205,046 - 330,729 - 1,155,972 1 47,646 - 748,214 - 68,085 - 9,197,457 4 53,948,167 22 10,000,000 4 27,277,821 11 451,056 - 8,100,162 3 193,291 - 858,838 1 438,649 - 47,319,817 19 101,267,984 41 33,614,472 14 1,168,692 1 15,068,480 6 63,001,957 25 16,125,837 7 94,196,274 38 (1,543,873) (1) 127,435,565 52 18,360,799 7 145,796,364 59 $ 247,064,348 100

The accompanying notes are an integral part of the consolidated financial statements

(With Deloitte & Touche auditors’ report dated March 21, 2019)

15 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 33 and 38) OPERATING COSTS (Notes 16, 33, 34 and 38) GROSS PROFIT UNREALIZED GROSS PROFIT ON SALE TO ASSOCIATES REALIZED GROSS PROFIT ON SALE TO ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative Expenses (Notes 34 and 38) Expected credit loss (Note 13) Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Other income (Note 34) Other gains and losses (Note 34) Finance costs (Note 34) Share of profit or loss of associates and joint ventures Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (Note 35) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss:		2018 Amount % $ 82,741,004 100 61,584,690 74 21,156,314 26 - 15,147 - 21,171,461 26 2,875,798 4 142,553 - 3,018,351 4 18,153,110 22 1,479,803 2 (1,733,766) (2) (1,673,185) (2) 4,144,156 5 2,217,008 3 20,370,118 25 5,480,921 7 14,889,197 18		2017
				Amount % $ 64,899,248 100 54,728,230 85 10,171,018 15 (540) - - - 10,170,478 15 2,733,762 4 - - 2,733,762 4 7,436,716 11 1,040,658 2 (728,230) (1) (1,772,075) (3) 2,522,090 4 1,062,443 2 8,499,159 13 1,833,618 2 6,665,541 11 (Continued)

16 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Unrealized gain on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans Share of the other comprehensive income of associates and joint ventures Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Unrealized gain on available-for-sale financial assets Cash flow hedges Share of other comprehensive income (loss) of associates and joint ventures Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation Non-controlling interests EARNINGS PER SHARE (Note 36) Basic Diluted		2018 Amount % $ 707,605 1 265,511 - 723,519 1 1,696,635 2 (894,761) (1) - - (2,434) - 636,733 1 (260,462) - 1,436,173 2 $ 16,325,370 20 $ 11,117,094 13 3,772,103 5 $ 14,889,197 18 $ 12,811,353 16 3,514,017 4 $ 16,325,370 20 $3.54 $3.49		2017
				Amount % $ - - 127,020 - 124,241 - 251,261 - (1,017,135) (1) 4,092,288 6 - - (1,206,875) (2) 1,868,278 3 2,119,539 3 $ 8,785,080 14 $ 5,469,007 8 1,196,534 2 $ 6,665,541 10 $ 7,895,746 12 889,334 2 $ 8,785,080 14 $1.74 $1.74

The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated March 21, 2019)

(Concluded)

17 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

		Equity Attribu	ble to Owners of the Corporation	ble to Owners of the Corporation	ble to Owners of the Corporation
Capital Stoc	k Issued Amount Capital Surplus $ 33,614,472 $ 1,167,881 - - - - - - - 811 - - - - - - - - 33,614,472 1,168,692 - - 33,614,472 1,168,692 - - - - - - - 185,411 - 8,451 - - - - - - - - - - $ 33,614,472 $ 1,362,554	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 14,673,903 $ 62,119,922 $ 14,805,588 394,577 - (394,577 ) - 881,019 (881,019 ) - - (3,025,302 ) - - - - - 5,469,007 - - 251,923 - - - - 1,016 (99,783) 15,068,480 63,001,957 16,125,837 - - 1,713,459 15,068,480 63,001,957 17,839,296 546,900 - (546,900 ) - 943,188 (943,188 ) - - (4,033,736 ) - - - - - - - - 11,117,094 - - 351,764 - - - - - (3,408,697 ) - - (17,172) $ 15,615,380 $ 63,945,145 $ 20,358,461		Other Equity			Total Other Equity $ (3,718,689 ) - - - - - 2,174,816 - - (1,543,873 ) (211,105) (1,754,978 ) - - - - - - 1,342,495 - 3,408,697 - $ 2,996,214
			Exchange Differences on Translating Foreign A Operations $ (44,313 ) - - - - - (2,593,840 ) - - (2,638,153 ) - (2,638,153 ) - - - - - - (3,211 ) - - - $ (2,641,364)	Unrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other vailable-for-sale Comprehensive Financial Assets Income $ (4,023,554 ) $ - - - - - - - - - - - 4,751,621 - - - - - 728,067 - (728,067) 516,962 - 516,962 - - - - - - - - - - - - - 1,343,257 - - - 3,408,697 - - $ - $ 5,268,916	Gains on Property Revaluation C $ 307,728 - - - - - - - - 307,728 - 307,728 - - - - - - - - - - $ 307,728	ash Flow Hedge $ 41,450 - - - - - 17,035 - - 58,485 - 58,485 - - - - - - 2,449 - - - $ 60,934

Shares 3,361,447 - - - - - - - - 3,361,447 - 3,361,447 - - - - - - - - - - 3,361,447

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

18 -

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Depreciation expenses
Share of profit or loss of associates and joint ventures
Finance costs
Dividend income
Impairment loss recognized on goodwill
Interest income
Reversal of impairment loss on (write-downs of) inventories
Amortization expenses
Net loss (gain) on fair value change of financial assets and liabilities
designated as at fair value through profit or loss
Gain on disposal of financial assets
Impairment loss recognized on associates and joint ventures
Expected credit loss recognized on trade receivables
Gain on change in fair value of investment properties
Impairment loss on property, plant and equipment
Gain on disposal of subsidiaries
Loss on disposal of property, plant and equipment
Unrealized foreign exchange (gain) loss
Effect of changes in exchange rate of bonds payable
Impairment loss recognized on trade receivables
Loss on disposal of intangible assets
Gain on disposal of associates
Other items
Changes in operating assets and liabilities:
Financial assets held for trading
Financial assets mandatorily classified as at fair value through
profit or loss
Contract assets
Notes receivable
Trade receivables
Other receivables
Inventories
Prepayments
Other current assets
Contract liabilities
Accounts payable and accrued expenses
Provisions
Customers' deposits and advances
Net defined benefit liabilities
Deferred revenue

Cash generated from operations
Interests received

2018
2017
$ 20,370,118 $ 8,499,159
4,649,561
4,839,940
(4,144,156)
(2,522,090)
1,673,185
1,772,075
(770,314)
(616,680)
630,631
-
(370,571)
(179,840)
315,353
(4,401)
269,631
337,651
256,294
(31,422)
(251,859)
(393,588)
200,245
122,619
142,553
-
(98,015)
(216,580)
51,888
-
(40,440)
-
33,455
103,818
(15,575)
419,217
300
(7,470)
-
159,402
-
1,030
-
(76)
(755)
4,949
-
37,397
(3,051,110)
-
(44,533)
-
(4,805,502)
(4,188,102)
525,258
596,114
(487,332)
(365,498)
(3,566,055)
278,234
(31,307)
(810,951)
(74,718)
12,784
(20,934)
-
(640,964)
496,543
176,021
153,618
-
41,831
(12,254)
(1,661)

(68,085)

(68,085)
10,800,014
8,469,937
254,393
191,079
(Continued)

-19-

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

Dividends received Interests paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at amortized cost Acquisition of property, plant and equipment Acquisition of financial assets at fair value through other comprehensive income Acquisition of associates Proceeds from disposal of property, plant and equipment Increase in long-term prepayments for investment Proceeds from disposal of subsidiaries Acquisition of intangible assets Increase in refundable deposits Decrease in other non-current assets Acquisition of investment properties Acquisition of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Increase in debt investments with no active market Cash receipt of capital reduction from investments accounted for using equity method Increase in prepayments for lease Cash receipt of capital reduction from available-for-sale financial assets Cash receipt of capital reduction from financial assets measured at cost Net cash inflow on disposal of associates Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Proceeds from issue of bonds Increase (decrease) in short-term borrowings Repayments of bonds Dividends paid Increase in short-term bills payable Change of non-controlling interests Decrease in other non-current liabilities Increase in guarantee deposits received	2018 $ 3,172,662 (1,658,691) (3,304,318) 9,264,060 (9,537,968) (4,274,600) (556,016) (123,120) 90,395 (83,721) 48,391 (13,037) (9,678) 1,559 (1,269) - - - - - - - - (14,459,064) 34,819,996 (30,396,615) 6,574,843 6,445,333 (4,089,430) (4,033,715) 2,439,125 723,504 (59,096) 14,691	2017 $ 2,298,195 (1,731,570) (1,088,593) 8,139,048 - (1,157,324) - (16,024) 150,935 (1,954,754) - (13,608) (711,225) 2,950 (48,967) (6,799,317) 5,689,530 (2,037,434) 115,631 (27,997) 16,880 5,841 86 (6,784,797) 33,917,158 (34,878,734) - (300,971) - (3,025,272) 4,094,700 (528,712) (63,285) 5,561

(Continued)

-20-

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

2018
Net cash generated from (used in) financing activities
$ 12,438,636

EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH AND CASH EQUIVALENTS HELD IN FOREIGN
CURRENCIES

(53,713)

NET INCREASE IN CASH AND CASH EQUIVALENTS
7,189,919
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

7,739,492

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$ 14,929,411

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated March 21, 2019)

2017
$ (779,555)

(285,210)

289,486

7,450,006
$ 7,739,492
(Concluded)

-21-

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Asia Cement Corporation

Opinion

We have audited the accompanying consolidated financial statements of Asia Cement Corporation and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance 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 and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a

-22-

whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2018 are stated as follows:

Estimated Impairment of Trade Receivables

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash flows are less than expected, a material impairment loss may arise. Please refer to Notes 5 and 13. Because the key assumptions and inputs used for measuring expected credit losses on trade receivables represent an area of significant judgement and uncertainty, we believe that the estimated impairment of trade receivables is one of key audit matters.

Corresponding audit procedures:

We obtained an understanding and performed tests of the management’s estimation of impairment of trade receivables and of the design and execution of relevant internal controls.
We evaluated the reasonableness of allowance for impairment loss by testing the ageing of trade receivables and by quantifying the potential risk on overdue balances at the balance sheet date.
We tested recoverability of receivables by vouching cash receipts after the balance sheet date.
For amounts that were past due and not yet recovered, we evaluated the adequacy of allowance for impairment loss by understanding the customers’ historical payment performance, any collateral pledged, and other abilities to repay the bills.

Fair Value Measurement of Investment Properties

The Group’s investment properties are subsequently measured using the fair value model and valued by independent qualified professional appraiser, a member of the ROC certified real estate appraisers. Please refer to Notes 5 and 20. Because the valuation of investment properties represents an area of significant judgement and uncertainty, we believe that the fair value

-23-

measurement of investment properties is one of key audit matters.

Corresponding audit procedures:

We assessed the competencies and independence of the appraiser engaged by the management and obtained an understanding of the scope of work and the process of engagement acceptance to evaluate the risk that the appraiser’s independence might be impaired and the scope of the appraiser’s work was limited.
We obtained an understanding of and assessed the reasonableness of management’s assumptions and methods used in valuation.
We tested samples of items from management’s supporting documentation, including the reasonableness of effective gross income, expenses, and ownerships of land and buildings used in valuation process and reperformed the calculation of fair value.

Emphasis of Matter

The Group’s investments in China Shanshui Cement Group Limited (CSCGL), which previously being recognized as financial assets at fair value through other comprehensive income, became qualified for the equity method of accounting and were therefore reclassified as investments accounted for using equity method in 2018. The Group reported provisional amounts of NT$2,789,881 thousand for the goodwill arising from the above transition during the measurement period as the goodwill was included in the carrying amounts of the Group’s investment in CSCGL. The Group will engage outside specialists to provide assistance in measuring the identifiable net assets of CSCGL and the measurement will be completed within one year from the transition date. The provisional amounts will be adjusted retrospectively during the subsequent measurement period to reflect new information obtained about facts and circumstances that existed as of the transition date that, if known, would have affected the amounts recognized as of that date. Please refer to Notes 8 and 18. Our opinion is not qualified in respect of this matter.

Other Matter

The financial statements of CSCGL, an associate accounted for using equity method, were audited by other auditors. Our opinion, insofar as it relates to the amounts included in the accompanying financial statements for CSCGL, is based solely on the reports of other auditors. As of December 31, 2018, the aggregate carrying value of the equity-method investments in CSCGL was NT$10,217,370 thousand, representing 4% of the consolidated total assets. For the year ended

-24-

December 31, 2018, the share of profit or loss of CSCGL was NT$376,557 thousand, representing 2% of the consolidated income before income tax.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks,

-25-

and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

-26-

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in the independent auditors’ report are Kuo, Li Wen and Fan, Yu Wei.

Deloitte & Touche Taipei, Taiwan Republic of China

March 21, 2019

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.

-27-

ASIA CEMENT CORPORATION

BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 32) Financial assets at fair value through profit or loss - current (Note 7) Financial assets at fair value through other comprehensive income - current (Notes 8 and 34) Available-for-sale financial assets - current (Notes 9 and 34) Financial assets at amortized cost - current (Notes 6, 11 and 32) Debt investments with no active market - current (Notes 6, 12 and 32) Notes receivable Third parties Trade receivables Third parties (Note 13) Related parties (Notes 13 and 32) Other receivables (Note 32) Current tax assets (Note 28) Inventories (Note 14) Prepayments (Note 19) Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 15 and 34) Financial assets at fair value through other comprehensive income - non-current (Note 8) Available-for-sale financial assets - non-current (Note 9) Financial assets measured at cost - non-current (Note 10) Property, plant and equipment (Notes 16 and 34) Investment properties (Notes 17, 32 and 34) Intangible assets (Note 18) Deferred tax assets (Note 28) Long-term prepayments for leases (Note 19) Other non-current assets (Notes 20, 24 and 32) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bills payable (Note 21) Financial liabilities at fair value through profit or loss - current (Note 7) Contract liabilities - current (Note 26) Accounts payable and accrued expenses Third parties Related parties (Note 32) Dividends and bonuses payable Current tax liabilities (Note 28) Customers' deposits and advances Deferred Revenue - current (Note 23) Current portion of long-term liabilities (Note 22) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 22) Long-term borrowings (Note 22) Provisions - non-current (Note 23) Deferred tax liabilities (Note 28) Deferred revenue - non-current (Note 23) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 25 and 28) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2018 Amount % $ 3,165,795 2 1,172,826 1 2,371,026 1 - - 462,275 - - - 95,212 - 474,070 - 520,982 - 29,495 - 9,022 - 1,663,395 1 188,456 - 12,125 - 10,164,679 5 125,632,890 65 5,386,142 3 - - - - 4,374,050 2 41,689,694 22 8,344 - 12,603 - 369,801 - 5,192,895 3 182,666,419 95 $ 192,831,098 100 $ 11,437,104 6 268,218 - 40,661 - 1,415,215 1 188,104 - 214,593 - 8,477 - - - 75,912 - 4,000,000 2 17,648,284 9 12,192,567 6 15,025,011 8 98,000 - 9,020,630 5 923,805 - 30,575 - 37,290,588 19 54,938,872 28 33,614,472 17 1,362,554 1 15,615,380 8 63,945,145 33 20,358,461 11 99,918,986 52 2,996,214 2 137,892,226 72 $ 192,831,098 100		2017
				Amount % $ 815,926 1 171,500 - - - 3,063,312 2 - - 2,596,386 1 102,303 - 365,037 - 399,481 - 33,114 - 5,664 - 1,303,587 1 105,239 - 8,327 - 8,969,876 5 109,772,422 61 - - 9,044,215 5 128,793 - 4,665,393 3 42,019,637 23 8,948 - 168,986 - 259,142 - 4,808,286 3 170,875,822 95 $ 179,845,698 100 $ 9,128,405 5 - - - - 1,342,662 1 172,116 - 201,986 - - - 49,701 - 68,085 - 4,088,612 2 15,051,567 8 10,000,000 6 18,574,083 10 - - 7,894,060 4 858,838 1 31,585 - 37,358,566 21 52,410,133 29 33,614,472 19 1,168,692 1 15,068,480 8 63,001,957 35 16,125,837 9 94,196,274 52 (1,543,873) (1) 127,435,565 71 $ 179,845,698 100

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

-28-

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 26 and 32) OPERATING COSTS (Notes 14, 26, 27 and 32) GROSS PROFIT REALIZED GROSS PROFIT ON SALE TO SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative expenses (Notes 27 and 32) Expected credit loss (Note 13) Total operating expenses OPERATING (LOSS) INCOME NON-OPERATING INCOME AND EXPENSES Other income (Note 27) Other gains and losses (Note 27) Finance costs (Note 27) Share of the profit or loss of subsidiaries and associates Total non-operating income and expenses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE (BENEFIT) (Note 28) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss: Unrealized loss on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans		2018 Amount % $ 8,732,236 100 8,479,146 97 253,090 3 3,444 - 256,534 3 649,813 8 694 - 650,507 8 (393,973) (5) 592,445 7 (641,800) (7) (331,984) (4) 12,970,044 148 12,588,705 144 12,194,732 139 1,077,638 12 11,117,094 127 (9) - 265,965 3		2017
				Amount % $ 8,186,867 100 7,525,121 92 661,746 8 9,181 - 670,927 8 522,645 6 - - 522,645 6 148,282 2 439,018 5 (85,962) (1) (331,552) (4) 5,231,593 64 5,253,097 64 5,401,379 66 (67,628) (1) 5,469,007 67 - - 148,032 2 (Continued)

-29-

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of the other comprehensive income of subsidiaries and associates Items that may be reclassified subsequently to profit or loss: Unrealized gain on available-for-sale financial assets Share of the other comprehensive income of subsidiaries and associates Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 29) Basic Diluted		2018 Amount % $ 1,426,545 17 1,692,501 20 - - 1,758 - 1,758 - 1,694,259 20 $ 12,811,353 147 $ 3.54 $ 3.49		2017
				Amount % $ 103,891 1 251,923 3 1,745,213 21 429,603 5 2,174,816 26 2,426,739 29 $ 7,895,746 96 $ 1.74 $ 1.74




				$

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 21, 2019) (Concluded)

-30-

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Capital Stock Issued Shares Amount Capital Surplus 3,361,447 $ 33,614,472 $ 1,167,881 - - - - - - - - - - - 811 - - - - - - - - - 3,361,447 33,614,472 1,168,692 - - - 3,361,447 33,614,472 1,168,692 - - - - - - - - - - - 185,411 - - 8,451 - - - - - - - - - - - - 3,361,447 $ 33,614,472 $ 1,362,554	Other Equity	Other Equity
	Unrealized Gain (Loss) on Exchange Unrealized Gain Financial Assets Differences on (Loss) on at Fair Value Translating Available-for- Through Other Foreign sale Financial Comprehensive Operations Assets Income $ (44,313 ) $ (4,023,554 ) $ - - - - - - - - - - - - - - - - (2,593,840 ) 4,751,621 - - - - (2,638,153 ) 728,067 - - (728,067) 516,962 (2,638,153 ) - 516,962 - - - - - - - - - - - - - - - - - - (3,211 ) - 1,343,257 - - 3,408,697 - - - $ (2,641,364) $ - $ 5,268,916	Gains on Property Revaluation $ 307,728 - - - - - - - 307,728 - 307,728 - - - - - - - - - $ 307,728	Cash Flow Hedge $ 41,450 - - - - - 17,035 - 58,485 - 58,485 - - - - - - 2,449 - - $ 60,934

Shares 3,361,447 - - - - - - - 3,361,447 - 3,361,447 - - - - - - - - - 3,361,447

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

-31-

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax

Adjustments for:
Share of profit or loss of subsidiaries and associates

Depreciation expenses
Dividend income
Finance costs
Loss (gain) on change in fair value of investment properties
Net gain on fair value change of financial assets and liabilities
designated as at fair value through profit or loss
Interest income
Write-downs of inventories
Unrealized foreign exchange loss
(Gain) loss on disposal of property, plant and equipment
Realized gross profit on sale to subsidiaries and associates
Amortization expenses
Expected credit loss recognized on trade receivables
Effect of changes in exchange rate of bonds payable
Gain on disposal of available-for-sale financial assets
Reversal of impairment loss on trade receivables
Other items
Changes in operating assets and liabilities:
Notes receivable
Trade receivables
Other receivables
Inventories
Prepayments
Other current assets
Net defined benefit assets
Contract liabilities
Accounts payable and accrued expenses
Provisions
Customers' deposits and advances
Deferred revenue

Cash generated from operations
Interest received
Dividend received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of financial assets at amortized cost
Acquisition of property, plant and equipment

2018
2017
$ 12,194,732 $ 5,401,379
(12,970,044)
(5,231,593)
464,781
641,963
(405,773)
(297,566)
331,984
331,552
331,211
(380,386)
(171,737)
(10,900)
(114,003)
(57,841)
52,791
-
44,425
257,339
(4,053)
79
(3,444)
(9,181)
3,297
3,438
694
-
300
(7,470)
-
(34,961)
-
(254)
-
4,409
7,091
32,810
(238,962)
(28,858)
1,322
(12,540)
(396,116)
(25,003)
(52,997)
52,336
(3,798)
(223)
(37,657)
(20,774)
(9,040)
-
189,552
(53,426)
48,000
-
-
(12,146)

(68,085)

(68,085)
(805,529)
474,098
112,952
57,546
4,296,112
3,105,652
(336,387)
(325,003)

(11,234)

(2,267)

3,255,914

3,310,026
2,096,122
-
(194,754)
(172,142)
(Continued)

-32-

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

Increase in refundable deposits Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Acquisition of investment properties Increase in debt investments with no active market Increase in long-term prepayment for investment Acquisition of available-for-sale financial assets Proceeds from disposal of available-for-sale financial assets Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term borrowings Proceeds from long-term borrowings Proceeds from issue of bonds Repayments of bonds Dividends paid Increase in short-term bills payable Decrease in guarantee deposits received Net cash (used in) generated from financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS 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	2018 $ (33,377) 4,059 (2,693) (1,269) - - - - 1,868,088 (18,588,000) 15,033,000 6,574,843 (4,089,430) (4,033,715) 2,310,000 (1,010) (2,794,312) 20,179 2,349,869 815,926 $ 3,165,795	2017 $ (720,804) - (2,099) (48,967) (1,872,833) (1,911,179) (899,109) 286,209 (5,340,924) (17,700,000) 18,588,000 - - (3,025,272) 2,990,000 (400) 852,328 (124,655) (1,303,225) 2,119,151 $ 815,926

The accompanying notes are an integral part of the financial statements.

(With Deloitte & Touche auditors’ report dated March 21, 2019)

(Concluded)

-33-

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

Asia Cement Corporation

Opinion

We have audited the accompanying financial statements of Asia Cement Corporation (the “Corporation”), which comprise the balance sheets as of December 31, 2018 and 2017, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Corporation in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on

-34-

these matters.

Key audit matters for the Corporation’s financial statements for the year ended December 31, 2018 are stated as follows:

Estimated Impairment of Trade Receivables of Subsidiaries

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Corporation’s subsidiaries use judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on their historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash flows are less than expected, a material impairment loss may arise. Because the key assumptions and inputs used for measuring expected credit losses on trade receivables represent an area of significant judgement and uncertainty, we believe that the estimated impairment of trade receivables is one of key audit matters.

Corresponding audit procedures:

We obtained an understanding and performed tests of the management’s estimation of impairment of trade receivables and of the design and execution of relevant internal controls.
We evaluated the reasonableness of allowance for impairment loss by testing the ageing of trade receivables and by quantifying the potential risk on overdue balances at the balance sheet date.
We tested recoverability of receivables by vouching cash receipts after the balance sheet date.
For amounts that were past due and not yet recovered, we evaluated the adequacy of allowance for impairment loss by understanding the customers’ historical payment performance, any collateral pledged, and other abilities to repay the bills.

-35-

Fair Value Measurement of Investment Properties

The Corporation’s and its subsidiaries’ investment properties are subsequently measured using the fair value model and valued by independent qualified professional appraiser, a member of the ROC certified real estate appraisers. Please refer to Notes 5 and 17. Because the valuation of investment properties represents an area of significant judgement and uncertainty, we believe that the fair value measurement of investment properties is one of key audit matters.

Corresponding audit procedures:

We assessed the competencies and independence of the appraiser engaged by the management and obtained an understanding of the scope of work and the process of engagement acceptance to evaluate the risk that the appraiser’s independence might be impaired and the scope of the appraiser’s work was limited.
We obtained an understanding of and assessed the reasonableness of management’s assumptions and methods used in valuation.
We tested samples of items from management’s supporting documentation, including the reasonableness of effective gross income, expenses, and ownerships of land and buildings used in valuation process and reperformed the calculation of fair value.

Emphasis of Matter

The Corporation’s and its subsidiaries’ investments in China Shanshui Cement Group Limited (CSCGL), which previously being recognized as financial assets at fair value through other comprehensive income, became qualified for the equity method of accounting and were therefore reclassified as investments accounted for using equity method in 2018. The Corporation and its subsidiaries reported provisional amounts of NT$2,789,230 thousand for the goodwill arising from the above transition during the

-36-

measurement period as the goodwill was included in the carrying amounts of the Corporation’s and its subsidiaries’ investment in CSCGL. The Corporation will engage outside specialists to provide assistance in measuring the identifiable net assets of CSCGL and the measurement will be completed within one year from the transition date. The provisional amounts will be adjusted retrospectively during the subsequent measurement period to reflect new information obtained about facts and circumstances that existed as of the transition date that, if known, would have affected the amounts recognized as of that date. Please refer to Notes 8 and 15. Our opinion is not qualified in respect of this matter.

Other Matter

The financial statements of CSCGL, an associate accounted for using equity method, were audited by other auditors. Our opinion, insofar as it relates to the amounts included in the accompanying financial statements for CSCGL, is based solely on the reports of other auditors. As of December 31, 2018, the aggregate carrying value of the equity-method investments in CSCGL was NT$10,215,045 thousand, representing 5% of the total assets. For the year ended December 31, 2018, the share of profit or loss of CSCGL was NT$376,472 thousand, representing 2% of the income before income tax.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or has no

-37-

realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Corporation’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control.

-38-

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Corporation to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

-39-

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in the independent auditors’ report are Kuo, Li Wen and Fan, Yu Wei.

Deloitte & Touche Taipei, Taiwan Republic of China

March 21, 2019

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.

-40-

Report 3: Audit Committee’s Review Report on the 2018 Financial Statements

To: The 2019 Regular Shareholders’ Meeting

The Board of Directors has prepared the Company’s 2018 Business Report, the Proposal for Profit Distribution, and the Financial Statements certified by CPA Ms. Li Wen Kuo and Mr. Yu Wei Fan of the Deloitte & Touche. The Business Report, Financial Statements, and the Proposal for Profit Distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Asia Cement Corporation. According to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Chairman of the Audit Committee: Ta-Chou Huang May 8, 2019

-41-

Report 4: Report on the 2018 Employees’ Compensation and Directors’ Remuneration

Explanation:

Pursuant to the Article 25 of the “Articles of Incorporation of Asia Cement Corporation”, 2% to 3.5% of profit of the current year should be distributed as employees’ compensation and not more than 2.5% of profit of the current year should be distributed as directors’ remuneration in the case where there are profits for the current year.

The 2018 directors’ remuneration is NT$223,657,728 (1.765%). The 2018 employees’ compensation is NT$ 253,436,520 (2.000%). The aforesaid items will be paid in cash.

The 8[th] meeting of 26[th] Board of Directors approved the 2018 employees’ compensation and directors’ remuneration.

-42-

Report 5: Report on Issued Corporate Bond

Explanation:

The Company issued 3rd overseas unsecured convertible bonds on Sep 21, 2018. This report on issued corporate bonds is made in compliance with the Article 246 of the Company Act.

Type of bond issued	Type of bond issued	3rd Overseas Unsecured Convertible Bonds
Nominal amount		US$215,000,000
Interest rate		0%
Term		Five years
Issuing reasons		Repayment of loans
Guaranty/guarantor		None
Approval date of Board of Directors		Mar. 23, 2018
Approval authority	Agency	1. Department of Foreign Exchange, Central Bank, ROC 2. Financial Supervisory Commission
	Date	1. Apr. 10, 2018 2. May. 2, 2018`、`Aug. 2, 2018
	Document No.	1. 1070011111 2. 1070312574`、`1070327694
Status		Issued on Sep. 21, 2018

-43-

II Recognizing Events

Proposed by the Board

Proposal 1: Acceptance of the 2018 Business Report and Financial Statements

Explanation:

The 2018 business report and financial statements of Asia Cement Corporation, attached as page 3-40, were audited and approved by Audit Committee.

The Audit Committee’s review report on the 2018 financial statements is attached as page

Resolution:

-44-

Proposed by the Board

Proposal 2: Acceptance of the Proposal for Distribution of 2018 Profits

Explanation:

The Board of Directors has approved the following proposal for distribution of 2018 profits in accordance with the article 26 of the articles of incorporation of Asia Cement Corporation.

rofits in accordance with the article 26 of the articles of incorporation Corporation.	of Asia Cement
(1). Opening unappropriated retained earnings Plus: Adjustment with initial adoption of TIFRS Opening unappropriated retained earnings-Adjusted Plus :The cumulative gain or loss transferred to retained earnings on disposals of equity investments designated as at fair value through other comprehensive income Plus: Effect of changes in percentage of ownership of investee Plus: Remeasurement of defined benefit plans Unappropriated retained earnings-Adjusted Net income of 2018 Less: Legal reserve appropriation Less: Special reserve appropriation Subtotal Plus: Unappropriated retained earnings-Adjusted Retained earnings available for distribution Retained earnings to be distributed in 2018 Closing unappropriated retained earnings (2). Appropriation items: Shareholders' bonus : Cash dividends NT $2.8 per share Total	10,602,012,347 $ 1,713,459,450
	12,315,471,797
	(3,408,697,180)
	(17,172,021)
	351,763,746
	9,241,366,342 $
	11,117,093,960 $ 1,111,709,396 518,280,616
	9,487,103,948 $ 9,241,366,342 18,728,470,290
	9,412,052,154
	9,316,418,136 $
	9,412,052,154 $
	9,412,052,154 $

2018 net profit will be distributed with priority. It is proposed that the Board authorized the Chairman to fix the record date of ex-cash dividend after the approved by 2019 Annual Shareholders' Meeting.
The distribution of earnings is calculated to the dollar (round up to the dollar). The total amount of the odd shares will be booked as the other income of the Company. Should ACC subsequently repurchase its common shares or issue new common shares according to Article 28-2 of the Securities and Exchange Act and other relevant regulations, the total number of common shares outstanding may change, and the ultimate cash to be distributed to each common share may need to be adjusted

-45-

accordingly. It is proposed that the Chairman of ACC be authorized to adjust the cash to be distributed to each common share based on the total amount of profits resolved to be distributed and the number of actual common shares outstanding on the record date for distribution.

Resolution:

-46-

III Discussing Events

Proposed by the Board

Proposal 1: Amendment to “Articles of Incorporation of Asia Cement Corporation”

Explanation:

In accordance with the actual operation situation and to stipulate the company’s dividend policy, the Board of Directors proposed to amend “the Articles of Incorporation of Asia Cement Corporation”. Please refer to following comparison table for details.

Resolution:

-47-

Comparison Table For

“Articles of Incorporation of Asia Cement Corporation”

After the Amendment

Article 25

1% to 4% of profit of the current year should be distributed as employees’ compensation and not more than 2.5% of profit of the current year should be distributed as directors’ remuneration in the case where there are profits for the current year. However, the Company's accumulated losses shall have been covered.

The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, to determine the actual ratio, amount, form (in the form of shares or in cash) and the number of shares of the profit distributable as Employees’ compensation; and a report of such distribution shall be submitted to the shareholders' meeting.

The actual ratio and amount of the profit distributable as directors’ remuneration shall also be determined by Board of Directors, and a report of such distribution shall be submitted to the shareholders' meeting.

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.

Fifty-third Amendment on June 26, 2018. - Fifty forth Amendment on June 24, 2019.

Before the Amendment

Article 25

2% to 3.5% of profit of the current year should be distributed as employees’ compensation and not more than 2.5% of profit of the current year should be distributed as directors’ remuneration in the case where there are profits for the current year. However, the Company's accumulated losses shall have been covered.

Article 31

Fifty-third Amendment on June 26, 2018.

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

-48-

Proposed by the Board

Proposal 2: Amendment to “Procedure for Acquisition and Disposal of Assets”.

Explanation:

Pursuant to FSC regulations, it is proposed to amend Article 2, 3, 5, 7, 8, 9, 9-1, 12, and 14 of the “procedure for acquisition and disposal of assets” of the Company. Please refer to following comparison table for details.

Resolution:

-49-

Comparison Table For

“Amendment to “Procedure for Acquisition and Disposal of Assets”

Article	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment	Before Amendment	Before Amendment	Before Amendment	Before Amendment
Article 2	The term “Assets” as used in these Procedures shall include the following: I. Marketable securities: Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (pull) warrants, beneficiary securities, and asset-backed securities. II. Real estate (including land, houses, and buildings, investment property) and equipment. III. Memberships. IV. Intangible assets such as patent rights, copyrights, trademark rights, and franchise rights. V.Right-of-use assets. VI.Derivatives. VII. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. VIII. Other major assets.				The term “Assets” as used in these Procedures shall include the following: I. Marketable securities: Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (pull) warrants, beneficiary securities, and asset-backed securities. II. Real estate (including land, houses, and buildings, investment property,land usage right) and equipment. III. Memberships. IV. Intangible assets such as patent rights, copyrights, trademark rights, and franchise rights. V.Derivatives. VI. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. VII. Other major assets.
Article 3	Key terms used in these Procedures are defined as				Key terms used in these Procedures are defined as
	follows:				follows:
	I. Derivatives: Forward contracts, option contracts,				I. Derivatives: Forward contracts, option contracts,
	futures contracts, leverage contracts, and swap				futures contracts, leverage contracts, swap
	contracts, whose value is derived from			a specified	contracts, and		compound contracts combining the
	interest rate, financial	instrument price, commodity			aforementioned productswhose value is derived
	price,exchange rates,	index of prices or rates,			from	assets, interest rates,exchange rates		,indices,
	credit rating or credit index, or other variable; or				or other interests.Forward contracts shall not
	hybrid contracts combining the above contracts; or				include insurance contracts, performance
	hybrid contracts or structured products containing				contracts, after-sales service contracts, long-term
	embedded derivatives.Forward contracts shall not				lease contracts, and long-term purchase (sales)
	include insurance contracts, performance contracts,				commitments.
	after-sales service contracts, long-term lease
	contracts, and long-term purchase (sales)
	commitments.
	II. Assets acquired or disposed of on account of				II. Assets acquired or disposed of on account of
	mergers, demergers, acquisitions, or transfer of				mergers, demergers, acquisitions, or transfer of
	shares: Assets acquired through mergers,				shares: Assets acquired through mergers,
	demergers, acquisitions, or transfer of shares				demergers, acquisitions, or transfer of shares
	conducted pursuant to the Business Mergers and				conducted pursuant to the Business Mergers and
	Acquisitions Act, Financial Holding Company Act,				Acquisitions Act, Financial Holding Company
	Financial Institution Merger Act and other acts, or				Act, Financial Institution Merger Act and other
	the issuance of new shares due to the acquisition of				acts, or the issuance of new shares due to the
	shares of another company in accordance with the				acquisition of shares of another company in
	regulations set forth in		Article 156-3of the		accordance with the regulations set forth in				Article
	Company Act (hereinafter referred to as the				156, Paragraph 8of the Company Act (hereinafter
	“acquisition of shares”).				referred to as the “acquisition of shares”).
	III.~VI.(omitted)				III.~VI.(omitted)
Article 5	Total investments in marketable securities listed in				Total investments in marketable securities listed in
	consolidated statements of the Corporation shall				consolidated statements of the Corporation shall
	not exceed a maximum of 150% of the				not exceed a maximum of 150% of the
	shareholders’ equity as specified in the most recent				shareholders’ equity as specified in the most recent
	financial statement, while investments in individual				financial statement, while investments in
	marketable securities listed in consolidated				individual marketable securities listed in

-50-

Article	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment
	statements shall not exceed a maximum of 60% of								consolidated statements shall not exceed a
	the shareholders’ equity as specified in the most								maximum of 60% of the shareholders’ equity as
	recent financial statement. The total book value of								specified in the most recent financial statement.
	non-operating real estate , equipment or								The total book value of non-operating real estate
	right-of-use assetsshall not exceed a maximum of								or equipment shall not exceed a maximum of 50%
	50% of the total asset value as specified in the most								of the total asset value as specified in the most
	recent financial statement.								recent financial statement.
	Total equity investments of the Corporation and its								Total equity investments of the Corporation and its
	subsidiaries shall not exceed a maximum of 150%								subsidiaries shall not exceed a maximum of 150%
	of the shareholders’ equity as specified in the most								of the shareholders’ equity as specified in the most
	recent financial statement. This proportion shall be								recent financial statement. This proportion shall be
	calculated in accordance with the regulations set								calculated in accordance with the regulations set
	forth in the Operating Rules of the Taiwan Stock								forth in the Operating Rules of the Taiwan Stock
	Exchange Corporation and relevant decrees.								Exchange Corporation and relevant decrees.
	The term “most recent financial statement” as used								The term “most recent financial statement” as used
	in these Procedures shall refer to consolidated								in these Procedures shall refer to consolidated
	financial statements of the Corporation audited and								financial statements of the Corporation audited and
	attested by a CPA in a transparent manner in								attested by a CPA in a transparent manner in
	accordance with relevant laws before the								accordance with relevant laws before the
	acquisition and disposal of assets.								acquisition and disposal of assets.
Article 7	Handling procedures for acquisition and disposal								Handling procedures for acquisition and disposal
	of real estate, equipment or				right-of-use assets				of real estate or equipment
	I. Evaluation procedures								I. Evaluation procedures
	(a) When the Corporation engages in investments								(a) When the Corporation engages in investments
	in real estate, equipment or				right-of-use assets,the				in real estate and equipment, the Accounting
	Accounting Division or other relevant units shall								Divisioen or other relevant units shall carefully
	carefully assess the expected investment returns								assess the expected investment returns and risks
	and risks based on the current business and								based on the current business and financial
	financial conditions and future development plans.								conditions and future development plans.
	(b) The declared present value, assessed value, and								(b) The declared present value, assessed value, and
	the actual transaction value of adjacent real								the actual transaction value of adjacent real
	properties shall be taken into consideration for the								properties shall be taken into consideration for the
	acquisition or disposal of real estate							or right-of-use	acquisition or disposal of real estate and
	assetsand transaction terms and values shall be								transaction terms and values shall be
	recommended. These data shall be compiled into								recommended. These data shall be compiled into
	an analysis report.								an analysis report.
	(c) Equipment			or right-of-use assetsshall be					(c) Equipment shall be acquired or disposed of
	acquired or disposed of through price inquiry, price								through price inquiry, price comparison,
	comparison, bargaining, or bidding.								bargaining, or bidding.
	II. evaluation report on real estate, equipment and								II. evaluation report on real estate and equipment
	right-of-use assets								If and whenever the amount of the acquisition or
	Unless real estate, equipment or					right-of-use assets			disposal of real estate or equipment by the
	are acquired or disposed of through transactions								Company, unless the same is transacted with
	with a	domesticgovernment agency,							government agency, entrusted construction on
	commissioned construction on owned or rented								self-owned land or leased land, or machine or
	land, or acquisition and disposal of operating								equipment for business use, has reached 20% of
	equipment		or right-of-use assets,evaluation reports						the paid-in capital of the company or NT$0.3
	shall be issued by professional appraisers before								billion, the professional appraiser shall be invited
	the occurrence date for transaction values								to make evaluation report prior to the date of
	exceeding 20% of the total paid-in capital or NT$								occurrence of the event (see detailed content as per
	300 million (a detailed list of required items for								appendix 1) and meanwhile the following
	evaluation reports is provided in Appendix 1). The								stipulations shall be complied with:
	following regulations shall be observed:								(a) If limited prices, specified prices, or special
	(a)If limited prices, specified prices, or special								prices are used as a reference basis for the
	prices are used as a reference basis for the								determination of transaction prices due to special
	determination of transaction prices due to special								circumstances, said transaction shall be approved
	circumstances, said transaction shall be approved								in advance by a board resolution.The
	in advance bya board resolution.						The same		aforementioned procedures shall also apply to

-51-

Article	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment
	procedure shall also be followed whenever there is				futuremodifications of transaction terms.
	anymodifications of transaction terms.				(b) If transaction amounts exceed NT$ 1 billion,
	(b) If transaction amounts exceed NT$ 1 billion,				evaluation shall be conducted by at least two
	evaluation shall be conducted by at least two				professional appraisers.
	professional appraisers.
	(c) An accountant shall be hired to conduct an				(c) An accountant shall be hired to conduct an
	appraisal in accordance with the provisions set				appraisal in accordance with the provisions set
	forth in Statement on Auditing Standards No. 20				forth in Statement on Auditing Standards No. 20
	issued by the Accounting Research and				issued by the Accounting Research and
	Development Foundation and render specific				Development Foundation and render specific
	opinions regarding the reasons for discrepancies				opinions regarding the reasons for discrepancies
	and the appropriateness of the transaction price if				and the appropriateness of the transaction price if
	the results of appraisals conducted by professional				the results of appraisals conducted by professional
	appraisers meet one of the following criteria unless				appraisers meet one of the following criteria unless
	the appraised values of assets to be acquired are all				the appraised values of assets to be acquired are all
	higher than the transaction amounts or the				higher than the transaction amounts or the
	appraised values of assets to be disposed of are all				appraised values of assets to be disposed of are all
	lower than the transaction amounts:				lower than the transaction amounts:
	1. The discrepancy between appraisal results and				1. The discrepancy between appraisal results and
	the transaction amount exceeds 20%.				the transaction amount exceeds 20%.
	2. The discrepancy between appraisal results of				2. The discrepancy between appraisal results of
	two or more professional appraisers exceeds 10%				two or more professional appraisers exceeds 10%
	of the transaction amount.				of the transaction amount.
	(d) No more than 3 months shall elapse between				(d) No more than 3 months shall elapse between
	the issuance date of the appraisal report and the				the issuance date of the appraisal report and the
	contract conclusion date. If the publicly announced				contract conclusion date. If the publicly announced
	current value for the same period applies and less				current value for the same period applies and less
	than six months have elapsed, the original				than six months have elapsed, the original
	professional appraiser shall issue an official				professional appraiser shall issue an official
	opinion.				opinion.
	(e) If the Corporation acquires or disposes of assets				(e) If the Corporation acquires or disposes of
	through foreclosure auction procedures, certificates				assets through foreclosure auction procedures,
	issued by the court may replace appraisal reports or				certificates issued by the court may replace
	the opinions of accountants.				appraisal reports or the opinions of accountants.
	III. Decision-making authority and executive units				III. Decision-making authority and executive units
	The acquisition or disposal of real estate,				The acquisition or disposal of real estate or
	equipment	or right-of-use assetsshall be executed			equipment shall be executed upon approval of
	upon approval of relevant data that are inspected				relevant data that are inspected and submitted by
	and submitted by the Finance Division by the				the Finance Division by the board of directors. If
	board of directors. If prior approval is impossible,				prior approval is impossible, the General Manager
	the General Manager shall be authorized to make				shall be authorized to make decisions regarding
	decisions regarding transactions of a value of less				transactions of a value of less than NT$ 10 million
	than NT$ 10 million (the General Manager may				(the General Manager may also delegate
	also delegate decision-making authority to others),				decision-making authority to others), while the
	while the Chairman shall be authorized to make				Chairman shall be authorized to make decisions
	decisions regarding transactions of a value of more				regarding transactions of a value of more than NT$
	than NT$ 10 million (the Chairman may also				10 million (the Chairman may also delegate
	delegate decision-making authority to others).				decision-making authority to others). Transactions
	Transactions shall be approved by the next board				shall be approved by the next board meeting.
	meeting.
Article 8	Handling procedures for related party transactions				Handling procedures for related party transactions
	I. (omitted)				I. (omitted)
	II. Evaluation and operating procedures				II. Evaluation and operating procedures
	When the Company intends to acquire or dispose				When the Company intends to acquire or dispose
	of real property		or right-of-use assetsfrom or to a		of real property from or to a related party, or when
	related party, or		when it intends to acquire or		it intends to acquire or dispose of
	dispose of				assets other than real property from or to a related
	assets other than realproperty			or right-of-use assets	partyand the transaction amount reaches 20 % or

-52-

After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment
from or to a related party and the transaction					more of paid-in capital, 10 %
amount reaches 20 % or more of paid-in capital, 10					or more of the company's total assets, or NT$300
% or more of the company's total assets, or					million or more, except in trading of government
NT$300 million or more, except in trading of					bonds or bonds under repurchase and resale
domesticgovernment bonds or bonds under					agreements, or subscription or redemption of
repurchase and resale agreements, or subscription					money funds issued by domestic securities
or redemption of money funds issued by domestic					investment trust enterprises, the company may not
securities investment trust enterprises, the company					proceed to enter into a transaction contract or
may not proceed to enter into a transaction contract					make a payment until the following matters have
or make a payment until the following matters have					first been approved by the Audit Committee and
first been approved by the Audit Committee and					then approved by the Board of Directors :
then approved by the Board of Directors :
(a)~(g) (omitted)					(a)~(g) (omitted)
III. Evaluation of reasonableness of transaction					III. Evaluation of reasonableness of transaction
cost					cost
(a) The following methods shall be employed for					(a) The following methods shall be employed for
assessments of the reasonableness of transaction					assessments of the reasonableness of transaction
costs for real estate or right-of-use assetsacquired					costs for real estate acquired from related parties:
from related parties:
1.~2. (omitted)					1.~2. (omitted)
(b) In case of combined purchases				or leasesof land	(b) In case of combined purchases of land and
and structures as a single property, transaction					structures as a single property, transaction costs
costs may be appraised separately for the land and					may be appraised separately for the land and
building structures by employing any method					building structures by employing any method
specified in the preceding clause.					specified in the preceding clause.
(c) When acquiring real estate			or right-of-use assets		(c) When acquiring real estate from related parties,
from related parties, the Corporation shall not only					the Corporation shall not only evaluate the costs of
evaluate the costs of real estate			or right-of-use		real estate in accordance with the regulations set
assetsin accordance with the regulations set forth					forth in the preceding two clauses but shall also
in the preceding two clauses but shall also hire an					hire an accountant to conduct reviews and render
accountant to conduct reviews			and render specific		specific opinions.
opinions.
(d) When one of the following			conditions applies		(d) When one of the following conditions applies
to the acquisition of real estate			or right-of-use		to the acquisition of real estate from related
assetsfrom related parties, such transactions shall					parties, such transactions shall be handled in
be handled in accordance with the regulations set					accordance with the regulations set forth in
forth in Paragraph 1 and 2 of this article. The					Paragraph 1 and 2 of this article. The regulations
regulations regarding assessment of the					regarding assessment of the reasonableness of
reasonableness of transaction costs in the preceding					transaction costs in the preceding three clauses
three clauses shall not be applicable to such					shall not be applicable to such transactions.
transactions.
1. Related party acquired the real estateor					1. Related party acquired the real estate through
right-of-use assetsthrough inheritance or as a gift.					inheritance or as a gift.
2. Over five years have elapsed between the time					2. Over five years have elapsed between the time
the related party concluded a contract to acquire					the related party concluded a contract to acquire
the real estate		or right-of-use assetsand the date of			the real estate and the date of the current
the current transaction contract.					transaction contract.
3. Real estate acquired by the related party through					3. Real estate acquired by the related party through
the signing of a joint construction contract or					the signing of a joint construction contract or
construction on owned or rented land by the related					construction on owned or rented land by the
party as a contractor.					related party as a contractor.
4.	The real estate right-of-use assets for business
us	e are acquired by the public company with its
parent or subsidiaries, or by its subsidiaries in
which it directly or indirectly holds 100 percent of
the issued shares or authorized capital.
(e) If the results of assessments conducted in					(e) If the results of assessments conducted in
accordance with the regulations set forth in Clause					accordance with the regulations set forth in Clause

-53-

After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment
(a) and (b) of this paragraph are uniformly lower				(a) and (b) of this paragraph are uniformly lower
than the transaction price, the regulations				than the transaction price, the regulations
prescribed in Clause (f) and (g) of this paragraph				prescribed in Clause (f) and (g) of this paragraph
shall apply. These restrictions shall not apply in				shall apply. These restrictions shall not apply in
case of the following circumstances if objective				case of the following circumstances if objective
evidence has been submitted and specific opinions				evidence has been submitted and specific opinions
on reasonableness have been obtained from				on reasonableness have been obtained from
professional real estate appraisers or accountants:				professional real estate appraisers or accountants:
1. The related party has acquired raw or leased land				1. The related party has acquired raw or leased
for construction. Proof of conformance with one of				land for construction. Proof of conformance with
the following conditions shall be provided:				one of the following conditions shall be provided:
(1) Raw land has been appraised in accordance				(1) Raw land has been appraised in accordance
with the provisions set forth in the preceding				with the provisions set forth in the preceding
clauses and the sum of the construction costs				clauses and the sum of the construction costs
incurred by the related party for building structures				incurred by the related party for building structures
and reasonable construction profits exceed the				and reasonable construction profits exceed the
actual transaction price. The term “reasonable				actual transaction price. The term “reasonable
construction profits” shall be based on the average				construction profits” shall be based on the average
gross profit margin of the related party’s				gross profit margin of the related party’s
construction department in the last three years or				construction department in the last three years or
the gross profit margin for the construction				the gross profit margin for the construction
industry for the most recent period as announced				industry for the most recent period as announced
by the Ministry of Finance (whichever is lower).				by the Ministry of Finance (whichever is lower).
(2) Completed transactions by non-related parties				(2) Completed transactions by non-related parties
of other floors of the same estate or adjoining areas				of other floors of the same estate or adjoining areas
within the last year provided that the area size and				within the last year provided that the area size and
transaction terms are similar as determined by				transaction terms are similar as determined by
assessment of reasonable floor or area price				assessment of reasonable floor or area price
differentials in accordance with real estate trading				differentials in accordance with real estate trading
or leasingpractices.				practices.
				(3) Leasing by non-related parties of other floors
				of the same property within the last year provided
				that transaction terms are similar as determined by
				estimates of reasonable floor price differentials in
				accordance with real estate leasing practices.
2. If the Corporation provides evidence that the				2. If the Corporation provides evidence that the
transaction terms of real estate acquired or			the real	transaction terms of real estate acquired from
estate right-of-use assetsleased from related parties				related parties are similar to those of completed
are similar to those of completed transactions by				transactions by non-related parties of adjoining
non-related parties of adjoining areas of a similar				areas of a similar parcel size within the last year.
parcel size within the last year. The term				The term “adjoining area transactions” shall refer
“adjoining area transactions” shall refer to				to transactions in the same or an adjacent street
transactions in the same or an adjacent street block				block and within a radius of less than 500m from
and within a radius of less than 500m from the				the transaction object or if the publicly announced
transaction object or if the publicly announced				current value is similar. The term “similar area
current value is similar. The term “similar area				size” shall refer to area sizes of transactions of
size” shall refer to area sizes of transactions of				non-related parties of at least 50% of the
non-related parties of at least 50% of the				transaction object.
transaction object.
(f) In	case the results of evaluation of the real			(f) In case the results of evaluation of the real
estate	or right-of-use assetsacquired by the			estate acquired by the associated person in
associated person in accordance with the fifth				accordance with the fifth subparagraph of this
subparagraph of this paragraph have been proven				paragraph have been proven to be lower than
to be lower than dealing price, the following				dealing price, the following provisions herein
provisions herein below shall be applied.				below shall be applied.
1. The difference between the dealing prices of the				1. The difference between the dealing prices of the
real estate		or right-of-use assetsappraised cost		real estate appraised cost thereof shall be allocated
thereof shall be allocated to Appropriated Retained				to Appropriated Retained Earnings in accordance

-54-

Article	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment
	Earnings in accordance with Article 41.1 of						with Article 41.1 of Securities Exchange Act and
	Securities Exchange Act and shall not be						shall not be distributed or converted into new
	distributed or converted into new shares. In case an						shares. In case an investor adopting equity
	investor adopting equity appraisal methods towards						appraisal methods towards its investment in this
	its investment in this company is a public						company is a public company, the same shall
	company, the same shall allocate a certain						allocate a certain percentage in proportion to its
	percentage in proportion to its proportion of shares						proportion of shares held to Appropriated Retained
	held to Appropriated Retained Earnings in						Earnings in accordance with laws.
	accordance with laws. .
	2. ~3.(omitted)						2. ~3.(omitted)
	(g) Special reserves set aside by this Corporation						(g) Special reserves set aside by this Corporation
	pursuant to the regulations set forth in the						pursuant to the regulations set forth in the
	preceding clause shall only be used upon approval						preceding clause shall only be used upon approval
	by the Financial Supervisory Commission after a						by the Financial Supervisory Commission after a
	loss due to declining market values of assets						loss due to declining market values of assets
	purchased			or leasedat a premium has been			purchased at a premium has been determined or
	determined or they have been disposed of,					or the	they have been disposed of, or appropriate
	leasing contract has been terminated,or appropriate						compensation has been made, or the status quo
	compensation has been made, or the status quo ante						ante has been restored, or other types of evidence
	has been restored, or other types of evidence prove						prove that no unreasonable circumstances exist.
	that no unreasonable circumstances exist.						(h) If other types of evidence indicate that irregular
	(h) If other types of evidence indicate that irregular						business practices exist with regard to the
	business practices exist with regard to the						acquisition of real estate from related parties by
	acquisition of real estate				or right-of-use assetsfrom		the Corporation, matters shall be handled in
	related parties by the Corporation, matters shall be						accordance with the regulations set forth in Clause
	handled in accordance with the regulations set forth						(f) and (g) of this paragraph.
	in Clause (f) and (g) of this paragraph.						IV. Decision-making authority and executive units
	IV. Decision-making authority and executive units						Acquisition or disposal of operating equipment
	With respect to the types of transactions listed						between the Corporation or its subsidiaries shall be
	below,when to be conductedbetween the						executed upon approval of relevant data that are
	Corporation or its subsidiariesor between its						inspected and submitted by the Accounting
	subsidiaries in which it directly or indirectly holds						Division or other relevant departments by the
	100 percent of the issued shares or authorized						board of directors. The Chairman shall be
	capital, shall be executed upon approval of relevant						authorized to make prior decisions regarding
	data that are inspected and submitted by the						transactions of a value of less than NT$ 300
	Accounting Division or other relevant departments						million. Such transactions shall be confirmed by
	by the board of directors. The Chairman shall be						the next board meeting.
	authorized to make prior decisions regarding
	transactions of a value of less than NT$ 300
	million. Such transactions shall be confirmed by
	the next board meeting :
	(a)	Acquisition or disposal of equipment or
	right-of-use assets thereof held for business use.
	(b)	Acquisition or disposal of real estate
	right-of-use assets held for business use.
	V.(omitted)						V.(omitted)
Article 9	Handling procedures on acquisition and disposal of						Handling procedures on acquisition and disposal
	membership or intangible assets						of membership or intangible assets
	I. Evaluation and operating procedures						I. Evaluation and operating procedures
	(a) (omitted).						(a) (omitted).
	(b) When acquiring or disposing of intangible						(b) When acquiring or disposing of intangible
	assets		or right-of-use assets,transaction terms and				assets, transaction terms and prices shall be
	prices shall be recommended based on expert						recommended based on expert appraisal reports or
	appraisal reports or fair market prices and shall be						fair market prices and shall be compiled into an
	compiled into an analysis report to be submitted to						analysis report to be submitted to the General
	the General Manager. Transactions of a value of						Manager. Transactions of a value of less than NT$
	less than NT$ 3 million shall be approved by the						3 million shall be approved by the General
	General Manager and reported to the next board						Manager and reported to the next board meeting

-55-

Article	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment	Before Amendment	Before Amendment
	meeting after completion of said transaction to be				after completion of said transaction to be approved
	approved for future reference. Transactions of a				for future reference. Transactions of a value of
	value of more than NT$ 3 million shall be				more than NT$ 3 million shall be approved by a
	approved by a board meeting before they are				board meeting before they are executed.
	executed.
	II. Evaluation report				II. Evaluation report		on membership and intangible
					assets
	(a) The Company shall obtain evaluation Report				(a) The Company shall obtain evaluation Report
	prepared by professional appraisals prior to				prepared by professional appraisals prior to
	acquisition and disposal of intangible assetsor				acquisition and disposal of intangible assets.
	right-of-use assets or membership.				(b) If and whenever the acquisition and disposal of
	(b) If and whenever the acquisition and disposal of				membership or intangible assets by the Company
	intangible assets		or right-of-use assetsor		has the following circumstances, or the amount
	membership by the Company has the following				thereof has reached 20% of the paid-in capital of
	circumstances, or the amount thereof has reached				the company or NT$ 0.3 billion, except in
	20% of the paid-in capital of the company or NT$				transaction with government agency, the
	0.3 billion, except in transaction with			domestic	accountant shall be invited to give opinions on the
	government agency, the accountant shall be invited				reasonableness of the dealing price prior to the
	to give opinions on the reasonableness of the				date of occurrence of the event in accordance with
	dealing price prior to the date of occurrence of the				the Statement of Financial Audit Standards, No. 20
	event in accordance with the Statement of Financial				announced by the Accounting R&D Foundation
	Audit Standards, No. 20 announced by the
	Accounting R&D Foundation
	(c) (omitted)				(c) (omitted)
	III. Executive units				III. Executive units
	Acquisitions and disposals of intangible assetsor				Acquisitions and disposals of memberships or
	right-of-use assetsor membership shall be executed				intangible assets shall be executed upon
	upon submission for approval by the Accounting				submission for approval by the Accounting
	Division in accordance with the authority levels				Division in accordance with the authority levels
	specified in Paragraph 1.				specified in Paragraph 1.
Article 9-1	The calculation of the transaction amounts referred				The calculation of the transaction amounts referred
	to in the preceding articles besides Article 8,				to in the preceding articles besides Article 8,
	paragraph 2 shall be done in accordance with				paragraph 2 shall be done in accordance with
	Article 12, paragraph 1-7 herein, and "within the				Article 12, paragraph 1-5herein, and "within the
	preceding year" as used herein refers to the year				preceding year" as used herein refers to the year
	preceding the date of occurrence of the current				preceding the date of occurrence of the current
	transaction. Items for which an appraisal report				transaction. Items for which an appraisal report
	from a professional appraiser or a CPA's opinion				from a professional appraiser or a CPA's opinion
	has been obtained need not be counted toward the				has been obtained need not be counted toward the
	transaction amount.				transaction amount.
	The calculation of the transaction amounts referred				The calculation of the transaction amounts referred
	to in the Article 8, paragraph 2 shall be done in				to in the Article 8, paragraph 2 shall be done in
	accordance with		Article 12, paragraph 1-7herein,		accordance with	Article 12, paragraph 1-5herein,
	and "within the preceding year" as used herein				and "within the preceding year" as used herein
	refers to the year preceding the date of occurrence				refers to the year preceding the date of occurrence
	of the current transaction. Items that have been				of the current transaction. Items that have been
	approved by the Audit Committee and the Board of				approved by the Audit Committee and the Board
	Directors need not be counted toward the				of Directors need not be counted toward the
	transaction amount.				transaction amount.
Article 12	Procedures for disclosure of information				Procedures for disclosure of information
	I. Items for public announcement and declaration				I. Items for public announcement and declaration
	and its standard				and its standard
	(a) Acquisition or disposal of real propertyor				(a) Acquisition or disposal of real property from or
	right-of-use assetsfrom or to a related party, or				to a related party, or acquisition or disposal of
	acquisition or disposal of assets other than real				assets other than real property from or to a related
	property	or right-of-use assetsfrom or to a related			party where the transaction amount reaches 20 %
	party where the transaction amount reaches 20 %				or more of paid-in capital, 10 % or more of the
	or more ofpaid-in capital,10 % or more of the				company's total assets,or NT$300 million or

-56-

Article	After Amendment	After Amendment	After Amendment	After Amendment	After Amendment	Before Amendment	Before Amendment	Before Amendment
	company's total assets, or NT$300 million or more;					more; provided, this shall not apply to trading of
	provided, this shall not apply to trading of				domestic	government bonds or bonds under repurchase and
	government bonds or bonds under repurchase and					resale agreements, or subscription or redemption
	resale agreements, or subscription or redemption of					of money funds issued by domestic securities
	money funds issued by domestic securities					investment trust enterprises.
	investment trust enterprises.
	(b)~(c) (omitted)					(b)~(c) (omitted)
	(d) The assets acquired or disposed are equipment					(d) The assets acquired or disposed are equipment
	or right-of-use assetsfor business use and the					for business use and the counterparties of the
	counterparties of the transaction are not related					transaction are not related parties and amount
	parties and amount thereof is more than NT$ 1					thereof is more than NT$ 1 billion.
	billion.
	(e) Where land is acquired under an arrangement					(e) Where land is acquired under an arrangement
	on engaging others to build on the company's own					on engaging others to build on the company's own
	land, engaging others to build on rented land, joint					land, engaging others to build on rented land, joint
	construction and allocation of housing units, joint					construction and allocation of housing units, joint
	construction and allocation of ownership					construction and allocation of ownership
	percentages, or joint construction and separate sale,					percentages, or joint construction and separate
	and furthermore the transaction counterparty is not					sale, and the amount the company expects to invest
	a related party,and the amount the company					in the transaction is more than NT$500 million.
	expects to invest in the transaction reaches NT$500
	million.
	(f) The amount of transactions other than those					(f) The amount of transactions other than those
	stated in the preceding five subparagraphs or an					stated in the preceding five subparagraphs or an
	investment in the mainland China reach 20% of					investment in the mainland China reach 20% of
	paid-in capital of the Company or NT$0.3 billion.					paid-in capital of the Company or NT$0.3 billion.
	The following circumstances shall be excluded					The following circumstances shall be excluded
	therein.					therein.
	1. Trading of	domesticgovernment bonds				1. Trading of government bonds
	2. Trading of	bonds under repurchase and				2. Trading of bonds under repurchase and
	subscription	or redemption of money funds issued				subscription or redemption of money funds issued
	by domestic securities investment trust enterprises.					by domestic securities investment trust enterprises.
	(g) The calculations for the dealing amount in the					(g) The calculations for the dealing amount in the
	preceding six subparagraph					preceding six subparagraph
	1. Amount of each transaction					1. Amount of each transaction
	2. Cumulative amount of acquisition or disposal of					2. Cumulative amount of acquisition or disposal of
	the objects of the same nature with the same					the objects of the same nature with the same
	counterpart within a year					counterpart within a year
	3. Respective cumulative amount of acquisition or					3. Respective cumulative amount of acquisition or
	disposal of real estate		or right-of-use assetsof the			disposal of real estate of the same project within a
	same project within a		year			year
	4. Respective cumulative amount of acquisition					4. Respective cumulative amount of acquisition
	and disposal of the same security within a year					and disposal of the same security within a year
	(h) (omitted)					(h) (omitted)
	II.~IV.(omitted)					II.~IV.(omitted)
Article 14	Subsidiaries of the Company shall comply with the					Subsidiaries of the Company shall comply with the
	following:					following:
	I. (omitted)					I. (omitted)
	II The board of directors of each subsidiary shall					II The board of directors of each subsidiary shall
	determine the quotas for total purchases of					determine the quotas for total purchases of
	non-operating real property			or right-of-use assets		non-operating real property or marketable
	or marketable securities and investments in					securities and investments in individual securities
	individual securities by subsidiaries.					by subsidiaries.
	III. (omitted)					III. (omitted)
	IV. “The total paid-in capital or the total asset					IV. “20% ofthe total paid-in capital or		10% ofthe
	value” as used in the announcement and reporting					total	asset value” as used in the announcement and
	standards of subsidiaries shall refer to the total					reporting standards of subsidiaries shall refer to the
	paid-in capital or total asset value of this					totalpaid-in capital or total asset value of this

-57-

Article	After Amendment	Before Amendment
	Corporation.	Corporation.
	V.(omitted)	V.(omitted)

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

-58-

Proposed by the Board

Proposal 3: Amendment to “Procedure for Making Endorsements and Guarantees”.

Explanation:

Pursuant to FSC regulations, it is proposed to amend Article 8 of the “procedure for making endorsements and guarantees” of the Company. Please refer to following comparison table for details.

Resolution:

-59-

Comparison Table For

“Procedure for Making Endorsements and Guarantees”

Article	After Amendment	Before Amendment
Article 8	This Corporation shall publicly announce and report the aggregate balance of endorsements/guarantees provided by itself and its subsidiaries in the previous month by the 10thof every month. Public announcements and reports shall be made within two days after the occurrence date if endorsements/guarantees provided by this Corporation meet one of the following criteria: I.~II. (omitted) III. The balance of endorsements/guarantees provided by this Corporation and its subsidiaries for a single enterprise exceeds NT$ 10 million and the aggregate amount of endorsements/guarantees to,investment of a long-term nature in,and loan balance with said enterprise exceeds 30% of the net value as stated in the most recent financial statement. IV. Newly added endorsement/guarantee amounts of this Corporation or its subsidiaries exceed NT$ 30 million or 5% of the net value as stated in the most recent financial statement. If subsidiaries of this Corporation are not domestic public companies, public announcements in accordance with Clause 4 of the preceding paragraph shall be made by this Corporation on their behalf. The term “public announcements and reports” as used in these procedures shall refer to the posting of relevant information on the information reporting website designated by the Financial Supervisory Commission. The term “Occurrence date” as used in these procedures shall refer to the date oftransactioncontract signing, date of payment, dates of board resolutions, or other dates which determinemaking endorsements and guarantees counterparties and amounts, whichever date is earlier. The corporation shall assess or record losses incurred due to endorsements/guarantees and disclose information pertaining to endorsements/guarantees in an adequate manner in financial statements as well as provide relevant data for required audit procedures conducted byaCPA.	This Corporation shall publicly announce and report the aggregate balance of endorsements/guarantees provided by itself and its subsidiaries in the previous month by the 10thof every month. Public announcements and reports shall be made within two days after the occurrence date if endorsements/guarantees provided by this Corporation meet one of the following criteria: I.~II. (omitted) III. The balance of endorsements/guarantees provided by this Corporation and its subsidiaries for a single enterprise exceeds NT$ 10 million and the aggregate amount of endorsements/guarantees to,long-term investments in,and loan balance with said enterprise exceeds 30% of the net value as stated in the most recent financial statement. IV. Newly added endorsement/guarantee amounts of this Corporation or its subsidiaries exceed NT$ 30 million or 5% of the net value as stated in the most recent financial statement. If subsidiaries of this Corporation are not domestic public companies, public announcements in accordance with Clause 4 of the preceding paragraph shall be made by this Corporation on their behalf. The term “public announcements and reports” as used in these procedures shall refer to the posting of relevant information on the information reporting website designated by the Financial Supervisory Commission. The term “Occurrence date” as used in these procedures shall refer to the date of contract signing, date of payment, dates of board resolutions, or other dates which determinetransaction counterparties and amounts, whichever date is earlier. The corporation shall assess or record losses incurred due to endorsements/guarantees and disclose information pertaining to endorsements/guarantees in an adequate manner in financial statements as well as provide relevant data for required audit procedures conducted by a CPA.

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

-60-

Proposed by the Board

Proposal 4: Amendment to “Procedure for Loan to Others”.

Explanation:

Pursuant to the FSC regulations, it is proposed to amend Article 2 and 8 of the “procedure for loan to others” of the Company. Please refer to following comparison table for details.

Resolution:

-61-

Comparison Table For `“` Procedure for Loan to Others”

Article	After Amendment	Before Amendment
Article 2	(Total loan amounts and quotas of individual beneficiaries) Total loan amounts granted to borrowers as specified in Paragraph 1 of the preceding Article by the Company shall not exceed 50% of the net worth of the Company as stated in the most recent financial statement audited and certified by a CPA (hereinafter referred to as “the Company’s latest net worth”). The total amount of loan extended by the Company to transaction counterparts shall not exceed 35% of the Company’s latest net worth. The amount of loan extended by the Company to a single transaction counterpart shall not exceed the amount of business transaction between both parties. The “amount of business transaction” mentioned herein refers to the amount of actual purchases, sales or trading between the Company and another party in the year preceding the effective date of the loan contract. Total loan amounts granted to companies with short-term financing needs shall not exceed 15% of the Company’s latest net worth, while individual loan amounts shall not exceed 10% of the Company’s latest net worth. When there is a lending for funding needs between overseas affiliate companies whose voting shares are 100% owned, directly or indirectly, by the Company, or loans to the Company by the overseas affiliate companies whose voting shares are 100% owned, directly or indirectly, by the Company, the total amount for such lending shall not be subject to the limit of 40% of the Company’s net worth and the term of each loan extended by the Company shall not exceed 1 year. However, the total amount of loans to all borrowers, the individual amount to a single borrowerand the borrowing term shall be in compliance with the procedure for loans of funds to others of the lending company. The financial statements of the Company are prepared in accordance with International Financial Reporting Standards. The term “net worth” as used in these procedures shall refer to the equity attributable to the owners of the parent company on the balance sheet in accordance with the provisions set forth in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.	(Total loan amounts and quotas of individual beneficiaries) Total loan amounts granted to borrowers as specified in Paragraph 1 of the preceding Article by the Company shall not exceed 50% of the net worth of the Company as stated in the most recent financial statement audited and certified by a CPA (hereinafter referred to as “the Company’s latest net worth”). The total amount of loan extended by the Company to transaction counterparts shall not exceed 35% of the Company’s latest net worth. The amount of loan extended by the Company to a single transaction counterpart shall not exceed the amount of business transaction between both parties. The “amount of business transaction” mentioned herein refers to the amount of actual purchases, sales or trading between the Company and another party in the year preceding the effective date of the loan contract. Total loan amounts granted to companies with short-term financing needs shall not exceed 15% of the Company’s latest net worth, while individual loan amounts shall not exceed 10% of the Company’s latest net worth. The total amount of loans to all borrowersandthe individual amount to a single borrowerfor the needed short-term financing provided between overseas affiliate companies which the Company holds, directly and indirectly, 100% of the voting shares,shall be in compliance with the procedure for loans of funds to others of the lending company. The financial statements of the Company are prepared in accordance with International Financial Reporting Standards. The term “net worth” as used in these procedures shall refer to the equity attributable to the owners of the parent company on the balance sheet in accordance with the provisions set forth in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Article 8	(Public announcement and reporting procedures) The Company shall publicly announce and report the aggregate balance of loans extended by itself and its subsidiaries in the previous month by the 10th of every month. Public announcements and reports shall be made within two days after the occurrence date if loans of funds extended bytheCompanymeet one of the	(Public announcement and reporting procedures) The Company shall publicly announce and report the aggregate balance of loans extended by itself and its subsidiaries in the previous month by the 10th of every month. Public announcements and reports shall be made within two days after the occurrence date if loans of funds extended bytheCompanymeet one of the

-62-

	following criteria: I. The balance of loans extended by the Company and its subsidiaries exceeds 20% of the Company’s net worth. II. The balance of loans extended by the Company and its subsidiaries to a single enterprise exceeds 10% of the Company’s net worth. III. The total amount of a new loan extended by the Company or its subsidiaries exceeds NT$ 10 million or 2% of the Company’s net worth. If subsidiaries of the Company are not domestic public companies, public announcements in accordance with Clause 3 of the preceding paragraph shall be made by the Company on their behalf. The term “public announcements and reports” as used in these procedures shall refer to the posting of relevant information on the information reporting website designated by the Financial Supervisory Commission. The term “Occurrence date” as used in these procedures shall refer to the date of contract signing, date of payment, dates of board resolutions, or other dates which determinethe borrowing counterparties and amounts, whichever date is earlier. This Corporation shall assess loan conditions and establish sufficient allowances for uncollectible accounts, disclose relevant information in financial statements in an adequate manner, as well as provide relevant data for required audit procedures conducted bya CPA.	following criteria: I. The balance of loans extended by the Company and its subsidiaries exceeds 20% of the Company’s net worth. II. The balance of loans extended by the Company and its subsidiaries to a single enterprise exceeds 10% of the Company’s net worth. III. The total amount of a new loan extended by the Company or its subsidiaries exceeds NT$ 10 million or 2% of the Company’s net worth. If subsidiaries of the Company are not domestic public companies, public announcements in accordance with Clause 3 of the preceding paragraph shall be made by the Company on their behalf. The term “public announcements and reports” as used in these procedures shall refer to the posting of relevant information on the information reporting website designated by the Financial Supervisory Commission. The term “Occurrence date” as used in these procedures shall refer to the date oftransaction contract signing, date of payment, dates of board resolutions, or other dates which determinetransaction counterparties and amounts, whichever date is earlier. This Corporation shall assess loan conditions and establish sufficient allowances for uncollectible accounts, disclose relevant information in financial statements in an adequate manner, as well as provide relevant data for required audit procedures conducted bya CPA.

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

-63-

V Questions and Motions

-64-

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.

Article 5 The Company shall have its principal business office in Taipei City, Taiwan and have its manufactories in Dadu Village, Hengshan

-65-

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' Meeting shall be held once a year within 6 months of the end of the Company's financial year.
Extraordinary Shareholders' Meeting shall be convened in accordance with the relevant laws, rules and regulations of the Republic of China.
Article 11 Notices of general shareholders' meeting shall be in writing and delivered to the shareholders along with a public notice 30 days prior to the general shareholders' meeting and 15 days prior to the extraordinary shareholders' meeting. The said notices shall specify the date, place and reasons for calling the shareholders' meeting.

-66-

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.
Chapter IV – Directors and Managerial Officers
Article 16 There shall be 13~19 directors of the Company, who are elected and appointed from the persons with legal capacity at the shareholders' meeting. The total shares number of the registered shares of the Company held by all of the directors 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 is for a period of 3 years. They may

-67-

be reappointed following their re-election.

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

Directors shall be elected by adopting candidate nomination system in accordance with the Article 192-1 of Company Act. A shareholder shall elect from the nominees listed in the roster of candidates. The election of independent and non-Independent directors should be held together while elected quotas should be calculated separately.

Article16-1 Pursuant to Article 14-4 of the Securities and Exchange Act, the Company will establish an Audit Committee. The Audit Committee shall make up of the entire number of independent directors, and it is responsible of executing powers relegated to Supervisors by the Company Act, Securities and Exchange Act and other laws and regulations.

The organizing members, exercise of powers and other matters to be abided by the Audit Committee shall follow related laws, regulations or rules or regulation of the Company. The organization regulations of the Audit Committee shall be adopted by the Board of Director.

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.

-68-

Article 19 (deleted) Article 20 The salaries of executive directors 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 law furnish various documents and statements and submit for approval at the General Shareholders' Meeting.
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 2% to 3.5% of profit of the current year should be distributed as employees’ compensation and not more than 2.5% of profit of the current year should be distributed as directors’ remuneration in the case where there are profits for the current year. However, the Company's accumulated losses shall have been covered.
The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, to determine the actual ratio, amount, form (in the form of shares or in cash) and the number of shares of the profit distributable as Employees’ compensation; and a report of such distribution shall be submitted to the shareholders' meeting.
The actual ratio and amount of the profit distributable as directors’ remuneration shall also be determined by Board of Directors, and a report of such distribution shall be submitted to the shareholders' meeting.
Article 26 Apart from paying all its income taxes in the case where there are net incomes at the end of the year, the Company shall make up for

-69-

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 proportion to the number of the shares held by each shareholder as shareholders’ dividend. However in the case of increase in the Company's share capital, the shareholders' dividend to be distributed to the shareholders of increased shares for the year shall be decided by the shareholders' meeting.

The distribution of shareholders’ dividend 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. Shareholders’ dividend shall be distributed aimed at maintaining the stability of shareholders’ dividend distributions.

Save for the purposes of improving the financial structure, reinvestments, production expansion or other capital expenditures in which capital is required, when distributing shareholders’ dividend, the dividend payout ratio each fiscal year shall be no less than fifty percent （50%）of the final surplus which is the sum of after-tax profit of the fiscal year to withhold previous loss, if any, legal reserve and special reserve as required by law; the cash dividend shall not be less than 10% of the shareholders’ dividend distributed in the same year.

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' meeting 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;

-70-

Second amendment on February 5, 1960; Third amendment on October 20, 1961; Fourth amendment on April 11, 1962; 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;

-71-

Forty-first amendment on May 13, 1998; Forty-second amendment on May 14, 1999; 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. Fifty-first Amendment on June 21, 2016. Fifty-second Amendment on June 27, 2017. Fifty-third Amendment on June 26, 2018.

*In case of any discrepancy between this English translation and the Chinese text of

this document, the Chinese text shall prevail.

-72-

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 Directors 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

-73-

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 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.

-74-

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). Anyone disobedient to
		the preceding rule shall be prohibited by the chairperson.
		Article 14 of this meeting rule shall apply if anyone disobedient to the preceding
		rule and 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.
		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

-75-

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’ 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.

-76-

Appendix

1. Shareholding of Directors

Title	Name	Representative	Shareholdings	Ratio of Shareholding
Chairman	Douglas Tong Hsu	-	23,278,334	0.69%
Independent Director	Ta-Chou Huang	-	0	0.00%
	Chi Schive	-	0	0.00%
	Gordon S. Chen	-	0	0.00%
Director	Far Eastern New Century Corporation	T.H. Chang Johnny Shih C.V. Chen	750,511,324	22.33%
	Bai-Yang Investment Holdings Corporation	Chin-Der Ou	3,849,468	0.11%
	U-Ding Corporation	K.Y. Lee	1,895,136	0.06%
	Far Eastern Y.Z. Hsu Science And Technology Memorial Foundation	Peter Hsu C.K. Chang	6,218,800	0.19%
	Ta Chu Chemical Fiber Co.,Ltd	Ruey Long Chen	1,560,068	0.05%
	Huey Kang Investment Corporation	Connie Hsu	4,837,436	0.14%
	Far Eastern Medical Foundation	Champion Lee	181,566,797	5.40%
	U-Ming Corporation	K.T. Li	1,505,585	0.04%
Shareholding of All Directors			975,222,948	29.01%

Note 1: The ratios above are calculated based on total issued shares (3,361,447,198

shares) on book closure date (April 26, 2019).

Note 2: The minimum required combined shareholding of all directors by law: 80,674,732 shares.
Note 3: The shareholdings of all directors and supervisors meet the minimum required combined shareholding.

-77-

2. Effects on Business Performance and EPS Resulting From 2018 Stock Dividend Distribution

Item	Year	Year	2018 (Estimated)
Paid-In Capital	(Beginningof The Year)		NT $33,614,471,980
Stock`＆`Cash Dividend Distribution	Cash Dividend Per Share		NT$2.8
	Stock Dividend From Retained Earnings Per Share		0.00 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 does not disclose its financial forecast information, in compliance with relevant governmental regulations, there is no need to provide this information.

-78-

==> picture [62 x 63] intentionally omitted <==

ASIA CEMENT CORPORATION

AI assistant

ACC — AGM Information 2019

51736_rns_2019-07-23_b1cc7736-e52e-4455-a642-7a2c14c7cfe9.pdf

遠東集團

FAR EASTERN GROUP

ASIA CEMENT CORPORATION Handbook For

The 2019 Regular Shareholders’ Meeting

Table of Contents

I Meeting Agenda

Asia Cement Corporation

Meeting Agenda of

II Reporting Events

Report 1: 2018 Business Report

Explanation:

2018 Business Report

1. Review of the Year 2018

Review of the international economic situation in 2018

Review of the Domestic Economic Situation in 2018

The Company's business performance in 2018

2. Operating Performance of 2018

A. Production:

＊ key performance indicator:

＊ key performance indicator:

B. Sales

i. Taiwan area:

＊ Key Performance Indicator:

＊ 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

F. Sichuan Lanfeng Cement Corp.

G. Yangzhou Yadong Cement Co., Ltd

H. Wuhan Yadong Cement Co., Ltd

I. Nanchang Yadong Cement Co., Ltd

5. International and Domestic Economic Situations in 2019

B. Prospects for the domestic economic situation in 2019

6. Prospects for the cement industry on both sides across the Taiwan Straits

A. Cement industry in China

i. Environmental protection is getting more and more serious:

ii. The cement supply end continues to tighten:

iii. Infrastructure investment boosts cement demand:

v. E-commerce is widespread, and regional platform is upgraded:

vi. The industry chain continues to expand:

B. Cement industry in Taiwan

7. Business Outlook of the Company in 2019

8. The Company's Operating Status in the First Quarter of 2019

Report 2: 2018 Financial Statements

Explanation:

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Estimated Impairment of Trade Receivables

Corresponding audit procedures:

Emphasis of Matter

Other Matter

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

ACC AGM Information 2019

`＊` key performance indicator:

`＊` key performance indicator:

`＊` Key Performance Indicator:

`＊` Key Performance Indicator:

Comparison Table For `“` Procedure for Loan to Others”