HsingTa — Audit Report / Information 2020

Nov 12, 2020

HSING TA CEMENT CO., LTD.

PARENT COMPANY ONLY FINANCIAL

STATEMENTS AND INDEPENDENT AUDITORS’

REPORT DECEMBER 31, 2020 AND 2019

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Hsing Ta Cement Co., Ltd.

Opinion

We have audited the accompanying parent company only balance sheets of Hsing Ta Cement Co., Ltd. (the “Company”) as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its parent company only financial performance and its parent company only 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 generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the audit of the parent company only financial statements section of our report. We are independent of the Company 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 Company’s 2020 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

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Key audit matters for the Company’s 2020 parent company only financial statements are stated as follows:

Occurrence of revenue recognition of cement sales

Description

Please refer to Note 4(26) of the financial statements for accounting policies on revenue recognition and Note 6(16) for details of operating revenue.

The Company’s operating revenue mainly consists of cement sales revenue, revenue from recycling and treatment and rental revenue. The revenue from cement sales amounted to NTD 1,620,195 thousand, constituting 93.76% of the 2020 operating revenue. The price of cement often fluctuates due to the prices

of raw materials, market supply and demand as well as the general economic situation. Sales prices and order quantities are based on the contracts signed with individual customers. Cement sales revenue is recognised when customers collect the cement, which is based on the dispatch report prepared by the cement factory according to actual collection situation. The Company’s counterparties are numerous, and the types of products, the related prices and the qualities are various. Also, the information process, recording and maintenance of the relevant reports mainly relies on manual operation. Therefore, more audit staff were required to perform the procedures. Additionally, since the cement sales revenue is material to the financial statements and the Company’s subsidiaries, accounted for using equity method, have the same matters as the aforementioned, we consider the occurrence of revenue recognition of cement sales of the Company and its subsidiaries as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Assessed the reasonableness of revenue recognition policies and procedures for cement sales based on our understanding of the Company’s business and the industry it operates in, and confirmed that these were consistently applied in the financial statements.

2. Obtained an understanding of the order, collection and delivery processes, and assessed as well as tested the relevant internal control procedures including sample testing the prices and quantities on the cement order reports and agreed them with the records on the cement sales register cards and the collection reports as well as checking whether the quantities on the collection report were consistent with the records on the delivery sheets and the daily dispatch reports.

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1. Verified the monthly dispatch report used by the management for revenue recognition, including sample testing the quantities on the reports whether they were consistent with the records on the daily dispatch report, and recalculating the amount of the revenue and agreeing them with the recorded revenue.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 generally accepted auditing standards 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 parent company only financial statements.

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

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1. Identify and assess the risks of material misstatement of the parent company only 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.

2. 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 Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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 Company’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 parent company only 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 Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the 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.

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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 parent company only financial statements of the current period 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.

Lai, Chung-Hsi

[Hsu, Ming-Chuan ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 30, 2021

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The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) 6(4) and 7 6(4) 6(5) 6(2) 6(3) and 8 6(6) 6(7) 6(8) 6(10) 6(23)	December 31, 2020 AMOUNT % $ 571,707 7 44,182 1 141,274 2 34,588 - 57,388 1 544 - 385,376 5 16,711 - - - 1,251,770 16 233,766 3 213,524 3 3,868,013 49 839,378 10 4,218 - 1,443,908 18 30,423 - 79,532 1 6,712,762 84 $ 7,964,532 100	December 31, 2019	December 31, 2019
		AMOUNT $ 571,707 44,182 141,274 34,588 57,388 544 385,376 16,711 - 1,251,770 233,766 213,524 3,868,013 839,378 4,218 1,443,908 30,423 79,532 6,712,762 $ 7,964,532	AMOUNT $ 306,766 43,047 120,000 22,124 46,048 670 393,626 9,141 4 941,426 273,016 211,858 3,417,334 918,089 6,993 1,457,715 47,762 71,042 6,403,809 $ 7,345,235	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1535 Financial assets at amortised cost- non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				4 1 2 - 1 - 5 - -
				13
				4 3 46 12 - 20 1 1
				87
				100

(Continued)

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HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2020 December 31, 2019 Notes AMOUNT % AMOUNT % 6(16) and 7 $ 32,898 - $ 36,102 - - - 12,848 - 106,058 1 58,551 1 206,028 3 190,113 3 53,484 1 44,282 1 3,508 - 3,419 - 1,131 - 974 - 403,107 5 346,289 5 6(23) 4,797 - 5,936 - 815 - 3,642 - 6(11) 40,645 1 152,344 2 17,302 - 18,507 - 63,559 1 180,429 2 466,666 6 526,718 7 6(12) 3,419,579 43 3,419,579 47 6(13) 22,651 - 22,551 - 6(14) 1,428,368 18 1,332,001 18 231,848 3 118,512 2 2,570,971 32 2,157,722 29 6(15) ( 175,551) ( 2) ( 231,848) ( 3 ) 7,497,866 94 6,818,517 93 9 11 $ 7,964,532 100 $ 7,345,235 100

Current liabilities 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 2645 Guarantee deposits received 25XX Non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items

Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(9)(10)(16) and 7 $ 1,728,042 100 $ 1,539,575 100 6(5)(10)(11)(21)(22)( 1,342,353) ( 78) ( 1,351,913) ( 88) 385,689 22 187,662 12 ( 237) - ( 132) - 132 - 103 - 385,584 22 187,633 12 6(11)(21)(22) and 7 ( 66,874) ( 4) ( 60,273) ( 4) ( 99,524) ( 5) ( 99,387) ( 6) ( 166,398) ( 9) ( 159,660) ( 10) 219,186 13 27,973 2 6(17) 4,101 - 5,045 - 6(18) 17,103 1 11,660 1 6(19) ( 19,516) ( 1) ( 5,964) ( 1) 6(20) ( 101) - ( 184) - 6(6) 879,299 51 983,813 64 880,886 51 994,370 64 1,100,072 64 1,022,343 66 6(23) ( 96,038) ( 6) ( 58,673) ( 4) $ 1,004,034 58 $ 963,670 62 6(11) ($ 5,693) - $ 868 - ( 374) - ( 1,245) - 6(23) 1,139 - ( 174) - ( 4,928) - ( 551) - 6(6)(15) 56,297 3 ( 113,336) ( 7) 56,297 3 ( 113,336) ( 7) $ 51,369 3 ($ 113,887) ( 7) $ 1,055,403 61 $ 849,783 55 $ 2.94 $ 2.82 $ 2.92 $ 2.81

4000 Sales revenue 5000 Operating costs 5900 Gross profit 5910 Unrealized profit from sales 5920 Realized profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method, net 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Actuarial (loss) gain on defined benefit plan 8330 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8380 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the year 8500 Total comprehensive income for the year Basic earnings per share 9750 Total basic earnings per share Diluted earnings per share 9850 Total diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

2019 Balance at January 1 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) for the year Appropriations and distribution of 2018 retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends Expired unclaimed dividends transferred to capital surplus Balance at December 31 2020 Balance at January 1 Profit for the year Other comprehensive income (ioss) for the year Total comprehensive income Appropriations and distribution of 2019 retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends Expired unclaimed dividends transferred to capital surplus Balance at December 31	Notes		Share capital - common stock		Capital	surplus	surplus			Retained earnings	Retained earnings			Exchange differences on translation of foreign financial statements		Total equity
					Treasury stock transactions		Others		Legal reserve		Special reserve		Unappropriated retained earnings
	6(15) 6(14) 6(15) 6(14)		$ 3,419,579 - - - - - - - $ 3,419,579 $ 3,419,579 - - - - - - - $ 3,419,579		$ 22,299 - - - - - - - $ 22,299 $ 22,299 - - - - - - - $ 22,299		$ 153 - - - - - - 99 $ 252 $ 252 - - - - - - 100 $ 352		$ 1,247,977 - - - 84,024 - - - $ 1,332,001 $ 1,332,001 - - - 96,367 - - - $ 1,428,368		$ 42,354 - - - - 76,158 - - $ 118,512 $ 118,512 - - - - 113,336 - - $ 231,848	$ 1,628,351 963,670 ( 551 ) 963,119 ( 84,024 ) ( 76,158 ) ( 273,566 ) - $ 2,157,722 $ 2,157,722 1,004,034 ( 4,928 ) 999,106 ( 96,367 ) ( 113,336 ) ( 376,154 ) - $ 2,570,971		($ 118,512) - ( 113,336) ( 113,336) - - - - ($ 231,848) ($ 231,848) - 56,297 56,297 - - - - ($ 175,551)	$ 6,242,201 963,670 ( 113,887 ) 849,783 - - ( 273,566 ) 99 $ 6,818,517 $ 6,818,517 1,004,034 51,369 1,055,403 - - ( 376,154 ) 100 $ 7,497,866

The accompanying notes are an integral part of these parent company only financial statements.

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HSING TA CEMENT CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense Net loss (gain) on financial assets at fair value through profit or loss Interest expense Interest income Dividend revenue Share of profit of associates and joint ventures accounted for using equity method Gain on lease modification Gain on disposal of investment Loss on disposal of property, plant and equipment Gain on disposal of investment property Unrealized gain from sale Realized gain from sale Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Notes receivable - related parties Accounts receivable, net Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Notes payable Accounts payable Other payables Other current liabilities Net defined benefit liability Cash inflow generated from operations Income taxes paid Net cash flows from operating activities

Year ended December 31 Notes 2020 2019 $ 1,100,072 $ 1,022,343 6(7)(8)(10)(21) 143,414 149,489 6(2)(19) 565 ( 11,522 ) 6(8)(20) 101 184 6(17) ( 4,101 ) ( 5,045 ) 6(18) ( 15,627 ) ( 8,290 ) 6(6) ( 879,299 ) ( 983,813 ) 6(8)(19) ( 688 ) - 6(19) - 1,471 6(19) 4,742 2,387 6(19) ( 120 ) - 237 132 ( 132 ) ( 103 ) ( 21,274 ) 23,140 ( 12,464 ) ( 11,056 ) ( 11,340 ) ( 1,874 ) - 4,923 8,250 14,369 ( 7,570 ) ( 238 ) 5 ( 4 ) ( 3,204 ) 17,187 ( 12,848 ) ( 26,459 ) 47,507 39,731 15,915 11,900 157 ( 47 ) ( 117,392 ) ( 45,068 ) 234,906 193,737 ( 69,497 ) ( 44,333 ) 165,409 149,404

(Continued)

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HSING TA CEMENT CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from capital reduction of financial assets at fair value through profit or loss Acquisition of financial assets at amortised cost Proceeds from liquidation of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Acquisition of investment property Proceeds from disposal of investment property Decrease (increase) in other non-current assets, others Increase in prepayments for business facilities Interest received Dividends received Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in guarantee deposits received Interest paid Cash dividend paid Payments of lease liabilities Expired unclaimed dividends transferred to capital surplus Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2020 2019 $ 33,410 $ - ( 1,666 ) - 10,384 - 6(7) ( 57,596 ) ( 45,643 ) 6(7) 709 356 165 1,816 6(10) - ( 328 ) 4,777 - 975 ( 3,838 ) ( 9,631 ) ( 10,189 ) 4,227 4,584 493,821 295,832 479,575 242,590 ( 1,205 ) ( 352 ) - ( 116 ) 6(14) ( 376,154 ) ( 273,566 ) 6(8) ( 2,784 ) ( 3,366 ) 100 99 ( 380,043 ) ( 277,301 ) 264,941 114,693 306,766 192,073 $ 571,707 $ 306,766

The accompanying notes are an integral part of these parent company only financial statements.

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HSING TA CEMENT CO., LTD. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

Hsing Ta Cement Co., Ltd. (the “Company”) was incorporated as company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) and the Company’s shares have been approved by Securities Commission, Ministry of Finance to be listed on October 7, 1991. The Company was primarily engaged in quarrying, processing, warehousing and distribution of minerals, manufacturing, processing, warehousing and distribution of limestone chemicals, cement products and limestone related industry, treatment of general waste, sales and leasing of real estate, consultancy of building management, etc.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These financial statements were authorised for issuance by the Board of Directors on March 30, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
New Standards,Interpretations andAmendments Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7 ,‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’ Note：Earlier application from January 1, 2020 is allowed by FSC.	Effective date by International Accounting StandardsBoard
	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

follows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption	January 1, 2021
from applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘	January 1, 2021
Interest Rate Benchmark Reform— Phase 2’

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or	January 1, 2023
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 16, ‘Property, plant and equipment:proceeds	January 1, 2022
before intended use’
Amendments to IAS 37, ‘Onerous contracts—cost of fulfilling a	January 1, 2022
contract’
Annual improvements to IFRS Standards 2018–2020	January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The financial statements of the Company have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

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(2) Basis of preparation

• A. Except for the following items, the financial statements have been prepared under the historical cost convention:

  • (a) Financial assets at fair value through profit or loss.

  • (b) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5.

• (3) Foreign currency translation

The financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the associates and subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

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iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realised within twelve months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

• (5) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(6) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

~16~

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

• (7) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

  • (a) The objective of the Company’s business model is achieved by collecting contractual cash flows.

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• (8) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (9) Impairment of financial assets

For financial assets at amortised cost at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

• (10) Derecognition of financial assets

The Company derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Company has not retained control of the financial asset.

- (11) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

• (12) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity), but excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

~17~

(13) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Unrealised gains on transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company recognise loss continuously in proportion to its ownership.

• D. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

• E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

~18~

• I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• J. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• K. In accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, the profit or loss and other comprehensive income or loss presented on the parent company only financial statements are consistent with those presented on the consolidated financial statements. In addition, owner’s equity presented on the parent company only financial statements is consistent with equity attributable to owners of parent presented on the consolidated financial statements.

(14) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Property, plant and equipment are measured at cost model subsequently. Land is not depreciated. Other property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

~19~

Buildings and structures 8 ~ 60 years Machinery and equipment 2 ~ 15 years Transportation equipment 4 ~ 15 years Office equipment 3 ~ 15 years Other equipment 2 ~ 20 years

(15) Leasing arrangements (lessee) - right-of-use assets/ lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable; and

• (b) Variable lease payments that depend on an index or a rate.

The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date; and

• (c) Any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(16) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 3 ~ 55 years.

• (17) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

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(18) Borrowings

Borrowings comprise long-term and short-term bank borrowings and other long-term and short-term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(19) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

• A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(21) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(22) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and are recognised as expenses in the period in which the employees render service.

• B. Pensions

• (a) Defined contribution plans

For the defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of highquality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.

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     - ii. Remeasurements arising on the defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ remuneration

  • Employees’ compensation and directors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

• (23) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the balance sheet. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

• D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

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(24) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

(25) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(26) Revenue recognition

• A. Sales of goods

The Company manufactures and sells limestone chemicals, cement products and limestone related products. Sales are recognised when control of the products has transferred to customers, the consideration is taking into account of business tax, returns, rebates and discounts. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

• B. Rental revenue

The Company follows the guidance of IFRS 16 ‘Leases’ to recognise revenue from the leasing of property. Leases are required to be classified as either finance lease or operating lease according to the extent of transition of risks and rewards of ownership. Revenue is recognised through the period of leases.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these financial statements requires management to make critical judgements in applying the Company accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

• Lease term

In determining the lease term, the Company takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option, including the expected changes of all fact and situation for the period from the commencement date of lease to the execution date of options. Also, the Company took into consideration the main factors, such as the contract terms and conditions during the option covered period and the importance to lessee’s operation if the significant lease improvement and underlying assets incurred during the contract terms. When significant events or significant changes occur within the Company’s control, the lease term will be re-estimated.

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(2) Critical accounting estimates and assumptions

Impairment assessment of tangible asset

The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Company strategy might cause material impairment on assets in the future.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
			December31,2020			December31,2019
Cash on hand and petty cash		$	702		$	716
Checking accounts			46,964			46,678
Demand deposits			392,731			130,222
Time deposits			344,834			341,008
			785,231			518,624
Less: Time deposits pledged	(		213,524)	(		211,858)
		$	571,707		$	306,766

• A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. Details of the Company’s certain time deposits pledged, shown as ‘non-current financial assets at amortised cost’ related to guarantee for mining land, are provided in Note 8.

(2) Financial assets at fair value through profit or loss

Items			December31,2020			December31,2019
Current items:
Financial assets mandatorily
measured at fair value through
profit or loss
Domestic listed stocks		$	55,159		$	55,159
Foreign listed stocks			2,549			2,549
			57,708			57,708
Valuation adjustment	(		13,526)	(		14,661)
		$	44,182		$	43,047
Non-current items:
Financial assets mandatorily
measured at fair value through
profit or loss
Domestic listed stocks		$	66,570		$	130,959
Valuation adjustment			167,196			142,057
		$	233,766		$	273,016

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

~24~

	YearendedDecember31	YearendedDecember31
	2020	2019
Financial assets mandatorily measured
at fair value through profit or loss
Equity instruments	565) ($	11,522 $

• B. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

• (3) Financial assets at amortised cost

in Note 12(2). Financial assets at amortised cost
Items December 31, 2020 Non-current items： Time deposits pledged 213,524 $	December 31, 2019
	211,858 $

A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed
below:
Year ended December31
2020 2019
Interest income 951 $ 1,329 $
B. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit
enhancements, the maximum exposure to credit risk in respect of the amount that best represents
the financial assets at amortised cost held by the Company was $213,524 and $211,858,
respectively.

• C. Details of the Company’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). (4) Notes and accounts receivable

Notes and accounts receivable
Notes receivable Notes receivable due from related parties Less: Allowance for uncollectible accounts Accounts receivable Less: Allowance for uncollectible accounts	December31,2020 141,274 $ 34,588 - 175,862 $ 57,388 $ - 57,388 $	December31,2019
		120,000 $ 22,124 -
		142,124 $
		46,048 $ -
		46,048 $

~25~

• A. The ageing analysis of notes and accounts receivable that were past due but not impaired is as follows:

Notes receivable Not past due 175,862 $ Up to 30 days - 31 to 90 days - 91 to 180 days - Over 180 days - 175,862 $ December	Accounts receivable 57,388 $ - - - - 57,388 $ 31,2020	Notes Accounts receivable receivable 142,124 $ 46,048 $ - - - - - - - - 142,124 $ 46,048 $ December31,2019

The above ageing analysis was based on past due date.

• B. As of December 31, 2020 and 2019, notes and accounts receivable were all from contracts with customers. And as of January 1, 2019, the balance of receivables from contracts with customers amounted to $154,208 and $44,174, respectively.

• C. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes and accounts receivable was $175,862 and $142,124; $57,388 and $46,048, respectively.

• D. Information relating to credit risk of notes and accounts receivable is provided in Note 12(2).

• (5) Inventories

nventories
Raw materials Supplies Work in progress Finished goods Raw materials Supplies Work in progress Finished goods		December 31, 2020
	Allowance for Cost valuation loss 131,444 $ - $ 189,929 1,153) ( 23,225 - 41,931 - 386,529 $ (1,153) $ December31,2019		Bookvalue 131,444 $ 188,776 23,225 41,931
			385,376 $
	Allowance for Cost valuation loss 141,849 $ - $ 214,616 1,417) ( 14,224 - 24,354 - 395,043 $ 1,417) ($		Bookvalue
			141,849 $ 213,199 14,224 24,354
			393,626 $

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The cost of inventories recognised as expense for the year:

(6)	Investments accounted for using equity method Cost of goods sold $ Underapplied overheads Loss on decline in market value Gain on reversal of decline in market value ( $ At January 1 $ Disposal of investments accounted for using equity method Share of profit or loss of investments accounted for using equity method Earnings distribution of investments accounted ( for using equity method Changes in other equity items (Note 6(15)) Others ( At December 31 $ Subsidiaries: Hsin I Ready Mixed Concrete Co., Ltd. Synergy Development Co., Ltd. Soaring Power Corp.		2020 2019 1,284,832 1,275,778 $ 26,696 47,892 - 579 264) - 1,311,264 1,324,249 $ YearendedDecember31 2020 2019 3,417,334 2,842,526 $ 484,438) 287,542) ( 56,297 113,336) ( 479) 2,746) ( 3,868,013 3,417,334 $ - 5,381) ( 879,299 983,813 December31,2020 December31,2019 239,090 $ 208,288 $ 63,382 63,131 3,565,541 3,145,915 3,868,013 $ 3,417,334 $	2020 2019 1,284,832 1,275,778 $ 26,696 47,892 - 579 264) - 1,311,264 1,324,249 $ YearendedDecember31 2020 2019 3,417,334 2,842,526 $ 484,438) 287,542) ( 56,297 113,336) ( 479) 2,746) ( 3,868,013 3,417,334 $ - 5,381) ( 879,299 983,813 December31,2020 December31,2019 239,090 $ 208,288 $ 63,382 63,131 3,565,541 3,145,915 3,868,013 $ 3,417,334 $
		$
				208,288 $ 63,131 3,145,915
				3,417,334 $

A. Subsidiaries

Please refer to Note 4(3) in the 2020 consolidated financial statements for the information regarding the Company’s subsidiaries.

B. Associates

Associates December 31, 2020 December 31, 2019 - - Taiwan Ooparts Co., Ltd. $ $

Taiwan Ooparts Co., Ltd. reduced capital to offset losses on May 19, 2019, and increased capital by issuing shares on May 20, 2019. The Company did not participate in the capital increase, and as a result, its shareholding ratio decreased from 41.11% to 18.68%. Hence, the Company no longer has significant influence over the associate. The Company remeasured the investment retained in Taiwan Ooparts Co., Ltd. at its fair value and recognised it as ‘non-current financial assets at fair value through profit or loss’. Any difference between fair value and carrying amount is recognised as current disposal loss amounting to $1,471.

~27~

(7) Property, plant and equipment

At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Additions Disposals Reclassification Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment	Buildings and Transportation Office Other Unfinished Land structures equipment equipment equipment construction Total Owner-occupied Owner-occupied Lease Subtotal Owner-occupied Owner-occupied Owner-occupied 394,731 $ 732,335 $ 3,439,341 $ 43,163 $ 3,482,504 $ 82,724 $ 8,616 $ 90,440 $ 480 $ 4,791,830 $ - 593,116) ( 3,078,653) ( 42,963) ( 3,121,616) ( 70,751) ( 7,329) ( 80,929) ( - 3,873,741) ( 394,731 $ 139,219 $ 360,688 $ 200 $ 360,888 $ 11,973 $ 1,287 $ 9,511 $ 480 $ 918,089 $ 394,731 $ 139,219 $ 360,688 $ 200 $ 360,888 $ 11,973 $ 1,287 $ 9,511 $ 480 $ 918,089 $ 4,789 2,000 45,915 - 45,915 256 - 3,676 960 57,596 - - 5,335) ( 112) ( 5,447) ( - 4) ( - - 5,451) ( - - - - - - - 480 480) ( - - 24,493) ( 99,565) ( 88) ( 99,653) ( 3,603) ( 335) ( 2,772) ( - 130,856) ( 399,520 $ 116,726 $ 301,703 $ - $ 301,703 $ 8,626 $ 948 $ 10,895 $ 960 $ 839,378 $ 399,520 $ 734,335 $ 3,472,924 $ - $ 3,472,924 $ 82,655 $ 8,488 $ 94,327 $ 960 $ 4,793,209 $ - 617,609) ( 3,171,221) ( - 3,171,221) ( 74,029) ( 7,540) ( 83,432) ( - 3,953,831) ( 399,520 $ 116,726 $ 301,703 $ - $ 301,703 $ 8,626 $ 948 $ 10,895 $ 960 $ 839,378 $ 2020 Machineryand equipment	Total
		839,378 $

~28~

At January 1 Cost Accumulated depreciation and impairment Opening net book amount as at January 1 Additions Disposals Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation and impairment	Buildings and Transportation Office Other Land structures equipment equipment equipment Owner-occupied Owner-occupied Lease Subtotal Owner-occupied Owner-occupied Owner-occupied 394,731 $ 724,304 $ 3,409,888 $ 43,163 $ 3,453,051 $ 81,156 $ 9,020 $ 89,983 $ - 566,983) ( 2,977,427) ( 42,874) ( 3,020,301) ( 67,617) ( 7,373) ( 77,936) ( 394,731 $ 157,321 $ 432,461 $ 289 $ 432,750 $ 13,539 $ 1,647 $ 12,047 $ 394,731 $ 157,321 $ 432,461 $ 289 $ 432,750 $ 13,539 $ 1,647 $ 12,047 $ - 8,031 34,546 - 34,546 2,129 - 457 - - 2,743) ( - 2,743) ( - - - - 26,133) ( 103,576) ( 89) ( 103,665) ( 3,695) ( 360) ( 2,993) ( 394,731 $ 139,219 $ 360,688 $ 200 $ 360,888 $ 11,973 $ 1,287 $ 9,511 $ 394,731 $ 732,335 $ 3,439,341 $ 43,163 $ 3,482,504 $ 82,724 $ 8,616 $ 90,440 $ - 593,116) ( 3,078,653) ( 42,963) ( 3,121,616) ( 70,751) ( 7,329) ( 80,929) ( 394,731 $ 139,219 $ 360,688 $ 200 $ 360,888 $ 11,973 $ 1,287 $ 9,511 $ 2019 Machineryand equipment	Unfinished construction Total - $ 4,752,245 $ - 3,740,210) ( - $ 1,012,035 $ - $ 1,012,035 $ 480 45,643 2,743) ( - 136,846) ( 480 $ 918,089 $ 480 $ 4,791,830 $ - 3,873,741) ( 480 $ 918,089 $	Total
			918,089 $

• A. The significant components of buildings and structures include office, nventory warehouse as well as firefighting and air conditioning equipment, which are depreciated over 30 to 60, 30 to 45 and 8 years, respectively.

• B. As the land with book value of $65,638 in Wulaokeng Sec., Su’ao Township is a farmland, therefore, the title to the land is temporarily registered to

a natural person. However, the Company has set the pledge of land ownership to itself in order to protect its rights.

~29~

(8) Leasing arrangements - lessee

• A. The Company leases various assets including mining land. Rental contracts are typically made for periods of 4 to 9 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The leased assets may not be used as security for borrowing purposes nor the rights to be transferred to others through business transfer or combination.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land - mining land Other equipment Land - mining land Other equipment	December31,2020 December31,2019 Carryingamount Carryingamount 3,993 $ 6,993 $ 225 - 4,218 $ 6,993 $ Year ended December 31	December31,2020 December31,2019 Carryingamount Carryingamount 3,993 $ 6,993 $ 225 - 4,218 $ 6,993 $ Year ended December 31
	2020 Depreciationcharge 3,372 $ 36 3,408 $	2019
		Depreciation charge
		3,366 $ -
		3,366 $

• C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets were $721 and $95, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Gain on lease modification	YearendedDecember31	YearendedDecember31
	2020 $ 101 1,717 65 688 2,571 $	2019
		$ 161 1,833 109 -
		2,103 $

• E. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases were $4,566 and $5,469, respectively.

• F. Extension and termination options

In determining the lease term, the Company takes into consideration all facts and circumstances that create an economic incentive to exercise an extension option or not to exercise a termination option. The assessment of lease period is reviewed if a significant event occurs which affects the assessment.

~30~

(9) Leasing arrangements - lessor

• A. The Company leases various assets including buildings. Rental contracts are typically made for periods of 1 and 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes, nor be subleased, lent, sold or granted fully or partially in any different form to the third parties.

• B. For the years ended December 31, 2020 and 2019, the Company recognised rent income in the amounts of $45,363 and $44,996, respectively, based on the operating lease agreement, which does not include variable lease payments.

C. The maturity	analysis of the lease payments under the operating	analysis of the lease payments under the operating	analysis of the lease payments under the operating	leases is as follows:
		December31,2020		December 31, 2019
2021	$	42,501	2020	$	45,358
2022		34,311	2021		42,177
2023		743	2022		34,218
2024		557	2023		743
2025		-	2024		557
	$	78,112		$	123,053

(10) Investment property

nvestment property 2023 743 2024 557 2025 - 78,112 $	2022 2023 2024	$	34,218 743 557 123,053
At January 1 Cost Accumulated depreciation Opening net book amount as at January 1 Additions Dispositions Depreciation charge Closing net book amount as at December 31 At December 31 Cost Accumulated depreciation		2020
	Buildings and Land structures Total $ 1,198,858 403,230 $ 1,602,088 $ - 144,373) ( 144,373) ( 1,198,858 $ 258,857 $ 1,457,715 $ $ 1,198,858 $ 258,857 $ 1,457,715 - - - - 4,657) ( 4,657) ( - 9,150) ( 9,150) ( 1,198,858 $ 245,050 $ 1,443,908 $ $ 1,198,858 381,180 $ 1,580,038 $ - 136,130) ( 136,130) ( 1,198,858 $ 245,050 $ 1,443,908 $		Total
			1,443,908 $

~31~

					2019
				Buildings and
		Land			structures			Total
At January 1
Cost	$	1,198,858		$	402,902		$	1,601,760
Accumulated depreciation		-	(		135,096)	(		135,096)
	$	1,198,858		$	267,806		$	1,466,664
Opening net book amount as at January 1	$	1,198,858	$		267,806	$		1,466,664
Additions		-			328			328
Depreciation charge		-	(		9,277)	(		9,277)
Closing net book amount as at December 31	$	1,198,858		$	258,857		$	1,457,715
At December 31
Cost	$	1,198,858	$		403,230		$	1,602,088
Accumulated depreciation		-	(		144,373)	(		144,373)
	$	1,198,858		$	258,857		$	1,457,715

• A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	Year ended December 31
	2020 45,363 $ 19,451 $	2019
		44,996 $
		20,044 $

• B. The fair value of the investment property held by the Company was $3,993,441 and $3,961,746 as of December 31, 2020 and 2019, respectively, which was based on the result of internal valuation by the management of the Company using the real estate appraisal methods and the transaction prices of similar properties nearby. The details of the valuation methods are as follows:

• (a) Direct capitalisation method of income approach: The Company adjusts the factors that affect the price of the subject property through the differences due to the local factors and individual factors between the comparable properties and the subject property to obtain the reasonable rents of the subject property; and calculates the effective gross income with deduction of the related expenses, then use an appropriate capitalisation rate to obtain the income value of the subject property.

• (b) The Company estimates the value of the subject property by comprehensive consideration of transaction prices from sales through agents of the neighbouring comparable properties which possess the same nature and have similar characteristics and the transaction prices of real estate from the Ministry of Interior.

~32~

• C. On June 19, 2000, the Company was approved to develop certain parcels of land with book value of $673,413 in Guanxi by the Tai 89 Nei-Ying-Zi Letter No. 8983677 issued by Construction and Planning Agency Ministry of the Interior through the submitted application of ‘Integrated Development and Construction Plan of Hsing Ta Guanxi Community’. However, the titles to certain parcels of land, categorised as cultivated land, were temporarily registered to natural persons and shall be subsequently registered to the Company after the parcels of land are categorised as non-cultivated land in accordance with laws as the Company signed trust deeds with each individual natural person. The Company has set the pledge of land ownership to itself in order to protect its rights.

(11) Pensions

• A. (a) The Company have a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement.

• (b) The amounts recognised in the balance sheet are as follows:

		December31,2020		December31,2019
Present value of defined benefit obligations	($	199,347)	($	199,251)
Fair value of plan assets		158,702		46,907
Net defined benefit liability	($	40,645)	($	152,344)

• (c) Movements in net defined benefit liabilities are as follows:

						2020
		Present value of
			defined benefit			Fair value			Net defined
			obligations			ofplanassets		benefitliability
At January 1	($		199,251)		$	46,907	($		152,344)
Current service cost	(		1,983)			-	(		1,983)
Interest (expense) income	(		1,395)			328	(		1,067)
	(		202,629)			47,235	(		155,394)
Remeasurements:
Return on plan assets			-			1,383			1,383
(excluding amounts included in
interest income or expense)
Change in financial assumptions	(		7,705)			-	(		7,705)
Experience adjustments			629			-			629
	(		7,076)			1,383	(		5,693)
Pension fund contribution			-			120,442			120,442
Paid pension			10,358	(		10,358)			-
At December 31	($		199,347)		$	158,702	($		40,645)

~33~

				2019
	Present value of
		defined benefit		Fair value		Net defined
		obligations		ofplanassets	benefitliability
At January 1	($	225,367)	$	27,087	($	198,280)
Current service cost	(	2,389)		-	($	2,389)
Interest (expense) income	(	2,028)		244	($	1,784)
	(	229,784)		27,331	(	202,453)
Remeasurements:
Return on plan assets		-		799		799
(excluding amounts included in
interest income or expense)
Change in financial assumptions	(	3,902)		-	(	3,902)
Experience adjustments		3,971		-		3,971
		69		799		868
Pension fund contribution		-		49,241		49,241
Paid pension		30,464	(	30,464)		-
At December 31	($	199,251)	$	46,907	($	152,344)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and HSIN I’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	YearendedDecember31	YearendedDecember31
	2020 0.30% 1.00%	2019
		0.70%
		1.00%

Assumptions regarding future mortality experience are set based on future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

~34~

Sensitivity analysis of the effect on present value of defined benefit obligation due from the changes of main actuarial assumptions was as follows:

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

Discount rate Future salary increases
Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25%
December 31, 2020
Effect on present value of
defined benefit obligation ($ 4,866) $ 5,040 $ 4,487 ($ 4,362)
December 31, 2019
Effect on present value of
defined benefit obligation ($ 4,860) $ 5,039 $ 4,506 ($ 4,376)
----- End of picture text -----

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method utilised in sensitivity analysis is the same as the method utilised in calculating net pension liability on the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis were consistent with the previous period.

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $54,648.

net pension liability on the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis were consistent with the previous period. (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $54,648.	net pension liability on the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis were consistent with the previous period. (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $54,648.	net pension liability on the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis were consistent with the previous period. (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2021 amount to $54,648.
(g) As of December 31, 2020, the weighted average duration of that retirement plan is 10 years.
The analysis of timing of the future pension payment was as follows:
Within 1 year	$	4,850
1-2 year(s)		13,875
2-5 years		31,146
Over 5 years		65,090
	$	114,961

• B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and HSIN I contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $7,618 and $7,602, respectively.

• (12) Share capital

As of December 31, 2020, the Company’s authorised capital was $5,400,000, consisting of 540,000 thousand shares, and the paid-in capital was $3,419,579 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. The Company’s ordinary shares outstanding at the beginning and at the end of the period were both 341,958 thousand shares for the years ended December 31, 2020 and 2019, respectively.

~35~

(13) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(14) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. When setting aside special reserve or retained when necessary, the Board of Directors shall present the distribution of the remaining earnings, if any, along with prior accumulated undistributed earnings for the approval of the stockholders at the stockholders’ meetings.

• B. The Company’s dividend policy is summarised below:

• The current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. If legal reserve has accumulated to an amount equal to the paid-in capital, then legal reserve is not required to be set aside any more, and the special reserve could be set aside or reversed in accordance with relevant laws and regulations where necessary. The Board of Directors should present the distribution including distribution ratios of the remaining earnings along with accumulated unappropriated retained earnings from prior periods for the approval of the shareholders.The dividends shall be distributed, in form of cash based on the distributable earnings for current year after reserving required funds to cooperate the long-term financial planning and investment or major capital budget planning, no less than one third of accumulated distributable earnings of the Company.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

~36~

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land, and reversed over the use period if the assets are investment property other than land.

• E. The appropriations of earnings of years 2019 and 2018 as resolved by the stockholders at their meetings on June 23, 2020 and June 21, 2019 are as follows:

Year ended December 31

	YearendedD	ecember31
Legal reserve Special reserve Cash dividends	Dividends per share Amount (in dollars) 96,367 $ 113,336 376,154 1.10 $ 2019	2018
		Dividends per share Amount (indollars) 84,024 $ 76,158 273,566 0.80 $

• F. The appropriation of 2020 earnings was resolved by the Board of Directors on March 30, 2021.

		Year ended December 31, 2020	Year ended December 31, 2020	Year ended December 31, 2020
				Dividends
				per share
		Amount		(indollars)
Legal reserve	$	99,911
Special reserve	(	56,297)
Cash dividends		512,937	$	1.50

The appropriation of the 2020 earnings has not been resolved by the shareholders at their meetings and the related information will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

~37~

(15) Other equity items

2020

At January 1 Currency translation differences: - Subsidiary At December 31

At January 1 Currency translation differences: - Subsidiary At December 31

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

Currency translation Total
($ 231,848) ($ 231,848)
56,297 56,297
($ 175,551) ($ 175,551)
2019
Currency translation Total
($ 118,512) ($ 118,512)
( 113,336) ( 113,336)
($ 231,848) ($ 231,848)
----- End of picture text -----

(16) Operating revenue

Operating revenue At December 31	($	231,848)	($	231,848
		Year ended	December	31
		2020		2019
Revenue from contracts with customers	$	1,682,679	$	1,494,579
Others - rental revenue		45,363		44,996
	$	1,728,042	$	1,539,575

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services at a point in time in the following major product lines and geographical regions:

Taiwan

	Taiwan
Year ended December 31, 2020 Revenue from external customer contracts Timing of revenue recognition At a point in time Over time Year ended December 31, 2019 Revenue from external customer contracts Timing of revenue recognition At a point in time Over time	Revenue from Cement recycling and products treatment 1,620,195 $ 62,484 $ 1,620,195 $ - $ - 62,484 1,620,195 $ 62,484 $ Revenue from Cement recycling and products treatment 1,450,767 $ 43,812 $ 1,450,767 $ - $ - 43,812 1,450,767 $ 43,812 $ Taiwan	Total
		1,682,679 $
		1,620,195 $ 62,484
		1,682,679 $
		Total
	Cement products 1,450,767 $ 1,450,767 $ - 1,450,767 $
		1,494,579 $
		1,450,767 $ 43,812
		1,494,579 $

~38~

B. Contract liabilities

The Company has recognised the following revenue-related contract liabilities: December 31, 2020 December 31, 2019 January 1, 2019 Contract liabilities – revenue from cement sales in advance Sales revenue $ 32,898 $ 36,102 $ 18,915

Revenue recognised that was included in the contract liability balance at the beginning of the year

	year
(17) (18) (19)	Interest income Other income Other gains and losses Revenue recognised that was included in the contract liability balance at the beginning of the year Cement sales contracts Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income Dividend income Other income	2020 2019 29,932 $ 10,398 $ Year ended December31 Year ended December 31
		2020 2019 3,147 $ 3,713 $ 951 1,329 3 3 4,101 $ 5,045 $ Year ended December 31	2019
			3,713 $ 1,329 3
			5,045 $
		2020 15,627 $ 1,476 17,103 $	2019
			8,290 $ 3,370
			11,660 $
	2020 2019 Gains on financial assets at fair value through profit or loss 565) ($ 11,522 $ Net foreign exchange losses 15,017) ( 13,628) ( Losses on disposals of property, plant and equipment 4,742) ( 2,387) ( Losses on disposals of investments 120 - Impairment loss - 1,471) ( Miscellaneous disbursements 688 - 19,516) ($ 5,964) ($ YearendedDecember31

Other gains and losses Dividend income Other income	$ $	2020 2019 15,627 $ 1,476 17,103 $	2020 2019 15,627 $ 1,476 17,103 $	2020 2019 15,627 $ 1,476 17,103 $	8,290 3,370 11,660
		YearendedDecember31
		2020		2019
Gains on financial assets at fair value through profit or	($	565)		$	11,522
loss
Net foreign exchange losses	(	15,017)	(		13,628)
Losses on disposals of property, plant and equipment	(	4,742)	(		2,387)
Losses on disposals of investments		120			-
Impairment loss		-	(		1,471)
Miscellaneous disbursements		688			-
	($	19,516)	($		5,964)

~39~

(20) Finance costs

(20)	Finance costs
(21) (22)	Expenses by nature Employee benefit expense Interest expense: Lease liabilities Others Change in inventory of finished goods and work in progress - raw materials and supplies used Employee benefit expense Depreciation charges on property, plant and equipment as well as investment property Depreciation charges on right-of-use assets Other expenses Operating cost and operating expenses Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	2020 2019 101 $ 161 $ - 23 101 $ 184 $ YearendedDecember31 2020 2019 389,672 $ 449,214 $ 323,555 310,600 140,006 146,123 3,408 3,366 652,110 602,270 1,508,751 $ 1,511,573 $ YearendedDecember31 YearendedDecember31
		2020 226,586 $ 21,638 10,667 51,042 13,622 323,555 $	2019
			217,449 $ 21,922 11,776 46,656 12,797
			310,600 $

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall be 1% to 3% for employees’ compensation and shall not be higher than 5% for directors’ remuneration.

~40~

• B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $23,405 and $21,752, respectively; while directors’ remuneration was accrued at $46,812 and $43,504, respectively. The aforementioned amounts were recognised in salary expenses.

• The employees’ compensation and directors’ remuneration were estimated and accrued based on 2% and 4% of distributable profit of current year. The employees’ compensation and directors’ remuneration resolved by the Board of Directors were $23,405 and $46,812, and will be distributed in the form of cash.

• Employees’ compensation and directors’ remuneration of 2019 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2019 financial statements. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(23) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

ome tax Income tax expense (a) Components of income tax expense:
		YearendedDecember31
		2020		2019
Current tax:
Current tax on profits for the year	$	62,047	$	25,361
Tax on undistributed surplus earnings		18,863		26,315
Prior year income tax underestimation		(2,211)		732
Total current tax		78,699		52,408
Deferred tax:
Origination and reversal of temporary
differences		17,339		6,265
Total deferred tax		17,339		6,265
Income tax expense	$	96,038	$	58,673
(b) The income tax (charge)/credit relating to components		of other comprehensive		income is as
follows:
		Year ended	December31
		2020		2019
Remeasurement of defined benefit obligations $		1,139	($	174)

~41~

B. Reconciliation between income tax expense and accounting profit

			YearendedDecember31	YearendedDecember31	YearendedDecember31	YearendedDecember31
			2020			2019
Tax calculated based on profit before tax and		$	220,014		$	204,468
statutory tax rate
Expenses disallowed by tax regulation			135			456
Expenses surplus by tax regulation	(		4,320)	(		1,260)
Tax exempt income by tax regulation	(		184,576)	(		200,887)
Income surplus by tax regulation			97,192			57,755
Prior year income tax underestimation	(		2,211)			732
Tax on undistributed earnings			18,863			26,315
Tax credit for income derived from Mainland
China	(		49,059)	(		28,906)
Income tax expense		$	96,038		$	58,673

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:
							2020
									Recognised
						Recognised			in other
						in profit or		comprehensive
			January1			loss			income		December31
Deferred tax assets:
Net sales revenue and expense		$	2,820		$		3,677	$	-		$	6,497
Unrealised exchange loss			1,704				2,508		-			4,212
Unrealised gross profit from sales			26				21		-			47
Loss on inventory decline			283				(53)		-			230
in market value
Impairment loss on investments			2,736				-		-			2,736
Net pension cost			36,405			(23,479)			-			12,926
Impairment loss on machinery			3,775				-		-			3,775
and equipment
Unrealised expenses			13	(			13)		-			-
			47,762	(		17,339)			-			30,423
Deferred tax liabilities:
Actuarial loss on defined benefit plan	(		5,936)				-		1,139	(		4,797)
	(		5,936)				-		1,139	(		4,797)
		$	41,826	($		17,339)		$	1,139		$	25,626

~42~

							2019	2019	2019
									Recognised
					Recognised					in other
					in profit or				comprehensive
			January1		loss					income			December31
Deferred tax assets:
Net sales revenue and expense		$	1,830		$	990			$		-		$	2,820
Unrealised exchange loss			80			1,624					-			1,704
Unrealised gross profit from sales			20				6				-			26
Loss on inventory decline			168			115					-			283
in market value
Impairment loss on investments			2,736				-				-			2,736
Net pension cost			45,418	(		9,013)					-			36,405
Impairment loss on machinery			3,775				-				-			3,775
and equipment
Unrealised expenses			-			13					-			13
			54,027	(		6,265)					-			47,762
Deferred tax liabilities:
Actuarial loss on defined benefit plan	(		5,762)				-	(			174)	(		5,936)
	(		5,762)				-	(			174)	(		5,936)
		$	48,265	($		6,265)		($			174)		$	41,826
The amounts of deductible temporary			difference that are not recognised as deferred											tax assets
are as follows:
			December			31,	2020			December				31, 2019
Deductible temporary differences			$				79,109			$				100,708

D. The amounts of deductible temporary difference that are not recognised as deferred tax assets are as follows:

E. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

(24) Earnings per share

Authority. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares - Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares		Weighted average number Earnings per share of ordinary shares outstanding (in dollars) 341,958 2.94 $ 341,958 1,504 343,462 2.92 $ Year ended December31,2020
	Amount after tax 1,004,034 $ 1,004,034 $ - 1,004,034 $

~43~

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

Year ended December 31, 2019
Weighted average number Earnings per share
Amount after tax of ordinary shares outstanding (in dollars)
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent $ 963,670 341,958 $ 2.82
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent $ 963,670 341,958
Assumed conversion of all dilutive
potential ordinary shares - Employees’
compensation - 1,394
Profit attributable to ordinary shareholders
of the parent plus assumed conversion of
all dilutive potential ordinary shares $ 963,670 343,352 $ 2.81
(25) Changes in liabilities from financing activities
Year ended December 31, 2020
Guarantee Liabilities from
deposits received Lease liabilities financing activities-gross
At January 1 $ 18,507 $ 7,061 $ 25,568
Changes in cash flow from financing ( 1,205) ( 2,784) ( 3,989)
activities
Changes in other non-cash items - 46 46
At December 31 $ 17,302 $ 4,323 $ 21,625
Year ended December 31, 2019
Guarantee Liabilities from
deposits received Lease liabilities financing activities-gross
At January 1 $ 18,859 $ 10,264 $ 29,123
Changes in cash flow from financing ( 352) ( 3,366) ( 3,718)
activities
Changes in other non-cash items - 163 163
At December 31 $ 18,507 $ 7,061 $ 25,568
----- End of picture text -----

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7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Relationship with the Company Hsin I Ready Mixed Concrete Co., Ltd. The subsidiary of the Company Soaring Power Corp. (SPC) The subsidiary of the Company Jiangsu Xinning New Building Materials Co., Ltd. (XN) The second-tier subsidiary of the Company Nanjing Xinrong New Green Materials Co., Ltd. The third-tier subsidiary of the Company Jiangsu Xinning New Building Materials Trading CO.,Ltd The third-tier subsidiary of the Company Chyn Da Freight Co., Ltd. An entity controlled by key management personnel Yang Tang Hai Charity Foundation An entity controlled by key management personnel Defu Trading Co., Ltd. Other related party Taiwan Ooparts Co., Ltd. Other related party Hiturbo Capital Co., Ltd. Other related party Hsing Ta Ind Co., Ltd. Other related party House Eco Lohas Co., Ltd. Other related party

(2) Significant related party transactions

• A. Operating revenue

nificant related party transactions Operating revenue urbo Capital Co., Ltd. ng Ta Ind Co., Ltd. se Eco Lohas Co., Ltd.	Other related party Other related party Other related party	Other related party Other related party Other related party
Sales of goods: Subsidiary Sales of services: Subsidiary (rental services) Other related parties (rental services) Entities controlled by key management personnel (rental services)	YearendedDecember31
	2020 142,159 $ 1,260 120 24 143,563 $	2019
		98,089 $ 1,260 193 24
		99,566 $

Goods and services are sold based on the price lists in force and terms that would be available to third parties.

• B. Purchases

third parties. Purchases
		Year ended December31
		2020		2019
Purchases of services:
Entities controlled by key management
personnel (rental services)	$	1,584	$	1,584
Services are rendered by entities controlled by key management personnel on normal commercial
terms and conditions.

• C. Notes receivable

terms and conditions. Notes receivable
Subsidiary	December31,2020 34,588 $	December31,2019
		22,124 $

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D. Advance sales receipts

Advance sales receipts
	December31,2020	December31,2019
Subsidiary	1,836 $	1,606 $
Property transactions
Disposal of property, plant and equipment:
	December	31, 2020
	Disposalproceeds	Gain on disposal
Other related party	5,150 $	135 $

• E. Property transactions

• F. Endorsed and guaranteed

• (a) The balance of provision of endorsements and guarantees to subsidiaries for bank borrowings and constructions is shown below, please refer to Note 13(1)B. for details.

December 31, 2020	December 31, 2019
Parent company 321,176 $	1,222,586 $
(b) The balance of provision of endorsements and guarantees to subsidiaries for lease of
government-owned mining land is shown below, please refer to Note	13(1)B. for details.

Key management compensation Parent company Short-term employee benefits Post-employment benefits	December31,2020 December31,2019 210,431 $ 204,885 $ Year ended December 31	December31,2019 204,885 $
	2020 2019 56,122 $ 51,941 $ 241 146 56,363 $ 52,087 $

(3) Key management compensation

8. Pledged Assets

The Company’s assets pledged as collateral are as follows:

Pledged Assets The Company’s assets pledged as	collateral are as follows:
Pledged asset Time deposits (shown as ‘non- current financial assets at amortised cost’)	December31,2020 December31,2019 213,524 $ 211,858 $ Bookvalue	Purpose
	December31,2020 213,524 $
		Guarantee for mining land

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

The details of the outstanding letters of credit for raw materials imports as of December 31, 2020 are as follows:

Currency JPY USD EUR	Original currency amount (In thousands)
	23,000 $ 1,965 102

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(2) Commitments

• A. (a) On January 15, 2015, XN entered into a USD 30 million non-revolving syndicated loan agreement with 5 banks including Chinatrust Commercial Bank, Mega International Commercial Bank Co., Ltd. and E. Sun Commercial Bank, Ltd. etc. with an agreement period of 5 years from the first drawdown. The Company was the joint guarantor for the syndicated loan.

• (b) The Company committed to maintain financial ratios based on the annual and the 2[nd] quarter 2020 consolidated financial statements as specified in the syndicated loan agreement entered by XN and 5 banks including Chinatrust Commercial Bank. The details are as follows:

  • i. Current ratio shall be maintained at more than 150% (inclusive).

  • ii. The debt ratio shall not be more than 50%.

  • iii. Interest coverage ratio ((income before tax + depreciation + amortisation + interest expense) / interest expense): Shall be maintained at more than 500% (inclusive).

  • iv. The tangible net value (stockholders’ equity less intangible assets) shall be maintained at more than $5.5 billion (inclusive).

As of December 31, 2020, the Company complied with the above financial ratios.

• B. Capital expenditure contracted for at the balance sheet date but not yet recognised is as follows:

December 31, 2020 December 31, 2019 Property, plant and equipment $ 610 $ 3,020

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

Please refer to Note 6(14) for details of the appropriation of the 2020 earnings resolved by the Board of Directors on March 30, 2021.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The management reviews the Company’s capital structure periodically and considers the costs and risks involved for a particular capital structure. Generally, the Company adopts a prudent risk management strategy.

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(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable Other payables Guarantee deposits received	December31,2020 277,948 $ 571,707 $ 213,524 175,862 57,388 544 31,318 1,050,343 $ December 31, 2020 - $ 106,058 206,028 17,302 329,388 $	December31,2019 316,063 $ 306,766 $ 211,858 142,124 46,048 670 31,483
		738,949 $
		December31,2019
		12,848 $ 58,551 190,113 18,507
		280,019 $

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b) Risk management is carried out by a central finance department (Company finance) under policies. Company finance identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

  • i. Exchange rate risk

  • (i). The Company’s businesses involve some non-functional currency operations The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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

December 31, 2020
Foreign currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD $ 8,335 28.110 $ 234,300
SGD : NTD 71 21.662 1,541
JPY : NTD 125 0.2725 34
RMB : NTD 31,798 4.3770 139,180
December 31, 2019
Foreign currency
amount Book value
(In thousands) Exchange rate (NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD : NTD $ 27 30.047 $ 826
SGD : NTD 64 22.325 1,428
JPY : NTD 148 0.2765 41
RMB : NTD 31,474 4.3050 135,495
----- End of picture text -----

(ii). The total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to $15,016 and $13,627 respectively.

(iii). Analysis of foreign currency market risk arising from significant foreign exchange variation:

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(Foreign currency: functional currency) Financial assets Monetary items USD : NTD SGD : NTD JPY : NTD RMB : NTD	Effect on other Degree of Effect on comprehensive variation profit or loss income 5% 11,715 $ - $ 5% 77 - 5% 2 - 5% 6,959 - Year ended December31,2020 Sensitivityanalysis

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD SGD : NTD JPY : NTD RMB : NTD	Effect on other Degree of Effect on comprehensive variation profit or loss income 5% 41 $ - $ 5% 71 - 5% 2 - 5% 6,775 - Year ended December31,2019 Sensitivityanalysis

ii. Price risk

• (i). The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company. The Company is not exposed to commodity price risk.

• (ii). The Company’s investments in equity securities comprise domestic listed and unlisted shares. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 5% with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $11,118 and $12,643, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss.

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(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents as well as deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.

• ii. Based on the customers’ contract period, financial position and past experience, the default occurs when the contract payments are past due over 150 days.

• iii. The Company adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Company classifies customers’ accounts receivable in accordance with credit rating of customer. The Company applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

• v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. The Company has written-off financial assets that are still under recourse procedures for the years ended December 31, 2020 and 2019.

• vi. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. For the years ended December 31, 2020 and 2019, no loss allowance for accounts receivable was recognised since the amount calculated using the simplified approach was immaterial.

• (c) Liquidity risk

• i. Cash flow forecasting is aggregated by Company finance. Company finance monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining the financial statements to meet the requirements of financial ratios, the details are provided in Note 9(2), so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance and compliance with internal balance sheet ratio targets.

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• ii. Surplus cash held by the Company over and above balance required for working capital management, Company finance will invest surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts. As at December 31, 2020 and 2019, the Company held money market position of $571,005 and $306,050, respectively, that are expected to readily generate cash inflows for managing liquidity risk.

• iii. The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities

Non-derivative financial liabilities
Less than December 31, 2020 3 months Accounts payable 106,058 $ Other payables 129,661 Lease liability (Note) 45 Less than December 31, 2019 3months Notes payable 12,848 $ Accounts payable 58,551 Other payables 118,032 Lease liability (Note) - Non-derivative financial liabilities	Between 3 months and 1year - $ 76,367 3,504 Between 3 months and 1year - $ - 72,081 3,432	Between 1 and 2 years - $ - 497 Between 1 and 2 years - $ - - 3,352	Between 2 and 5 Over 5 years years - $ - $ - - 316 25 Between 2 and 5 Over 5 years years - $ - $ - - - - 346 69
				- $ - - 69

Note: It includes interests of expected future payments.

• iv. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly differents.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs for the asset or liability. The domestic unlisted stocks invested by the Company are included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(10).

• C. The carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, notes payable, accounts payable, other payables, and guarantee deposits received) are approximate to their fair values.

• D. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets at December 31, 2020 and 2019 are as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

==> picture [444 x 202] intentionally omitted <==

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

December 31, 2020 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities $ 44,182 $ - $ 233,766 $ 277,948
December 31, 2019 Level 1 Level 2 Level 3 Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Equity securities $ 43,047 $ - $ 273,016 $ 316,063
----- End of picture text -----

• (b) The methods and assumptions the Company used to measure fair value are as follows:

• i. The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price

• Listed shares Closing price

• ii. For high-complexity financial instruments, the fair value is measured by using selfdeveloped valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to equity instruments without active market. Certain inputs used in the valuation model are not observable at market, and the Company must make reasonable estimates based on its assumptions. The effect of unobservable inputs to the valuation of financial instruments is provided in Note 12(3)I.

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• iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial instruments at the parent company only balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• iv. The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company’s credit quality.

• E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.

• F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

2019:
2020 Non-derivative equity instrument At January 1 273,016 $ Gains and losses recognised in profit or loss (Note) 4,544 Proceeds from capital reduction in the period 33,410) ( Proceeds from liquidation in the period 10,384) ( Transfers into Level 3 - At December 31 233,766 $	2019
	Non-derivative equityinstrument
	255,771 $ 11,864 - 5,381
	273,016 $

Note: Recorded as non-operating income and expense.

• G. The Company’s initial shareholding ratio of TAIWAN OOPARTS CO., LTD. was 41.11%, which was recognised as investment accounted for using equity method. However, TAIWAN OOPARTS CO., LTD. reduced capital to offset losses on May 19, 2019, and increased capital by issuing shares on May 20, 2019. The Company did not participate in the capital increase, the shareholding ratio decreased to 18.68% so that the Company lost significant influence over it. Hence, the Company remeasured the investment retained in TAIWAN OOPARTS CO., LTD. at its fair value and transferred it into Level 3.

• H. Finance segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

~54~

• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity Unlisted shares Unlisted shares instrument: Non-derivative equity instrument: Unlisted shares Unlisted shares	Fair value at December 31,2020	Valuation technique Market comparable companies Net asset value Valuation technique	Significant unobservable input	Range 9.06~63.60 0.90~2.42 20%~40% N/A 10% Range	Relationship of input to fair value The higher the multiple, the higher the fair value The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value The higher the net asset value, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Relationship of input to fair value
	187,778 $ 45,988 Fair value at December 31,2019		Price to earnings ratio multiple Price to book ratio multiple Discount for lack of marketability Net asset value Discount for lack of marketability Significant unobservable input
	$ 174,338 98,678	Market comparable companies Net asset value	Price to earnings ratio multiple Price to book ratio multiple Discount for lack of marketability Net asset value Discount for lack of marketability	10.41 ~ 52.62 0.89~2.51 20%~40% N/A 0%~10%	The higher the multiple, the higher the fair value The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value The higher the net asset value, the higher the fair value The higher the discount for lack of marketability, the lower the fair value

• J. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets categorised within Level 3 if the inputs used to valuation models have changed:

Financial assets Equity instrument Financial assets Equity instrument	Input Price to earnings ratio multiple, price to book ratio multiple, discount for lack of marketability and net asset value Input Price to earnings ratio multiple, price to book ratio multiple, discount for lack of marketability and net asset value	Change ±1% Change ±1%	December	31,2020	31,2020
			Favourable Unfavourable Change Change 2,338 $ 2,338) ($ Recognised in profit or loss December	Recognised in other comprehensive income
			Favourable Change 2,338 $	Favourable Change - $ 31,2019	Unfavourable Change
					- $
			Favourable Unfavourable Change Change 2,730 $ 2,730) ($ Recognised in profit or loss	Recognised in other comprehensive income
			Favourable Change 2,730 $	Favourable Change - $	Unfavourable Change
					- $

~55~

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: Please refer to table 1.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital: None.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Refer to table 3.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

• I. trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 3.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 4.

• (3) Information on investments in Mainland China

• A. Basic information: Please refer to table 5.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 6.

• (4) Major shareholders information

Major shareholders information: Please refer to table: 6.

14. Segment Information

Not applicable.

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HSING TA CEMENT CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

==> picture [505 x 139] intentionally omitted <==

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

Item Description Amount
Cash on hand Headquarters $ 62
Petty cash South Shenghu factory and all places of business 640
Cash in banks
Checking accounts 46,964
NTD demand deposits 148,986
Foreign currency demand deposits (Note) USD 8,335,123.36 Exchange rate 28.110 234,300
SGD 71,148.01 Exchange rate 21.662 1,541
JPY 124,693.00 Exchange rate 0.2725 34
CNY 1,797,965.90 Exchange rate 4.3770 7,870
Foreign currency time deposits (Note) Interest rate: 2.55%
CNY 30,000,000.00 Exchange rate 4.3770 131,310
$ 571,707
----- End of picture text -----

Note: Foreign demand and time deposits are expressed in dollars.

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HSING TA CEMENT CO., LTD

STATEMENT OF FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Name of Financial Instrument	Shares Description (in thousands) Domestic shares 1,698 Foreign shares 60	Face Value (in dollars) Total Amount Interest Rate 10.00 $ 16,980 $ 22.30 1,338	Cost 55,159 $ 2,549 57,708 $	Unit Price Accumulated Net Value Impairment (in dollars) Total Amount Note 24.75 $ 42,026 $ 35.94 2,156 44,182 $ Fair Value
China Steel Corporation Hotung Investment Holdings Limited

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HSING TA CEMENT CO., LTD STATEMENT OF NOTES RECEIVABLE

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Client Name	Description	Amount Note 29,036 $ 25,837 23,512 10,626 10,080 42,183 None of the balance of each remaining expense is greater than 5% of this account balance - 141,274 34,588 175,862 $
Non-related parties: Mork Inc. Cao Xin Tai Co.,Ltd. Li Tai Constructional Co., Ltd. Chin Ong Ready Mixed Concrete Co., Ltd. Maorong Ready Mixed Concrete Co., Ltd. Others Less: Allowance for uncollectible accounts Related parties: Net amount Hsin I Ready Mixed Concrete Co., Ltd.

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HSING TA CEMENT CO., LTD

STATEMENT OF ACCOUNTS RECEIVABLES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Client Name Description Non-related parties: Sfon Building Materials Co., Ltd. Cao Xin Tai Co.,Ltd. Taiwan Semiconductor Manufacturing Co.,Ltd. Union Chemical Industrial Co., Ltd. Goldsun Building Materials Co., Ltd. Rg Concrete Industrial Co., Ltd Right Source Manufacturing Co., Ltd. Others Less: Allowance for uncollectible accounts Net amount	Amount Note 22,653 $ 9,901 4,893 4,155 3,931 3,725 2,992 5,138 57,388 $ - 57,388 $ None of the balance of each remaining expense is greater than 5% of this account balance

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HSING TA CEMENT CO., LTD STATEMENT OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Raw materials Supplies Work in progress Finished goods Net amount decline in market value Item Description Less: Allowance for loss on inventory	Cost NetRealizable Value 131,444 $ 131,444 $ 189,929 188,776 23,225 32,730 41,931 58,602 386,529 411,552 $ 1,153) ( 385,376 $ Amount Note

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HSING TA CEMENT CO., LTD

STATEMENT OF CHANGES IN FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS - NON-CURRENT YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

	Beginning	Balance	Balance	Addition	(Note 1)	(Note 1)		Decrease(Note 2)	Decrease(Note 2)	Decrease(Note 2)	Ending	Balance	Balance
	Shares(in			Shares(in				Shares(in			Shares(in
Name of Financial Instrument	thousands)	Fair Value		thousands)	Amount			thousands)	Amount		thousands)	Fair Value		Collateral	Note
Chin Ta Construction Co., Ltd.	5,200	$	49,000	-	$	-		-	($	9,080)	5,200	$	39,920	None
Taiwan Ooparts Co., Ltd.	538		5,370	-		-		-	(	983)	538		4,387	"
Taian Insurance Co., Ltd.	365		5,164	-		94		-		-	365		5,258	"
Pershing Technology Services Co., Ltd.	2,173		60,493	153		11,886		-		-	2,326		72,379	"
Fujitec Taiwan Co., Ltd.	70		34,489	-		-		-	(	20,003)	70		14,486	"
Global Securities Finance Co., Ltd.	3,504		33,367	-		-	(	3,341)	(	31,687)	163		1,680	"
Da Chiang International Co., Ltd.	3,448		69,372	-		20,587		-		-	3,448		89,959	"
Kemitek Industrial Co., Ltd.	167		4,820	-		877		-		-	167		5,697	"
Chia Huan Tung Cement Co., Ltd.	5,882		10,941	-		-	(	5,882)	(	10,941)	-		-	"
Power Digital Card Co., Ltd.	796		-	-		-		-		-	796		-	"
Amcom Communications,	520		-	-		-		-		-	520		-	"
Inc.(Preferred Stock B)
Amcom Communications,
Inc.(Preferred Stock C)	189		-	-		-		-		-	189		-	"
		$	273,016		$	33,444			($	72,694)		$	233,766

Note 1: It refers to share dividends received from the investees, increase of book value of financial assets measured at fair value and reclassification of investments accounted for using equity method.

Note 2: It refers to proceeds from capital reduction of investees and decrease of book value of financial assets measured at fair value.

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HSING TA CEMENT CO., LTD

STATEMENT OF CHANGES IN LONG-TERM EQUITY INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

	YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan dollars)
Name of Financial Instrument Hsin I Ready Mixed Concrete Co., Ltd. Synergy Development Co., Ltd. Soaring Power Corp.	Shares Shares Shares Shares Percentage of (in thousands) Fair Value (in thousands) Amount (in thousands) Amount (in thousands) Ownership 6,072 208,288 $ - 30,802 $ - - $ 6,072 55.20% 5,880 63,131 - 251 - - 5,880 98.00% 46,587 3,145,915 - 419,626 - - 46,587 66.67% 3,417,334 $ 450,679 $ - $ Decrease EndingBalance BeginningBalance Addition	Amount 239,090 $ 63,382 3,565,541 3,868,013 $	Unit Price (in dollars) - $ - -	Total Amount 239,090 $ 63,382 3,565,541 3,868,013 $	Collateral Note None " "
	Shares (in thousands) 6,072 5,880 46,587

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HSING TA CEMENT CO., LTD STATEMENT OF ACCOUNT PAYABLES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

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Client Name Description Amount Note
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Non-related parties: Wang Yi Co. Gain Hwang Paper Mfg. Co., Ltd. Yaosheng Co. Chain Way Building Materials Co., Ltd. Others Estimated payable for material purchase It refers to estimated other raw materials and supplies	3,438 $ 2,746 1,983 1,840 24,983 34,990 71,068 106,058 $ None of the balance of each remaining expense is greater than 5% of this account balance

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HSING TA CEMENT CO., LTD STATEMENT OF OPERATING REVENUE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Volume		Amount Note
Cement and clinker	746,175 tons	$	1,620,418
Rental revenue			45,363
Other operating revenue			62,484
Less: Sales discounts and
allowances	(		223)
Net amount		$	1,728,042

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HSING TA CEMENT CO., LTD STATEMENT OF OPERATING COSTS YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

			Amount
Item			Subtotal	Total
Raw materials used			$	299,743
Beginning raw materials		$	141,849
Add: Raw materials purchased			314,669
Less: Ending raw materials	(		131,444)
Less: Sales of limestone and clay	(		25,331)
Indirect materials				116,507
Beginning indirect materials			214,616
Add: Indirect materials purchased			91,401
Less: Transferred out			419
Less: Ending indirect materials	(		189,929)
Direct labor				91,958
Manufacturing expense				492,654
Manufacturing cost				1,000,862
Add: Beginning work in progress				14,224
Less: Ending work in progress			(	23,225)
Cost of finished goods				991,861
Add: Beginning finished goods				24,354
Less: Ending finished goods			(	41,931)
Add: Commodity tax				217,606
Add: Cost of limestone sales				25,331
Add: Cement purchased				67,611
Add: Underapplied overhead				26,696
Less: Loss on inventory decline in market value			(	264)
Cost of sales				1,311,264
Cost of rental sales				19,451
Other operating costs				11,638
			$	1,342,353

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HSING TA CEMENT CO., LTD STATEMENT OF SELLING EXPENSES YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Freight Wages and salaries Other expenses	Insurance expense, entertainment expense and vehicles operating expense, etc.		53,265 $ 9,356 4,253 66,874 $

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HSING TA CEMENT CO., LTD STATEMENT OF ADMINISTRATIVE EXPENSES YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Note
Wages and salaries Other expenses	Rent expense, insurance expense and service expense, etc.		75,219 $ 24,305 99,524 $

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HSING TA CEMENT CO., LTD

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Employee Benefit Expense Wages and salaries Labour and health insurance fees Pension costs Directors' remuneration Other personnel expenses Depreciation Expense Amortisation Expense	Classified as Classified as Operating Costs OperatingExpenses Total $ 194,506 $ 32,080 $ 226,586 18,346 3,292 21,638 9,213 1,454 10,667 - 51,042 51,042 12,429 1,193 13,622 234,494 $ 89,061 $ 323,555 $ 142,985 $ 429 $ 143,414 $ - $ - $ - $ Year ended December31,2020	Classified as Classified as Operating Costs OperatingExpenses Total $ 194,506 $ 32,080 $ 226,586 18,346 3,292 21,638 9,213 1,454 10,667 - 51,042 51,042 12,429 1,193 13,622 234,494 $ 89,061 $ 323,555 $ 142,985 $ 429 $ 143,414 $ - $ - $ - $ Year ended December31,2020	Year ended December31,2019	Year ended December31,2019	Year ended December31,2019
	Classified as Operating Costs $ 194,506 18,346 9,213 - 12,429 234,494 $ 142,985 $ - $	Classified as OperatingExpenses $ 32,080 3,292 1,454 51,042 1,193 89,061 $ 429 $ - $	Classified as Operating Costs $ 185,373 18,681 10,047 - 11,638 225,739 $ 149,083 $ - $	Classified as OperatingExpenses $ 32,076 3,241 1,729 46,656 1,159 84,861 $ 406 $ - $	Total
					$ 217,449 21,922 11,776 46,656 12,797
					310,600 $
					149,489 $
					- $

Note:

• 1.As at December 31, 2020 and 2019, the Company had 366 and 372 employees, including 9 and 8 non-employee directors, respectively.

• A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information：

• (1) Average employee benefit expense in current year was $763 (‘total employee benefit expense in current year – total directors’ remuneration in current year’ /

• ‘the number of employees in current year – the number of non-employee directors in current year’).

• Average employee benefit expense in previous year was $725 (‘total employee benefit expense in previous year – total directors’ remuneration in previous year’ / ‘the number of employees in previous year – the number of non-employee directors in previous year’)

• (2) Average employees salaries in current year were $635 (total salaries and wages in current year / ‘the number of employees in current year - the number of non-employee directors in current year’).

• Average employees salaries in previous year were $597 (total salaries and wages in previous year / ‘the number of employees in previous year - the number of non-employee directors in previous year’).

• (3) Adjustments of average employees salaries were 6.37% (‘the average employee salaries and wages in current year - the average employee salaries and wages in previous year’ / the average employee salaries and wages in previous year)

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HSING TA CEMENT CO., LTD

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION (Cont.) YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

• (4) The Company has no supervisors, therefore it has no supervisors’ remuneration for the years ended December 31, 2020 and 2019.

• (5) Salary policy for employees, managers, directors, independent directors.

The directors, managers, and employees’ emoluments are distributed in accordance with the Articles of Incorporation of the Company, the Remuneration Committee Charter and Personnel Regulations.

• A. The principle of directors’ emoluments

The directors’ emoluments policy is set in the Articles of Incorporation and approved by the Board of Directors. The Board of Directors was authorised to determine the directors’ emoluments in accordance with the general pay levels of the industry.

The directors’ transportation allowance is determined by the Board of Directors. The directors’ remuneration is distributed in accordance with the Articles of Incorporation, if the Company has distributable profit for the year.

• B. President/Vice president

The emoluments of the president and vice president consists of salary, bonus and employees’ compensation. This emoluments policy is to offer appropriate emoluments

based on their education and work experience by reference to the general pay levels of the industry, the assessment of responsibility and role of the position, target achievement and degree of contribution and the result of operation performance to recognise the responsibilities and risks they assumed.

• C. Employees

Except for considering the general pay levels of the industry, the performance assessment as well as the content and amount of individual salary and compensation of the

Company’s employees are determined based on the assessment results according to the performance assessment standard, personal performance, the Company’s operating performance and future risks.

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Expressed in thousands of NTD (Except as otherwise indicated)

Hsing Ta Cement Co., Ltd. and Subsidiaries

Provision of endorsements and guarantees to others

Year ended December 31, 2020

Table 1

Number （Note 1）	Endorser/ guarantor	endorsed/guaranteed Party being	endorsed/guaranteed Party being	Limit on endorsements/ guarantees provided for a single party （Note3）	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020 （Note 4）	Outstanding endorsement/ guarantee amount at December 31, 2020 （Note5）	Actual amount drawn down （Note6）	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company(%)	Ceiling on total amount of endorsements/ guarantees provided （Note3）	Provision of endorsements/ guarantees by parent company to subsidiary （Note 7）	Provision of endorsements/ guarantees by subsidiary to parent company （Note 7）	Provision of endorsements/ guarantees to the party in Mainland China （Note 7）	Footnote
		Companyname	Relationship with the endorser/ guarantor （Note 2）
0 1	Hsing Ta Cement Co., Ltd. Hsin I Ready Mixed Concrete Co., Ltd.	HSIN I READY MIXED CONCRETE Hsing Ta Cement Co., Ltd.	2 4	3,748,933 346,851	321,176 210,431	321,176 210,431	321,176 210,431	- -	4.28 48.54	7,497,866 433,564	Y N	N Y	N N

• Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1)The Company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (1)Having business relationship.

• (2)The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3)The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

• (4)The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

• (5)Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

• (6)Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7)Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

• Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and

• Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote.

• Under the Company’s “Procedures for Provision of Endorsements and Guarantees”, the Company’s total guarantees and endorsements to others should not exceed the Company’s net asset value based on the latest financial statements,

• and total guarantees and endorsements provided for a single party should not exceed 50% of the Company’s net asset value based on the latest financial statements. The calculation is shown below:

• (1) $7,497,866 (the net asset value on the 2020 Q4 financial statements) × 50% = $3,748,933.

• (2) $7,497,866 (the net asset value on the 2020 Q4 financial statements) × 100% = $7,497,866.

• Under the subsidiary, HSIN I READY MIXED CONCRETE CO., LTD.’s “Procedures for Provision of Endorsements and Guarantees”, this company’s total guarantees and endorsements to others should not exceed its net asset value

• based on the latest financial statements, and total guarantees and endorsements provided for a single party should not exceed 80% of its net asset value based on the latest financial statements. The calculation is shown below:

• (3) $433,564 (the net asset value on the 2020 Q4 financial statements) × 80% = $346,851.

• (4) $433,564 (the net asset value on the 2020 Q4 financial statements) × 100% = $433,564.

• Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

• Note 5: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

• Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

• Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.

Table 1, Page 1

Hsing Ta Cement Co., Ltd. and Subsidiaries

Table 2

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of December 31,2020	As of December 31,2020		Footnote (Note 4)
				Number of shares or units(in thousands)	Bookvalue(Note3)	Ownership (%)	Fairvalue
Hsing Ta Cement Co., Ltd. Jiangsu Xinning New Building Materials Co., Ltd. Nanjing Xinrong New Green Materials Co., Ltd.	China Steel Corporation Hotung Investment Holdings Limited BenliFeng Bubugao Financial Products Bank Of Communication Structured Deposits Bank Of Hangzhou Structured Deposits China Merchants Bank Certificates Of Deposit SPD Bank Certificates Of Deposit BenliFeng Bubugao Financial Products		Current financial assets at fair value through profit or loss 〞 〞 〞 〞 〞 〞 〞	1,698 60 - - - - - -	42,026 $ 2,156 240,735 43,770 43,770 569,010 131,310 53,618		42,026 $ 2,156 240,735 43,770 43,770 569,010 131,310 53,618 1,126,395 $
					1,126,395 $

Table 2, Page 1

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of December 31,2020	As of December 31,2020		Footnote (Note 4)
				Number of shares or units(in thousands)	Bookvalue(Note3)	Ownership (%)	Fairvalue
Hsing Ta Cement Co., Ltd.	Chin Ta Construction Co., Ltd. Taiwan Ooparts Co., Ltd. Taian Insurance Co ,ltd Pershing Technology Services Corporation Fujitec Taiwan Co., Ltd. Global Securities Finance Corporation Da Chiang International Co., Ltd. Kemitek Industrial Corp. Power Digital Card Co., Ltd. Amcom Communications,inc. (Preferred Stock B) Amcom Communications,inc. (Preferred Stock C)	Other related party	Non-current financial assets at fair value through profit or loss 〞 〞 〞 〞 〞 〞 〞 〞 〞 〞	5,200 538 365 2,326 70 163 3,448 167 796 520 189	39,920 $ 4,387 5,258 72,379 14,486 1,680 89,959 5,697 - - - 233,766 $	19.90 18.68 0.12 8.73 2.33 0.88 1.72 0.24 1.70 11.15 9.70	39,920 $ 4,387 $ 5,258 72,379 14,486 1,680 89,959 5,697 - - - 233,766 $

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS9 ‘Financial instruments’. Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 2, Page 2

Hsing Ta Cement Co., Ltd. and Subsidiaries

Table 3

Significant inter-company transactions during the reporting periods

Year ended December 31, 2020

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
0 0 0 0 1 1 1	Hsing Ta Cement Co., Ltd. Hsing Ta Cement Co., Ltd. Hsing Ta Cement Co., Ltd. Hsing Ta Cement Co., Ltd. Nanjing Xinrong New Green Materials Co., Ltd. Nanjing Xinrong New Green Materials Co., Ltd. Nanjing Xinrong New Green Materials Co., Ltd.	HSIN I READY MIXED CONCRETE CO., LTD. HSIN I READY MIXED CONCRETE CO., LTD. HSIN I READY MIXED CONCRETE CO., LTD. HSIN I READY MIXED CONCRETE CO., LTD. Jiangsu Xinning New Building Materials Co., Ltd. Jiangsu Xinning New Building Materials Co., Ltd. Jiangsu Xinning New Building Materials Co., Ltd.	1 1 1 1 3 3 3	Sales revenue Rent income Notes receivable Advance sales receipts Sales revenue Accounts receivable Notes receivable	142,159 $ 1,260 34,588 1,836 10,335 4,421 2,483	Note 4 Note 5 Note 4 - Note 4 Note 4 Note 4	1.87 0.01 0.29 0.02 0.14 0.04 0.02

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1)Parent company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent

• company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with

• a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

• (1)Parent company to subsidiary.

• (2)Subsidiary to parent company.

• (3)Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to total operating revenues or total assets, it is computed based on period-end balance of transaction to total assets for balance sheet accounts and based on accumulated transaction amount for the period to total operating revenues for income statement accounts.

• Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.

• Note 5: The rental charged and the payment terms agreed are available to third parties.

Table 3, Page 1

Table 4

Expressed in thousands of NTD

Hsing Ta Cement Co., Ltd. and Subsidiaries

Information on investees

Year ended December 31, 2020

(Except as otherwise indicated)

Investor	Investee （Notes 1 and 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2020	Shares held as at December 31,2020	Shares held as at December 31,2020	Net profit (loss) of the investee for the year ended December 31, 2020 （Note 2(2)）	Investment income(loss) recognised by the Company for the year ended December 31, 2020 （Note 2(3)）	Footnote
				Balance as at December 31,2020	Balance as at December 31,2019	Number of shares (In thousands)	Ownership (%)	Book value
Hsing Ta Cement Co., Ltd.	Hsin I Ready Mixed Concrete Co., Ltd. Synergy Development Co., Ltd Soaring Power Corp.	Taipei city 〞 Virgin Islands	Manufacturing and sales of concrete Agency service of real estates, etc. Overseas investment	60,720 $ 58,800 1,488,493	60,720 $ 58,800 1,488,493	6,072 5,880 46,587	55.20 98.00 66.67	239,090 $ 63,382 3,565,541	56,671 $ 256 1,271,585	31,282 $ 251 847,766	Subsidiaries 〞 〞

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

• (1)The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at December 31, 2020’ should fill orderly in the Company’s (public company’s) information on investees and every

directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column..

• (2)The ‘Net profit (loss) of the investee for the year ended December 31, 2020’ column should fill in amount of net profit (loss) of the investee for this period.

• (3)The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and

• recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Table 4, Page 1

Hsing Ta Cement Co., Ltd. and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2020

Table 5 Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	ended December 31,2020 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	ended December 31,2020 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	Accumulated amount of remittance from Taiwan to Mainland China as of December 31 2020	Net income of investee as of December 31,2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020 （Note 3(2)B）	Book value of investments in Mainland China as of December 31 2020	Accumulated amount of investment income remitted back to Taiwan as of December 31,2020 Footnote Expressed in thousands of NTD (Except as otherwise indicated)	Accumulated amount of investment income remitted back to Taiwan as of December 31,2020 Footnote Expressed in thousands of NTD (Except as otherwise indicated)
					Remitted to Mainland China	Remitted back to Taiwan
Jiangsu Xinning New Building Materials Co., Ltd. Nanjing Xinrong New Green Materials Co., Ltd.	Manufacturing of new building materials, new special cement clinker, various silicate cement and new special cement, mineral powder, stone, commercial concrete and cement products; recycling and wholesale of recycled materials; treatment and recycling of sewage; treatment of solid waste; construction of interior and exterior decoration; sales of self- produced products and provide related supporting services; import and export business of self- management and agent of various goods and techniques (goods and techniques that are restricted to operate and prohibited to import and export by the country are excluded) Research and development of new environmental protection materials, technology promotion services; development and service of energy conservation and environmental protection technology; manufacturing of special equipment for environmental protection; promotion services of environmental protection technologies and energy conservation technologies; manufacturing and wholesale of non- metallic ore and products; wholesale of chemical products (excluding hazardous chemicals); fine processing of non-metallic ore	2,385,679 $ USD 74,880 (Note 1) 146,764 CNY 33,424	2 (Soaring Power Corp.) 3 (Jiangsu Xinning New Building Materials Co., Ltd.)	1,487,098 $ USD 46,587 -	- $ -	- $ -	1,487,098 $ USD 46,587 -	1,388,063 $ 9,251) (	66.67% 35.15%	925,422 $ 3,252) (	3,558,287 $ 45,402	927,650 $ -

Table 5, Page 1

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Hsing Ta Cement Co., Ltd.	$ 1,487,098 USD 46,587	$ 1,590,532 USD 49,920	5,724,609 $

Note 1: It includes capitalisation of earnings amounting to USD 5,000 with amount of USD 5,000×66.67%=USD 3,333.5 approved by MOEA.

Note 2: Investment methods are classified into the following four categories; fill in the number of category each case belongs to:

• (1)Directly invest in a company in Mainland China.

• (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China ： Soaring Power Corp.

• (3) Reinvestments through an existing company in Mainland China approved by MOEA: According to the regulation of MOEA, the Company needs no approval from MOEA for reinvestments through an existing company in Mainland China, thus, those investment amounts are not included in the ceiling on investments.

• (4) Others.

Note 3: In the ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column:

• (1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.

• (2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:

• A.The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.

• B.The financial statements that are audited and attested by R.O.C. parent company’s CPA.

• C.Others.

Note 4: The numbers in this table are expressed in New Taiwan Dollars.

Table 5, Page 2

Hsing Ta Cement Co., Ltd. and Subsidiaries

Major shareholders information

December 31, 2020

Table 6

Name of major shareholders	Shares	Shares
	Number of shares held	Ownership (%)
YANG CHUNG-HSIUNG YANG REN-HSIUNG YANG JEE SHING HU MEI-HONG	41,528,048 36,108,783 34,426,166 20,668,448	12.14% 10.55% 10.06% 6.04%

Table 6