Stock Code 1109

Hsing Ta Cement Co., LTD.

2021 Annual Shareholders’ Meeting

Handbook

Hsing Ta Cement Co., LTD. Website http://www.hsingta.com.tw Market Observation Post System http://mops.twse.com.tw

June 24, 2021

This English version is a translation based on the original Chinese version. Where any discrepancy arises between the two versions, the Chinese version shall prevail.

Table of Contents
Meeting Procedure	P1
Meeting Agenda	P2
Reporting Matters	P3
Proposed Resolutions	P3
Elections	P4
Discussions	P5
Extempore Motion	P5
Final Annual Reports	P6
Audit Committee's Review Report of 2020 Annual	P33
Accounting Final Statements
2020 Distribution Report of Employees’ Compensation and	P34
Directors’ Remuneration
Endorsement and Guarantee	P34
2020 Earnings Distribution Table	P34
Appendix
Rules of Procedure of Shareholders’ Meeting	P35
Article of Incorporation	P39
Rules of Election of Directors	P46
Current Number of Shares held by Directors	P49

Hsing Ta Cement Co., LTD. 2021 Annual Shareholders’ Meeting Procedures

Commence Meeting
Chairman Takes the Chair
Chairman Remarks
Reporting Matters
Proposed Resolutions
Elections
Discussions
Extempore Motion

9. Adjournment

Hsing Ta Cement Co., LTD. 2021 Annual Shareholders’ Meeting Agenda

Time: 9 a.m., Thursday, June 24, 2021
Venue: 6F.-6, No. 51, Hengyang Rd., Zhongzheng Dist., Taipei City (Taipei Foundation of Finance)
Chairman's Remarks
Reporting Matters
(1) Presenting the Company’s 2020 Business Report and Financial Statements.
(2) Audit Committee’s Review on 2020 Annual Accounting Final Reports.
(3) Presenting the Company’s 2020 Employees’ Compensation and Directors’ Remuneration Distribution.
(4) Report on the Status of Endorsement and Guarantee.
Proposed Resolutions
(1) Adoption of the Company's 2020 Annual Accounting Final Reports and Statements.
(2) Adoption of the Proposal for the Company’s Distribution of 2020 Profits.

6. Elections

The 20[th] Election of Directors.

7. Discussions

Proposal of Release the Prohibition on Directors and its Representative from Participation in Competitive Business.

Extempore Motion

9. Adjournment

Reporting Matters

(1) Please refer to pages 6~32 of this manual for the Company’s 2020 Business Report and Financial Statements.
(2) Please refer to page 33 of this manual for Audit Committee’s Review Report of 2020 Annual Accounting Final Statements.
(3) Please refer to page 34 of this manual for 2020 Distribution Report of
Employees’ Compensation and Directors’ Remuneration.
(4) Please refer to page 34 of this manual for Endorsement and Guarantee Report.

Proposed Resolutions

1. Proposed by the Board of Directors Proposal:

Adoption of the Company's 2020 Annual Accounting Final Reports. Explanation:

(1) The Company’s 2020 Annual Accounting Final Reports, including Business Report and Financial Statements, were prepared by the Board of Directors
and have been audited by Audit Committee and CPA.
(2) Please refer to pages 11~32 of this manual for the Annual Accounting Final Reports and Independent Auditor's Report.
(3) The agenda has been proposed for acknowledgment.
Resolution:

2. Proposed by the Board of Directors Proposal:

Adoption of the Proposal for the Company’s Distribution of 2020 Profits. Explanation:

(1) A Proposal for Distribution of 2020 Profits (please refer to page 34 of this manual) has been adopted by the Board of Directors in accordance with the
Company Act and Articles of Incorporation and audited by Audit Committee.
(2) The company plans to appropriate NT$512,936,802 of distributable earnings for cash dividend distribution, namely NT$1.5 per share calculated on the basis of the Company’s actual number of outstanding shares. The cash dividends being distributed shall be rounded off proportionately to the nearest Taiwan dollar and the sum of all cash dividends less than NT$1 shall be transferred to other income of the Company.
(3) Subject to approval of this shareholders’ meeting, the Chairman of the Board of Directors is authorized to determine the cash dividend record date.
(4) The agenda has been proposed for acknowledgment. Resolution:

Elections

1. Proposed by the Board of Directors Proposal:

Election of Directors. Explanation:

(1) Three-year term of the current Directors concluded on June 20, 2021 and pursuant to the law, election of new Directors shall be submitted.
(2) To comply with Article 17 of the Article of Incorporation, the Company shall have nine Directors, including three Independent Directors and the term of office of Directors shall not exceed three years. Three-year term of the new Directors will start from June 24, 2021 and conclude on June 23, 2024.
(3) In accordance with Article 17 of the Company’s Article of Incorporation, a candidate nomination system shall be adopted. The list of the candidates for Directors and Independent Directors has been approved by the Board of Directors and relevant information is as follows:

No.	Title	Name of the Candidates	Education Background and Work Experience	Number of Shares Held
1	Director	Yang Jee-Shing	⚫Bachelor’s degree in Industrial Management at Tamsui Oxford College. ⚫Chairman of the Board of Directors: ➢Hsing Ta Cement Co., LTD. ➢Hsin I Ready Mixed Concrete Co. Ltd.	34,426,166
2	Director	Yang Chung-Hsiung	⚫Bachelor’s degree in Banking at National Chengchi University. ⚫Chairman of the Board of Directors: ➢Hsing Ta Cement Co., LTD. ➢Yang Tang Hai Charity Foundation	41,528,048
3	Director	Yang Ren-Hsiung	⚫Bachelor’s degree in Hydraulic Engineering at Tamkang University. ⚫Chairman of the Board of Directors: ➢Jiangsu Xinning New Building Materials Co., Ltd. ➢Nanjing Xinrong New Green Materials Co., Ltd. ➢Jiangsu Xinning New Building Materials Trading CO., Ltd	36,108,783
4	Director	Yang Da-Qin	⚫Bachelor’s degree in Information Management at National Yunlin University of Science & Technology. ⚫Chairman of the Board of Directors: Hsing Ta Industrial Co., Ltd. Co., Ltd.	8,145,934
5	Director	Yang Po-Wei, Representative of Turbo Investment Co., Ltd.	⚫Bachelor’s degree in Industrial Engineering and Management at Da-Yeh University. ⚫Deputy Chairman of the Board of Directors of Chin Ta Construction Co., Ltd.	50,000
6	Director	Lin Hua-Ling	⚫High school diploma from National Keelung Senior High School. ⚫Chairman of the Board of Directors: Shun Siang Co., Ltd.	3,188,620

7	Independent Director	Chen Jheng-Ting	⚫Bachelor’s degree in Accounting at Chinese Culture University. ⚫President of Trustworthy CPAs Firm. ⚫Director of Taipei CPA Association.	0
8	Independent Director	Wu Rui-Tai	⚫Bachelor’s degree in Finance at National Chengchi University. ⚫Deputy Manager of underwriting department of Fubon Securities. ⚫Supervisor of Syncmold Enterprise Corp. ⚫Chairman of the Board of Directors J-Mas Enterprise Co., Ltd. ⚫Director of Sayyo Games Co., Ltd ⚫Supervisor of Leohab Enterprise Co., Ltd. ⚫CEO and Director of Borden Technology Corporation.	0
9	Independent Director	Shih Cheng-Tung	⚫Master degree in Finance at University of Illinois at Urbana-Champaign. ⚫Vice president of investment department of China Life Insurance Co., Ltd. ⚫Chief Investment Officer of INVESCO ⚫Chief Investment Officer of CPIC Fund Management Co., Ltd.	0

(4) Please refer to pages 46~48 of this manual for the Company’s Rules for Election of Directors.

(5) It is submitted for election.

Results of the Election:

Discussions

1. Proposed by the Board of Directors Proposal:

To Release the Prohibition on Directors and its Representative from Participation in Competitive Business.

Explanation:

(1) In accordance with Article 209 of the Company Act, a Director who does anything for himself or on behalf of another person that is within the scope of
the Company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
(2) It is proposed to release non-competition restrictions on the Directors elected newly at this (2021) shareholders’ meeting, who may participate in the business as mentioned above, under the premise that no harm to the Company's interest.
(3) It is submitted for approval. Resolution:

Extempore Motion

Adjournment

Final Annual Reports

2020 Annual Operation Report and Final Statement

I. Operation Overview

In retrospect, the international economic situation in 2020 was affected by ravages of the COVID-19 pandemic, which caused a recession worldwide except for a few countries. The economic growth of Taiwan was getting better in 2020. Many institutions revised down the estimated value of economic growth due to severe epidemic situation in April (The minimum value International Monetary Fund estimated was -4%). As the epidemic control was gradually entering blissful circumstances, the growth of 3rd quarter was over 3% and reached as high as 3.92% which increased over the same periods annually since 2015. The annual growth rate was estimated about 2.38%. The growth trend plummeted to its rock bottom in the 2nd quarter and reversed as V-shape.

In terms of domestic construction industry, benefited from the return of overseas Taiwanese capital, strong demand of semiconductor worldwide, expansion of TSMC and other domestic semiconductor companies, almost no impact was made and there was growth from the manufacturers in the construction industry.

In terms of domestic cement market, the overall cement consumption in 2020 was only 12.10 million metric tons. With the efforts of all employees, sales volume of cement and clinker in 2020 was approximately 746,000 metric tons, an increase of 12.15% over the previous year, and sales amount in 2020 was NT$1,556,285 thousand, an increase of 11.26% over the previous year. In terms of non-operating income, the Company’s income from resource recycle and reuse in 2020 was NT$62,484 thousand, and rental income was NT$45,363 thousand, an increase of NT$19,039 thousand from the previous year.

In terms of Mainland cement market, except for the delay from halting production in lockdown, the epidemic was well controlled and the local government’s requirements for pollution prevention and control continued to intensify this year. Under the implementation and promotion of many environmental protection policies such as energy saving and emission reduction, staggered peak production, comprehensive regulation of mines, and transportation governance, the total demand for cement has increased. The Mainland government has been boosting the economy and promoting infrastructure construction, and the recovery of the housing market has propelled demand for cement, making cement prices stable at high levels and cement profits recovered gradually. Jiangsu Xinning New Building Materials Co., Ltd. in which the Company holds 66.67% of its shares, decreased its sales in 2020 by 10.11% compared with the previous year because of the impact of epidemic.

With the efforts of the entire group, the consolidated operating revenues of 2020 were NT$7,593,294 thousand, a decrease of 2.93% from the NT$7,822,895 thousand of 2019; the consolidated net profits of 2020 were NT$1,448,873 thousand, which represented a decrease of 0.67% from the net profits of NT$1,458,617 thousand of 2019.

II. Comparison of performance in 2020 and 2019

Unit: metric tons


	Production quantity			Sales quantity
Cement and
			Increase
clinker						Increase
	2020	2019	(decrease)	2020	2019
						(decrease) %
			%


Domestic	732,371	631,172	16.03	746,175	665,323	12.15


Mainland	2,126,103	2,324,479	(8.53)	2,118,499	2,327,529	(8.98)


Total	2,858,474	2,955,651	(3.29)	2,864,674	2,992,852	(4.28)

Unit: Thousand $NT

			Increase
Operating				Increase
	2020	2019	(decrease)
revenues				(decrease) %
			amount


Domestic	2,539,619	2,201,058	338,561	15.38


Mainland	5,053,675	5,621,837	(568,162)	(10.11)

Consolidated sales
	7,593,294	7,822,895	(229,601)	(2.93)
revenue

Consolidated net
	1,448,873	1,458,617	(9,744)	(0.67)
profits for the year

III. Research and development

The themes of the Company’s R&D are environmental protection, labor safety, efficient operation, quality policy implementation, manufacturing process rationalization, product diversification, and responsibility for pollution prevention and control. In addition, the Company has mass production for related products in response to market demand to increase competitiveness, market penetration and share. The cement industry has entered a mature stage. In order to boost the momentum of future business growth, the Company will continue to promote Type II cement and IS cement to Public Works Division, and continue to develop construction business for better achievements to obtain the best benefits in different construction location.

IV.
Business promotion and development direction and strategy
(1) Active participate in public projects: Taipei MRT Circular Line, Wanda Line, LRT Ankeng Line, Xinyi Line East Extension, New Taipei City Sanying Line, Taoyuan City Green Line, Taoyuan Airport Expansion Project, Datan Power Plant and surrounding projects, etc.
(2) Explore blast furnace slag cement market, highlight product advantages, and differentiate from similar products.
(3) Master the characteristics of type I low-alkali cement such as antiwhitening and cracking, and promote the type I low-alkali 50 kg bagged cement to the paint market.
(4) Utilize the channel of bagging cement, promote new building materials and dry mix cement sand business including powder materials, compartment materials and substrate materials.
(5) Make use of the high temperature calcination of cement production which can remove heavy metals, dioxin and other substances that cannot be processed by general garbage incinerators, and will not produce secondary waste without affecting the quality of cement to increase the reusable items and amount of business waste recycling.
V. Policy in response to the influence of external competition, legal environment, and overall business environment.
(1) Implement labor safety management measures to ensure the safety and efficiency of the working environment.
(2) Adhere to the business philosophy of honesty, diligence, pragmatism, frugality and social responsibility, promote the sustainable development of the Company, increase participation in local community care and health promotion activities, and fulfill corporate social responsibility.
(3) Cooperate with the government’s circular economy policy of environmental protection, energy saving, waste reduction and reuse, actively invest in various equipment and improvements to not only strengthen process stability, but also to improve the dust flying

problem during the transportation of raw materials and semi-finished products to protect the environment, and to actively migrate to a green industry.

(4) Ensure compliance with all laws and regulations can keep up with the times, and regularly review whether the equipment operation efficiency and the professional knowledge and operation technology of the operation personal keep up with the times.
(5) Implement quality policies to ensure the good operation of the quality management system, and supply products and services that meet customer needs.
(6) Continue to improve production efficiency, reduce costs, and strengthen market competitiveness.
(7) Improve operating performance of the core cement business, expand the use of funds, and invest in adjacent industries with development potential.
VI.
Business plan and outlook for 2020

The Countries in the Northern Hemisphere was facing a severe winter outbreak of the covid-19 pandemic and the major countries restarted strict control policy. Although the current restrictions lead to a recession in the service industry, there is limited impact on the manufacturing industry. Many countries have begun vaccination work, but the initial vaccine quantity is limited and the storage and transportation are not easy, which increases the difficulties of vaccine popularity. In addition, the United States, South Africa, the United Kingdom and other countries have found mutant viruses recently, vaccine effectiveness still needs to be tested by each country. However, as each country follows up and vaccines become popular gradually, the global economy is expected to return to the levels before the outbreak of epidemic by the end of 2021 or early 2022.

Domestic cement market: Although construction industry fully engages in the plant system integration project related to the semiconductor supply chain, the recent increase of rebar cost, the tight situation of concrete source supply, and the wet and cold weather in northern region unfavorable for construction environment result in less progress than expected and flat view of the business climate performance by 90% of the construction industry. Looking to the future, although the orders of workin-process construction are still large and the subsequent composition of the engineering business will also increase the proportion in the private sector, especially in high-order manufacturing, the future public construction will slow down because of budget redistribution of the government and tight schedule of materials allocation, which results in flat view of the business climate performance for the next six months by as high as 80% of the construction industry. Domestic prices of cement market should remain stable, and is expected to represent small growth. The demand for cement, ready-mixed concrete will also increase, and the national cement demand will remain stable. In summary, the domestic

cement market is expected to maintain a dynamic balance in terms of cement demand and supply in 2021. The Company's cement and clinker sales target in Taiwan is 770,000 metric tons. The company will continue to integrate resources within the Group and evaluate business diversification to maintain its competitive advantage.

Mainland cement market: The environmental protection policy continues to tighten, and the production restriction policy is not expected to be significantly relaxed. The supply side of the cement industry will continue to be controlled and the cement staggered peak production policy will continue to be enforced. In terms of environmental protection, Mainland China announced a ban on low-end cement. In order to strengthen infrastructure, maintain economic growth, continuously expand domestic demand and reduce the burden on manufacturers, China has positive development space for the cement industry under the policy of promoting urbanization. T he overall cement price in Mainland China continue to stabilize. Next, attention should be paid to the role of infrastructure construction and real estate investment in driving cement demand.

In terms of non-operating income, maintain the existing incomes from rental and resource recycle and reuse while at the same time, take care of social needs, environmental protection and economic development to achieve the objectives of industrial symbiosis and sustainable social development.

Chairman of BOD ： Yang Jee-Shing General manager ： Yang Ta-Kuan Accounting Manager ： Chu Ping

Year 2020 Consolidated Financial Statements and Independent Auditors’ Report

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 consolidated balance sheets of Hsing Ta Cement Co., Ltd. and its subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

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 consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements of the current period are stated as follows:

Occurrence of revenue recognition of cement sales

Description

Please refer to Note 4(28) of the financial statements for accounting policies on revenue recognition and Note 6(18) for details of operating revenue.

The Group’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 7,460,933 thousand, constituting 98.26% 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 recognized when customers collect the cement, which is based on the dispatch reports prepared by the cement factory according to actual collection situation. The Group’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, we consider the occurrence of revenue recognition of cement sales 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:

Assessed the reasonableness of revenue recognition policies and procedures for cement sales based on our understanding of the Group’s business and the industry it operates in, and confirmed that these were consistently applied in the financial statements.
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.
Verified the monthly dispatch reports 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 reports, and recalculating the amount of the revenue and agreeing them with the recorded revenue.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of the Company as at and for the years ended December 31, 2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

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

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 consolidated 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:

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

management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements 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

The accompanying consolidated 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 consolidated 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.

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

December 31,2020 AMOUNT % $ 2,276,512 19 1,126,395 10 129,429 1 1,687,340 14 390,257 3 3,638 - 893,683 8 65,597 1 145 - 6,572,996 56 233,766 2 226,244 2 - - 2,928,658 25 152,475 1 1,445,742 12 49,460 1 34,875 - 32,486 - 134,351 1 5,238,057 44 $ 11,811,053 100	December 31,2019	December 31,2019
AMOUNT $ 2,276,512 1,126,395 129,429 1,687,340 390,257 3,638 893,683 65,597 145 6,572,996 233,766 226,244 - 2,928,658 152,475 1,445,742 49,460 34,875 32,486 134,351 5,238,057 $ 11,811,053	AMOUNT $ 874,572 1,317,327 73,019 2,035,960 495,586 3,120 830,282 53,235 4 5,683,105 273,016 224,578 - 3,093,153 157,056 1,454,358 51,243 57,828 32,959 163,998 5,508,189 $ 11,191,294	%
		8 12 1 18 4 - 7 1 -
		51
		2 2 - 28 1 13 - 1 - 2
		49
		100

(Continued)

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Current liabilities 2130 Current contract liabilities 2150 Notes payable 2160 Notes payable - related parties 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities, others 21XX Current Liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 2670 Other non-current liabilities, others 25XX Non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent 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 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity	December 31,2020 December 31,2019 Notes AMOUNT % AMOUNT % 6(18) $ 62,491 - $ 85,532 1 111,203 1 75,868 1 7 1,091 - 1,161 - 1,173,364 10 947,007 8 6(11) and 7 556,945 5 601,282 5 6(25) 249,898 2 312,962 3 6,322 - 6,459 - 6(12) - - 225,244 2 1,307 - 1,210 - 2,162,621 18 2,256,725 20 6(25) 4,797 - 5,936 - 15,980 - 18,263 - 6(13) 48,491 1 161,626 2 38,148 - 118,622 1 107,416 1 304,447 3 2,270,037 19 2,561,172 23 6(14) 3,419,579 29 3,419,579 31 6(15) 22,651 - 22,551 - 6(16) 1,428,368 12 1,332,001 12 231,848 2 118,512 1 2,570,971 22 2,157,722 19 6(17) ( 175,551)( 1)( 231,848 ) ( 2) 7,497,866 64 6,818,517 61 2,043,150 17 1,811,605 16 9,541,016 81 8,630,122 77 9 11 $ 11,811,053 100 $ 11,191,294 100	December 31,2019	December 31,2019
			%
			1 1 - 8 5 3 - 2 -
			20
			- - 2 1
			3
			23
			61
			16
			77
			100

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

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED 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(10)(18) and 7 $ 7,593,294 100 $ 7,822,895 100 6(5)(10)(13)(23)(24 ) and 7 ( 4,983,512 ) ( 65) ( 5,218,440) ( 67) 2,609,782 35 2,604,455 33 6(13)(23)(24) and 7 ( 184,119 ) ( 3) ( 180,922) ( 2) ( 310,250 ) ( 4) ( 357,032) ( 5) 12(2) ( 13,054 ) - - - ( 507,423 ) ( 7) ( 537,954) ( 7) 2,102,359 28 2,066,501 26 6(19) 9,261 - 8,098 - 6(20) 25,953 - 33,184 - 6(21) ( 16,982 ) - ( 842) - 6(22) ( 2,160 ) - ( 18,487) - 6(6) - - 238 - 16,072 - 22,191 - 2,118,431 28 2,088,692 26 6(25) ( 669,558 ) ( 9) ( 630,075) ( 8) $ 1,448,873 19 $ 1,458,617 18
4000 Sales revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6450 Expected credit losses 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 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

Items

Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(10)(18) and 7
$ 7,593,294
100
$ 7,822,895
100
6(5)(10)(13)(23)(24
) and 7
(
4,983,512 ) (
65) (
5,218,440) (
67)
2,609,782
35
2,604,455
33
6(13)(23)(24) and 7
(
184,119 ) (
3) (
180,922) (
2)
(
310,250 ) (
4) (
357,032) (
5)
12(2)
(
13,054 )
-
-
-
(
507,423 ) (
7) (
537,954) (
7)
2,102,359
28
2,066,501
26
6(19)
9,261
-
8,098
-
6(20)
25,953
-
33,184
-
6(21)
(
16,982 )
-
(
842)
-
6(22)
(
2,160 )
-
(
18,487)
-
6(6)
-
-
238
-
16,072
-
22,191
-
2,118,431
28
2,088,692
26
6(25)
(
669,558 ) (
9) (
630,075) (
8)
$ 1,448,873
19
$ 1,458,617
18

4000
Sales revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6450
Expected credit losses
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
7060
Share of profit of associates and joint
ventures accounted for under equity
method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year

(Continued)

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED 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	Year ended December 31
	2020	2019
	AMOUNT ($ 6,540 ) 1,308 ( 5,232) 85,525 85,525 $ 80,293 $ 1,529,166 $ 1,004,034 444,839 $ 1,448,873 $ 1,055,403 473,763 $ 1,529,166 $
Other comprehensive income 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 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 8361 Financial statements translation differences of foreign operations 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 Profit, attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest 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 consolidated financial statements.

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars)

Notes				Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent	Equity attributable to owners ofthe parent			Non-controlling interest
	Ordinary share	Capitalsurplus treasury share transactions others $ 22,299 $ 153 - - - - - - - - - - - - - 99 - - $ 22,299 $ 252 $ 22,299 $ 252 - - - - - - - - - - - - - 100 - - $ 22,299 $ 352		Retained earnings				Exchange differences on translation of foreign financial statements	Total
		treasury share transactions		Legal reserve $1,247,977 - - - 84,024 - - - - $1,332,001 $1,332,001 - - - 96,367 - - - - $1,428,368	Special reserve		Unappropriated retained earnings
6(17) 6(16) 6(17) 6(16)	$3,419,579		$ 22,299			$ 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	$1,447,886 494,947 ( 57,650 ) 437,297 - - - - ( 73,578 ) $1,811,605 $1,811,605 444,839 28,924 473,763 - - - - ( 242,218 ) $2,043,150	$7,690,087 1,458,617 ( 171,537 ) 1,287,080 - - ( 273,566 ) 99 ( 73,578 ) $8,630,122 $8,630,122 1,448,873 80,293 1,529,166 - - ( 376,154 ) 100 ( 242,218 ) $9,541,016
	- -		- -
	-		-
	- - - - -		- - - - -
	$3,419,579		$ 22,299
	$3,419,579		$ 22,299
	- -		- -
	-		-
	- - - - -		- - - - -
	$3,419,579		$ 22,299

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

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED 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 Amortisation expense Expected credit losses Net 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 Loss on disposal of property, plant and equipment Loss on disposals of investments Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable, net Other receivables Inventories Prepayments Other current assets Changes in operating liabilities Current contract liabilities Notes payable Notes payable - related parties Accounts payable Other payables Other current liabilities, others 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 $ 2,118,431 $ 2,088,692 6(7)(8)(10)(23) 318,741 325,508 6(23) 5,771 4,694 12(2) 13,054 - 6(2)(21) ( 30,675 ) ( 26,314 ) 6(8)(22) 2,160 18,487 6(19) ( 9,261 ) ( 8,098 ) 6(20) ( 15,627 ) ( 8,290 ) 6(6) - ( 238 ) 6(8)(21) ( 688 ) - 6(21) 7,526 5,852 6(21) - 1,471 348,620 330,445 92,275 ( 251,807 ) ( 646 ) 3,318 ( 63,401 ) ( 21,026 ) ( 12,362 ) ( 11,521 ) ( 141 ) 166 ( 23,041 ) 14,136 35,335 ( 3,686 ) ( 70 ) 376 226,357 68,334 ( 41,343 ) 188,908 97 97 ( 113,982 ) ( 47,185 ) 2,857,130 2,672,319 ( 709,500 ) ( 533,990 ) 2,147,630 2,138,329	Year ended December 31	Year ended December 31
			2019

(Continued)

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at amortised cost Proceeds from capital reduction of financial assets at fair value through profit or loss Proceeds from liquidation of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Acquisition of investment property Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Decrease (increase) in other non-current assets, others (Increase) decrease in prepayments for business facilities Interest received Dividends received Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayments of long-term debt Increase in guarantee deposits received (Decrease) increase in shareholder accounts Payments of lease liabilities Cash dividend paid Interest paid Dividends paid to non-controlling interests Expired unclaimed dividends transferred to capital surplus Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents 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 ( $ 1,859,655 ) ( $ 2,579,436 ) 2,104,308 1,701,473 ( 137,578 ) ( 12,017 ) 79,502 - 33,410 - 10,384 - 6(7)(27) ( 128,374 ) ( 168,206 ) 6(10) - ( 328 ) 11,908 1,061 473 21,859 50,174 ( 55,080 ) ( 22,765 ) 7,545 9,389 7,637 15,627 8,290 166,803 ( 1,067,202 ) 6(28) ( 222,538 ) ( 324,538 ) 6(28) ( 8,775 ) 14,021 ( 72,000 ) 48,000 6(28) ( 3,071 ) ( 3,665 ) 6(16) ( 376,154 ) ( 273,566 ) ( 3,350 ) ( 20,747 ) 4(3) ( 242,218 ) ( 143,771 ) 100 99 ( 928,006 ) ( 704,167 ) 15,513 ( 44,692 ) 1,401,940 322,268 874,572 552,304 $ 2,276,512$ 874,572	Year ended December 31	Year ended December 31
			2019

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

Year 2020 Parent Company Only Financial Statements and Independent Auditors’ Report

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.

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:

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.
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.
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:

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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.

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.
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.

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

---------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------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.

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

(Expressed in thousands of New Taiwan dollars)

Assets 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	December 31,2020 Notes AMOUNT % 6(1) $ 571,707 7 6(2) 44,182 1 6(4) 141,274 2 6(4) and 7 34,588 - 6(4) 57,388 1 544 - 6(5) 385,376 5 16,711 - - - 1,251,770 16 6(2) 233,766 3 6(3) and 8 213,524 3 6(6) 3,868,013 49 6(7) 839,378 10 6(8) 4,218 - 6(10) 1,443,908 18 6(23) 30,423 - 79,532 1 6,712,762 84 $ 7,964,532 100 (Continued)	December 31,2019	December 31,2019
		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	%
			4 1 2 - 1 - 5 - -
			13
			4 3 46 12 - 20 1 1
			87
			100

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

	(Expressed in thousands	(Expressed in thousands	of New Taiwan dollars)	of New Taiwan dollars)
				December 31,2020				December 31,2019
	Liabilities and Equity	Notes		AMOUNT	%			AMOUNT	%
	Current liabilities
2130	Current contract liabilities	6(16) and 7	$	32,898		-	$	36,102	-
2150	Notes payable			-		-		12,848	-
2170	Accounts payable			106,058		1		58,551	1
2200	Other payables			206,028		3		190,113	3
2230	Current income tax liabilities			53,484		1		44,282	1
2280	Current lease liabilities			3,508		-		3,419	-
2300	Other current liabilities			1,131		-		974	-
21XX	Current Liabilities			403,107		5		346,289	5
	Non-current liabilities
2570	Deferred income tax liabilities	6(23)		4,797		-		5,936	-
2580	Non-current lease liabilities			815		-		3,642	-
2640	Accrued pension liabilities	6(11)		40,645		1		152,344	2
2645	Guarantee deposits received			17,302		-		18,507	-
25XX	Non-current liabilities			63,559		1		180,429	2
2XXX	Total liabilities			466,666		6		526,718	7
	Equity
	Share capital	6(12)
3110	Share capital - common stock			3,419,579	43			3,419,579	47
	Capital surplus	6(13)
3200	Capital surplus			22,651		-		22,551	-
	Retained earnings	6(14)
3310	Legal reserve			1,428,368	18			1,332,001	18
3320	Special reserve			231,848		3		118,512	2
3350	Unappropriated retained earnings			2,570,971	32			2,157,722	29
	Other equity interest	6(15)
3400	Other equity interest		(	175,551 ) (		2) (		231,848) (	3)
3XXX	Total equity			7,497,866	94			6,818,517	93
	Significant contingent liabilities and	9
	unrecognised contract commitments
	Significant events after the balance sheet date	11
3X2X	Total liabilities and equity		$	7,964,532	100		$	7,345,235	100

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	YearendedDecember31	YearendedDecember31
	2020	2019
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
	$

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		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) Capital surplus Retained earnings Share capital - common stock Treasury stock transactions Others Legal reserve Special reserve $ 3,419,579 $ 22,299 $ 153 $ 1,247,977 $ 42,354 - - - - - - - - - - - - - - - - - - 84,024 - - - - - 76,158 - - - - - - - 99 - - $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 - - - - - - - - - - - - - - - - - - 96,367 - - - - - 113,336 - - - - - - - 100 - - $ 3,419,579 $ 22,299 $ 352 $ 1,428,368 $ 231,848	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) Capital surplus Retained earnings Share capital - common stock Treasury stock transactions Others Legal reserve Special reserve $ 3,419,579 $ 22,299 $ 153 $ 1,247,977 $ 42,354 - - - - - - - - - - - - - - - - - - 84,024 - - - - - 76,158 - - - - - - - 99 - - $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 - - - - - - - - - - - - - - - - - - 96,367 - - - - - 113,336 - - - - - - - 100 - - $ 3,419,579 $ 22,299 $ 352 $ 1,428,368 $ 231,848	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) Capital surplus Retained earnings Share capital - common stock Treasury stock transactions Others Legal reserve Special reserve $ 3,419,579 $ 22,299 $ 153 $ 1,247,977 $ 42,354 - - - - - - - - - - - - - - - - - - 84,024 - - - - - 76,158 - - - - - - - 99 - - $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 - - - - - - - - - - - - - - - - - - 96,367 - - - - - 113,336 - - - - - - - 100 - - $ 3,419,579 $ 22,299 $ 352 $ 1,428,368 $ 231,848	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) Capital surplus Retained earnings Share capital - common stock Treasury stock transactions Others Legal reserve Special reserve $ 3,419,579 $ 22,299 $ 153 $ 1,247,977 $ 42,354 - - - - - - - - - - - - - - - - - - 84,024 - - - - - 76,158 - - - - - - - 99 - - $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 - - - - - - - - - - - - - - - - - - 96,367 - - - - - 113,336 - - - - - - - 100 - - $ 3,419,579 $ 22,299 $ 352 $ 1,428,368 $ 231,848	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) Capital surplus Retained earnings Share capital - common stock Treasury stock transactions Others Legal reserve Special reserve $ 3,419,579 $ 22,299 $ 153 $ 1,247,977 $ 42,354 - - - - - - - - - - - - - - - - - - 84,024 - - - - - 76,158 - - - - - - - 99 - - $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 $ 3,419,579 $ 22,299 $ 252 $ 1,332,001 $ 118,512 - - - - - - - - - - - - - - - - - - 96,367 - - - - - 113,336 - - - - - - - 100 - - $ 3,419,579 $ 22,299 $ 352 $ 1,428,368 $ 231,848
					Legal reserve $ 1,247,977 - - - 84,024 - - - $ 1,332,001 $ 1,332,001 - - - 96,367 - - - $ 1,428,368		Special reserve $ 42,354 - - - - 76,158 - - $ 118,512 $ 118,512 - - - - 113,336 - - $ 231,848
	6(15) 6(14) 6(15) 6(14)

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

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	Year ended December 31	Year ended December 31
			2019

(Continued)

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	Year ended December 31	Year ended December 31
			2019

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

Audit Committee's Review Report of 2020 Annual Accounting Final Statements

Audit Report of Audit Committee

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements and Earnings Distribution Proposal. The Company’s Financial Statements have been audited and an audit report has been issued by the PricewaterhouseCoopers. The Business Report, Financial Statements and Earnings Distribution Proposal have been reviewed and considered to be complied with relevant rules by the Audit Committee. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report.

Hsing Ta Cement Co., LTD. Chairman of the Audit Committee ： Chen Jheng-Ting

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April 30, 2021

2020 Distribution Report of Employees’ Compensation and Directors’ Remuneration

1.The total amount of NTD $23,405,776 shall be distributed in cash as employees' compensation.
2.The total amount of NTD $46,811,552 shall be distributed in cash as Directors' remuneration.

Endorsement and Guarantee

As of December 31, 2020, the Company’s aggregate balance of endorsement and guarantee was not more than the Company's net asset value based on the latest financial statements and the total endorsement and guarantee for a single enterprise was not more than 50 percent of the Company's net asset value based on the latest financial statements, both of which were in accordance with the Rules of Procedure of Endorsement and Guarantee. The list of details is as follows:

(Thousand $NT) Limit on Endorsement/ Name of the Company being The Ending Balance of Guarantee Provided for a Endorsed/ Guaranteed Endorsement/Guarantee Single Enterprise Hsin I Ready Mixed Concrete 3,748,933 321,176 Co., Ltd. 2020 Earnings Distribution Table Hsing Ta Cement Co., Ltd. 2020 Earnings Distribution Table Thousand $NT Unappropriated Retained Earnings at Beginning of Year 1,571,865,115 Add (Less): 2020 Remeasurement of Defined Benefit Obligations (4,928,624) 2020 Profit After Tax 1,004,033,696 Reversal of Special Reserve 56,297,417 Appropriation of Legal Reserve (99,910,507) Distributable Earnings for the Current Period 2,527,357,097 Less: Cash Dividends （ $1.5/Per Share ） (512,936,802) Unappropriated Retained Earnings at End of Year 2,014,420,295 Chairman of BOD ： Yang Jee-Shing General manager ： Yang Ta-Kuan Accounting Manager ： Chu Ping

2020 Earnings Distribution Table

Appendix

Rules of Procedure of Hsing Ta Cement Co., Ltd. Shareholders’ Meeting Date: June 16, 2017 (Amended)

Article 1

Shareholders’ meeting of the Company shall be governed by these Rules except as otherwise provided by law or regulation.

Article 2

The Company shall furnish the attending shareholders with an attendance book to sign, or attending shareholders shall hand in the sign-in cards in lieu of signing in.

The number of shares in attendance shall be calculated according to the shares indicated by the attendance book or sign-in cards handed in plus the number of shares in voting rights exercised electronically.

Article 3

The attendance and votes of the shareholders’ meeting shall be calculated based on the number of shares.

Article 4

The venue of a shareholders’ meeting shall be the premises of the Company or a place accessible to the shareholders and suitable for a shareholders’ meeting. The meeting shall begin no earlier than 9 am and no later than 3 pm.

Article 5

A shareholders’ meeting convened by the Board of Directors shall be presided over by the Chairman of the Board of Directors. In case of the absence of the Chairman, a Director appointed by the Chairman shall be designated to act on behalf thereof. In the absence of the designation, the Directors shall elect one representative from among themselves to act on behalf of the Chairman.

For the shareholders’ meeting convened by any other person having the convening right, the convener shall act as the Chairman of that meeting provided.

Article 6

The lawyers, accountants or relevant personnel appointed by the company may attend the shareholders’ meeting.

Staffs handling administrative affairs of a shareholders’ meeting shall wear identification cards or arm bands.

Article 7

The Company shall make an uninterrupted audio and video recording throughout the process of a shareholders’ meeting and the recorded materials shall be retained for at least one year.

Article 8

The Chairman shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the Chairman may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act.

Prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the Chairman may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 9

If a shareholders’ meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which shall not be changed without a resolution of the shareholders’ meeting.

The provision of the preceding paragraph shall apply to a shareholders’ meeting convened by a party having the convening right that is not the Board of Directors. The Chairman shall not announce the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. After close of the said meeting, shareholders shall not elect another Chairman to continue the meeting at the same or any other place. If the Chairman declares the meeting adjourned in violation of the rules of procedure, attending shareholders shall elect a new Chairman by agreement of a majority of the votes represented by the attending shareholders and then continue the meeting. Article 10

Before speaking, an attending shareholder must specify on a speaker's slip the subject, shareholder account number and account name. The order in which shareholders speak will be set by the Chairman.

Attending shareholder who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

When an attending shareholder is speaking, other shareholders shall not speak or interrupt unless they have obtained the consent of the Chairman and the speaking shareholder. The Chairman shall stop any violation.

Article 11

Except with the consent of the Chairman, a shareholder may not speak more than twice on the same proposal and shall not exceed five minutes in a single speech.

If the shareholder's speech violates the provision of the preceding paragraph or

exceeds the scope of the agenda, the Chairman may terminate the speech.

Article 12

When a juristic person is appointed to attend a shareholders’ meeting, it shall designate only one person as a representative in the meeting.

When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one representative shall speak on the same proposal.

Article 13

After an attending shareholder has spoken, the Chairman may respond in person or direct relevant personnel to respond.

Article 14

When the Chairman is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chairman may announce the discussion closed and call for a vote.

Article 15

The scrutineer and counting personnel for the vote on a proposal shall be appointed by the Chairman, provided that all scrutineers shall be shareholders of the Company. Immediately after vote counting has been completed, the results of the voting shall be announced on-site at the meeting and recorded.

Article 16

When a meeting is in progress, the Chairman may announce a break based on time considerations.

Article 17

The passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders unless specified otherwise by the Company Act and the Company’s Article of Incorporation.

In case of a vote, if the shareholders exercising voting rights electronically have no objection to a proposal and other attending shareholders have no objection via the Chairman’s query, it shall be deemed as passed. The effect shall be the same as that of a vote.

Article 18

When there is an amendment or an alternative to the same proposal, the Chairman shall decide the voting order in conjunction with the original case. When one of the cases is passed, the other proposals shall then be deemed rejected, and no further voting shall be required.

Article 19

The Chairman may direct the proctors (or security personnel) to help maintain order at the venue. When proctors (or security personnel) help maintain order at

the meeting, they shall wear arm bands bearing the word "Proctor."

Article 20

These rules will be implemented after approval by the shareholders’ meeting. Subsequent amendments thereto shall be affected in the same manner.

Article of Incorporation of Hsing Ta Cement Co., Ltd.

Chapter 1 General Provisions

Article 1

The Company shall be incorporated as a Company Limited by Shares under the Company Act, and its name shall be Hsing Ta Cement Co., Ltd.

Article 2

The Company shall have its head office in Taipei City, and may, pursuant to a resolution adopted at the meeting of the Board of Directors, set up branch offices, mining areas or manufacturing factories within or outside the territory of the Republic of China when deemed necessary.

Article 3

The Code of Business Scope of the Company shall be ZZ99999, all business items that are not prohibited or restricted by law, except those that are subject to special approval.

Article 4

Deleted.

Article 5

The Company may provide endorsement or act as a guarantor pursuant to its business needs.

Article 5-1

The total amount of the Company’s investment shall not be subject to the restriction of the Company Act. Any matter regarding the long-term equity investment shall be upon adoption of a resolution at the meeting of the Board of Directors.

Chapter 2 Capital Stock

Article 6

The total capital stock of the Company shall be in the amount of 5,400,000,000 New Taiwan Dollars, divided into 540,000,000 shares, at ten New Taiwan Dollars each, to be issued in installments.

Article 7

The share certificates of the Company shall all be name-bearing share certificates, and before they are issued, shall be signed by or affixed with the seals of no less than three Directors of the Company, and be certified pursuant to the law. The Company shall be exempted from printing any share certificate for the shares issued and shall register the issued shares with a centralized securities depositary enterprise.

Article 8

Seal specimen shall be submitted by each shareholder to the Company for filing,

and this shall apply to any change to the seal specimen. The seal specimen kept by the Company shall be the basis for the exercise of each shareholder’s right.

Article 9

All transfer of stocks, pledge of rights, loss, succession, gift, loss of seal, amendment of seal, change of address conducted by each shareholder of the Company shall follow the “Regulations Governing the Administration of Shareholder Services of Public Companies” unless specified otherwise by law and securities regulations.

Article 10

Registration for transfer of shares shall be suspended 60 days immediately before the convening date of a regular shareholders’ meeting, and 30 days immediately before the convening date of any special shareholders’ meeting, or within 5 days before the day on which dividend, bonus, or any other benefit is scheduled to be paid by the Company.

Chapter 3 Shareholders' Meeting

Article 11

The shareholders’ meetings of the Company shall include regular and special meetings. Regular meetings shall be convened at least once a year within six months following the end of the fiscal year, and a written notice for convening a regular meeting shall be sent to each shareholder no later than 30 days prior to the scheduled meeting date. Special meetings shall be called when necessary, and a written notice for convening a special meeting shall be sent to each shareholder no later than 15 days prior to the scheduled meeting date. The convening date, place and subjects of a meeting shall be indicated in the notice provided to each shareholder.

The shareholders’ meeting shall be called by the Board of Directors unless specified otherwise by the Company Act.

Article 12

In the event that any shareholder cannot attend a shareholders’ meeting in person, the shareholder may entrust a representative to attend the meeting by presenting a proxy issued by the Company, stamped with the original seal specimen and specifying the scope of authorization. When a person is entrusted by two or more shareholders, the number of the voting rights represented shall not exceed 3% of the total outstanding number of voting shares of the Company. Otherwise, the portion in excess of 3% voting rights represented by the total outstanding shares shall not be counted.

The use of a proxy for attendance at shareholders’ meeting shall be in accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” unless specified otherwise by the Company Act.

Article 13

The shareholders’ meeting shall be presided over by the Chairman of the Board of Directors of the Company unless specified otherwise by the Company Act. In case of the absence of the Chairman, a Director appointed by the Chairman shall be designated to act on behalf thereof. In the absence of the designation, the Directors shall elect one representative from among themselves to act on behalf of the Chairman.

Shareholders’ meeting shall follow Rules of Procedure for Shareholders’ Meeting of the Company.

Article 14

Each share held by each shareholder of the Company shall carry one voting right unless specified otherwise by the Company Act.

A shareholder shall exercise the voting right at a shareholders’ meeting in writing or by the way of electronic transmission. The exercise of the voting right shall be in accordance with the Company Act and the Regulation of Competent Authority. Article 15

Unless specified otherwise by the Company Act, resolution of the shareholders’ meeting shall be adopted by a majority vote of the shareholders at a meeting attended by shareholders representing over half of the total outstanding shares.

Article 16

Resolutions adopted at a shareholders' meeting shall be recorded in the minutes affixed with the signature or seal of the Chairman and distributed to all shareholders within 20 days following the meeting.

The distribution of minutes shall be in accordance with the Company Act.

The minutes of shareholders' meeting shall record the date and place of the meeting, the name of the Chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The minutes shall be kept persistently throughout the life of the company. The attendance list bearing the signatures of shareholders present at the meeting and the powers of attorney of the proxies shall be kept by the company for a minimum period of at least one year. However, if a lawsuit has been instituted by any shareholder in accordance with the Article 189 of the Company Act hereof, the minutes of the shareholders' meeting involved shall be kept by the company until the legal proceedings of the foregoing lawsuit have been concluded.

Chapter 4 Directors, Audit Committee

Article 17

The Company shall have nine Directors, including three Independent Directors. In accordance with Article 192-1 of the Company Act, a candidate nomination system shall be adopted by the Company and the shareholders shall elect the Directors from among the nominees listed in the roster of Director candidates. The term of office of a Director shall not exceed three years and may be eligible for re-election. The total number of registered shares owned by all Directors shall be in

accordance with the ratio stipulated in “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”.

The professional qualifications, restrictions on shareholdings and concurrent positions held, assessment of independence, method of nomination, and other matters for compliance with respect to Independent Directors shall be in accordance with the Regulation of Competent Authority.

The Directors of the Company shall be elected in accordance with Article 198 of the Company Act, with Independent and Non-Independent Directors elected at the same time, but in separately calculated numbers. A candidate to whom the ballots cast represent a prevailing number of votes shall be deemed an Independent and Non-Independent Director elected.

The Company may obtain Directors liability insurance with respect to liabilities resulting from exercising their duties during their terms of directorship.

Article 17-1

The Company shall establish an Audit Committee, which shall be composed of all Independent Directors, one of whom shall be convener, and at least one of whom shall have accounting or financial expertise.

The Audit Committee shall be responsible for the duties of supervisors stipulated in the provisions of the Company Act, Securities and Exchange Act and other laws and regulations.

The exercise of powers by Audit Committees shall comply with the provisions of relevant regulations and the Company rules. The Audit Committee Charter shall be adopted by resolution of the Board of Directors.

Article 18

The Directors shall establish the Board of Directors. The Chairman of the Board of Directors shall be elected from among the Directors, and the Chairman shall be responsible for the overall administration of the business operations of the Company and represent the Company externally.

Article 19

In calling a meeting of the Board of Directors, a notice shall be sent to each Director no later than 7 days prior to the scheduled meeting date. In the case of emergency, a meeting of the Board of Directors may be convened at any time. The reasons for calling a Board of Directors meeting shall be indicated on the notice which shall be sent in writing, by email or fax.

Meetings of the Board of Directors shall be convened by the Chairman of the Board of Directors. The Chairman of the Board of Directors shall preside the meeting of the Board of Directors, and in case of the absence of the Chairman, a Director appointed by the Chairman shall be designated to act on behalf thereof. In the absence of the designation, the Directors shall elect one representative from among themselves to act on behalf of the Chairman.

In case a meeting of the Board of Directors is proceeded via visual communication network, then the Directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.

In case of the absence of a Director, another Director shall be appointed to attend a meeting of the Board of Directors on behalf thereof with written proxy on which the scope of authority with reference to the subjects to be discussed at the meeting shall be indicated.

Article 20

Unless specified otherwise by the Company Act, resolutions of the Board of Directors shall be adopted by a majority of the Directors at a meeting attended by a majority of the Directors.

Article 21

Deleted.

Article 22

The Board of Directors shall be authorized to determine the remuneration of Directors in line with industry standards. The transportation allowance for the Directors shall be adopted by resolution of the Board of Directors.

Chapter 5 Management

Article 23

The Company shall have one General manager and more Deputy General Managers, Senior managers and Managers. Appointment and discharge of the managerial personnel shall be decided by a resolution to be adopted by a majority vote of the Directors at a meeting of the Board of Directors attended by at least a majority of the entire Directors of the Company.

The General manager hall be responsible for the overall administration of the business operations of the Company in accordance with resolutions of the Board of Directors.

Article 24

The Company shall have one Chief Engineer of whom the appointment and discharge proposed by the Chairman of the Board of Directors shall be decided by a resolution of the Board of Directors.

Chapter 6 Accounting

Article 25

The fiscal year for the Company shall be from January 1 of each year to December 31 of the same year. After the close of each fiscal year, the following reports shall be prepared by the Board of Directors, and submitted to the regular shareholders’ meeting for recognition:

Business Report.
Financial Statements.
Proposals Concerning the Distribution of Earnings or Compensation of Losses.

Article 26

If there is profit at the end of each fiscal year, at least 1% but less than 3% of profit of the current year shall be appropriated as employees' compensation and not more than 5% shall be distributed as Directors’ remuneration. The employees’ compensation and Directors’ remuneration shall be upon adoption of a resolution at the meeting of the Board of Directors and be submitted to the shareholders’ meeting. However, the Company shall reserve a sufficient amount to offset its accumulated losses.

Article 26-1

The earnings of the current year, if any, shall be used to pay the tax first, offset the losses of the prior years, and then 10% of the remaining amount shall be set aside as legal reserve. When necessary if needed, the special reserve or retained earnings shall be set aside. Distribution as shareholders’ dividends of remaining earnings along with the beginning unappropriated retained earnings shall be proposed by the Board of Directors and upon subject to the approval of the shareholders’ meeting.

In accordance with the Regulation of Competent Authority, if there are Unrealized impairment loss on long-term investment, Accumulated translation adjustment or other debits of Shareholders’ Equity, the same amount of special reserve within the following limits shall be set aside before distribution of retaining earnings.

Special reserve set aside for the current year’s amount of the debit balance on Shareholders’ Equity shall not be more than the sum of current year’s net profit

after tax and prior years’ accumulated unappropriated retained earnings.

The prior years’ amount of the debit balance on Shareholders’ Equity shall not be more than the net of the amount reserved on subparagraph 1 deducted

by prior years’ accumulated unappropriated retained earnings.

The amount reversed from the debit balance of Shareholders’ Equity may be distributed as earnings when reversed. The Company has entered a mature stage and regarding the distribution of dividends, the cash dividends shall not less than 10% of shareholders’ bonuses of the current year unless needed in fact for future capital expenditures or financial plans of the Company’s development.

Chapter 7 Supplemental Provisions

Article 27

The Company’s organization and business guidelines shall be separately prescribed.

Article 28

Matters not stipulated herein shall be governed by the Company Act and other relevant laws and regulations.

Article 29

These Articles of Incorporation were enacted on March 15, 1964, with the 1st amendment on April 12, 1966; the 2nd amendment on August 15, 1966; the 3rd

amendment on May 20, 1967; the 4th amendment on April 10, 1972; the 5th amendment on October 4 , 1973; the 6th amendment on March 21, 1974; the 7th amendment on November 20, 1974; the 8th amendment on April 15, 1975; the 9th amendment on August 20, 1975; the 10th amendment on December 22, 1975; the 11th amendments on November 1, 1977; the 12th amendment on July 21, 1979; the 13th amendment on October 2, 1979; the 14th amendment on May 22, 1980; the 15th amendment on November 17, 1982; the 16th amendment on June 11, 1983; the 17th amendment on October 29, 1983; the 18th amendment on June 16, 1984; the 19th amendment on June 15, 1985; the 20th amendment on July 1, 1987; the 21st amendment on June 11, 1988; the 22nd amendment on February 19, 1990; the 23rd amendment on April 17, 1990; the 24th amendment on May 26, 1990; the 25th amendment on May 24, 1991; the 26th amendment on May 14, 1992; the 27th amendment on May 25, 1993; the 28th amendment on May 24, 1995; the 29th amendment on May 26, 2000; the 30th amendment on June 14, 2002; the 31st amendment on May 30, 2003; the 32nd amendment on June 14, 2005; the 33rd amendment on June 9, 2006; the 34th amendment on June 18, 2010; the 35th amendment on June 22, 2012; the 36th amendment on June 28, 2013 the 37th amendment on June 12, 2014; the 38th amendment on June 18, 2015; the 39th amendment on June 22, 2016 ; the 40th amendment on June 16, 2017; the 41st amendment on June 21, 2018, effective from the date of resolution of the shareholders’ meeting. Subsequent amendments thereto shall be affected in the same manner.

Rules for Election of Directors of Hsing Ta Cement Co., Ltd.

Date: June 21, 2018

Article 1

Elections of the Company’s Directors shall be conducted in accordance with these procedures, adopted pursuant to the Company Act and the Company’s Article of Incorporation.

Article 2

The Company’s Directors shall be elected by the shareholders’ meeting.

Article 3

Voting by disclosed ballot shall be implemented on the election of Directors. The ballots shall be prepared by the Board of Directors and then distributed to the attending shareholders with the Meeting Agenda.

Article 4

In the process of electing Directors, the number of votes exercisable in respect of one share shall be the same as the number of Directors to be elected. The ballots of which the number of votes exercisable shall be the same as the number of Directors shall be prepared by the Board of Directors and distributed to the shareholders.

The ballots of the preceding paragraph may be consolidated for election of one candidate or may be split for election of two or more candidates.

Article 5

The Company’s Directors shall be elected by the shareholders’ meeting from among the persons with disposing capacity and in accordance with the number of Directors stipulated in the Company’s Article of Incorporation, the Independent and Non-Independent Directors shall be elected at the same time, but in separately calculated numbers. A candidate to whom the ballots cast represent a prevailing number of votes shall be deemed a director elect. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the Chairman drawing lots on behalf of any person not in attendance.

A candidate nomination system shall be adopted on the election of Independent Directors at the Company in accordance with Article 192-1 of the Company Act. With respect to Independent Directors, the professional qualifications, restrictions, assessment of independence and other matters shall be complied with Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies and other regulations.

If an Independent Director candidate of the Company has already served as an Independent Director of the Company for three consecutive terms or more, the Company shall publicly disclose, together with the review results, the reasons why the candidate is nominated again for the independent directorship, and present the reasons to the shareholders at the time of the election at the shareholders’

meeting.

Article 6

Attendance numbers shall be specified on the ballots, together with the number of voting rights of each shareholder, when the ballots prepared by the Board of Directors.

Article 7

At the beginning of election, the Chairman shall appoint a number of persons to perform the respective duties of vote monitoring and counting.

Article 8

The ballot boxes shall be prepared by the Board of Directors and publicly checked by the vote monitoring personnel before voting commences.

Article 9

If the candidate is a shareholder of the Company, voters shall fill in the candidate column the candidate's name and shareholder's number. If the candidate is not a shareholder of the Company, voters shall fill in the candidate column the candidate's name and ID number. If the candidate is a government agency or a juristic person, the full name of the government agency or the juristic person or the names of their representatives shall be filled in the candidate column. If there are several representatives, their names shall be filled in separately.

Article 10

Ballots shall be deemed void under any of the following circumstances:

Ballots not pursuant to the provisions of this procedure;
Blank ballots placed in the ballot box;
Illegible writing and not be recognized or change and not corrected in
accordance with law;
If the candidate is a shareholder of the Company, the name or shareholder's number of the candidate filled in the ballot inconsistent with the shareholders' register. If the candidate is not a shareholder of the Company, the name or ID

number of the candidate filled in the ballot is incorrect;

On the same ballot, the number of candidates filled exceeds the quota to be elected and voting rights filled exceeds the total number of such voter;
Ballots with other written characters in addition to the candidate's name, shareholder's number (ID number) and the number of votes cast for the candidate; or
Only one of the candidate's name or shareholder’s number (ID number) filled in the candidate column of ballots.

Article 11

The ballot boxes shall be prepared for elections of Directors. After voting, the scrutineer and counting personnel open the ballot boxes jointly.

Article 12

The scrutineers oversee the counting of ballots. When in doubt, the scrutineers shall check the validation of ballots and indicate “void” together with signing on the void ballots after verification. After the counting persons confirm that the total numbers of valid and void ballots are correct, the counting persons shall fill the numbers of voting rights in the record separately and sign with the scrutineers jointly. The results of election shall be announced by the Chairman on the site.

Article 13

This Board of Directors shall issue notifications to each Director elected.

Article 14

These rules will be implemented after approval by the shareholders’ meeting. Subsequent amendments thereto shall be affected in the same manner.

Current Directors’ Shareholdings are as follows on April 26, 2021:

Title	Name	Appointment Date	Number of Shares Held at the Time of Appointment	Number of Shares Held at the Time of Appointment	Number of Shares Held at the Time of Appointment	Number of Shares Held Currently	Number of Shares Held Currently	Number of Shares Held Currently	Note
			Stock Class	Number of Shares	%	Stock Class	Number of Shares	%
Chairman	Yang Jee-Shing	June 21, 2018	Common Stock	36,238,070	10.07	Common Stock	34,426,166	10.07	-
Director	Yang Chung-Hsiung	June 21, 2018	Common Stock	43,713,735	12.14	Common Stock	41,528,048	12.14	-
Director	Yang Ren-Hsiung	June 21, 2018	Common Stock	38,009,246	10.56	Common Stock	36,108,783	10.56	-
Director	Yang Da-Qin	June 21, 2018	Common Stock	8,574,668	2.38	Common Stock	8,145,934	2.38	-
Director	Shelly Sheue-Ching Ka	June 21, 2018	Common Sock	7,556,237	2.10	Common Sock	7,188,425	2.10	-
Director	Hiturbo Capital Co., Ltd.	June 21, 2018	Common Stock	96,900	0.03	Common Stock	15,387,055	4.50	-
Independent Director	Chen Jheng-Ting	June 21, 2018	Common Stock	0	0.00	Common Stock	0	0.00	-
Independent Director	Chen Li-Hsiung	June 21, 2018	Common Stock	0	0.00	Common Stock	0	0.00	-
Independent Director	Shih Cheng-Tung	June 21, 2018	Common Stock	0	0.00	Common Stock	0	0.00	-
Total				134,188,856		Common Stock	142,784,411

Total Number of Outstanding Shares on June 21, 2018: 359,955,650 Total Number of Outstanding Shares on April 26, 2021: 341,957,868

Note:

Total Number of Shares shall be held by all Directors pursuant to the law: 13,678,314 Total Number of Shares held by all Directors as of April 26, 2021:142,784,411

The shareholdings of Independent Directors of the Company shall not be counted in the total of the shareholdings of Directors.

All Directors’ shareholdings of the Company shall be in accordance with the percentage of “ Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies”.

AI assistant

HsingTa — AGM Information 2021

51740_rns_2021-07-21_e9273e73-914f-4f93-a5c7-9fc0304135d4.pdf

Hsing Ta Cement Co., LTD.

2021 Annual Shareholders’ Meeting

Handbook

Table of Contents

Hsing Ta Cement Co., LTD. 2021 Annual Shareholders’ Meeting Procedures

9. Adjournment

Hsing Ta Cement Co., LTD. 2021 Annual Shareholders’ Meeting Agenda

6. Elections

7. Discussions

9. Adjournment

Reporting Matters

Proposed Resolutions

1. Proposed by the Board of Directors Proposal:

2. Proposed by the Board of Directors Proposal:

Elections

1. Proposed by the Board of Directors Proposal:

Discussions

Explanation:

Extempore Motion

Adjournment

Final Annual Reports

2020 Annual Operation Report and Final Statement

II. Comparison of performance in 2020 and 2019

III. Research and development

Year 2020 Consolidated Financial Statements and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Occurrence of revenue recognition of cement sales

Description

How our audit addressed the matter

Other matter – Parent company only financial reports

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

[Hsu, Ming-Chuan ]

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019 (Expressed in thousands of New Taiwan dollars)

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

Year 2020 Parent Company Only Financial Statements and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Occurrence of revenue recognition of cement sales

How our audit addressed the matter

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

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

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

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

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

HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

HSING TA CEMENT CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

Audit Committee's Review Report of 2020 Annual Accounting Final Statements

Audit Report of Audit Committee

2020 Distribution Report of Employees’ Compensation and Directors’ Remuneration

Endorsement and Guarantee

2020 Earnings Distribution Table

Appendix

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 11

HsingTa AGM Information 2021