LUCKY CEMENT — Annual Report 2021

Dec 15, 2021

Lucky Cement Co. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as of and for the year ended December 31, 2021 as provided in International Financial Reporting Standard No. 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies as of and for the year ended December 31, 2021. Hence, we did not prepare a separate set of consolidated financial statements of affiliates for the year ended December 31, 2021.

Very truly yours,

LUCKY CEMENT CO.

By

CHEN, LIANG-CHUAN Chairman

March 30, 2022

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勤業眾信聯合會計師事務所 110016 台北市信義區松仁路 100 號 20 樓

Deloitte & Touche 20F, Taipei Nan Shan Plaza No. 100, Songren Rd., Xinyi Dist., Taipei 110016, Taiwan Tel : + 886 (2) 2725 - 9988 Fax: + 886 (2) 4051 - 6888 www.deloitte.com.tw

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Lucky Cement Co.

Opinion

We have audited the accompanying consolidated financial statements of Lucky Cement Co. and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FCS) of the Republic of China.

Basis of Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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The descriptions of the key audit matters of the consolidated financial statements for the year ended December 31, 2021 are as follows:

Occurrence of Sales Revenue from Key Customers

The Group’s sales revenue mainly comes from sales of cement, stone materials and other cement products. The net sales revenue of the Group in 2021 was lower than in 2020. However, the net sales revenue from key customers had increased compared to previous year, which accounted for 15% of the total sales revenue in 2021. Therefore, we deemed the occurrence of sales as a significant risk and key audit matter.

Refer to Note 4(11) to the consolidated financial statements for accounting policies on revenue recognition and Note 24(1) for the disclosures related to the operating revenue.

Our key audit procedures performed in respect of the above area included the following:

1. We obtained an understanding of the internal control procedures over the sales revenue and assessed the design and effectiveness of the implementation of internal controls.

2. We obtained the summary of sales to the key customers for the year; we tested the completeness of the summary, selected samples from the summary, and examined supporting vouchers, shipping documents, delivery receipts, invoices, etc. and verified the occurrence of sales.

3. We inspected the sales ledger for any significant sales returns and allowances recorded after the balance sheet date and verified that the returns and allowances were related to sales after the balance sheet date.

Other Matter

We have also audited the parent company only financial statements of Lucky Cement Co. as of and for the years ended December 31, 2021 and 2020, on which we have issued an unmodified opinion.

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

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

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

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

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. 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.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. 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.

6. Obtain sufficient and 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.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Chao-Mei Chen and Chiang-Hsun Chen.

Deloitte & Touche Taipei, Taiwan Republic of China March 30, 2022

Notice to Readers

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

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

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - current (Notes 4 and 8) Financial assets at amortized cost - current (Notes 4, 9 and 32) Notes receivable (Notes 4, 10 and 24) Notes receivable from related parties (Notes 4, 24 and 31) Accounts receivable (Notes 4, 10 and 24) Accounts receivable from related parties (Notes 4, 24 and 31) Other receivables (Notes 4 and 10) Other receivables from related parties (Notes 4 and 31) Inventories (Notes 4, 11 and 32) Prepayments (Note 13) Other current assets (Note 14) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Financial assets at amortized cost - non-current (Notes 4, 9 and 32) Property, plant and equipment (Notes 4, 15 and 32) Right-of-use assets (Notes 4 and 16) Deferred tax assets (Notes 4 and 26) Refundable deposits Other non-current assets (Notes 4, 17 and 21) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 18 and 32) Short-term bills payable (Notes 18 and 32) Contract liabilities (Note 24) Notes payable (Note 19) Notes payable to related parties (Notes 19 and 31) Accounts payable (Note 19) Accounts payable to related parties (Notes 19 and 31) Other payables (Note 20) Other payables to related parties (Note 31) Current tax liabilities (Note 26) Lease liabilities - current (Notes 4 and 16) Current portion of long-term borrowings (Notes 18 and 32) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 18 and 32) Deferred tax liabilities (Notes 4 and 26) Lease liabilities - non-current (Notes 4 and 16) Other payables to related parties (Note 31) Net defined benefit liabilities (Notes 4 and 21) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share capital Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS (Note 23) Total equity TOTAL		2021 Amount % $ 220,238 3 44,932 1 73,319 1 111,953 1 297,280 4 6,571 - 418,395 5 3,250 - 2,613 - 247 - 3,676,472 46 233,445 3 29,292 - 5,118,007 64 - - 11,038 - 202,326 2 2,302,034 29 155,588 2 75,217 1 18,427 - 159,073 2 2,923,703 36 $ 8,041,710 100 $ 928,359 12 404,424 5 190,789 2 214,743 3 43,148 1 123,370 1 2,046 - 138,507 2 2,511 - 17,477 - 51,476 1 914,000 11 1,537 - 3,032,387 38 120,000 2 23,818 - 105,376 1 45,800 1 34,745 - 34,010 - 363,749 4 3,396,136 42 4,047,380 50 18 - 210,524 3 14,135 - 374,225 5 598,884 8 (773) - 4,645,509 58 65 - 4,645,574 58 $ 8,041,710 100		2020
				Amount % $ 320,535 4 11,296 - 34,126 1 101,335 1 573,958 7 235 - 492,996 6 5,764 - 15,422 - 313 - 3,545,586 44 160,658 2 22,734 1 5,284,958 66 8,734 - 14,994 - 164,062 2 2,223,887 28 79,560 1 120,156 2 20,580 - 110,376 1 2,742,349 34 $ 8,027,307 100 $ 320,000 4 189,588 2 333,095 4 345,327 4 39,596 1 241,920 3 20,006 - 208,340 3 78,338 1 46,463 1 37,081 - 290,000 4 1,508 - 2,151,262 27 1,040,000 13 20,663 - 43,161 1 45,800 1 36,798 - 32,704 - 1,219,126 15 3,370,388 42 4,047,380 50 9 - 170,899 2 14,135 - 419,967 6 605,001 8 4,455 - 4,656,845 58 74 - 4,656,919 58 $ 8,027,307 100

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

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE(Notes 4, 24 and 31) Sales Less: Discounts and allowances Total operating revenue OPERATING COSTS (Notes 11, 25 and 31) GROSS PROFIT OPERATING EXPENSES (Notes 10, 25 and 31) Selling and marketing expenses General and administrative expenses Expected credit loss Total operating expenses OTHER OPERATING INCOME AND EXPENSES (Note 25) PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 15, 25 and 31) Interest income Rental income Other income Gain on disposal of investments Gain on disposal of non-current assets held for sale Foreign exchange gain Fair value changes of financial assets Other losses Interest expense Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE YEAR		2021 Amount % $ 3,772,443 100 (3,421) - 3,769,022 100 3,208,996 85 560,026 15 111,495 3 119,664 3 3,740 - 234,899 6 13,442 - 338,569 9 1,943 - 8,564 - 16,030 1 436 - - - 2,179 - 13,374 - (7,706) - (32,077) (1) 2,743 - 341,312 9 (79,107) (2) 262,205 7		2020
				Amount % $ 4,533,370 100 (3,198) - 4,530,172 100 3,813,497 84 716,675 16 119,454 3 138,745 3 2,042 - 260,241 6 (8,959) - 447,475 10 1,591 - 8,336 - 12,349 - - - 15,724 1 1,865 - (538) - (10,448) - (31,946) (1) (3,067) - 444,408 10 (52,139) (1) 392,269 9 (Continued)

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 21) Unrealized (loss) gain on investments in equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Unrealized gain on investments in debt instruments at fair value through other comprehensive income Other comprehensive income, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests EARNINGS PER SHARE (Note 27) Basic Diluted		2021 Amount % $ 1,492 - 11,885 - (3,107) - (503) - 9,767 - $ 271,972 7 $ 262,205 7 - - $ 262,205 7 $ 271,972 7 - - $ 271,972 7 $ 0.65 $ 0.65		2020
				Amount % $ 2,380 - 1,997 - 25 - 24 - 4,426 - $ 396,695 9 $ 392,269 9 - - $ 392,269 9 $ 396,695 9 - - $ 396,695 9 $ 0.97 $ 0.97
		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

BALANCE, JANUARY 1, 2020 Appropriation of 2019 earnings Legal reserve Cash dividend to shareholders - NT$0.15 per share Special reserve Net profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020 Total comprehensive income (loss) for the year ended December 31, 2020 Difference between consideration and carrying amount of subsidiaries acquired (Note 12) Disposal of investments in equity instruments designated as at fair value through other comprehensive income (Note 23) BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings Legal reserve Cash dividend to shareholders - NT$0.70 per share Net profit for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021 Total comprehensive income (loss) for the year ended December 31, 2021 Difference between consideration and carrying amount of subsidiaries acquired Disposal of investments in equity instruments designated as at fair value through other comprehensive income (Note 23) BALANCE AT DECEMBER 31, 2021		Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Total Non-controlling Interests $ 4,320,860 $ 77 - - (60,711) - - - 392,269 - 4,426 - 396,695 - 1 (3) - - 4,656,845 74 - - (283,317) - 262,205 - 9,767 - 271,972 - 13,512 (9) (13,503) - $ 4,645,509 $ 65	Total Equity $ 4,320,937 - (60,711) - 392,269 4,426 396,695 (2) - 4,656,919 - (283,317) 262,205 9,767 271,972 13,503 (13,503) $ 4,645,574
	Common Stock Capital Surplus $ 4,047,380 $ 8 - - - - - - - - - - - - - 1 - - 4,047,380 9 - - - - - - - - - - - 9 - - $ 4,047,380 $ 18	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 166,309 $ 17,256 $ 85,901 4,590 - (4,590) - - (60,711) - (3,121) 3,121 - - 392,269 - - 2,380 - - 394,649 - - - - - 1,597 170,899 14,135 419,967 39,625 - (39,625) - - (283,317) - - 262,205 - - 1,492 - - 263,697 - - 13,503 - - - $ 210,524 $ 14,135 $ 374,225	Other Equity
			Exchange Differences on Translation of Unrealized Gain on Financial Assets at Fair Value Through Other Foreign Operations Comprehensive Income $ 7,450 $ (3,444) - - - - - - - - 25 2,021 25 2,021 - - - (1,597) 7,475 (3,020) - - - - - - (3,107) 11,382 (3,107) 11,382 - - - (13,503) $ 4,368 $ (5,141)

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

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before income tax Adjustments for: Depreciation expense Amortization and depletion expense Expected credit loss recognized on trade receivables Net (gain) loss on fair value changes of financial assets at fair value through profit or loss Interest expense Interest income Dividend income Gain on disposal of investments (Gain) loss on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Inventory write-downs Gain on lease modification Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Notes receivable Notes receivable from related parties Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Other current assets Other non-current assets Contract liabilities Notes payable Notes payable to related parties Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Cash generated from operations Interest received Interest paid Income tax (paid) refunded Net cash generated from operating activities	2021 $ 341,312 152,136 15,807 3,740 (13,374) 32,077 (1,943) (2,145) (436) (13,442) - 1,691 - (30,402) 276,678 (6,336) 70,861 2,514 (1,330) 66 (132,577) (72,787) (6,558) (34) (142,306) (130,584) 11,552 (118,550) (17,960) (38,989) (5,778) 29 (561) 172,371 2,007 (32,256) (59,999) 82,123	2020 $ 444,408 194,212 12,460 2,042 538 31,946 (1,591) (3,720) - 8,959 (15,724) - (10) 4,592 (85,197) 4,737 (82,918) 1,686 190 (158) (29,514) 4,148 334 (102) 73,664 143,265 (3,060) 117,789 (15,526) 35,093 7,008 (1,008) (950) 847,593 2,441 (32,119) 14,142 832,057

(Continued)

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LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of non-current assets held for sale Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Decrease in other receivables Increase in other non-current assets Other dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in short-term bills payable Decrease in short-term bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits received Increase in notes payable to related parties Decrease in notes payable to related parties Increase in other payable to related parties Decrease in other payable to related parties Repayment of the principal portion of lease liabilities Cash dividends paid Acquisition of subsidiary Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH CASH AT THE BEGINNING OF YEAR CASH AT THE END OF YEAR	2021 $ (260,941) 242,289 7,387 (48,882) - (273,101) 41,688 2,153 - (6,030) 2,766 (292,671) 608,359 215,000 - 220,000 (516,000) 1,306 - (8,000) - (70,000) (54,737) (283,317) - 112,611 (2,360) (100,297) 320,535 $ 220,238	2020 $ (39,221) 37,173 5,125 (39,644) 20,741 (654,165) 80 328 65,000 (18,218) 3,099 (619,702) 87,300 - (30,000) 200,000 (350,000) 1,904 8,000 - 70,000 - (51,753) (60,711) (2) (125,262) 16 87,109 233,426 $ 320,535

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

(Concluded)

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LUCKY CEMENT CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Lucky Cement Co. (the “Company”) was established in 1974; its main business is production and sale of Portland cement. The Company listed its shares on the Taiwan Stock Exchange in June 1990.

The consolidated financial statements of the Company and its subsidiaries (collectively, the “Group”) are presented in Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on March 30, 2022.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

• b. The IFRSs endorsed by the FSC for application starting from 2022

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”	Effective Date Announced by IASB
	January 1, 2022 (Note 1) January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4)

• Note 1: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

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• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group had assessed that the application of other standards and interpretations will not have a material impact on the Group’s financial position and financial performance.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

Effective Date Announced by IASB (Note 1)

To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 2) January 1, 2023 (Note 3) January 1, 2023 (Note 4)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

• b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities (assets) which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for the asset or liability.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within twelve months after the reporting period; and

• 3) Cash unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and

• 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

The Group is also engaged in construction and development of properties; its operating cycle is longer than 1 year. Its assets and liabilities related to the construction business are not classified as current or non-current under normal operating cycle but presented according to the order of their perceived liquidity to non-liquidity.

• 14 -

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

Refer Note 12 and Note 36(5) for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Foreign currencies

Transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences are recognized in profit or loss in the year in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in foreign currencies are not retranslated.

For the purpose of presenting consolidated financial statements, the financial statements of the Company’s foreign operations that are prepared using functional currencies which are different from the currency of the Company are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

f. Inventories

Inventories consist of raw materials, supplies and spare parts, finished goods, work-in-process, merchandise and real estate under development and real estate to be developed and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date. The construction cost of property inventories is calculated according to the proportion of an area to the total area of a building floor; the

• 15 -

principle is to match construction cost with property sales revenue; operating costs are recognized at the end of the reporting period.

Land for development is classified as real estate to be developed while being prepared for construction, and classified as real estate under development when it is actively being developed and has obtained a construction permit.

• g. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• h. Impairment of property, plant and equipment and right-of-use asset

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment and right-of-use asset to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss.

i. Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, and the sale should be expected to qualify for recognition as a completed sale within 1 year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Such assets classified as held for sale are not depreciated.

• 16 -

j. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost, and investments in debt instruments and equity instruments at FVTOCI.

• i. Financial asset at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 30.

• ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash, financial assets at amortized cost and trade receivables are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

• 17 -

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

• i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset; and

• ii) Financial asset that is not credit-impaired on purchase or origination but has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit-impaired when one or more of the following events have occurred:

• i) Significant financial difficulty of the issuer or the borrower;

• ii) Breach of contract, such as a default;

• iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

• iv) The disappearance of an active market for that financial asset because of financial difficulties.

• iii. Investments in debt instruments at FVTOCI

Debt instruments that meet the following conditions are subsequently measured at FVTOCI:

• i) The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and

• ii) The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.

• iv. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

• 18 -

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables) and investments in debt instruments that are measured at FVTOCI.

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group):

• i. Internal or external information shows that the debtor is unlikely to pay its creditors.

• ii. When a financial asset is more than 181 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The Group recognizes impairment loss or reversal of impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

• c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

• 19 -

2) Financial liabilities

• a) Subsequent measurement

All financial liabilities are measured at amortized cost using the effective interest method.

• b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• k. Revenue recognition

The Group identifies the contract with the customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Revenue from sale of goods

Revenue from sale of goods comes from sales of cement, stone materials and other cement products. Sales of cement, stone materials and other cement products are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

• l. Leasing

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

• 1) The Group as lessor

Lease payments from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

• 2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

• 20 -

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

m. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other than those stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

• n. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur or when the plan amendment or curtailment occurs. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• o. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 21 -

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current tax and deferred tax for the year

Current tax and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current tax and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years.

The Group did not have critical accounting judgments and key sources of estimation uncertainty that need to be reported.

• 22 -

6. CASH

December 31 2021 2020 Cash on hand and revolving funds $ 1,334 $ 1,432 Checking accounts and demand deposits 205,848 309,601 Foreign currency demand deposits 13,056 9,502 $ 220,238 $ 320,535 FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31 2021 2020 Current Financial assets mandatorily classified as at FVTPL - mutual funds $ 44,932 $ 11,296 Non-current Financial assets mandatorily classified as at FVTPL - mutual funds $ - $ 8,734		December 31	December 31
			2020 $ 1,432 309,601 9,502 $ 320,535 31
		2021 $ 44,932 $ -	2020 $ 11,296 $ 8,734

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

In May 2021, the Group purchased fund beneficiary certificates which were classified as non-current financial assets at fair value through profit or loss. The Group decided to settle and distribute its real estate to investors. Because the transfer procedures of the real estate allocated by the Group have not been completed, it was recorded in other non-current assets - prepayments for investment property.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Current Investments in equity instruments Investments in debt instruments Non-current Investments in Equity instruments		December	31
		2021 $ 73,319 - $ 73,319 $ 11,038	2020 $ 28,213 5,913 $ 34,126 $ 14,994

• 23 -

a. Investments in Equity instruments at FVTOCI

Current Domestic investments - ordinary shares Non-current Domestic investments - ordinary shares		December	31
		2021 $ 73,319 $ 11,038	2020 $ 28,213 $ 14,994

For information on the above investments, refer to Note 36 Schedule 3 “Marketable Securities Held”.

For other relevant information on financial assets measured at FVTOCI, refer to Note 23(5) and Note 30.

These investments in equity instruments are held for strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes.

The Group disposed its shares that had a fair value of $224,288 thousand and $28,596 thousand. The shares related unrealized valuation gain of $13,503 thousand and $1,597 thousand were transferred from other equity to retained earnings in 2021 and 2020, respectively.

Dividends of $2,145 thousand and $3,720 thousand were recognized in 2021 and 2020, respectively.

The Group received return of capital of $7,387 thousand and $5,125 thousand when the invested company reduced capital in 2021 and 2020, respectively.

b. Investments in debt instruments at FVTOCI

Current Domestic investment Bond investment		December	31
		2021 $ -	2020 $ 5,913

The bond held by the Group have a coupon rate of 3.375% in 2020.

The bond issuer implemented the early redemption of bonds in October 2021, with a redemption price of 5,809 thousand, refer to Note 23(5) “Other equity items”.

• 24 -

For credit risk management of investment in debt instruments, the Group invests only in debt instruments with low credit risk after impairment assessments. The Group’s current credit risk grading mechanism is as follows:

Category Performing Doubtful In default Write-off	Description The counterparty has a low risk of default and a strong capacity to meet contractual cash flows There has been a significant increase in credit risk since initial recognition There is evidence indicating the asset is credit impaired There is evidence indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery	Basis for Recognizing Expected Credit Losses (ECLs)
		12-month ECLs Lifetime ECLs - not credit impaired Lifetime ECLs - credit impaired Amount is written off

The Group assesses that the debtor’s credit risk is low and that it has sufficient ability to pay off the contractual cash flows. As of December 31, 2020, there was no expected credit loss for investment in debt instruments.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months Restricted assets Non-current Restricted assets		**December 31 **	**December 31 **
		2021 $ 7,273 104,680 $ 111,953 $ 202,326	2020 $ 7,155 94,180 $ 101,335 $ 164,062

• a. The interest rates of time deposits with original maturities of more than 3 months were approximately 2.30% and 2.35% per annum as of December 31, 2021 and 2020, respectively.

• b. The restricted assets - current are savings deposits and certificate of deposit that are provided as guarantees for bank loan and construction contract; market interest rate ranges were approximately 0.0007%-0.56% per annum both of December 31, 2021 and 2020.

• c. The restricted assets - non-current are certificate of deposit in the bank that is pledged as the security of mining right, which has market interest rate range of approximately 0.10%-0.82% per annum both of December 31, 2021 and 2020.

• d. Refer to Note 32 for information relating to investments in financial assets at amortized cost pledged as security.

• 25 -

10. NOTES RECEIVABLE, TRADE RECEIVABLES, OTHER RECEIVABLES AND OVERDUE RECEIVABLES

Notes receivable At amortized cost Gross carrying amount Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Sale of securities Other Overdue receivables Overdue receivables Less: Allowance for impairment loss		December 31	December 31
		2021 $ 297,280 $ 437,338 (18,943) $ 418,395 $ 624 1,989 $ 2,613 $ 28,743 (28,743) $ -	2020 $ 573,958 $ 508,199 (15,203) $ 492,996 $ 12,816 2,606 $ 15,422 $ 28,743 (28,743) $ -

a. Notes receivable

The average credit period of sales of goods was 60-150 days. No interest is charged on notes receivable. In order to minimize credit risk, the management of the Group has delegated a team for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. The Group recognizes 100% allowance for impairment loss if notes receivable become overdue.

Notes receivable of the Group are not overdue at the date of balance sheet.

b. Trade receivables

The average credit period of sales of goods is 60-150 days. No interest is charged on trade receivables. In order to minimize credit risk, the management of the Group has delegated a team for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts.

The Group measure the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix prepared by reference to the past default experience of the customer, the customer’s current financial position, as well as the GDP forecasts and industry outlook. The Group’s provision matrixes are prepared by reference to if the

• 26 -

customer were in severe financial difficulty. The Group recorded a 100% of loss allowance when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery; If the customer were not in severe financial difficulty, as the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2021

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2020	Not Past Due Pa 0%-0.69% $ 406,784 (2,009) $ 404,775	st Due within 30 Days P 8.90% $ 6,172 (548) $ 5,624	ast Due 31 to 60 Days P 15.60% 22 $ 7,909 (1,234) $ 6,675	ast Due 61 to 180 Days P .03%-71.86% $ 2,896 (1,575) $ 1,321	ast Due Over 181 Days Assessed Individually 100% 100% $ 6,621 $ 35,699 (6,621) (35,699) $ - $ -	Total $ 466,081 (47,686) $ 418,395

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due Pa 0%-0.19% $ 463,440 (726) $ 462,714	st Due within 30 Days P 4.90% $ 14,118 (692) $ 13,426	ast Due 31 to 60 Days P 7.85% 14 $ 14,077 (1,105) $ 12,972	ast Due 61 to 180 Days P .32%-58.86% $ 5,186 (1,302) $ 3,884	ast Due Over 181 Days Assessed Individually 100% 100% $ 4,422 $ 35,699 (4,422) (35,699) $ - $ -	Total $ 536,942 (43,946) $ 492,996

The movements of the loss allowance of trade receivables and overdue receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written-off Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 43,946 3,740 - $ 47,686	2020 $ 44,704 2,042 (2,800) $ 43,946

• c. Other receivables

Other receivables mainly include proceeds from equipment and interest. The Group adopted a policy of only dealing with high credit rating entities and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit rating information is obtained from its own historical trading records to rate its customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored.

The Group considers the current financial condition of debtors to determine the expected credit losses for debt instrument investments. As December 31, 2021 and 2020, the expected credit loss rate of other receivables was both 0%.

• 27 -

11. INVENTORIES

Real estate under development and real estate to be developed Raw materials Finished goods Work in progress Supplies and spare parts Merchandise		December 31	December 31
		2021 $ 3,184,345 271,725 98,289 44,096 71,399 6,618 $ 3,676,472	2020 $ 3,153,571 234,118 87,339 29,975 32,633 7,950 $ 3,545,586

The nature of the cost of goods sold is as follows:

Cost of inventories sold Inventory write-downs	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 3,207,305 1,691 $ 3,208,996	2020 $ 3,813,463 34 $ 3,813,497

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2021 and 2020 was $3,208,996 thousand and $3,813,497 thousand, respectively.

The inventories pledged as collateral for bank borrowings are set out in Note 32.

12. SUBSIDIARIES

The entities included in these consolidated financial statements are as follows:

Investor Company Subsidiary Nature of Business Lucky Cement Co. Dasheng Enterprise Co., Ltd. (“Dasheng Enterprise”) Sale and lease of national residences, commercial buildings, parking lots and industrial areas Luckicon Ready-mixed Concrete Factory Co., Ltd. (“Luckicon Ready-mixed Co.”) Production and sales of concrete Lucky Cement Corp., Japan (“Lucky Cement Japan”) Buy and sell of cement Luckyship Marine Co., Ltd (“Luckyship Co.”) Shipping agent Just Bright Ltd. Investment business Luckicon Ready-mixed Co. Fuyu Development Co., Ltd. Earth and stone

Percentage of Equity Held December 31 2021 2020 Explanation 99.99 99.99 a. 100.00 100.00 b. 100.00 100.00 100.00 99.99 c. - 100.00 d. 100.00 100.00

• 28 -

Notes:

• a. Dasheng Enterprise implemented a capital reduction to cover losses of $200,000 thousand on August 19, 2021, and increased its capital by $200,000 thousand on August 20, 2021. After the capital increase, the Company’s shareholding in Dasheng Enterprise increased. Dasheng Enterprise recognized the difference between the consideration and the adjusted carrying amount of non-controlling interests of $9 thousand under capital surplus.

• b. Luckicon Ready-mixed Co. increased its capital by $250,000 thousand on August 15, 2020, and the Company acquired the residual interests for $2 thousand from non-controlling interests in September 2020. After the capital increase, the Company’s shareholding in Luckicon Ready-mixed Co. increased from 99.99% to 100%. Luckicon Ready-mixed Co. recognized the difference between the consideration and the adjusted carrying amount of non-controlling interests of $1 thousand under capital surplus.

• c. Luckyship Co. implemented a capital reduction to cover losses of $65,000 thousand on November 30, 2021. Due to the surrender of shares by non-controlling interests, the Company’s shareholding in Luckyship Co. increased from 99.99% to 100%.

• d. The Company’s board of directors resolved in its meeting on December 27, 2019 to go out of business of its subsidiary, Just Bright Ltd., and the procedure was completed in May 2021.

13. PREPAYMENTS

Prepaid expenses Office supplies Prepayments for land purchases Prepayments for purchases of materials Other		December 31	December 31
		2021 $ 89,857 72,853 69,350 1,032 353 $ 233,445	2020 $ 39,115 106,920 - 14,548 75 $ 160,658

14. OTHER CURRENT ASSETS

Offset against business tax payable Other		December	31
		2021 $ 29,291 1 $ 29,292	2020 $ 22,733 1 $ 22,734

• 29 -

15. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2021 Additions Disposals Net exchange difference Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Disposals Net exchange difference Balance at December 31, 2021 Carrying amount at December 31, 2021 Cost Balance at January 1, 2020 Additions Reclassification Disposals Net exchange difference Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposals Net exchange difference Balance at December 31, 2020 Carrying amount at December 31, 2020	Land $ 1,650,349 2,524 - - $ 1,652,873 $ - - - - $ - $ 1,652,873 $ 1,084,102 571,264 (5,017 ) - - $ 1,650,349 $ - - - - $ - $ 1,650,349	Buildings Machinery and Equipment $ 2,290,846 $ 6,097,312 - 16,022 (67,679 ) (520,755 ) (11,280) (1,457) $ 2,211,887 $ 5,591,122 $ 1,965,873 $ 6,004,617 42,082 15,760 (67,679 ) (520,755 ) (10,769) (1,223) $ 1,929,507 $ 5,498,399 $ 282,380 $ 92,723 $ 2,294,349 $ 6,107,551 - 5,990 - 5,098 (3,596 ) (21,340 ) 93 13 $ 2,290,846 $ 6,097,312 $ 1,913,451 $ 5,971,633 53,161 46,745 (826 ) (13,771 ) 87 10 $ 1,965,873 $ 6,004,617 $ 324,973 $ 92,695	Electrical Equipment Transportation Equipment $ 1,196,322 $ 877,182 178 177,209 (89,539 ) (191,559 ) - (39) $ 1,106,961 $ 862,793 $ 1,183,518 $ 756,261 4,112 26,337 (89,539 ) (164,613 ) - (39) $ 1,098,091 $ 617,946 $ 8,870 $ 244,847 $ 1,196,322 $ 858,385 - 68,270 - - - (49,474 ) - 1 $ 1,196,322 $ 877,182 $ 1,178,305 $ 772,430 5,213 33,304 - (49,474 ) - 1 $ 1,183,518 $ 756,261 $ 12,804 $ 120,921	Other Equipment $ 517,173 6,724 (161,090 ) (57) $ 362,750 $ 495,028 8,526 (161,090 ) (55) $ 342,409 $ 20,341 $ 499,954 5,053 14,712 (2,546 ) - $ 517,173 $ 493,038 4,536 (2,546 ) - $ 495,028 $ 22,145	Total $ 12,629,184 202,657 (1,030,622 ) (12,833) $ 11,788,386 $ 10,405,297 96,817 (1,003,676 ) (12,086) $ 9,486,352 $ 2,302,034 $ 12,040,663 650,577 14,793 (76,956 ) 107 $ 12,629,184 $ 10,328,857 142,959 (66,617 ) 98 $ 10,405,297 $ 2,223,887

• a. The above-mentioned property, plant and equipment are reclassified as non-current assets held for sale, refer to Note 15(2) for the details; besides long-term prepaid expenses are reclassified as machinery and equipment and other equipment.

• b. The Company proposed to dispose of the idle land at the Puxin factory on March 24, 2020, and signed the contract with non-related parties on April 24, 2020. The land was reclassified as non-current assets held for sale. The Company has completed the land transfer process with a net consideration of $20,741 thousand (contract price $21,618 thousand less related fees $877 thousand) and recognized disposal gain was $15,724 thousand in 2020.

• c. A part of the Group’s land use rights reserved for use by the aborigines and for agriculture is temporarily registered in the name of a third person. The trustee had issued an affidavit and mortgaged the land to the Group.

• 30 -

• d. The Group’s property, plant and equipment are depreciated on a straight-line method over their estimated useful lives as follows:

Buildings Main building of plant 35-55 years Electrical power equipment 10-15 years Engineering system 3-5 years Machinery and equipment 2-10 years Electrical equipment 5-15 years Transportation equipment 3-15 years Office equipment 3-10 years

• e. No impairment assessment was performed for the year ended December 31, 2021 and 2020 as there was no indication of impairment.

• f. Property, plant and equipment used by the Group and pledged as collateral for bank borrowings are set out in Note 32.

16. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Land Buildings Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment		**December 31 **	**December 31 **
	2021 $ 12,480 142,491 617 $ 155,588 For the Year Ended		2020 $ 21,060 58,341 159 $ 79,560 December 31
		2021 $ 131,347 $ 11,061 43,579 679 $ 55,319	2020 $ 1,887 $ 16,150 33,202 1,901 $ 51,253

The Group had written off right-of-use assets on lease contracts terminated earlier in 2020; the carrying amount written off was $665 thousand, and gain on lease modification was $10 thousand.

• 31 -

b. Lease liabilities

Carrying amount Current Non-current Range of discount rate for lease liabilities was as follows: Land Buildings Transportation equipment c. Other lease information Expenses relating to short-term leases Expenses relating to low-value asset leases Interest on lease liabilities Principal of lease liabilities Total cash outflow for leases OTHER NON-CURRENT ASSETS Prepayments for business facilities Long-term prepaid expenses Net limestone mining rights Prepayments for investment property (Note 7) Net defined benefit assets (Note 21) Overdue receivables (Note 10)				December 31
				2021 2020 $ 51,476 $ 37,081 $ 105,376 $ 43,161 December 31
		2021 2020 1.55%-1.68% 1.55%-1.68% 1.51%-1.60% 1.55% 1.55%-1.60% 1.55% For the Year Ended December 31
			2021 $ 74,032 46,953 18,768 18,874 446 - $ 159,073

17. OTHER NON-CURRENT ASSETS

• 32 -

18. BORROWINGS

a. Short-term borrowings

b.	Secured borrowings (Note 32) Bank loans Unsecured borrowings Line of credit borrowings The interest rates of the bank loans were as follows: Secured borrowings Unsecured borrowings Short-term bills payable Commercial paper Less: Unamortized discounts on bills payable Outstanding short-term bills payable were as follows: December 31, 2021 Guarantee/Promissory Institution Par Value Discount Amount Commercial paper Ta Ching Bills Finance Corporation $ 95,000 $ 170 Grand Bills Finance Corporation 160,000 74 Dah Chung Bills Finance Corporation 50,000 126 China Bills Finance Corporation 100,000 206 $ 405,000 $ 576		**December 31 **
			2021 2020 $ 583,100 $ 105,000 345,259 215,000 $ 928,359 $ 320,000 December 31
		2021 2020 1.20%-1.59% 1.39%-1.59% 0.69%-1.35% 1.25%-1.70% **December 31 **
			2021 2020 $ 405,000 $ 190,000 (576) (412) $ 404,424 $ 189,588 Carrying Amount Interest Rate $ 94,830 1.05%-1.65% 159,926 1.04%-1.65% 49,874 1.04% 99,794 1.08%-1.13% $ 404,424

• 33 -

December 31, 2020

Guarantee/Promissory Institution Commercial paper Ta Ching Bills Finance Corporation Grand Bills Finance Corporation	Par Value $ 110,000 80,000 $ 190,000	Discount Amount $ 251 161 $ 412	Carrying Amount Interest Rate $ 109,749 1.10%-1.65% 79,839 1.28%-1.70% $ 189,588

Short-term bills payable are commercial promissory notes guaranteed by bank, and the duration of each note does not exceed 180 days.

For information on assets pledged as collateral of the short-term bills payable, refer to Note 32.

c. Long-term borrowings

Secured borrowings (Note 32) Bank loans $ Unsecured borrowings Loans from bank Less: Current portion Long-term borrowings $ Details Secured borrowings Taiwan Cooperative Bank The loan period is from April 12, 2018 to April 12, 2023, with grace period of 2 years. The loan principal is payable over 11 quarters (ending January, April, July, October) with $40 million each quarter. In addition, the Group signed a new contract in October,2021 to repay the old contract. The period is from January 12, 2022 to January 12, 2027, and the quarterly repayment amount of the loan principal is about $500 thousand from January 2024.			December 31
		$	2021 2020 734,000 $ 1,050,000 300,000 280,000 (914,000) (290,000) 120,000 $ 1,040,000 December 31
		$
			2021 2020 $ 120,000 $ 300,000 (Continued)

• 34 -

Details Bank of Taiwan The loan period is from November 12, 2019 to November 12, 2022. Repayment schedule for the principal is $40 million in February 2021 and the balance payable in 6 quarters (ending February, May, August, November) with $32 million each quarter, $18 million will be repaid one time on maturity date. O-Bank The loan period is from November 21, 2017 to November 21, 2022; the principal will be repaid one time on maturity date. O-Bank The loan period is from December 28, 2017 to December 28, 2022; the principal will be repaid one time on maturity date. Unsecured borrowings The Export-Import Bank of the Republic of China The loan period is from December 7, 2020 to January 7, 2022; the principal will be repaid one time on maturity date. The Export-Import Bank of the Republic of China The loan period is from December 14, 2020 to January 7, 2022; the principal will be repaid one time on maturity date. O-Bank The loan period is from March 23, 2020 to March 23, 2022; the principal will be repaid one time on maturity date. O-Bank The loan period is from September 13, 2021 to March 23, 2022; the principal will be repaid one time on maturity date. KGI Bank Revolving loan; credit period is from September 7, 2020 to September 7, 2022. Less: Current portion Long-term borrowings		**December 31 **	**December 31 **
		2021 $ 114,000 250,000 250,000 50,000 50,000 80,000 20,000 100,000 1,034,000 (914,000) $ 120,000	2020 $ 250,000 250,000 250,000 50,000 50,000 80,000 - 100,000 1,330,000 (290,000) $ 1,040,000 (Concluded)

The annual interest rates of long-term borrowings were 1.24%-1.72% as both of December 31, 2021 and 2020.

• 35 -

19. NOTES PAYABLE AND TRADE PAYABLES

Notes payable From operating activities Non-related parties Related parties Trade payables From operating activities Non-related parties Related parties		December 31	December 31
		2021 $ 214,743 $ 43,148 $ 123,370 $ 2,046	2020 $ 345,327 $ 39,596 $ 241,920 $ 20,006

The Group’s notes payable and trade payables (including related parties) arise from operating activities. The average credit period for purchases is 3 months. The Group’s financial risk management policies ensure that all payables are repaid within the pre-agreed credit period.

20. OTHER PAYABLES

Payables for salaries and bonuses Payables for utilities expense Payables for taxes Payables for purchases of equipment Others		**December 31 **	**December 31 **
		2021 $ 75,008 19,120 12,695 - 31,684 $ 138,507	2020 $ 87,318 18,285 34,498 30,878 37,361 $ 208,340

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company, Dasheng Enterprise, Luckicon Ready-mixed Co., Luckyship Co, and Fuyu Development Co., Ltd. adopted the pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the entities make monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group in Japan are members of the retirement benefits program operated by the government of Japan. The subsidiary must allocate a specific percentage of salary costs to the retirement benefit plan to provide funding for the plan. The Group’s obligation for this government-operated retirement benefit plan is only to allocate a specific amount.

• 36 -

b. Defined benefit plans

The defined benefit plans adopted by the Company, Dasheng Enterprise, and Luckicon Ready-mixed Co. in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company, Dasheng Enterprise, and Luckicon Ready-mixed Co. contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

Since August 2021, the subsidiary, Dasheng Enterprise, had no employees under labor pension system of the Labor Standards Act.

The amount of the Group’s defined benefit plan is included in the balance sheets as follows:

Present value of funded defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2021 $ 198,626 (164,327) $ 34,299	2020 $ 234,543 (198,158) $ 36,385

The above net defined benefit liabilities are the net amount of defined benefit assets (reported as other non-current assets) of $446 thousand and $413 thousand and defined benefit liabilities of $34,745 thousand and $36,798 thousand as of December 31, 2021 and 2020, respectively.

Movements in net defined benefit liabilities were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liabilities
Balance at January 1, 2020	$ 255,484	$ (215,667)	$	39,817
Service costs
Current service costs	1,598	-		1,598
Net interest expense (income)	1,583	(1,340)		243
Recognized in profit or loss	3,181	(1,340)		1,841
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(7,541)		(7,541)
Actuarial loss
Changes in financial assumptions	4,199	-		4,199
Experience adjustments	962	-		962
Recognized in other comprehensive income	5,161	(7,541)		(2,380)
Contributions from the employer	-	(2,893)		(2,893)
Benefit paid	(29,283)	29,283		-
Balance at December 31, 2020	$ 234,543	$ (198,158)	$	36,385

(Continued)

• 37 -

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liabilities
Balance at January 1, 2021	$ 234,543	$ (198,158)	$	36,385
Service costs
Current service costs	1,210	-		1,210
Net interest expense (income)	880	(747)		133
Recognized in profit or loss	2,090	(747)		1,343
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(2,867)		(2,867)
Actuarial loss
Changes in demographic assumptions	5,418	-		5,418
Changes in financial assumptions	(655)	-		(655)
Experience adjustments	(3,388)	-		(3,388)
Recognized in other comprehensive income	1,375	(2,867)		(1,492)
Contributions from the employer	-	(1,937)		(1,937)
Benefit paid	(39,382)	39,382		-
Balance at December 31, 2021	$ 198,626	$ (164,327)	$	34,299
				(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plan is as follows:

Operating costs Selling and marketing expenses General and administrative expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 984 153 206 $ 1,343	2020 $ 1,436 179 226 $ 1,841

Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated using the future salaries of plan participants. As such, an increase in the salaries of the plan participants will increase the present value of the defined benefit obligation.

• 38 -

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations are as follows:

Discount rate Expected rate of salary increase	**December 31 **
	2021 2020 0.625% 0.375% 1.250% 1.250%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease		December	31
		2021 $ (3,366) $ 3,455 $ 3,374 $ (3,304)	2020 $ (4,199) $ 4,316 $ 4,202 $ (4,110)

The above sensitivity analysis may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December	31
	2021 2020 $ 1,465 $ 1,910 6.6-7 years 3.7-7.3 years

22. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The current/non-current classification of the Group’s assets and liabilities relating to the construction and development business was based on its operating cycle. The amounts expected to be recovered or settled within 1 year after the reporting period and more than 1 year after the reporting period for related assets and liabilities were as follows:

Within 1 Year More Than 1 Year December 31, 2021 Assets Financial assets at amortized cost $ 25,680 $ - Inventories - 3,184,345 Prepayment for land purchases - 69,350 $ 25,680 $ 3,253,695	Total $ 25,680 3,184,345 69,350 $ 3,279,375 (Continued)

• 39 -

Within 1 Year More Than 1 Year December 31, 2020 Assets Financial assets at amortized cost $ - $ 25,680 Inventories - 3,153,571 $ - $ 3,179,251	Total $ 25,680 3,153,571 $ 3,179,251 (Concluded)

23. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2021 498,646 $ 4,986,460 404,738 $ 4,047,380	2020 498,646 $ 4,986,460 404,738 $ 4,047,380

A holder of issued ordinary share with a par value of $10 is entitled to exercise shareholders’ voting rights and to receive distributed dividends.

• b. Capital surplus

May be used to offset a deficit, pay cash dividends or increase capital* The difference between the consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual acquisition (Note 12) May be used only to offset a deficit Changes in percentage of ownership interests in subsidiaries		**December **	**31 **
		2021 $ 10 8 $ 18	2020 $ 1 8 $ 9

• Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

• 40 -

• c. Retained earnings and dividend policy

The Company passed an amendment to its articles of incorporation (“Articles”) on June 12, 2019, which stipulates that the Company shall consider distribution of earnings or appropriation of earnings to a reserve at the end of the first half of the fiscal year or at the end of the fiscal year. The business report and financial statements should be submitted to the audit committee for review, and to the board of directors for resolution.

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. However, these stipulations shall not apply when the legal reserve amount has reached the authorized capital. The Company should also follow Article 240 of the Company Act in the case of distribution of earnings in the form of shares; in the case of distribution of earnings in cash, the board of directors is authorized to resolve the distribution of cash dividends; the resolution should be adopted by a majority vote in the meeting of the board of directors attended by two-thirds of all the directors, and then reported to the shareholders’ meeting.

According to the Articles, the Company should distribute earnings or appropriate earnings to a reserve based on the financial statements audited or reviewed by an independent accountant.

The Company’s Articles stipulate that in the allocation of annual earnings, the Group shall first appropriate 10% of earnings to legal reserve and then appropriate to special reserve amount to cover deduction items in the equity, payment of business tax and to make up for past annual loss. From the remaining amount after the above allocation plus 40%-80% of unappropriated earnings in the previous year, no distribution will be made if the amount is less than NT$0.1 per share but will be retained in the unappropriated earnings. The board of directors shall propose distribution of dividends and the shareholders in their meeting shall approve the proposal. Refer to Note 25 (8)“employee benefits” for the revised policy on the remuneration of employees and directors.

The appropriation and distribution of earnings and capital surplus as cash dividend or stock dividend shall be subject to the real profit and fund situation in the current year, with consideration of fund for investment and possible dilution of earnings per share. The allocation for stock dividend shall be limited to 20% of the issued stock. In case there is deduction item in equity, the deduction item shall be first offset with earnings or capital surplus before making the appropriation and allocation. When equity deduction item is reversed, the reversed amount shall be allocated to capital surplus. The allocation of capital surplus shall be accounted in the current year and passed in the general meeting of shareholders in the next year.

The Company shall appropriate to or reverse from special reserve pursuant to the provisions set forth in the Letter No. Jin-Kuang-Fa-Tzi No. 1090150022 and “Following the adoption of International Financial Reporting Standards, questions and answers on special reserve”. When a deduction item in equity is reversed, the reversed amount may be allocated to capital surplus.

Legal reserve shall be appropriated until its balance reaches the gross amount of paid-in capital of the Company. Legal reserve shall be used to offset loss. If there is no loss, legal reserve in excess of 25% of the total paid-in capital may be transferred to capital or distributed in cash.

On November 11, 2020, the Company’s board of directors adopted the results of operations for the first half of 2020 and decided not to distribute dividends.

On November 12, 2021, the Company’s board of directors adopted the results of operations for the first half of 2021 and decided not to distribute dividends.

• 41 -

The appropriations of earnings for 2020 and 2019 were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2020 $ 39,625 $ - $ 283,317 $ 0.70	2019 $ 4,590 $ (3,121) $ 60,711 $ 0.15

The above 2020 and 2019 appropriations for cash dividends had been resolved by the Company’s board of directors on March 26, 2021 and March 24, 2020, respectively; the other proposed appropriations had been resolved by the shareholders in their meetings on August 4, 2021 and June 18, 2020, respectively.

The appropriation of earnings and dividend per share for 2021 that were approved in the board of directors’ meeting on March 30, 2021 were as follows:

	Appropriation	Appropriation	Dividend Per
	of	Earnings	Share
Legal reserve	$	27,720
Special reserve		773
Cash dividends		242,843	$0.60

The above appropriation for cash dividends had been resolved by the Company’s board of directors; the other proposed appropriations will be resolved by the shareholders in their meeting to be held on June 30, 2022.

d. Special reserve

Beginning at January 1 Reversals: Reversal of the debits to other equity items Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 14,135 - $ 14,135	2020 $ 17,256 (3,121) $ 14,135

Upon initial application of IFRSs, the conversion adjustments of NT$14,135 thousand were transferred to retained earnings, and the same amount was appropriated to special reserve.

• 42 -

e. Other equity items

• 1) Exchange differences on the translation of the financial statements of foreign operations

Balance at January 1 Recognized for the year Exchange differences on the translation of the financial statements of foreign operations Balance at December 31	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 7,475 (3,107) $ 4,368	2020 $ 7,450 25 $ 7,475

2) Unrealized valuation gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain (loss) - debt instruments Unrealized gain (loss) - equity instruments Reclassification adjustments Disposal of debt instruments Other comprehensive income recognized for the year Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ (3,020) (67) 11,885 (436) 11,382 (13,503) $ (5,141)	2020 $ (3,444) 24 1,997 - 2,021 (1,597) $ (3,020)

f. Non-controlling interest

Balance at January 1 Changes in ownership interest in subsidiaries Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 74 (9) $ 65	2020 $ 77 (3) $ 74

24. REVENUE

a. Segmentation of customer contract revenue

Cement Cement products Stone materials Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,849,038 1,248,735 299,897 371,352 $ 3,769,022	2020 $ 2,074,180 1,669,310 322,445 464,237 $ 4,530,172

• 43 -

b. Balance of assets and liabilities related to the sales contracts

	December 31,	December 31,	December 31,	December 31,
		2021		2020	January 1, 2020
Notes receivable (Note 10)	$	297,280	$	573,958	$	488,761
Notes receivable from related parties	$	6,571	$	235	$	4,972
Trade receivables (Note 10)	$	418,395	$	492,996	$	412,120
Trade receivables from related parties	$	3,250	$	5,764	$	7,450
Contract liability
Cement sales	$	189,789	$	331,854	$	256,832
Others		1,000		1,241		2,599
	$	190,789	$	333,095	$	259,431

The changes in contract liabilities primarily resulted from the timing difference between the satisfaction of performance obligation and the customer’s payment.

The amount of contract liability at the beginning of the year with performance obligation satisfied and revenue recognized in the current year was is as follows:

Contract liability at the beginning of the year Cement sales Others	For the Year Ended	For the Year Ended	December 31
		2021 $ 331,854 1,241 $ 333,095	2020 $ 256,832 2,599 $ 259,431

25. NET PROFIT

a. Other operating income and expenses

Gains (loss) on disposals of property, plant and equipment b. Interest income Bank deposits Investments in debt instruments at FVTOCI	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 $ 13,442 $ (8,959) For the Year Ended December 31
		2021 $ 1,694 249 $ 1,943	2020 $ 1,291 300 $ 1,591

• 44 -

c. Other income

Revenue from dividends Others d. Other expenses Depreciation of leased assets Others e. Interest expense Bank loan Related party loans Interest on lease liabilities f. Depreciation, amortization and depletion Property, plant and equipment Right-of-use assets Long-term prepaid expenses Limestone mining rights Depreciation by function Operating costs Operating expenses Non-operating expenses	For the Year Ended	For the Year Ended	December 31
	2021 $ 2,145 13,885 $ 16,030 For the Year Ended		2020 $ 3,720 8,629 $ 12,349 December 31
	2021 $ 3,356 4,350 $ 7,706 **For the Year Ended **		2020 $ 6,150 4,298 $ 10,448 **December 31 **
	2021 $ 29,507 370 2,200 $ 32,077 For the Year Ended		2020 $ 30,008 381 1,557 $ 31,946 December 31
		2021 $ 96,817 55,319 15,801 6 $ 167,943 $ 105,260 43,520 3,356 $ 152,136	2020 $ 142,959 51,253 12,455 5 $ 206,672 $ 142,625 45,437 6,150 $ 194,212 (Continued)

• 45 -

Amortization by function Operating costs Operating expenses Depletion by function Operating costs	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2021 $ 10,807 4,994 $ 15,801 $ 6	2020 $ 6,236 6,219 $ 12,455 $ 5 (Concluded)

• g. Employee benefits expense

Post-employment benefits Defined contribution plan Defined benefit plan (Note 21) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2021 $ 12,693 1,343 14,036 366,626 $ 380,662 $ 258,742 121,920 $ 380,662	2020 $ 13,062 1,841 14,903 414,942 $ 429,845 $ 284,195 145,650 $ 429,845

• h. Compensation of employees and remuneration of directors

The Company shall appropriate 3% and not less than 5% of the profit before tax and before deduction of compensation of employees and remuneration of directors in the current year. The compensation of employees and the remuneration of directors for the years ended December 31, 2021 and 2020 are estimated as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount	**For the Year Ended December 31 **
	2021 2020 3% 3% 5% 5%

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2021 Cash $ 9,972 16,620	2020
		Cash $ 13,583 22,638

• 46 -

If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2020 and 2019.

Information on compensation of employees and remuneration of directors resolved by the Group’s board of directors in 2021 and 2020 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

• i. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,551 (372) $ 2,179	2020 $ 2,853 (988) $ 1,865

26. INCOME TAXES

• a. Major components of tax expense recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 24,780 4,605 1,628 31,013 48,094 $ 79,107	2020 $ 47,009 684 86 47,779 4,360 $ 52,139

• 47 -

A reconciliation of accounting profit and income tax expense is as follows:

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses (nontaxable income) in determining taxable income Unrecognized deductible temporary differences and loss carryforwards Tax-exempt income Income tax on unappropriated earnings Land value increment tax Basic tax payable difference Adjustments for prior years’ tax Income tax expense recognized in profit or loss b. Current tax assets and liabilities Current tax liabilities Income tax payable c. Deferred tax assets and liabilities	For the Year Ended	For the Year Ended	December 31
		2021 $ 341,312 $ 68,262 (14,582) 21,360 (4,622) 4,605 - 2,456 1,628 $ 79,107 December	2020 $ 444,408 $ 88,882 (20,488) (13,700) (3,890) 684 565 - 86 $ 52,139 31
		2021 $ 17,477	2020 $ 46,463

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2021

Deferred tax assets Temporary differences Pension limit exceeded Investment loss under equity method Unrealized inventory valuation loss Unrealized foreign exchange loss Allowance for impairment loss Impairment loss on financial assets at FVTOCI Gross profit from advance receipts with issued bill of lading Tax loss	Opening Balance Recognized in Profit or Loss Closing Balance $ 18,250 $ (117) $ 18,133 61,823 (51,092) 10,731 13,772 (18) 13,754 83 (71) 12 6,274 1,036 7,310 4,700 - 4,700 2,607 718 3,325 107,509 (49,544) 57,965 12,647 4,605 17,252 $ 120,156 $ (44,939) $ 75,217

(Continued)

• 48 -

Deferred tax liabilities Temporary differences Accelerated depreciation of fixed assets Unrealized foreign exchange gain Others For the year ended December 31, 2020 Deferred tax assets Temporary differences Pension limit exceeded Investment loss under equity method Unrealized inventory valuation loss Unrealized foreign exchange loss Allowance for impairment loss Impairment loss on financial assets at FVTOCI Gross profit from advance receipts with issued bill of lading Tax loss Deferred tax liabilities Temporary differences Accelerated depreciation of fixed assets Unrealized foreign exchange gain

Opening Balance Recognized in Profit or Loss Closing Balance $ 20,630 $ 2,581 $ 23,211 33 95 128 - 479 479 $ 20,663 $ 3,155 $ 23,818 (Concluded) Opening Balance Recognized in Profit or Loss Closing Balance $ 18,458 $ (208) $ 18,250 57,295 4,528 61,823 13,961 (189) 13,772 30 53 83 6,640 (366) 6,274 4,700 - 4,700 2,102 505 2,607 103,186 4,323 107,509 24,459 (11,812) 12,647 $ 127,645 $ (7,489) $ 120,156 $ 23,792 $ (3,162) $ 20,630 - 33 33 $ 23,792 $ (3,129) $ 20,663

d. Income tax assessments

The income tax returns through 2019 of the Company and its subsidiaries, Luckicon Ready-mixed Co., Fuyu Development Co. and Luckyship Marine Co., have been assessed by the tax authorities and there is no significant difference between the reported amounts and the assessed amounts. The income tax returns through 2020 of Dasheng Enterprise Co. have been assessed by the tax authorities and there is no significant difference between the reported amounts and the assessed amounts.

• 49 -

27. EARNINGS PER SHARE

The net profit and the weighted-average number of ordinary shares used to calculate the earnings per share were as follows:

Net Profit

Net profit for the year Earnings Per Share	For the Year Ended	For the Year Ended	December 31
		2021 2020 $ 262,205 $ 392,269 (In Thousands of Shares)

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 404,738 1,083 405,821	2020 404,738 1,131 405,869

The Group may settle the compensation of employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

28. CASH FLOW INFORMATION

The following are the Group’s non-cash investing activities which were not reflected in the consolidated statements of cash flows for the years ended December 31, 2021 and 2020:

Partial cash generated from disposal of financial assets at FVTOCI Proceeds from sale of financial assets at fair value through other comprehensive income Changes in receivable from sale of securities (reported as other receivables) Cash received	**For the Year Ended **	**For the Year Ended **	December 31
		2021 $ 230,097 12,192 $ 242,289	2020 $ 28,596 8,577 $ 37,173 (Continued)

• 50 -

Partial cash payments for purchase of PP&E Acquisition of property, plant and equipment Net changes in prepayments for business facilities Net changes in payable for purchase of land Cash paid Partial cash generated from disposal of PP&E Proceeds from disposal of property, plant and equipment Changes in receivable from sale of property, plant and equipment (reported as other receivables) Cash received Partial cash generated from dividends income Dividend income Net changes in dividends receivable (reported as other receivables) Cash received	**For the Year Ended **	**For the Year Ended **	December 31
		2021 $ 202,657 39,566 30,878 $ 273,101 $ 40,388 1,300 $ 41,688 $ 2,145 621 $ 2,766	2020 $ 650,577 34,466 (30,878) $ 654,165 $ 1,380 (1,300) $ 80 $ 3,720 (621) $ 3,099 (Concluded)

Changes in Liabilities Arising from Financing Activities

For the year ended December 31, 2021

Short-term borrowings Short-term bills payable Long-term borrowings Notes payable to related parties Other payables to related parties Guarantee deposits received Lease liabilities	January 1, 2021 $ 320,00 189,588 1,330,000 39,596 124,138 32,704 80,242 $ 2,116,268	Cash Flows $ 608,359 215,000 (296,000 ) (8,000 ) (70,000 ) 1,306 (54,737) $ 395,928		No	n-cash Changes	Discount Amortization $ - (164 ) - - - - - $ (164)	Others $ - - - 11,552 (5,827 ) - - $ 5,725	Balance at December 31, 2021 $ 928,359 404,424 1,034,000 43,148 48,311 34,010 156,852 $ 2,649,104
				New Lease $ - - - - - - 131,347 $ 131,347	Lease Decrease $ - - - - - - - $ -

For the year ended December 31, 2020

Short-term borrowings Short-term bills payable Long-term borrowings Notes payable to related parties Other payables to related parties Guarantee deposits received Lease liabilities	January 1, 2020 $ 232,700 219,465 1,480,000 34,656 47,081 30,800 130,783 $ 2,175,485	Cash Flows $ 87,300 (30,000 ) (150,000 ) 8,000 70,000 1,904 (51,753) $ (64,549)		No	n-cash Changes	Discount Amortization $ - 123 - - - - - $ 123	Others $ - - - (3,060 ) 7,057 - - $ 3,997	Balance at December 31, 2020 $ 320,000 189,588 1,330,000 39,596 124,138 32,704 80,242 $ 2,116,268
				New Lease $ - - - - - - 1,887 $ 1,887	Lease Decrease $ - - - - - - (675) $ (675)

• 51 -

29. CAPITAL MANAGEMENT

The Group manages capital by optimizing the debt and equity balance to be able to continue as going concerns and pay dividends to shareholders.

30. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

There is no significant difference between the carrying amount and fair value of the financial assets and financial liabilities which are not measured at fair value.

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2021

Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares Unlisted shares December 31, 2020 Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares Unlisted shares Investments in debt instruments Corporate bonds	Level 1 $ 44,932 $ 73,319 - $ 73,319 Level 1 $ 11,296 $ 28,213 - 5,913 $ 34,126	Level 2 $ - $ - - $ - Level 2 $ - $ - - - $ -	Level 3 $ - $ - 11,038 $ 11,038 Level 3 $ 8,734 $ - 14,994 - $ 14,994	Total $ $ 73,319 11,038 $ 84,357 Total $ 20,030 $ 28,213 14,994 5,913 $ 49,120

There were no transfers between Levels 1 and 2 in the current and prior year.

• 52 -

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2021

Financial Assets at FVTPL - Mutual Funds Financial Assets at FVTOCI - Equity Instruments Balance at January 1, 2021 $ 8,734 $ 14,994 Return of shares after capital reduction - (7,387) Sale/settlements (Note 17) (18,874) (624) Recognized in profit or loss (included in loss on financial assets at FVTPL) 10,140 - Recognized in other comprehensive income (included in unrealized valuation loss on financial assets at FVTOCI) - 4,055 Balance at December 31, 2021 $ - $ 11,038 For the year ended December 31, 2020 Financial Assets at FVTPL - Mutual Funds Financial Assets at FVTOCI - Equity Instruments Balance at January 1, 2020 $ 9,598 $ 19,733 Purchases - 4,371 Return of shares after capital reduction - (5,125) Sale/settlements - (326) Recognized in profit or loss (included in loss on financial assets at FVTPL) (864) - Recognized in other comprehensive income (included in unrealized valuation loss on financial assets at FVTOCI) - (3,659) Balance at December 31, 2020 $ 8,734 $ 14,994

Total $ 23,728 (7,387) (19,498) 10,140 4,055 $ 11,038 Total $ 29,331 4,371 (5,125) (326) (864) (3,659) $ 23,728

• 3) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair value of privately offered fund is based on the net asset value provided by the fund company.

The asset approach and comparable listed companies approach were used to calculate the fair values of investments in domestic unlisted equity instruments.

The comparable listed companies approach takes into account the transaction prices of shares of listed companies in an active market, the value multiplier implicit in the price, and the liquidity discount when evaluating the fair value of the target company.

The asset approach assesses the total market value of individual assets and individual liabilities of the valuation target and considers the reduction of non-controlling interests and a reduction in liquidity to reflect the overall value of the entity or business.

• 53 -

• c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Debt instruments Financial liabilities FVTPL Amortized cost (2)	December 31
	2021 2020 $ 44,932 $ 20,030 1,281,300 1,695,200 84,357 43,207 - 5,913 2,883,215 2,729,803

• 1) The balances include financial assets at amortized cost, which comprise cash, financial assets at amortized cost, notes receivable, trade receivables, other receivables and refundable deposits.

• 2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, short-term bills payable, notes payable, accounts payable, other payables (excluding salaries, bonuses and taxes), long-term borrowings and guarantee deposits received.

• d. Financial risk management objectives and policies

The Group’s major financial instruments include equity and debt investments, trade receivables, trade payables, borrowings and lease liabilities. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (1) below) and interest rates (see (2) below).

The exposure to market risk of the financial instruments of the Group and the management and measurement of the exposure have not changed.

a) Foreign currency risk

The carrying amounts of the Group’s foreign currency denominated monetary assets (including those eliminated on consolidation) at the end of the year are set out in Note 35.

Sensitivity analysis

The Group is mainly exposed to the USD and RMB.

• 54 -

The following table shows the sensitivity analysis of the Group when the exchange rate of the New Taiwan dollar to the relevant foreign currency increases and decreases by 5%. The 5% sensitivity rate is used for reporting currency risk to key management personnel of the Group; the management believes it is the reasonably acceptable range of fluctuation of foreign currency rate. The positive (negative) amounts on the table below indicate an increase (decrease) in pre-tax income and equity amount when the New Taiwan dollar weakens (strengthens) by 5% relative to the relevant currency.

Profit or loss	USD Impact For the Year Ended December 31 2021 2020 $ 8,519 $ (329)	RMB Impact
		For the Year Ended December 31
		2021 2020 $ (364) $ (359)

The above analysis included cash in banks, financial assets at FVTPL, financial assets at amortized cost, financial assets at FVTOCI and bank loans denominated in USD and RMB which are outstanding at the end of the reporting period.

b) Interest rate risk

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2021 2020 $ 479,040 $ 456,409 2,366,783 1,917,588

The following sensitivity analysis shows the effect of 25 basis points change in interest rates of non-derivative instruments at the balance sheet date. A 25-basis-point sensitivity is used in internal reports to key management personnel; it represents the reasonably possible change in interest rates acceptable to the management.

Had interest rates increased/decreased by 25 basis points, the profit before tax in 2021 and 2020 would have decreased/increased by $4,719 thousand and $3,653 thousand, respectively, with all other variables held constant; the non-derivative instruments include floating rate loan, demand deposit and restricted asset.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. At the end of the year, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Group, could be equal to the total assets shown on the balance sheets.

The policy of the Group is to only trade with counterparties with high reputation, and to require sufficient guarantee to reduce the financial loss from default. The Group transacts with a large number of unrelated customers and thus, credit risk is not highly concentrated.

• 55 -

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. The Group had available unutilized short-term bank loan facilities set out in (b) below.

a) Liquidity and interest rate risk table

The following table details the Group’s remaining contractual maturities for its non-derivative financial liabilities with agreed upon repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group is required to pay.

December 31, 2021

Non-interest bearing liabilities Lease liabilities Variable interest rate liabilities December 31, 2020 Non-interest bearing liabilities Lease liabilities Variable interest rate liabilities	On Demand or Less than 1 Month $ 185,218 9,758 440,885 $ 635,861 On Demand or Less than 1 Month $ 381,225 8,158 297,941 $ 687,324	1-3 Months $ 197,908 5,393 529,259 $ 732,560 1-3 Months $ 347,293 3,043 129,647 $ 479,983	3 Months to 1 Year $ 67,468 40,179 1,276,639 $ 1,384,286 3 Months to 1 Year $ 20,447 27,267 450,000 $ 497,714	1-5 Years $ 3,638 104,718 120,000 $ 228,356 1-5 Years $ 750 44,158 1,040,000 $ 1,084,908	5+ Years $ 62,200 6,059 -
					$ 68,259
					5+ Years $ 62,500 - -
					$ 62,500

• 56 -

b) Financing facilities

Unsecured facilities Amount used Amount unused Secured facilities Amount used Amount unused		December 31	December 31
		2021 $ 864,213 463,812 $ 1,328,025 $ 1,522,100 878,796 $ 2,400,896	2020 $ 556,543 160,665 $ 717,208 $ 1,345,000 1,819,800 $ 3,164,800

31. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed as follows:

a. Related parties

Related Party Name

Related Party Category

Other related party

Yung-Sheng Development Enterprise Co., Ltd. (“Yung-Sheng Development”) Liang-Chuan Cultural and Educational Foundation (“Liang-Chuan Foundation”)

East Life Biotech Co., Ltd. (“East Life Biotech”) Jia Fu Entertainment Co., Ltd. (“Jia Fu Entertainment”) Wantong Product Insurance Brokerage Co., Ltd. (“Wantong Product Insurance”) Lucky Construction Co., Ltd. (“Lucky Construction”) Kuochuan Development Co., Ltd. (“Kuochuan Development”) Changheng Investment Co. (“Changheng Investment”) Cheng Haibin Fuan Mining Co., Ltd. (“Fuan Mining”)

The chairman is also the chairman of the Company

The chairman is also the chairman of the Company

of the Company The chairman is also the chairman of the Company

The chairman is first-degree relative of the chairman of the Company

The chairman is first-degree relative of the chairman of the Company

The chairman is first-degree relative of the chairman of the Company

The chairman is first-degree relative of the chairman of the Company

The company is major shareholder of the Company

The person is third-degree relative of the chairman of the Company A manager in the company is spouse of a first-degree relative of the chairman of the Company

• 57 -

b. Business transaction

Line Item Related Party Name Sale of goods Other related parties Purchases of goods Fuan Mining Other related parties Operating costs - transportation expenses Other related parties Operating costs - manufacturing expenses Other related parties Operating expenses Other related parties Other income Other related parties	For the Year Ended	For the Year Ended	December 31
		2021 $ 61,223 $ 173,133 37,058 $ 210,191 $ 17,834 $ 360 $ 4,715 $ 24	2020 $ 84,450 $ 297,363 52,422 $ 349,785 $ 46,730 $ 307 $ 2,987 $ 586

The prices of purchases and sales between the Group and related parties are negotiated separately, and the period of receipt and payment is comparable to that of non-related parties.

c. Receivables from related parties

Line Item Related Party Name Notes receivable Fudong Freight Fuan Mining Trade receivables Fuan Mining Yung-Sheng Development Other receivables Other related parties		December 31	December 31
		2021 $ - 6,571 $ 6,571 $ 3,246 4 $ 3,250 $ 247	2020 $ 235 - $ 235 $ 4,651 1,113 $ 5,764 $ 313

The outstanding trade receivables from related parties are unsecured. As of December 31, 2021 and 2020, no impairment losses were recognized for trade receivables from related parties.

• 58 -

d. Payables to related parties

Line Item Related Party Name Notes payable (excluding loan from Fuan Mining related parties) Fudong Freight Other related parties Trade payables Fuan Mining Fudong Freight Other payables - current (excluding loan Fudong Freight from related parties) Other related parties		December 31	December 31
		2021 $ 39,683 3,465 - $ 43,148 $ - 2,046 $ 2,046 $ 1,353 1,158 $ 2,511	2020 $ 23,763 7,828 5 $ 31,596 $ 16,876 3,130 $ 20,006 $ 8,145 144 $ 8,289

The outstanding trade payables to related parties are unsecured.

• e. Loan from related parties

Line Item Related Party Name Notes payable Fuan Mining Other payables - current Fuan Mining Other payables - non-current Cheng Haibin Interest expense Other related parties		**December 31 **	**December 31 **
		2021 $ - $ - $ 45,800 $ 370	2020 $ 8,000 $ 70,049 $ 45,800 $ 381

The interest rate of the other payables - current has no difference to the market interest rate. The other payables to related parties - non-current are interest-free loans from shareholders. The loans from the related parties are unsecured.

• f. Lease arrangements

• Lease arrangements the Group is lessor under operating leases

Future lease payments receivable are as follows:

Related Party Category/Name Fudong Freight Other related parties		December	31
		2021 $ 3,788 288 $ 4,076	2020 $ 1,968 144 $ 2,112

• 59 -

Lease income was as follows:

Related Party Category/Name Fudong Freight Other related parties	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,396 142 $ 1,538	2020 $ 2,323 132 $ 2,455

The rental amounts and collection methods are negotiated.

• g. Remuneration of key management personnel

Type of Remuneration Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 39,012 529 $ 39,541	2020 $ 43,057 519 $ 43,576

The remuneration of directors and key executives is determined by the remuneration committee based on the performance of individuals and market trends.

32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets of the Group are pledged as collateral for long-term and short-term bank loans, short-term bills payable, and other credit accommodation:

Property under development (reported as inventories) Property, plant and equipment Restricted assets (reported as financial assets at amortized cost)		December 31	December 31
		2021 $ 3,124,443 899,667 307,006 $ 4,331,116	2020 $ 3,093,669 935,824 258,242 $ 4,287,735

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

• a. As of December 31, 2021 and 2020, the Group has signed a contract for purchase of property, plant and equipment; the unpaid amount is $253,770 thousand and $328,805 thousand, respectively.

• b. As of December 31, 2021 and 2020, unused letters of credit for purchases of raw materials amounted to approximately $18,954 thousand and $61,543 thousand, respectively.

34. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD:

On March 9, 2022, the board of directors of Dasheng Enterprise resolved to sell thirteen pieces of lands, including Daitianfu Section, Anle District and Keelung City, to non-related parties for $1,746,951 thousand; the installment payments were collected according to the terms of contract.

• 60 -

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than the functional currency of the Group and the related exchange rates between foreign currencies and functional currency were as follows:

(In Thousands of New Taiwan Dollars and Foreign Currencies)

December 31, 2021
	Foreign			Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	313	27.68 (USD:NTD)	$	8,678
RMB		1,674	4.328 (RMB:NTD)		7,273
Financial liabilities
Monetary item
USD		6,469	27.68 (USD:NTD)		179,057
December 31, 2020
	Foreign			Carrying
	Currency		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	231	28.48 (USD:NTD)	$	6,588
RMB		1,641	4.377 (RMB:NTD)		7,181
Non-monetary item
USD		307	28.48 (USD:NTD)		8,734

Foreign exchange gains (realized and unrealized) of the Group in 2021 and 2020 were $2,179 thousand and $1,865 thousand, respectively. Because of the variety of foreign currency transactions, it is not practical to disclose exchange gains and losses by foreign currency.

36. ADDITIONAL DISCLOSURES

• a. Information about significant transactions:

• 1) Financing provided to others: Please see Table 1 attached;

• 2) Endorsements/guarantees provided: Please see Table 2 attached;

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): Please see Table 3 attached;

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None;

• 61 -

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None;

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None;

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 4 attached;

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None;

• 9) Trading in derivative instruments: None;

• 10) Intercompany relationships and significant intercompany transactions: Please see Table 6 attached.

• b. Information on investees: Please see Table 5 attached.

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area: None;

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year: None.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year: None.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes: None.

  • e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds: None.

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services: None.

• d. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: Please see Table 7 attached.

• 62 -

37. SEGMENT INFORMATION

The Group defined its reportable segments as follows:

Cement segment: Producing and selling business for products related to cement.

Other segment: Other operations of non-cement business.

• a. Revenue of segments and operating results

The Group’s revenues and operating results analyzed by the operating segments were as follows:

Cement segment Other segment Total amount of business unit Interest income Rent income Other income Foreign exchange gains (Gain) loss from financial assets measured at FVTPL Gain on disposal of non-current assets held for sale Gain on disposal of investments Other expenses Interest expense Profit before tax		Income of Segments 2021 2020 $ 3,742,860 $ 4,481,068 26,162 49,104 $ 3,769,022 $ 4,530,172		Profit/Loss of	Segments
		2021 $ 3,742,860 26,162 $ 3,769,022		2021 $ 330,700 7,869 338,569 1,943 8,564 16,030 2,179 13,374 - 436 (7,706) (32,077) $ 341,312	2020 $ 476,777 (29,302) 447,475 1,591 8,336 12,349 1,865 (538) 15,724 - (10,448) (31,946) $ 444,408

The revenue of segments reported above is generated from external client exchange. There is no selling between segments in 2021 and 2020.

The revenue of segments means the profits earned by each segment, excluding interest income which shall be apportioned, rent income, other income, foreign exchange gains, gains or losses from financial assets measured at FVTPL, gain on disposal of non-current assets held for sale, other expense and interest expense.

b. Total assets and liabilities of segments

Segment assets Operating segment Cement segment Other segment Total assets		**December 31 **	**December 31 **
		2021 $ 4,707,090 3,334,620 $ 8,041,710	2020 $ 4,772,255 3,255,052 $ 8,027,307 (Continued)

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Segment liabilities Operating segment Cement segment Other segment Total liabilities		**December 31 **	**December 31 **
		2021 $ 2,738,059 658,077 $ 3,396,136	2020 $ 2,649,731 720,657 $ 3,370,388 (Concluded)

c. Geographic information

The Group’s main operating area is in the Republic of China.

d. Main customer’s information

The sales revenue amounted to NT$3,769,022 thousand and NT$4,530,172 thousand in 2021 and 2020. In 2021 and 2020, there was no revenue from a single customer that exceeded 10% of the Group’s total revenue.

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TABLE 1

LUCKY CEMENT CO. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

No.	Financing Company	Counterparty	Financial Statement Account	Maximum Balance in Current Period	Related Party		Ending Balance (Note 4)	Amount Actually Drawn (Note 5)	Interest Rate	Nature for Financing (Note 1)	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Note 2)	Financing Company’s Total Financing Amount Limits (Note 3)
														Name	Value
0	Lucky Cement Co.	Dasheng Enterprise Luckyship Co.	Other receivables from related parties Other receivables from related parties	$ 200,000 20,000	Yes Yes		$ 200,000 20,000 $ 220,000	$ 9,300 -	1.4316 1.4316	b. b.	$ - -	Operating turnover Operating turnover	$ - -	- -	- -	$ 464,551 464,551	$ 1,858,204 1,858,204

Note 1: The nature of financing is as follows:

• a. Party with business.

• b. Party with short-term financing need.

• Note 2: Financing of Lucky Cement Co. to a more than 50% owned subsidiary should not be more than 10% of the net value of Lucky Cement Co. at end of year; For a subsidiary that is 20% to 50% owned, loan should not be more than 5% of the net value of Lucky Cement Co. at end of year; for less than 20% owned subsidiary, loan should not be more than 2% of the net value of Lucky Cement Co. at end of year.

Note 3: The limit is 40% of net value of the financing company at end of the year.

Note 4: The amount is approved by the board of directors.

• Note 5: All intra-group transactions, balances, income and expenses are eliminated upon consolidation.

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TABLE 2

LUCKY CEMENT CO. AND SUBSIDIARIES

ENDORSEMENT/GUARANTEE PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

No.	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note 1)	Maximum Balance for the Period		Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity Per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Note 2)	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0	Lucky Cement Co.	Dasheng Enterprise Luckicon Ready-mixed Co Lucky Cement Japan	Subsidiary Subsidiary Subsidiary	$ 1,858,204 1,858,204 1,858,204	$ 620,000 420,000 13,580		$ 620,000 420,000 12,025 $ 1,052,025	$ 605,000 135,000 -	$ 120,000 (Note 3) - -	13.35 9.04 0.26	$ 2,322,755 2,322,755 2,322,755	Y Y Y	- - -	- - -

Note 1: The upper limit that Lucky Cement Co. endorses for single company shall not exceed 10% of the net value of Lucky Cement Co. and shall not exceed 40% of the net value of subsidiary.

Note 2: The endorsement approved in the meeting of shareholders shall not exceed 50% of the net value of Lucky Cement Co.

Note 3: The certificate of deposit of NT$60,000 thousand is provided as collateral which is recognized as financial assets at amortized cost - restricted asset.

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TABLE 3

LUCKY CEMENT CO. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Holding Company Name	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/Units	Carrying Value	(%)	Fair Value (Notes 1 and 2)
Lucky Cement Co. Luckyship Marine Co. Luckicon Ready-mixed Co.	Fund Cathay Global Autonomous and Electric Vehicles ETF FSITC Global Vedio Gaming & eSports Fund O-Bank No.1 Real Estate Investment Trust Non-listed common stock Jonfeng Mining Co., Ltd Listed ordinary shares Yang Ming Marine Transport Corp. Evergreen Marine Corp. (Taiwan) Ltd. Asia Cement Corporation Far Eastern New Century Corporation Taiwan Cement Corp U-Ming Marine Transport Corporation United Microelectronics Corporation Winbond Electronics Corp. Medigen Biotechnology Corporation Sanitar Co., Ltd. China Development Financial First Financial Holding Co., Ltd. Capital Securities Corp. Hua Nan Financial Holdings Co., Ltd. Non-listed common stock Jonfeng Mining Co., Ltd. Fund Mega Danish Covered Mortgage Bond Index Fund	- - - - - - - - - - - - - - - - - - - -	Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTOCI - noncurrent Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - noncurrent Financial assets at FVTPL - current	2,000,000 500,000 100,000 1,283,068 200,000 100,000 165,000 200,000 105,148 78,000 72,351 130,181 28,628 24,000 13,496 926 875 457 42,068 500,000	$ 33,480 5,835 911 10,688 24,200 14,250 7,309 5,860 5,047 4,711 4,703 4,426 1,643 886 236 23 15 10 350 4,706	- - - 10.58 0.01 - - - - 0.01 - - 0.02 0.03 - - - - 0.35 -	$ 33,480 5,835 911 10,688 24,200 14,250 7,309 5,860 5,047 4,711 4,703 4,426 1,643 886 236 23 15 10 350 4,706

Note 1: Financial assets at FVTPL: Fair value is based on the net asset value of funds on December 30, 2021.

Note 2: Financial assets at FVTOCI: Fair value of listed shares is based on their closing price on December 30, 2021. Fair value of non-listed shares is estimated by the fair value method.

Note 3: Please refer to Table 5 for information regarding subsidiaries.

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TABLE 4

LUCKY CEMENT CO. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationships		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Credit Period	Ending Balance	% to Total (Note 1)
Lucky Cement Co.	Luckicon Ready-mixed Co. Fuan Mining Co., Ltd.	Subsidiary Other related parties	Sale Purchase	$ (350,070) 173,133	(12.73) 14.43	About 90 days About 90 days	Similar to general transactions Agreed	Similar to general transactions Similar to general transactions	Accounts receivable $ 33,025 Notes receivable 48,028 Trade payables - Notes payable (39,683)	7.41 10.77 - (16.59)	Note 2

Note 1: The rate is calculated in accordance with individual financial statements of each company.

Note 2: All intra-group transactions, balances, income and expenses are eliminated upon consolidation.

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TABLE 5

LUCKY CEMENT CO. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Investor Company	Investee Company	Address	Main Businesses and Products	Original Investment Amount (Note 3)	Original Investment Amount (Note 3)	Balance as of December	Balance as of December	31, 2021	Net Income (Loss) of the Investee	Investment Income (Loss) Recognized (Notes 1 and 6)	Note
				December 31, 2021	December 31, 2020	Number of Shares	Percentage of Ownership	Carrying Value
Lucky Cement Co. Luckicon Ready-mixed Co.	Dasheng Enterprise Luckicon Ready-mixed Co. Just Bright Ltd. Lucky Cement Corp., Japan Luckyship Marine Co. Fuyu Development Company	14F., No.237, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) No. 191, Sec. 1, Meishi Rd., Yangmei Dist., Taoyuan City 326, Taiwan (R.O.C.) Tropic Isle Building, PO Box 438, Road Town, Tortola, British Virgin Islands Aichi, Japan hekinan Yu Jin-Pu-cho 12 gu 13F., No. 237, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.) 13F., No. 237, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan (R.O.C.)	Sale and lease of real estate Manufacturing and trading of ready-mixed concrete Investment business Cement trading Shipping agent On land clay and stone quarrying	$ 2,367,473 350,000 - 82,300 88,615 12,571	$ 2,167,473 350,000 - 82,300 88,615 12,571	157,295,883 47,000,000 - 6,800 2,000,000 1,000,000	99.99 100.00 - 100.00 100.00 100.00	$ 2,482,542 729,188 - 19,805 25,623 7,752	$ 1,830 87,726 - (1,939) (9,432) (973)	$ 1,830 87,759 (Note 4) - (1,939) (9,427) (Note 5) (973)	Note 2

Note 1: The amounts were based on audited financial statements.

Note 2: The Company’s board of directors resolved in its meeting on December 27, 2019 to discontinue the operations of its subsidiary, Just Bright Ltd.; the cancellation was completed in May 2021.

Note 3: The original investment amount shown is the amount prior to capital reduction to make up for the losses.

Note 4: The difference is upstream transactions realized gain of $33 thousand.

Note 5: The difference is downstream transactions unrealized loss of $5 thousand.

Note 6: All intra-group transactions, balances, income and expenses are eliminated upon consolidation.

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TABLE 6

LUCKY CEMENT CO. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

No	Company Name	Counterparty	Nature of Relationship (Note)		Intercompany Transactions	Intercompany Transactions
				Financial Statements Item	Amount	Terms	%of Consolidated Net Revenue or Total Assets
0	Lucky Cement Co.	Luckicon Ready-mixed Co. Luckicon Ready-mixed Co. Luckicon Ready-mixed Co. Luckicon Ready-mixed Co. Luckicon Ready-mixed Co. Luckicon Ready-mixed Co. Fuyu Development Company Fuyu Development Company Fuyu Development Company Fuyu Development Company Fuyu Development Company Fuyu Development Company Luckyship Marine Co. Luckyship Marine Co. Luckyship Marine Co. Luckyship Marine Co. Dasheng Enterprise Dasheng Enterprise Dasheng Enterprise Dasheng Enterprise Dasheng Enterprise Dasheng Enterprise Dasheng Enterprise	a a a a a a a a a a a a a a a a a a a a a a a	Notes receivable Accounts receivable Other receivables Contract liabilities Sales Rental income Notes receivable Notes payable Other payables Cost of sales Rental income Other income Other receivables Cost of sales Rental income Interest income Refundable deposits Other receivables - financing Other receivables Accounts receivable Sales Rental income Interest income	$ 48,028 33,025 105 7,550 350,070 1,525 811 15 1,747 3,084 8,064 1,200 4 7,109 276 78 159,000 9,300 10 59 56 90 1,069	About 90 days About 90 days About 90 days About 90 days About 90 days 30 days About 90 days About 90 days About 90 days About 90 days 30 days 30 days About 90 days About 90 days 30 days 30 days Returned upon completion according to the contract Financing, the repayment period is one year About 90 days About 90 days About 90 days 30 days 30 days	0.60 0.41 - 0.09 9.29 0.04 0.02 - 0.02 0.08 0.21 0.03 - 0.19 0.01 - 1.98 0.12 - - - - 0.03
1	Luckicon Ready-mixed Co.	Dasheng Enterprise Dasheng Enterprise	c c	Sales Accounts receivable	2,710 2,846	About 90 days About 90 days	0.07 0.04

• Note: The flow of transactions is as follows:

• a. From the parent to the subsidiary.

• b. From the subsidiary to the parent.

• c. From the subsidiary to the subsidiary.

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TABLE 7

LUCKY CEMENT CO.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2021

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Changheng Investment Co. East Life Biotech Co. Jinli Investment Co. RI KON Construction Co. Yung-Sheng Development Enterprise Co. Lucky Construction Co.	52,631,034 30,378,008 25,230,451 22,658,066 22,514,509 22,091,152	13.00 7.50 6.23 5.59 5.56 5.45

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual truster who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to Market Observation Post System.

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