ACC - AGM Information 2021 | FinancialReports.eu

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

ASIA CEMENT CORPORATION Handbook For The 2021 Regular Shareholders’ Meeting

Meeting Time: 9:00 A.M., June 25, 2021

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: 2020 BUSINESS REPORT ......................................................................................................................2 REPORT 2: 2020 FINANCIAL STATEMENTS .......................................................................................................... 13 REPORT 3: AUDIT COMMITTEE’S REVIEW REPORT ON THE 2020 FINANCIAL STATEMENTS ................................. 39 REPORT 4: REPORT ON THE 2020 DIRECTORS’ REMUNERATION AND EMPLOYEES’ COMPENSATION ................... 40 REPORT 5: REPORT ON ISSUED CORPORATE BOND.............................................................................................. 41 REPORT 6: REPORT ON THE AMENDMENTS TO “ASIA CEMENT CORPORATION SUSTAINABILITY POLICY” ........... 43 II RECOGNIZING EVENTS ............................................................................................................................. 49 PROPOSAL 1: ACCEPTANCE OF THE 2020 BUSINESS REPORT AND FINANCIAL STATEMENTS ............................... 49 PROPOSAL 2: ACCEPTANCE OF THE PROPOSAL FOR DISTRIBUTION OF 2020 PROFITS ......................................... 50 III DISCUSSING EVENTS ................................................................................................................................. 51 PROPOSAL 1: AMENDMENT TO “ELECTION RULES FOR DIRECTORS” .................................................................. 51 V QUESTIONS AND MOTIONS ....................................................................................................................... 55 RULES AND BYLAWS ....................................................................................................................................... 56 1. ARTICLES OF INCORPORATION OF ASIA CEMENT CORPORATION ..................................................................... 56 2. MEETING RULES OF SHAREHOLDERS FOR ASIA CEMENT CORPORATION ........................................................ 64 APPENDIX ........................................................................................................................................................... 69 1. SHAREHOLDING OF DIRECTORS ...................................................................................................................... 69 2. EFFECTS ON BUSINESS PERFORMANCE AND EPS RESULTING FROM STOCK DIVIDEND DISTRIBUTION ........... 70

I Meeting Agenda

Asia Cement Corporation

Meeting Agenda of

The 2021 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: 2020 Business Report

Explanation:

The 2020 business report is attached as the following pages.

2020 Business Report

1. Review of the global and domestic economy in 2020

Review of the global economy in 2020

As a result of the COVID-19 pandemic, countries around the world have adopted a stricter level of containment measures in 2020, resulting in a significant slowdown in global economy. According to an analysis by the Chung-Hua Institution for Economic Research, the most affected industries are the airline, tourism, catering, hotel, and entertainment industries.

Although the logistics, e-commerce and telecommunication industries benefited from the surge in demand, the global economy fell into the biggest recession since the Great Depression of the 1930s.

Many countries have adopted accommodative monetary policies to mitigate the impact, but with limited success.

Countries in Europe and the US, especially those hit by the pandemic, have seen the biggest drop in economic growth in decades. Some emerging market countries, such as India and Mexico, have seen their economies shrink by more than 7.5% due to the severity of the pandemic. On the other hand, Asian countries such as Vietnam, China and Taiwan, which have been successful in combating the pandemic, have experienced positive growth of over 2% in their domestic economies, thanks to the stimulation of domestic demand and the expansion of external demand.

According to IHS Markit analysis, the global economy grew at -3.9% last year, the first negative growth rate since 2010. The IMF's World Economic Outlook reports that the global economy will grow at -3.3% in 2020, the lowest rate in 10 years.

Review of the domestic economy in 2020

The COVID-19 pandemic swept the world in 2020. Taiwan's representative word for 2020, "pandemic", was the most popular choice, showing that the pandemic has turned the lives of the public and changed the economic landscape of the world.

In order to prevent the spread of the pandemic, countries have taken strict measures such as shutting down the cities, border controls and restrictions on the movement of people, resulting in a near shutdown of activities and demand. As a result of the global economic downturn, Taiwan's economic performance also dropped significantly in the first half of the year. Fortunately, the government and its citizens worked together to prevent the pandemic,

so that production, manufacturing and consumption activities could continue. The effects of the various revitalization programmes are gradually taking effect, maintaining a certain degree of consumer power.

According to the Taiwan Institute of Economic Research, from the third quarter onwards, the economies of major countries have gradually revived. Taiwan's domestic traditional industry is recovering as overseas demand picks up. The electronic and information technology industry benefited from the demand for long-distance business opportunities, with major semiconductor manufacturers receiving new orders from Europe and the US, as well as an influx of urgent orders from Chinese manufacturers under US sanctions, leading to a gradual strengthening of Taiwan's manufacturing sector in the second half of the year.

According to the Directorate-General of Budget, Accounting and Statistics, the Executive Yuan, Taiwan's economy will grow at a rate of 3.11% in 2020. For the first time since 1991, the growth of economy in Taiwan surpassed that of China and also leads among developed countries.

Performance of the Company in 2020

A. In 2020, the overall cement consumption in China amounted to about 2.377 billion MT, representing a YOY growth of 1.6%. In the same period, the clinker production of the Company in China amounted 23.91 million MT, representing a YOY decline of 3.76%. The total sales of cement, clinker and slag powder are 29.18 million MT, representing a YOY decline of 5.36%.

In 2020, the net income of Asia Cement (China) Holdings Corp. is NT$ 11,392,945 thousand. Among which, the Company and its subsidiaries recognized a total investment profit of NT$ 8,202,920 thousand.

B. For domestic cement industry, according to a statistics conducted by the Taiwan Cement Manufacturers’ Association, total production of cement in Taiwan in 2020 was 11,862,124 MT, representing a YOY growth of 4.28%. Among which domestic sales accounted for 9,595,630 MT, representing a YOY growth of 5.97%; while exported accounted for 2,266,494 MT, representing a YOY decline of 2.35%.

The total sales of cement by the Company in Taiwan was 2,745,789 MT which is equivalent to 28.61% of the total production in Taiwan, or 22.73% of the overall consumption in Taiwan. Comparing to the gloomy performance by traditional industries in 2020 due to the pandemic, cement industry has, against the trend, improved owing to the demand from government projects and private sectors d.

Cement consumption in Taiwan has increased by 6.83% to 12,105,825 MT in 2020 which

converted to consumption per capita of 514kg, representing a growth of 6.64% from that of 482kg in 2019..

C. The consolidated operating revenue of the Company in 2020 is NT $78,240,880 thousand, decline of 12.43% from 2019. The consolidated profit from operations was NT $19,670,138 thousand, decline of 10.85% from 2019. The Company recognized income of NT $4,639,504 thousand under equity method mainly from invement in Shanshui Cement, China, Far Eastern New Century Corp., and U-Ming Marine Transport Corp. The consolidated net profit after tax reached NT $18,773,807 thousand representing net profit rate after tax of 23.99%. Among which, the consolidated net profit attributable to the Company is $14,710,486 thousand. The 27[th] Board of Directors adopted in its 4[th] meeting to propose to distribute cash dividend of NT $3.55 per share.

2. Operating Performance of 2020

A. Production:

Unit: 1000 MT

					Unit: 1000	MT
Item Region	Cement	Difference Compared to 2019	%	Clinker	Difference Compared to 2019	%
ACC (Taiwan)	3,624	88	2.49	3,490	104	3.07

`＊` key performance indicator:

Actual aggregate cement output amounted to 3,624 thousand MT with the achievement rate of 101.34%, comparing to estimated output 3,576 thousand MT.

Actual aggregate clinker output amounted to 3,490 thousand MT with the achievement rate of 97.70% comparing to estimated output 3,572 thousand MT.

Unit: 1000 MT

Item Region	Cement	Difference Compared to 2019	%	Clinker	Difference Compared to 2019	%
ACC (China)	27,017	(1,730)	(6.02)	23,908	(935)	(3.76)

`＊` key performance indicator:

Actual aggregate cement output amounted to 27,017 thousand MT with the achievement rate of 93.98% comparing to estimated output 28,748 thousand MT.

Actual aggregate clinker output amounted to 23,908 thousand MT with the achievement rate of 96.86% comparing to estimated output 24,684 thousand MT.

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	2020				Difference Compared to 2019
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	%	Value	%
Cement & Clinker	2,762	6,142,157	997	1,588,607	112	3.07	102,775	1.35

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker produced by ACC amounted to 3,759 thousand MT with the achievement rate of 98.35% comparing to the estimated sales 3,822 thousand MT.

ii. China area:

Unit: 1000 MT; NT$1,000

Volume & Value Product	2020	2020	2020	2020	Difference Compared to 2019	Difference Compared to 2019	Difference Compared to 2019	Difference Compared to 2019
	Domestic Sales		Export Sales
	Volume	Value	Volume	Value	Volume	%	Value	%
Cement & Clinker	29,110	43,279,889	-	-	(1,728)	(5.60)	(6,514,021)	(13.08)

`＊` Key Performance Indicator:

Actual aggregate sales of cement and clinker produced by ACC (China) amounted to 29,110 thousand MT with the achievement rate of 98.35% comparing to the estimated sales 30,368 thousand MT.

3. The Company’s Strategy Layout in China

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

On May 20, 2008, the subsidiary of the Company, Asia Cement (China) Holdings Corporation, hereinafter referred to as ACC (China) thereafter was listed on the main board of Hong Kong Exchanges and Clearing Limited. Total assets reached RMB 21 billion.

Currently, the investments of ACC (China) are mainly located along 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), and Hubei Yadong Cement (Middle China), as core production bases. In addition to Sichuan Lanfeng Cement Corp., Huanggang Yadong Cement, Wuhan Yaxin Cement, and Yangzhou Yadong Cement ,there are three grinding factories, four cement products companies, three transportation companies, Wuhan Asia Shipping Co., Ltd (joint-venture), Hubei Xinlongyuan Building Material Company(jointventure), Hubei Zhongjian Yadong Concrete Company(joint-venture), Tai Zhou Oriental Construction Co., Ltd., Ruichang Yadong New Material Company, 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 11.3 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 system which transports the limestone from quarry directly to the plant and enhances the transportation efficiency and reduces the cost of raw-material and also completely prevent interfering with neighboring area,, roads, and living of residents.

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 clinker amounts to 1 million MT which can produce 1.5 million MT cement.

F. Sichuan Lanfeng Cement Corp.

To enhance the market position and market share in Chengdu area, Sichuan Yadong Cement Co., Ltd in 2014 acquired 100% shares of Sichuan Lanfeng Cement Corp. Lanfeng located in Pengzhou City, Sichuan, China which owns two new dry process clinker production lines. The annual output of clinker amounts to 3.8 million MT which can produce 5 million MT cement. The waste heat recycling generators can produce 130 million kWh electricity annually.

G. Yangzhou Yadong Cement Co., Ltd

The grinding factory can produce 2.3 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 1.8 million MT cement annually to supply the market in Wuhan area.

I. Nanchang Yadong Cement Co., Ltd

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

5. Prospects for the global and domestic economy in 2021

A. Prospects for the global economy in 2021

According to analysis from both domestic and abroad, the global economy is expected to grow modestly in 2021 with the introduction of the COVID-19 vaccine, provided that the COVID-19 outbreak can be effectively controlled. However, the employment situation in the service sector, which is adversely impacted remains sluggish. In addition, trade tensions between the US and China may slow down the pace of recovery. IHS

Markit forecasts global economic growth of 4.2% in 2021, driven by high growth in mainland China. The International Monetary Fund (IMF) has twice revised upwards its forecast for global growth in 2021, following fiscal stimulus measures in the US and a rebound in the economy driven by increased vaccination. Global economic growth is forecasted to reach 6.0%.

In the financial markets, the central banks of advanced countries have adopted unprecedentedly loose monetary policies in 2020 in response to the financial crisis that could arise from the pandemic, leading to record high bond and stock market prices in many countries. However, this policy will eventually be withdrawn and the financial markets will panic, which will in turn affect the bond and stock markets, which is the biggest uncertainty affecting the economic outlook.

B. Prospects for the domestic economy in 2021

Looking ahead to 2021, the global economy is poised to recover. Investment and consumption in Taiwan will also regain momentum, and external trade will continue to expand steadily. According to a report by the Taiwan Institute of Economic Research, Taiwan's export performance will grow significantly due to the relocation of some of production lines , owned by oversea Taiwanese businesses, back to Taiwan and the strong global demand for information technology products. In addition, as semiconductor manufacturers continue to invest in advanced manufacturing processes and benefit from restructuring of global supply chain, as well as the government's efforts to promote construction of green energy and attract foreign investment to Taiwan, all of these will help boost domestic demand performance. Overall, both domestic and external demand improved in tandem.

According to the IMF Global Economic Outlook survey, Taiwan's economic growth rate is expected to reach 4.7% this year. The Directorate-General of Budget, Accounting and Statistics under the Executive Yuan has also revised upwards the economic growth rate for 2021 to 4.64%, the highest in nearly seven years.

Despite the positive situation, some experts have warned that hot money is also being used to speculate in the housing and stock markets in Taiwan, and that the appreciation of the Taiwan dollar is still under pressure, which will affect some industries. Both could lead to a worsening of the gap between the rich and the poor, which would be detrimental to demand growth. Looking ahead to economy in 2020, there are still hidden worries amidst the optimism, and it is still advisable to be cautious and strive for stability.

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

A. Mainland China:

Thanks to the establishment of a regular epidemic prevention and control mechanism, the economy of Mainland China has demonstrated strong resilience and abundant growth momentum under the impact of the pandemic of COVID-19, with the economy running steadily in a positive direction. Market demand is expected to recover fully and GDP is expected to reach over 8% for the year of 2021.

Crude oil and coal prices are expected to continue to move upwards this year, but with the relevant authorities actively taking measures to stabilize raw fuel prices, the impact of the increase in raw fuel costs on cement is expected to be limited.

The operating outlook for the cement industry in Mainland China is set out below:

a. During the "14th Five-Year Plan" period, national-level policies have been issued frequently and special funds have been allocated to support cement demand.
i. According to the "Outline of the Comprehensive Three-dimensional Transportation Network Plan", 700,000 kilometers of transportation network will be constructed, and major projects will be actively promoted and stable investment will be laid out. According to the "Key Tasks for New Type of Urbanization and Integrated Development of Urban and Rural Areas in 2021", China's urbanization rate will reach 65.5% by 2025.
ii. Local government special bonds of RMB3.65 trillion, together with the balance from previous years, will continue to be used for major projects to promote coordinated regional development, which will significantly boost market demand for the cement industry.
iii. Dedicated investment to support the integrated development of the Guangdong, Hong Kong and Macau Bay Area and the Yangtze River Delta will benefit cement demand in the region.
b. The cement industry will enter an era of full-scale peak production, with increasingly stringent capacity replacement and continued tightening of industry supply.
c. Prioritize the use of green energy first to reduce carbon emissions autonomously: China's National Energy Administration requires the proportion of coal consumption to reduce to below 56% by 2021 in order to make full use of alternative primary fuels, and to make vigorous efforts in environmental protection, energy saving and emission reduction, low-carbon development and the continuous increase in the task of
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collaborative disposal.

d. Digitalization, smart manufacturing and smart quarry are the future directions for cement industry.
e. Expanding advantages and extending the industrial chain: Under the normalised environmental custodianship system, resource development will place greater emphasis on ecological protection. With the restriction of river sand mining, the closure of poor mines or the forced withdrawal of production lines, sand and gravel resources will have an irreplaceable role. In the future, the leading enterprises with the advantage of resources will fully grasp the market voice.

B. Taiwan

In terms of domestic demand of construction, the government will continue its expansion policy and accelerate the promotion and implementation of various infrastructure projects and tenders in order to expand domestic demand. According to the Director-General of Budget, Accounting and Statistics under the Executive Yuan, the total budget for infrastructure projects in 2021 is NT$132.4 billion, plus a special budget of NT$104.1 billion for Phase 3 of the Forward-Looking Infrastructure Project and NT$297.5 billion for operating and non-operating special funds. All of the above eventually summed up to NT$534 billion, with an increase of $96.2 billion, or 22%, compared to FY2020.

In terms of real estate, the Ministry of the Interior announced that the number of housing units to be sold and transferred in 2020 will be 326,000, a record high for the past seven years, with an annual growth rate of 8.6% compared to 300,000 in 2019, showing that the housing market continues to recover. The number of units sold and transferred has increased for four consecutive years since 2017. In 2021, the housing market fundamentals will remain solid in terms of homeownership demand. However, the government's recent efforts to curb shortterm speculation, in addition to credit controls and the passage of the Housing Land Tax 2.0, will cast a shadow of doubt on the growth of the housing market.

Overall, 2021 will be a year of uncertainty due to government regulation of the housing market, severe shortages of labor in construction and the continued impact of COVID-19. However, with the government accelerating the implementation of public projects, Taiwan's total cement demand is still expected to grow comparing to last year.

7. Business Outlook of the Company in 2021

In 2021, total domestic clinker production is expected to be 3,610 thousand MT, total

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cement production is expected to be 3,810 thousand MT and sales of self-produced cement and clinker are expected to be 3,871 thousand MT. In China, the production of clinker and cement is expected to reach 25,338 thousand MT and 29,008 thousand MT, with 30,539 thousand MT of self-produced cement and clinker as the sales volume.

8. The Company's Operating Status in the First Quarter of 2021

For the first quarter of 2021, the Company's consolidated operating income was $17,877,389 thousand, which was 36% more than $13,138,882 thousand for the same period in 2020. The consolidated net income after tax was $3,849,242 thousand, which was 240% more than $1,130,599 thousand in the same period in 2020. The net after-tax profit attributable to the owner of the Company was $3,200,039 thousand.

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Report 2: 2020 Financial Statements

Explanation:

The 2020 financial statements are attached as the following pages.

Consolidated Balance Sheets (December 31, 2020)
Consolidated Statements of Comprehensive Income (Years Ended December 31, 2020)
Consolidated Statements of Changes in Equity (Years Ended December 31, 2020)
Consolidated Statements of Cash Flows (Years Ended December 31, 2020)
Balance Sheets (December 31, 2020)
Statements of Comprehensive Income (Years Ended December 31, 2020)
Statements of Changes in Equity (Years Ended December 31, 2020)
Statements of Cash Flows (Years Ended December 31, 2020)

Independent auditor’s report by Hsin Wei Tai and Yu Wei Fan of Deloitte & Touche is attached.

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

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Asia Cement Corporation

Opinion

We have audited the accompanying consolidated financial statements of Asia Cement Corporation and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, 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 (collectively referred to as the “consolidated financial statements”).

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, 2020 and 2019, 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, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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The key audit matters identified in the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Estimated Impairment of Trade Receivables

The estimated provision for impairment of trade receivables is based on the assumptions of defaults and expected loss rates. The assumptions and selection of inputs for impairment calculation are based on the Group’s historical experience, existing market conditions as well as forward looking estimates. When the actual future cash flows are less than expected, a material impairment loss may arise, refer to Notes 5 and 10 to the consolidated financial statements. Because key assumptions and inputs used for measuring expected credit losses on trade receivables involve significant judgments and uncertainties, we considered the estimated impairment of trade receivables as one of the key audit matters.

The corresponding audit procedures that we performed for the estimated impairment of trade receivables are as follows:

We obtained an understanding of the internal control procedures with respect to management’s allowance for impairment loss of trade receivables.
We evaluated the reasonableness of allowance for impairment loss by testing the aging of trade receivables and by quantifying the potential risk of trade receivables that were overdue at the balance sheet date.
We tested the recoverability of the trade receivables by vouching cash receipts after the balance sheet date.
For the estimated impairment of accounts receivable, we evaluated the adequacy of management’s provision for impairment based on customers’ past default experience, current financial position, any collateral pledged, existing market conditions as well as forward looking estimates.

Fair Value Measurement of Investment Properties

The Group’s investment properties are subsequently measured using the fair value model and valued by an independent qualified professional appraiser, a member of the ROC certified real estate appraisers, refer to Notes 5 and 17 to the consolidated financial statements. Because the valuation of investment properties involves significant judgments and uncertainties, we considered the fair value measurement of investment properties as one of the key audit matters.

The corresponding audit procedures that we performed for the fair value measurement of investment properties are as follows:

We assessed the professional competence and independence of the appraiser engaged by management and we obtained an understanding of the appraiser’s scope of work and process of engagement to confirm that no circumstances affect the appraiser’s independence and limit the scope of his work.
We obtained an understanding of and assessed the reasonableness of management’s assumptions and methods used in the valuation.
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We sample-tested items from management’s supporting documents, which include the effective gross income, expenses, and property rights of land and buildings to verify the valuation process used by management and recalculated the fair value of investment properties to assess the reasonableness of management’s calculation.

Other Matter

The financial statements of China Shanshui Cement Group Limited (CSCGL), an associate accounted for using equity method, were audited by other auditors as of December 31, 2020 and 2019. 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, 2020 and 2019, the aggregate carrying value of the equity-method investments in CSCGL was NT$14,380,609 thousand and NT$12,024,837 thousand, respectively, representing 5% and 4% of the consolidated total assets. For the years ended December 31, 2020 and 2019, the share of profit or loss of CSCGL was NT$2,146,467 thousand and NT$2,211,559 thousand, respectively, representing 9% and 8%, respectively, of the consolidated profit before income tax.

We have also audited the parent company only financial statements of Asia Cement Corporation as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion with other matter paragraph.

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.

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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, 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.

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, 2020 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.

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The engagement partners on the audit resulting in this independent auditors’ report are Tai, Xin Wei and Fan, Yu Wei.

Deloitte & Touche Taipei, Taiwan Republic of China March 31, 2021

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 Chineselanguage independent auditors’ report and consolidated financial statements shall prevail.

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 35) 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 36) Financial assets at amortized cost - current (Notes 6, 9, 35 and 36) Contract assets - current (Notes 28 and 35) Notes receivable Third parties Trade receivables Third parties (Notes 10 and 11) Related parties (Notes 10 and 35) Other receivables (Notes 35) Current tax assets (Note 30) Inventories (Note 12) Prepayments (Notes 35) Other current assets (Note 20) Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 14, 35 and 36) Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 36) Financial assets at amortized cost - non-current (Notes 6, 9, 35 and 36) Property, plant and equipment (Notes 15 and 36) Right-of-use assets (Notes 16 and 35) Investment properties (Notes 17 and 36) Intangible assets (Notes 18 and 19) Deferred tax assets (Note 30) Finance lease receivables - non-current (Note 11) Other non-current assets (Notes 20 ,26 and 35) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 21 and 35) Short-term bills payable (Note 22) Financial liabilities at fair value through profit or loss - current (Notes 7 and 35) Contract liabilities - current (Notes 28) Accounts payable and accrued expenses Third parties (Note 19) Related parties (Note 35) Dividends and bonuses payable Other payables - others Current tax liabilities (Note 30) Provisions - current (Note 25) Lease liabilities - current (Notes 16 and 35) Deferred revenue - current (Note 24) Current portion of long-term liabilities (Notes 23 and 35) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 23) Long-term borrowings (Notes 23 and 35) Provisions - non-current (Notes 20, 25 and 37) Deferred tax liabilities (Note 30) Lease liabilities - non-current (Note 16 and 35) Deferred revenue - non-current (Note 24) Net defined benefit liabilities - non-current (Note 26) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 27) 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 (Notes 27 and 32) Total equity TOTAL		2020 Amount % $ 25,911,732 9 14,864,809 5 4,252,727 2 16,575,640 6 98,607 - 7,046,851 2 8,850,968 3 650,797 - 580,809 - 9,434 - 6,596,268 2 1,050,301 - 535,004 - 87,023,947 29 84,873,235 29 11,127,995 4 52,778 - 52,820,212 18 4,938,963 2 36,589,248 12 7,254,262 2 690,705 - 7,392,214 3 4,323,296 1 210,062,908 71 $ 297,086,855 100 $ 19,214,889 7 13,881,948 5 425,693 - 1,117,842 - 9,316,509 3 247,171 - 238,361 - 139,378 - 2,954,930 1 52,000 - 222,101 - 75,912 - 16,140,876 6 64,027,610 22 38,800,000 13 10,944,833 4 749,480 - 10,115,317 4 1,158,824 - 771,981 - 173,189 - 458,669 - 63,172,293 21 127,199,903 43 33,614,472 11 1,492,584 1 18,473,057 6 65,267,773 22 27,842,666 10 111,583,496 38 1,078,007 - 147,768,559 50 22,118,393 7 169,886,952 57 $ 297,086,855 100		2019
				Amount % $ 24,735,495 8 4,728,223 2 3,978,366 1 23,016,985 8 68,412 - 11,159,687 4 10,159,263 3 803,340 - 481,800 - 6,785 - 7,789,794 3 1,812,789 1 501,127 - 89,242,066 30 84,412,240 28 11,692,138 4 36,064 - 50,681,281 17 5,080,287 2 36,176,439 12 7,000,317 2 474,929 - 8,170,867 3 4,311,884 2 208,036,446 70 $ 297,278,512 100 $ 23,811,603 8 18,932,294 6 112,070 - 987,496 - 13,266,966 5 256,803 - 230,151 - 312,069 - 2,957,672 1 50,661 - 190,607 - 75,912 - 13,151,315 5 74,335,619 25 19,280,807 7 20,820,990 7 715,432 - 9,991,422 3 1,264,765 1 847,893 - 164,208 - 408,338 - 53,493,855 18 127,829,474 43 33,614,472 11 1,456,054 - 16,727,089 6 64,463,426 22 27,373,840 9 108,564,355 37 2,432,477 1 146,067,358 49 23,381,680 8 169,449,038 57 $ 297,278,512 100

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

(With Deloitte & Touche auditors’ report dated March 31, 2021)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 28 and 35) OPERATING COSTS (Notes 12, 29 and 35) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative expenses (Notes 29 and 35) Expected credit loss (Note 10) Total operating expenses OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Interest income Other income (Note 29) Other gains and losses (Note 29) Finance costs (Note 29) Share of profit of associates and joint ventures Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 30) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE LOSS, NET Items that will not be reclassified subsequently to profit or loss: Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans		2020 Amount % $ 78,240,880 100 54,911,404 70 23,329,476 30 - - 23,329,476 30 3,115,420 4 543,918 1 3,659,338 5 19,670,138 25 1,085,263 1 999,556 1 (1,086,933) (1) (1,163,645) (1) 4,639,504 6 4,473,745 6 24,143,883 31 5,370,076 7 18,773,807 24 (978,258) (1) (64,126) -		2019
				Amount % $ 89,347,637 100 63,746,928 71 25,600,709 29 14,392 - 25,586,317 29 3,332,110 4 191,031 - 3,523,141 4 22,063,176 25 1,126,001 1 872,599 1 661,654 1 (1,820,623) (2) 5,490,375 6 6,330,006 7 28,393,182 32 6,149,229 7 22,243,953 25 1,193,292 1 486,711 1 (Continued)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of other comprehensive (loss) 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 Share of other comprehensive loss of associates and joint ventures Other comprehensive loss 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 31) Basic Diluted		2020 Amount % $ (254,143) (1) (1,296,527) (2) 885,825 1 (778,629) (1) 107,196 - (1,189,331) (2) $ 17,584,476 22 $ 14,710,486 19 4,063,321 5 $ 18,773,807 24 $ 13,255,580 17 4,328,896 5 $ 17,584,476 22 $ 4.70 $ 4.41		2019
				Amount % $ 1,778,252 2 3,458,255 4 (2,635,629) (3) (1,439,930) (2) (4,075,559) (5) (617,304) (1) $ 21,626,649 24 $ 17,459,673 20 4,784,280 5 $ 22,243,953 25 $ 17,652,536 20 3,974,113 4 $ 21,626,649 24 $ 5.56 $ 5.25

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

(With Deloitte & Touche auditors’ report dated March 31, 2021)

(Concluded)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

		Equity Attributable to O	rs of the Corporation
Share Capital	Issued Amount Capital Surplus $ 33,614,472 $ 1,362,554 - - - - - - - 93,500 - - - - - - - - - - 33,614,472 1,456,054 - - - - - - - - - 36,112 - - - - - 418 - - - - - - - - $ 33,614,472 $ 1,492,584	Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 15,615,380 $ 63,945,145 $ 20,215,361 1,111,709 - (1,111,709 ) - 518,281 (518,281 ) - - (9,412,052 ) - - - - - 17,459,673 - - 676,889 - - - - - 79,711 - - (15,752) 16,727,089 64,463,426 27,373,840 1,745,968 - (1,745,968 ) - 804,347 (804,347 ) - - (10,084,341 ) - - - - - - - - 14,710,486 - - (103,026 ) - - (1,424,920 ) - - (20,704 ) - - - - - 2,590 - - (60,944 ) $ 18,473,057 $ 65,267,773 $ 27,842,666		Other Equity		Total Other Equity $ 2,996,214 - - - - - (484,026 ) - (79,711 ) - 2,432,477 - - - - - - (1,351,880 ) - - - (2,590 ) - $ 1,078,007
			Exchange Differences on Unrealized Gain (Loss) on Translating the Financial Financial Assets at Fair Value Statements of Through Other Foreign Comprehensive Operations Income $ (2,641,364 ) $ 5,268,916 - - - - - - - - - - (3,271,837 ) 2,719,118 - - - (79,711 ) - - (5,913,201 ) 7,908,323 - - - - - - - - - - - - (195,754 ) (1,491,574 ) - - - - - - - (2,590 ) - - $ (6,108,955) $ 6,414,159	Gains on Property Revaluation $ 307,728 - - - - - 77,486 - - - 385,214 - - - - - - 331,756 - - - - - $ 716,970	Cash Flow Hedges $ 60,934 - - - - - (8,793 ) - - - 52,141 - - - - - - 3,692 - - - - - $ 55,833

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

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

(With Deloitte & Touche auditors’ report dated March 31, 2021)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 24,143,883	$ 28,393,182
Adjustments for:
Depreciation expenses	4,628,688	4,827,418
Amortization expenses	318,863	1,292,725
Expected credit loss recognized on trade receivables	543,918	191,031
Net loss (gain) on fair value changes of financial assets and
liabilities designated as at fair value through profit or loss	240,993	(1,129,040)
Finance costs	1,163,645	1,820,623
Interest income	(1,085,263)	(1,126,001)
Dividend income	(786,481)	(761,309)
Share of loss of associates and joint ventures	(4,639,504)	(5,490,375)
Loss on disposal of property, plant and equipment	72,151	44,225
Loss on disposal of intangible assets	1,886	-
Gain on disposal of financial assets	(306,543)	(365,192)
(Gain) Loss on disposal of investments accounted for using equity
method	(2,774)	5,761
Impairment loss recognized on property, plant and equipment	13,212	-
Write-downs (reversal) of inventories	8,690	(18,619)
Realized gain on transactions with associates	(3,997)	-
Unrealized gain on foreign exchange	(121,120)	(295,492)
Gain on changes in fair value of investment properties	(237,856)	(197,647)
Loss on disposal of subsidiaries	58,871	-
Gains on modification of lease	(8,743)	-
Changes in operating assets and liabilities
Financial assets mandatorily classified as at fair value through
profit or loss	(9,769,641)	5,660,259
Contract assets	(30,195)	79,116
Notes receivable	4,193,907	1,351,524

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Trade receivables Other receivables Inventories Prepayments Other current assets Contract liabilities Accounts payable and accrued expenses Provisions Net defined benefit liabilities Deferred revenue Cash generated from operations Interests received Dividends received Interests paid Income tax paid	1,548,211 (69,801) 1,221,677 730,120 (44,399) 130,407 (614,462) 33,048 (11,295) (75,912) 21,244,184 1,021,397 3,938,949 (1,106,774) (5,482,574)	273,510 1,769,088 1,857,463 (408,758) (34,246) 256,481 697,124 35,916 (5,682) (75,912) 38,647,173 1,161,528 4,062,869 (1,803,500) (4,796,169)

(Continued)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from (Purchase of) financial assets at amortized cost Acquisition of associates Net cash inflow on disposal of associates Increase in long-term prepayments for investment Net cash inflow on disposal of subsidiaries Proceeds from capital reduction of investments accounted for using equity method Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in advance receipt for investment Decrease in refundable deposits Payments for intangible assets Payments for right-of-use assets Payments for investment properties (Increase) Decrease in other non-current assets Proceeds from disposal of right-of-use assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings (Decrease) Increase in short-term bills payable	2020 $ 19,615,182 (1,597,817) 909,341 5,931,149 (6) 2,774 (67,474) (2,857) 16,467 (6,293,577) 189,913 150,000 69,924 (3,779,208) (66,453) (2,343) (37) 34,143 (4,506,061) (4,390,372) (5,050,100)	2019 $ 37,271,901 (275,281) - (8,715,533) (3,326,114) 63,008 (11,224) - - (3,754,851) 37,708 - 596,780 (58,941) - (27,224) 5,300 - (15,466,372) (704,248) 369,075

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Proceeds from issuance of bonds
Repayments of bonds
Proceeds from long-term borrowings
Repayments of long-term borrowings

Decrease in guarantee deposits received
Repayment of the principal portion of lease liabilities
Increase in other non-current liabilities
Dividends paid

Acquisition of additional interests in subsidiaries
Dividends paid to non-controlling interests

Net cash used in financing activities

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

28,800,000
10,000,000
(3,000,000)
(4,000,000)
64,307,163
86,653,202
(77,052,903) (92,064,122)
(281,771)
(10,073)
(236,111)
(267,792)
15,717
21,680
(10,084,585)
(9,412,164)
(5,391,054)
-

(1,646,335)

(1,748,520)
(14,010,351)
(11,162,962)

77,467

(836,483)
(Continued)

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ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

		2020		2019
NET INCREASE IN CASH AND CASH EQUIVALENTS	$	1,176,237	$	9,806,084
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR		24,735,495		14,929,411
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$	25,911,732	$	24,735,495
The accompanying notes are an integral part of the consolidated financial	statements.
(With Deloitte & Touche auditors’ report dated March 31, 2021)		(Concluded)

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders 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, 2020 and 2019, 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 (collectively referred to as the “financial statements”).

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, 2020 and 2019, 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, 2020. 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 these matters.

The key audit matters identified in the Corporation’s financial statements for the year ended December 31, 2020 are stated as follows:

Estimated Impairment of Trade Receivables of Subsidiaries

The estimated provision for impairment of trade receivables is based on the assumptions of defaults and expected loss rates. The assumptions and selection of inputs for impairment calculation are based on the historical experience, existing market conditions as well as forward looking estimates of the Corporation’s subsidiaries. When the actual future cash flows are less than expected, a material impairment loss may arise. Because key assumptions and inputs used for measuring expected credit losses on trade receivables involve significant judgments and uncertainties, we considered the estimated impairment of trade receivables as one of the key audit matters.

The corresponding audit procedures that we performed for the estimated impairment of trade receivables of the

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subsidiaries are as follows:

We obtained an understanding of the internal control procedures with respect to management’s allowance for impairment loss of trade receivables.
We evaluated the reasonableness of allowance for impairment loss by testing the aging of trade receivables and by quantifying the potential risk of trade receivables that were overdue at the balance sheet date.
We tested the recoverability of the trade receivables by vouching cash receipts after the balance sheet date.
For the estimated impairment of accounts receivable, we evaluated the adequacy of management’s provision for impairment based on customers’ past default experience, current financial position, any collateral pledged, existing market conditions as well as forward looking estimates.

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 an independent qualified professional appraiser, a member of the ROC certified real estate appraisers, refer to Notes 5 and 15 to the financial statements. Because the valuation of investment properties involves significant judgments and uncertainties, we considered the fair value measurement of investment properties as one of the key audit matters.

The corresponding audit procedures that we performed for the fair value measurement of investment properties are as follows:

We assessed the professional competence and independence of the appraiser engaged by management and we obtained an understanding of the appraiser’s scope of work and process of engagement to confirm that no circumstances affect the appraiser’s independence and limit the scope of his work.
We obtained an understanding of and assessed the reasonableness of management’s assumptions and methods used in the valuation.
We sample-tested items from management’s supporting documents, which include the effective gross income, expenses, and property rights of land and buildings to verify the valuation process used by management and recalculated the fair value of investment properties to assess the reasonableness of management’s calculation.

Other Matter

The financial statements of China Shanshui Cement Group Limited (CSCGL), an associate accounted for using equity method, were audited by other auditors as of December 31, 2020 and 2019. 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, 2020 and 2019, the aggregate carrying value of the equity-method investments in CSCGL was NT$ 14,380,091 thousand and NT$12,022,105 thousand, respectively, representing 7% and 6%, respectively, of the total assets. For the years ended December 31, 2020 and 2019, the share of profit or loss of CSCGL was NT$ 2,146,187 thousand and NT$2,211,060 thousand, respectively, representing 14% and 12%, respectively, of the profit 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

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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 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.
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 company audit. We remain solely responsible for our audit opinion.

We also provide those charged with governance with a statement that we have complied with relevant ethical

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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 financial statements for the year ended December 31, 2020 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 this independent auditors’ report are Tai, Xin Wei and Fan, Yu Wei.

Deloitte & Touche Taipei, Taiwan Republic of China

March 31, 2021

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.

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ASIA CEMENT CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 30) 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 31) Financial assets at amortized cost (Notes 6, 9 and 30) Notes receivable Third parties Trade receivables Third parties (Note 10) Related parties (Notes 10 and 30) Other receivables (Note 30) Inventories (Note 11) Prepayments (Note 17) Other current assets Total current assets NON-CURRENT ASSETS Investments accounted for using equity method (Notes 12 , 30 and 31) Financial assets at fair value through other comprehensive income - non-current (Note 8) Property, plant and equipment (Notes 13, 30 and 31) Right-of-use assets (Note 14) Investment properties (Notes 15, 30 and 31) Intangible assets (Note 16) Deferred tax assets (Note 25) Other non-current assets (Notes 17, 21 and 30) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term bills payable (Note 18) Financial liabilities at fair value through profit or loss - current (Notes 7 and 30) Contract liabilities - current (Note 23) Accounts payable and accrued expenses Third parties Related parties (Note 30) Dividends and bonuses payable Current tax liabilities (Note 25) Lease liabilities - current (Note 14) Deferred revenue - current (Note 20) Current portion of long-term liabilities (Note 19) Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Note 19) Long-term borrowings (Note 19) Provisions - non-current Deferred tax liabilities (Note 25) Lease liabilities - non-current (Note 14) Deferred revenue - non-current (Note 20) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Notes 22) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		2020 Amount % $ 4,228,490 2 1,939,437 1 1,899,303 1 1,038,147 - 90,204 - 432,838 - 517,239 - 96,468 - 1,385,906 1 144,765 - 6,637 - 11,779,434 5 146,952,667 68 6,051,238 3 4,137,094 2 477,318 - 42,479,693 20 3,171 - 94,337 - 3,923,293 2 204,118,811 95 $ 215,898,245 100 $ 2,199,722 1 425,693 - 89,566 - 1,717,146 1 165,403 - 235,301 - 326,235 - 76,819 - 75,912 - 9,370,305 5 14,682,102 7 38,800,000 18 3,950,000 2 98,000 - 9,733,184 5 64,629 - 771,981 - 29,790 - 53,447,584 25 68,129,686 32 33,614,472 15 1,492,584 1 18,473,057 9 65,267,773 30 27,842,666 13 111,583,496 52 1,078,007 - 147,768,559 68 $ 215,898,245 100		2019
				Amount % $ 2,475,739 1 1,690,528 1 2,237,578 1 1,763,189 1 80,634 - 513,070 - 447,234 - 75,865 - 1,545,309 1 45,581 - 6,234 - 10,880,961 5 135,143,849 67 6,588,692 3 4,234,288 2 441,661 - 42,114,210 21 4,957 - 16,463 - 4,515,418 2 193,059,538 95 $ 203,940,499 100 $ 10,757,906 5 112,070 - 83,726 - 1,478,744 1 201,804 - 224,335 - 298,368 - 40,370 - 75,912 - 3,000,000 2 16,273,235 8 19,280,807 9 11,795,000 6 98,000 - 9,503,629 5 44,787 - 847,893 - 29,790 - 41,599,906 20 57,873,141 28 33,614,472 17 1,456,054 1 16,727,089 8 64,463,426 32 27,373,840 13 108,564,355 53 2,432,477 1 146,067,358 72 $ 203,940,499 100

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

(With Deloitte & Touche auditors’ report dated March 31, 2021)

32 -

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 23 and 30) OPERATING COSTS (Notes 11, 24 and 30) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES AND ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES Administrative expenses (Notes 24 and 30) Expected credit (gain) loss (Note 10) Total operating expenses OPERATING INCOME (LOSS) NON-OPERATING INCOME AND EXPENSES Interest income Other income (Note 24) Other gains and losses (Note 24) Finance costs (Note 24) Share of profit of subsidiaries and associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME, NET Items that will not be reclassified subsequently to profit or loss: Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income Remeasurement of defined benefit plans		2020 Amount % $ 8,991,169 100 7,927,392 88 1,063,777 12 (2,479) - 1,061,298 12 554,056 6 (3,386) - 550,670 6 510,628 6 241,043 3 484,912 5 (299,831) (3) (365,013) (4) 14,891,791 165 14,952,902 166 15,463,530 172 753,044 9 14,710,486 163 (875,729) (10) (42,895) -		2019
				Amount % $ 8,985,917 100 8,507,992 95 477,925 5 (8,442) - 469,483 5 678,405 7 3,753 - 682,158 7 (212,675) (2) 299,327 3 513,468 6 814,110 9 (369,349) (4) 17,111,219 190 18,368,775 204 18,156,100 202 696,427 8 17,459,673 194 329,435 4 467,246 5 (Continued)

33 -

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Share of other comprehensive (loss) income of subsidiaries and associates Items that may be reclassified subsequently to profit or loss: Share of other comprehensive loss of subsidiaries and associates Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 26) Basic Diluted		2020 Amount % $ (372,105) (4) (1,290,729) (14) (164,177) (2) (164,177) (2) (1,454,906) (16) 13,255,580 147 $ 4.70 $ 4.41		2019
				Amount % $ 2,650,225 29 3,446,906 38 (3,254,043) (36) (3,254,043) (36) 192,863 2 17,652,536 196 $ 5.56 $ 5.25

The accompanying notes are an integral part of the financial statements. (With Deloitte & Touche auditors’ report dated March 31, 2021)

(Concluded)

34 -

ASIA CEMENT CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Share Capital Issued Shares Amount Capital Surplus 3,361,447 $ 33,614,472 $ 1,362,554 - - - - - - - - - - - 93,500 - - - - - - - - - - - - 3,361,447 33,614,472 1,456,054 - - - - - - - - - - - 36,112 - - - - - - - - 418 - - - - - - - - - 3,361,447 $ 33,614,472 $ 1,492,584		Other Equity
	Exchange Differences on Translating the Unrealized Gain (Loss) on Financial Assets Financial at Fair Value Statements of Through Other Foreign Comprehensive Operations Income $ (2,641,364) $ 5,268,916 - - - - - - - - - - (3,271,837) 2,719,118 - (79,711) - - (5,913,201) 7,908,323 - - - - - - - - - - (195,754) (1,491,574) - - - - - (2,590) - - $ (6,108,955) $ 6,414,159	Gains on Property Revaluation $ 307,728 - - - - - 77,486 - - 385,214 - - - - - 331,756 - - - - $ 716,970	Cash Flow Hedge $ 60,934 - - - - - (8,793) - - 52,141 - - - - - 3,692 - - - - $ 55,833

Shares 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 31, 2021)

35 -

ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (reversed) recognized on trade receivables Net loss (gain) on fair value changes of financial assets and liabilities designated as at fair value through profit or loss Finance costs Interest income Dividend income Share of profit of subsidiaries and associates Gain on disposal of property, plant and equipment Unrealized gain on transactions with subsidiaries and associates Unrealized loss on foreign exchange Gain on changes in fair value of investment properties 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 Deferred revenue Cash generated from operations Interest received	2020 $ 15,463,530 476,738 2,155 (3,386) 64,714 365,013 (241,043) (316,139) (14,891,791) (509) 2,479 89,606 (363,140) (9,570) (1,550) (25,096) 156,566 (99,184) (403) (37,541) 5,840 129,525 (75,912) 690,902 245,536	2019 $ 18,156,100 523,626 3,589 3,753 (673,850) 369,349 (299,327) (422,860) (17,111,219) (40) 8,442 143,442 (399,682) 14,578 27,930 (35,221) 67,546 107,544 5,891 (48,810) 43,065 57,642 (75,912) 465,576 288,178

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Dividend received
Interest paid
Income tax paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other comprehensive
income
Purchase of financial assets at amortized cost
Proceeds from sale of financial assets at amortized cost
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease in refundable deposits
Payments for intangible assets
Payments for investment properties

6,780,804
7,345,508
(208,551)
(257,528)

(562,772)

(35,186)

6,945,919

7,806,548
-
(123,395)
-
(1,365,160)
695,706
-
(253,796)
(183,122)
525
46
567,920
679,526
(369)
(202)

(2,343)

(24,834)
(Continued)

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ASIA CEMENT CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

Net cash generated from (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term bills payable
Proceeds from issuance of bonds
Repayments of bonds
Proceeds from long-term borrowings
Repayments of long-term borrowings

Decrease in guarantee deposits received
Repayment of the principal portion of lease liabilities
Dividends paid

Acquisition of additional interests in subsidiaries

Net cash used in 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

The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated March 31, 2021)

2020
2019
$ 1,007,643
$ (1,017,141)
(8,560,000)
(680,000)
28,800,000
10,000,000
(3,000,000)
(4,000,000)
4,643,000
58,508,000
(12,488,000) (61,746,000)
-
(785)
(83,756)
(86,929)
(10,084,585)
(9,412,164)

(5,390,490)

-

(6,163,831)

(7,417,878)

(36,980)

(61,585)
1,752,751
(690,056)

2,475,739

3,165,795
$ 4,228,490
$ 2,475,739
(Concluded)

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Report 3: Audit Committee’s Review Report on the 2020 Financial Statements

To: The 2021 Regular Shareholders’ Meeting

The Board of Directors has prepared the Company’s 2020 Business Report, the Proposal for Profit Distribution, and the Financial Statements certified by CPA Mr. Hsin Wei Tai 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: Yun-Peng Chu

March 13, 2021

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Report 4: Report on the 2020 Directors’ Remuneration and Employees’ Compensation

Explanation:

Pursuant to the Article 25 of the “Articles of Incorporation of Asia Cement Corporation”, 0.1% 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.

The 2020 directors’ remuneration is NT$166,104,411 (1.05%). The 2020 employees’ compensation is NT$ 189,833,613 (1.2%). The aforesaid items will be paid in cash.

The 4[th] meeting of 27[th] Board of Directors approved the employees’ compensation and directors’ remuneration.

40 -

Report 5: Report on Issued Corporate Bond

Explanation:

The Company issued four Corporate Bond in 2020. This report on issued corporate bonds is made in compliance with the Article 246 of the Company Act.

Type of Bond Issued Item	Type of Bond Issued Item	1st Unsecured Corporate Bond Issued in 2020	2nd Unsecured Corporate Bond Issued in 2020
Date Issued		Apr. 20,2020	Jun. 18,2020
Par Value		NT$1,000,000	NT$1,000,000
Issue and Trade Place		N/A	N/A
Issue Price		Par Value	Par Value
Nominal Amount		NT$7,700,000,000	NT$5,500,000,000
Interest Rate		0.66%	Tranche A: 0.75% Tranche B: 0.83%
Term		Five Years. Maturity: Apr. 20, 2025	Tranche A`：`Five Years. Maturity`：`Jun. 18, 2025 Tranche B`：`Seven Years. Maturity`：`Jun. 18,2027
Guaranty/Guarantor		None	None
Trustee		China Trust Commercial Bank, Trust Department	China Trust Commercial Bank, Trust Department
Underwriter		Yuanta Securities Co.,Ltd.	Yuanta Securities Co.,Ltd.
Certified Lawyer		M.T.HUANG	M.T.HUANG
Certified Public Accountant		H.W. Tai, Y.W. Fan	H.W. Tai, Y.W. Fan
Repayment Method		Repayment In Lump Sum Upon Maturity	Repayment In Lump Sum Upon Maturity
OutstandingBalance		NT$7,700,000,000	NT$5,500,000,000
Redemption Clauses		None	None
Restrictive Covenants		None	None
Credit Rating Agency/Date/Rating		Taiwan Ratings Corporation Long term Credit Ratings: twA+ Short term Credit Ratings: twA-1 Outlook: Stable Bond Ratings: - Credit ratingdate: Oct. 23,2019	Taiwan Ratings Corporation Long term Credit Ratings: twA+ Short term Credit Ratings: twA-1 Outlook: Stable Bond Ratings: - Credit ratingdate: Oct. 23,2019
Convertible	Amount Converted	None	None
	Issue/ Conversion Rules	None	None
Terms to issuance, conversion, exchange and subscription. The impacts to current shareholder equityandpotential dilutions.		None	None
Custodian		None	None

41 -

Type of Bond Issued Item	Type of Bond Issued Item	3rd Unsecured Corporate Bond Issued in 2020	4th Unsecured Corporate Bond Issued in 2020
Date Issued		Sep. 23,2020	Dec. 23,2020
Par Value		NT$1,000,000	NT$1,000,000
Issue and Trade Place		N/A	N/A
Issue Price		Par Value	Par Value
Nominal Amount		NT$6,200,000,000	NT$9,400,000,000
Interest Rate		Tranche A: 0.65% Tranche B: 0.73%	Tranche A: 0.57% Tranche B: 0.65%
Term		Tranche A`：`Five Years. Maturity`：`Sep. 23, 2025 Tranche B`：`Seven Years. Maturity`：`Sep. 23,2027	Tranche A`：`Five Years. Maturity`：`Dec. 23, 2025 Tranche B`：`Seven Years. Maturity`：`Dec. 23,2027
Guaranty/Guarantor		None	None
Trustee		China Trust Commercial Bank, Trust Department	China Trust Commercial Bank, Trust Department
Underwriter		Masterlink Securities Corporation	Yuanta Securities Co.,Ltd.
Certified Lawyer		M.T.HUANG	M.T.HUANG
Certified Public Accountant		H.W. Tai, Y.W. Fan	H.W. Tai, Y.W. Fan
Repayment Method		Repayment In LumpSum Upon Maturity	Repayment In LumpSum Upon Maturity
OutstandingBalance		NT$6,200,000,000	NT$9,400,000,000
Redemption Clauses		None	None
Restrictive Covenants		None	None
Credit Rating Agency/Date/Rating		Taiwan Ratings Corporation Long term Credit Ratings: twA+ Short term Credit Ratings: twA-1 Outlook: Stable Bond Ratings: - Credit ratingdate: Oct. 23,2019	Taiwan Ratings Corporation Long term Credit Ratings: twA+ Short term Credit Ratings: twA-1 Outlook: Positive Bond Ratings: - Credit ratingdate: Sep. 28,2020
Convertible	Amount Converted	None	None
	Issue/ Conversion Rules	None	None
Terms to issuance, conversion, exchange and subscription. The impacts to current shareholder equityandpotential dilutions.		None	None
Custodian		None	None

42 -

Report 6: Report on the Amendments to “Asia Cement Corporation Sustainability Policy”

Explanation:

In accordance with the "Corporate Governance 3.0 - Blueprint for Sustainable Development" announced by the Financial Supervisory Commission on August 25, 2020, and the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies " issued by the Taiwan Stock Exchange on February 13, 2020, it is proposed to amend the Company's sustainability policy. Please refer to the following pages for details.

43 -

Asia Cement Corporation Sustainability Policy

Asia Cement Corporation Sustainability Policy	Asia Cement Corporation Sustainability Policy
	Enacted on November 11, 2014, by Board of Directors Amended on May13, 2021, byBoard of Directors
Chapter 1	General Provisions
Article 1	In fulfilling corporate sustainability and promoting the advancement of an economic, social and biological environment and sustainable development, the Company has formulated this policy by referring to “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies”.
Article 2	This policy is applicable to the overall operational activities of the Company and its subsidiaries (hereinafter called the Company). While operating the business, the Company shall identify the relevant stakeholders, understand and respect their reasonable expectations, needs, rights and interests through appropriate ways of communication. While pursuing sustainable operation and making earnings, the Company shall value the factors of environment, society and corporate governance, and incorporate them into company’s managementguidelines and operational activities.
Article 3	In order to ensure a sound and comprehensive management for corporate sustainability, the Board of Directors shall establish a “Corporate Sustainability Committee” in charge of the guidance of promoting corporate sustainability and the supervision of implementing corporate sustainability policy, systems or related management principles, and periodically reporting to Board of Directors regarding the status of progression. The Company shall assign the manager of Secretarial Department as the chief convener to establish a “Committee for Promoting Corporate Sustainability” in charge of the affairs relating to corporate sustainability. The tasks of the Committee for Promoting Corporate Sustainability are as follows: 1. Compile and disclose the information of corporate sustainability. 2. Plan and implement the corporate sustainability program. 3. Collect and submit the information of external assessment on corporate sustainability.
Article 4	The Company shall perform risk assessments on the company operational related environmental, social and corporate governance issues in accordance with the materiality principle, and formulate relevant risk management policy and strategy, in order to manage the risks and impacts caused by them to economy, environment and society.

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Article 5	The Company shall comply with the following principles for the fulfillment of corporate sustainability: 1. Fulfill corporate governance. 2. Develop a sustainable environment. 3. Maintain social good. 4. Enhance the disclosure of corporate sustainabilityinformation.
Chapter 2	Fulfill Corporate Governance
Article 6	The Board of Directors of the Company shall exercise the duty of care of a good administrator in supervising the Company to fulfill the responsibility of sustainability, reviewing the results and driving the on-going improvement to ensure the implementation of corporate sustainability policy. While carrying out the tasks of corporate sustainability, the Company ought to fully consider the interests of the stakeholders including the following items: 1. Set a “Roadmap for the Strategy of Sustainability” and the management principles relating to corporate sustainability. 2. Incorporate corporate sustainability into the Company’s operational activities and the direction of development, and initiate a specific promotion program for corporate sustainability. 3. Ensure timely and accurate disclosure of the information relating to corporate sustainability. The Company ought to offer education and training to the relevant staffs on implementingcorporate sustainability.
Article 7	The Company shall create an effective corporate governance framework and the relevant codes of ethics and affairs to have a sound corporategovernance.
Article 8	The Company shall comply with the relevant laws and regulations for its operational activities, avoid the conduct of unfair competition, bribe and corruption, in order to create an environment for fair competition.
Chapter 3	Develop a Sustainable Environment
Article 9	The Company shall establish an environmental management system in accordance with the laws, regulations and international principles relating to environment, including: 1. Collect and evaluate the complete and timely information of the effects to the natural environment caused by the operational activities. 2. Set a measurable target for environmental sustainability and review the persistence and correlation of its development. 3. Establish measures such as concrete programs or action items and review the performance of their execution. The Companyshall establish a dedicated environmental management unit or assign

45 -

	dedicated staffs to establish, drive and maintain an environmental management system and specific action items, and offer environmental educational courses to the relevant employees. While executing operational activities and internal management, the Company shall consider the effects to eco-efficiency caused by the operations, endeavor to reach the Company’s environmental goals and reduce the impact to natural environment and human beings.
Article 10	The Company ought to evaluate the potential risks and opportunities to operational activities caused by climate change, and adopt the measures in response to climate issues.
Article 11	The Company shall strive to increase the efficiency of using various energy and resources, reduce the consumption of energy and water resource by products and services, increase the recyclable feature and reuse of raw material orproducts.
Article 12	The Company shall construct and strengthen the facilities to protect environment, properly dispose wastes, reduce the discharge of pollutants, toxic substance and wastes into water, air and land, and adopt proper measures for pollution prevention and control technology.
Article 13	The Company shall measure and disclose the volumes of greenhouse gas emission, water used, energy consumption and various generated wastes in accordance with domestic and international universal standards orguidelines.
Chapter 4	Maintain Social Good
Article 14	The Company shall comply with the relevant labor laws and International Bill of Human Rights to protect the legitimate rights and interests of employees, and not to have any events of jeopardizing the basic rights of laborers. In addition, it shall provide to employees the information of the labor laws and rights entitled by labors in the country where the place of operation is located. The Company shall stipulate and review the management policy and procedures relating to human rights. The Company shall make sure that its employment policy does not contain any differentiated treatment in terms of gender, race, socioeconomic status, age, marital and family status. In addition, the employment, welfare, remuneration, qualification of employment, training, performance appraisal and promotion opportunities shall all be based on theprinciple of equality.
Article 15	The Company shall establish a channel for bi-directional communication with employees, respect the right of negotiation of employees’ representatives, and inform employees through reasonable ways regarding the change of operation which will cause significant influences. Regardingthe events that harm the rights and interests of laborers, the Companyshall

46 -

	provide an effective and proper mechanism of appealing and ensure the equality and transparencyin theprocess of appealing.
Article 16	The Company shall provide to employees a safe and healthy work environment including the necessary measures for health and first aid, and endeavor to reduce the factors that will harm the safety and health of employees. It may offer safety and health education and training to the relevant staffs in order to prevent from occupational disasters.
Article 17	The Company ought to build an environment in favor of employees’ career development and initiate a training program to effectively develop skills and ability for employees’ career. The Company shall stipulate and implement reasonable remuneration policy and employee welfare measures, ensure that the planning adheres to the goals of organizational strategy and the interests of the stakeholders, and the results of operational performance can be reflected on the remuneration and welfare of employees.
Article 18	The Company shall comply with government’s laws, regulations and the industrial guidelines to ensure the quality of products and services and to ensure the safety of the products through R&D, procurement, production and work process The Company shall comply with the relevant laws, regulations or international guidelines in terms of the safety compliance of the products and services, the trade secret of customers, marketing and advertisement, to ensure not to have any cheating, misleadingand fraudulent conducts.
Article 19	The Company ought to assess the environmental and social influences of the procurement behaviors to the community where the supplier is located and cooperate with suppliers and business partners to jointly strive for the advancement of corporate sustainability. The Company ought to formulate a supplier management policy and include the corporate sustainability policy in the contracts entered with the main suppliers for the compliance of both parties. The Company ought to avoid doing business with the suppliers who contradict to the sustainability policy of the Company. In the event that the supplier violates the Company’s supplier policy and causes noticeable environmental and social impacts to the communitywhere it is located, the Companymayterminate or cancel the contract.
Article 20	The Company ought to assess the influence of the operation to the community and properly hire local manpower from the place where the operation is located in order to enhance the community recognition. The Company may introduce its resources, by way of investment, commercial activities, donations, corporate volunteeringservices or otherprofessional services,

47 -

	into organizations that resolve social or environmental problems via commercial modes, or participate the activities held by civil organizations that dedicate to community development or community education, charitable and public interest groups and localgovernment, in order to advance communitydevelopment.
Chapter 5	Enhance the disclosure of corporate sustainability information.
Article 21	The Company shall make the information publicly available in accordance with the relevant laws and regulations, and disclose the relevant and reliable information on corporate sustainabilityin order to increase the transparencyof the information.
Article 22	The Company shall comply with the relevant laws and regulations, adopt the internationally accepted principles or guidelines to disclose to the public the status and performance of promoting corporate sustainability, and obtain the firm believe or assurance from the third party to enhance the reliability of the information. The disclosed information on corporate sustainability shall include the following: 1. The implementation of corporate sustainability policy, systems or principles of management and specific promotion programs. 2. The main stakeholders and the concerned issues. 3. The performance and review of fulfilling corporate governance, developing sustainable environment, maintaining social good and enhancing economic development. 4. Future improvements andgoals.
Chapter 6	Supplementary Provisions
Article 23	The Company shall pay attention to the development of domestic and international principles on corporate sustainability and the change of business environment and use them as the basis of reviewing and improving the established systems for corporate sustainability in order to improve the performance of fulfilling corporate sustainability.
Article 24	This policy shall be effective and enforceable after resolved by the Board of Directors and submitted to the shareholders’ meeting for reporting, the same shall apply to the amendment of thispolicy.

48 -

II Recognizing Events

Proposed by the Board

Proposal 1: Acceptance of the 2020 Business Report and Financial Statements

Explanation:

The business report and financial statements of Asia Cement Corporation, attached as page 3-38, were audited and approved by Audit Committee.

The Audit Committee’s review report on the financial statements is attached as page 39.

Resolution:

49 -

Proposed by the Board

Proposal 2: Acceptance of the Proposal for Distribution of 2020 Profits

Explanation:

The Board of Directors has approved the following proposal for distribution of 2020 profits in accordance with the article 26 of the articles of incorporation of Asia Cement Corporation.

==> picture [441 x 304] intentionally omitted <==

----- Start of picture text -----

1. Opening unappropriated retained earnings $ 14,739,184,628
Plus: Effect of retrospective application and retrospective restatement 0
Opening unappropriated retained earnings-Adjusted 14,739,184,628
Plus :The cumulative gain or loss transferred to retained earnings on disposals 2,588,830
Plus: Effect of changes in percentage of ownership of investee (1,506,566,612)
Plus: Remeasurement of defined benefit plans (103,026,637)
Unappropriated retained earnings-Adjusted $ 13,132,180,209
Net income of 2020 $ 14,710,485,716
Less: Legal reserve appropriation 1,310,348,130
Less: Special reserve appropriation 1,209,096,086
Subtotal $ 12,191,041,500
Plus: Unappropriated retained earnings-Adjusted 13,132,180,209
Retained earnings available for distribution 25,323,221,709
Retained earnings to be distributed 11,933,137,553
Closing unappropriated retained earnings $ 13,390,084,156
2. Appropriation items:
Shareholders' bonus : Cash dividends NT $3.55 per share $ 11,933,137,553
Total $ 11,933,137,553
----- End of picture text -----

2020 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 2020 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 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:

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III Discussing Events

Proposed by the Board

Proposal 1: Amendment to “Election Rules for Directors”

Explanation:

In accordance with the amended “Sample Template for XXX Co., Ltd. Procedures for Election of Directors” of the Taiwan Stock Exchange Corporation, the Board of Directors proposed to amend “Election Rules for Directors”. Please refer to following comparison table for details.

Resolution:

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Comparison Table For

“Election Rules for Directors”

After the Amendment

Article 3

The election of directors shall be pursued according to the number of position required; provided, however, that the independent and nonindependent directors elected shall be calculated separately. The candidates that obtain more number of votes shall be elected. If there are two or more candidates obtaining the same number of vote but the number of position offered is limited, a draw shall be made amongst them to determine. The chairperson shall conduct the drawing for the candidate who is absent.

Directors shall be elected by adopting the candidate nomination system specified in Article 192-1 of Company Act.

The overall composition of the Board of Directors shall be taken into consideration in the selection of this Corporation's directors. The composition of the Board of Directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company's business operations, operating dynamics, and development needs. It is advisable that the policy include, without being limited to, the following two general standards:

Basic requirements and values: Gender, age, nationality, and culture.
Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:

1.The ability to make judgments about

Before the Amendment

Article 3

The election of independent directors and non- independent directors shall be pursued according to the number of position required and shall be held together; provided, however, that the independent and non-independent directors elected shall be calculated separately. The candidates that obtain more number of votes shall be elected. If there are two or more candidates obtaining the same number of vote but the number of position offered is limited, a draw shall be made amongst them to determine. The chairperson shall conduct the drawing for the candidate who is absent.

Directors shall be elected by adopting the candidate nomination system specified in Article 192-1 of Company Act.

Basic requirements and values: Gender, age, nationality, and culture.
Professional knowledge and skills: A professional background (e.g., law, accounting, industry, finance, marketing, technology), professional skills, and industry experience.

Each board member shall have the necessary knowledge, skill, and experience to perform their duties; the abilities that must be present in the board as a whole are as follows:

The ability to make judgments about
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After the Amendment

operations.
2.Accounting and financial analysis ability. 3.Business management ability.
4.Crisis management ability.
5.Knowledge of the industry.
6.An international market perspective.
7.Leadership ability.
8.Decision-making ability.

Moreover, the professional qualifications, the assessment of independence and other matters of the independent directors shall be in compliance with the “Regulations Governing Appointment of Independent Directors and ” Compliance Matters for Public Companies or other relevant regulations.

Article 6

Where a candidate is a natural person, the voters shall expressly enter the candidate’s name on the ballots. Where a candidate is a government or a corporate shareholder, the voters shall expressly enter such government or corporate shareholder name. Where a candidate is a representatives of a government or a corporate shareholder, the voters shall expressly enter such government or corporate shareholder and its representative’s name.

Article 7

A ballot is null and void if:

Not in the ballot form as required under the Rules;
Bearing two or more candidates on a same ballot;
Remaining blank bearing no entries from the vote;
Bearing irrelevant wording except for filling in candidates and assigning voting rights;
Bearing vague, illegible wording; 6. The filled-in list of electees which proves not conforming the director
Before the Amendment
operations.
Accounting and financial analysis ability. 3. Business management ability.
Crisis management ability.
Knowledge of the industry.
An international market perspective.
Leadership ability.
Decision-making ability.

Article 6

Where a candidate is a natural person, the voters shall expressly enter the candidate’s account name and shareholder account number on the ballots if he is a shareholder, and shall expressly enter the candidate’s name and ID document number on the ballots if he is not a shareholder. Where a candidate is a government or a corporate shareholder, other than the shareholder account number, the voters may enter as well the name of the government or a corporate shareholder and name of the representative. In case of several representatives, the names of representatives shall be entered.

Article 7

A ballot is null and void if:

Not in the ballot form as required under the Rules;
Bearing two or more candidates on a same ballot;
Remaining blank bearing no entries from the vote;
Bearing entries not satisfactory to Article 6 or bearing other irrelevant wording;
Bearing vague, illegible wording; 6. Bearing a candidate who proves nonconforming in qualifications.
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	After the Amendment	Before the Amendment
7.	candidates; The total number of voting rights allocated by the voter on the voting ballot exceeds the number of voting rights held by the voter.

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

this document, the Chinese text shall prevail.

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V Questions and Motions

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

Chapter II– Shares

Article 6 The Company's total capital shall be forty billion New Taiwan Dollars (NT$40,000,000,000) divided into 4,000,000,000 shares of NT$10 each. The Board of Directors is authorized to issue the un-issued shares in separate trenches.
Out of the above total capital amount, One Hundred Million New Taiwan Dollars (NT$100,000,000) shall be divided into 10,000,000 shares of NT$10 each, to be issued as warrants for employees to subscribe.
Article 7 Shares issued by the Company are not required to be evidenced by share certificates, provided that they shall be recorded at the securities central depository enterprises.

The Company can issue preferred shares.

In the event that the Company mergers with another company, matters relating to the merger need not be approved by way of a resolution of the shareholders meeting of prefer shares.
Article 8 Matters relating to the Company's shares shall be dealt with according to the provisions of "Regulations Governing Handling of Stock Affairs by Public Companies" and the relevant laws and regulations.
Article 9 Registration of share transfer shall be closed within 60 days prior to the general shareholders' meeting, or within 30 days prior to an extraordinary shareholders' meeting or within 5 days prior to the record date on which Company distributes the dividends or bonuses.

Chapter III - Shareholders' Meeting

Article 10 The Shareholders' Meetings shall be General or Extraordinary Shareholders' Meetings:

General Shareholders' 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
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shareholders' meeting. The said notices shall specify the date, place and reasons for calling the shareholders' meeting.

Article 12 Unless otherwise provided for in the Company Act, a quorum shall be present at the shareholders' meeting if shareholders representing more than half of the shares issued by the Company are in attendance, and resolutions at the said assembly shall be adopted if approved by a majority of the shareholders in attendance.
Article 13 Shareholders may by way of power of attorney appoint proxies to attend the shareholders' meeting. Except for trust enterprises or share registration agencies approved by the securities authorities, when one shareholder is entrusted by two or more shareholders, the voting right represented by the said shareholder shall not exceed 3% of the voting rights of total shares issued. Where it has so exceeded, the voting right in excess shall not be included.
Unless otherwise stipulated by the Company Act, attendance of shareholder's proxies shall be in accordance with the provisions of "Regulation Governing the Use of Proxies For Attendance of Shareholders' Meeting of Public Companies".
Article 14 Unless otherwise provided for in the Company Act and the Articles of Incorporation, shareholders' meeting shall be conducted in accordance with the Company's regulations for shareholders' meeting.
Article 15 Minutes and resolutions of shareholders' meeting shall be recorded and signed by or affixed with the seal of the chairperson of the meeting. The said minutes and resolutions shall specify the date and place of the shareholders' meeting, number of shares represented by the shareholders (or proxies) present at the meeting; number of voting rights represented; name of the chairperson of the shareholders' meeting; resolutions and the manner in which they are passed. The said minutes and resolutions shall be kept, together with the register of shareholders' attendance and the proxies' powers of attorney, in compliance with the law.
The preparation and distribution of the minutes of shareholders' meeting
as required in the preceding Paragraph may be made by means of electronic transmission.

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".
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The term of office of directors is for a period of 3 years. They may 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.

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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 0.1% 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 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 accumulated losses in past years. Where there is still balance, the
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Company shall set aside 10% of the sum of said profit in balance and the amount of profit (or loss) items adjusted to the current year’s undistributed earnings other than the said profit as legal reserve and a special reserve as required by law. 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;
Second amendment on February 5, 1960;
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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; Forty-first amendment on May 13, 1998;

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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. Fifty-forth Amendment on June 24, 2019. Fifty-fifth Amendment on June 23, 2020.

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

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2. Meeting Rules of Shareholders for Asia Cement Corporation

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

Last amended on June 23, 2020

Article 1 The shareholders’ meeting of the Company shall be held according to the rules herein.

Article 2 The location for stockholders’ meeting shall be the Company’s place of business or a place convenient for attendance by stockholders (or by proxies) that is suitable for holding of this meeting. The meeting shall be held between 9:00AM and 3:00PM. The stockholders (or proxies) when attending the meeting shall wear admission badge and hand in signed attendance form.

When convening stockholders’ 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 stockholders’ 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 stockholders’ meeting, those who vote via electronic casting shall be considered as abstain.

Number of stockholders 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 stockholders’ meeting.

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

For a stockholders’ 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

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exercise the rights, the vice-chairperson of the Board of Directors shall preside instead. If the position of vice-chairperson is vacant or the vicechairperson 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 from among themselves.

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

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

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

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

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

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

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

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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.

Article 6 Any proposal for the agendas shall be submitted in written form. Except for the proposals set out in the agenda, any proposal by the shareholders (or proxies) to amend, substitute or to initiate extemporary motions with respect to the original proposal shall be seconded by other shareholders (or proxies). The same rule shall apply to any proposal to amend the agenda and motion to adjourn the meeting. The shares represented by the proponents and the seconders shall reach 100,000.
Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of inquiry and reply shall be limited to 3 minutes per person. The time may be extended for 3 minutes with the chairperson’s permission.

The chairperson may restrain shareholders (or proxies) from speaking if that shareholders (or proxies) speak overtime, speak beyond the allowed frequency or content of the speech is beyond the scope of the proposal. When a shareholder (or proxy) is speaking, other shareholder (or proxy) shall not interrupt without consent of the chairperson and the speaking shareholder (or proxy). Any disobedient of the preceding rule shall be prohibited by the chairperson. Article 14 of this meeting rule shall apply if the disobedient do not follow the chairperson’s

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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 personnel responsible for overseeing and counting of the votes for resolutions shall be appointed by the chairperson. The person responsible for vote overseeing shall be of the shareholder status.

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 stockholders (or proxies) attending the meeting.

All proposals shall be put to vote and 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 When a force majeure occurs during the meeting, the chairperson may decide to temporarily suspend the meeting and announce the time for

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the continuation of the meeting as appropriate.

Article 13 The chairperson may maintain the meeting order by instructing the security guards. The0 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 Company Act, Stock Exchange Law and the other related laws and regulations.
Article 16 The rules herein take effect after approval at the shareholders’ meeting. The same provision apply for any amendments.
*In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.
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Appendix

1. Shareholding of Directors

Title	Name	Representative	Shareholdings	Ratio of Shareholding
Chairman	Douglas Tong Hsu	-	23,278,334	0.69%
Independent Director	Chi Schive	-	0	0.00%
	Gordon S. Chen	-	0	0.00%
	Yun-Peng Chu	-	0	0.00%
Director	Far Eastern New Century Corporation	T.H. Chang Johnny Shih C.V. Chen	750,511,324	22.29%
	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	0.18%
	Ta Chu Chemical Fiber Co.,Ltd	Ruey Long Chen	1,560,068	0.05%
	Far Eastern Medical Foundation	Champion Lee	181,566,797	5.39%
	U-Ming Corporation	K.T. Li	1,505,585	0.04%
Shareholding of All Directors			970,385,512	28.81%

Note 1: The ratios above are calculated based on total issued shares (3,367,379,460 shares) on book closure date (April 25, 2020).

Note 2: The minimum required combined shareholding of all directors by law: 80,817,107 shares.
Note 3: The shareholdings of all directors and supervisors meet the minimum required combined shareholding.
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2. Effects on Business Performance and EPS Resulting From Stock Dividend Distribution

Item	Year	Year	2021 (Estimated)
Paid-In Capital	(Beginningof The Year)		NT $33,614,471,980
Stock`＆`Cash Dividend Distribution	Cash Dividend Per Share		NT$3.55
	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.
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==> picture [185 x 60] intentionally omitted <==

AI assistant

ACC — AGM Information 2021

51736_rns_2021-08-06_bc4aa76d-4c00-49a3-9626-25a18aa25d71.pdf

ASIA CEMENT CORPORATION Handbook For The 2021 Regular Shareholders’ Meeting

Table of Contents

I Meeting Agenda

II Reporting Events

Report 1: 2020 Business Report

Explanation:

2020 Business Report

1. Review of the global and domestic economy in 2020

Review of the global economy in 2020

Review of the domestic economy in 2020

Performance of the Company in 2020

2. Operating Performance of 2020

＊ key performance indicator:

＊ key performance indicator:

B. Sales

i. Taiwan area:

＊ Key Performance Indicator:

ii. China area:

＊ Key Performance Indicator:

3. The Company’s Strategy Layout 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

5. Prospects for the global and domestic economy in 2021

B. Prospects for the domestic economy in 2021

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

A. Mainland China:

B. Taiwan

7. Business Outlook of the Company in 2021

8. The Company's Operating Status in the First Quarter of 2021

Report 2: 2020 Financial Statements

Explanation:

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Estimated Impairment of Trade Receivables

Fair Value Measurement of Investment Properties

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

ASIA CEMENT CORPORATION AND SUBSIDIARIES

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION AND SUBSIDIARIES

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

ASIA CEMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Estimated Impairment of Trade Receivables of Subsidiaries

Fair Value Measurement of Investment Properties

Other Matter

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

ASIA CEMENT CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ASIA CEMENT CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ACC AGM Information 2021

`＊` key performance indicator:

`＊` key performance indicator:

`＊` Key Performance Indicator:

`＊` Key Performance Indicator: