Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

LUCKY CEMENT Annual Report 2020

Aug 4, 2021

51739_rns_2021-08-04_e62d734d-3073-45bc-9841-8a9b8a9bc348.pdf

Annual Report

Open in viewer

Opens in your device viewer

Stcok Code ： 1108

Taiwan Stock Exchange Market Observation Post System https://mops.twse.com.tw Lucky Cement Corporation http://www.luckygrp.com.tw

==> picture [127 x 118] intentionally omitted <==

Lucky Cement Corporation

2020 Annual Report Printed on: April 30, 2021

Notice to readers

This English-version report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

  • I. Spokesperson / Deputy Spokesperson

Name ： Weng Xiu-Chu ／ Chen Yi-Cheng Title ： Manager ／ Vice Manger Telephone : (02)2509-2188 FAX : (02)2504-8672 E-mail : [email protected] /[email protected]

II. Contact Information

Name Address Phone
Headquarter 15F, 237 Songjiang Rd., Taipei City (02)2509-2188
Dongao Plant 101 Suhua Rd., Sec. 3, Nan’ao Township, Yilan (03)998-6110
County
Puxin Plant 193 Meishi Rd., Sec. 1, Yangmei Dist., Taoyuan City (03)481-4788
Horen Plant 73 Heren Rd., Heping Village, Xiulin Township, (03)868-1217
Hualien County
  • III. Stock Transfer Agent

Name: Stock affairs agency, Sinopac Securities Address: 3F, 17 Bo’ai Rd., Zhongzheng Dist., Taipei City Telephone:(02)2381-6288 Website: http://www.sinotrade.com.tw

  • IV Auditors

CPA Firm: Deloitte & Touche CPA: Huang Hai-Yue & Chao-Mei Chen. Address: 20F, Taipei Nan Shan Plaza No.100, Songren Rd. Xinyi Dist., Taipei Telephone: (02)2725-9988

Website: http://www.deloitte.com.tw

  • V Overseas Securities Exchange: Not applicable

  • VI Corporate Website: http://www.luckygrp.com.tw

  • 1 -

Contents

Contents Contents
I Letter to Shareholders 3
1.1 The words of the Chairman 3
1.2 2020 Business Report 4
1.3 2021 Busimess Plans 6
II Company History 7
III Corporate Governance Report 10
3.1 Organization 10
3.2 Directors, Supervisors and Management Team 12
3.3 Implementation of Corporate Governance 20
3.4 Information Regarding the Company’s Audit Fee and Independence 42
3.5 Other matters to be clarified 42
IV Fund Raising 46
4.1 Source of Capital 46
4.2 Composition of Shareholders 47
4.3 Shareholding Distribution Status 48
4.4 List of Major Shareholders 48
4.5 Market Price, Net Worth, Earnings, and Dividends per Share 49
4.6 Dividend Policy and Implementation Status 50
4.7 The effect of this issuance of bonus shares on company’s operating
performance and earnings per share		 50
4.8 Employee Compensation and Directors' Remuneration 50
4.9 Buyback of Shares of the Company 51
4.10 Bonds and Preferred Stock Issued 51
4.11 Status of Overseas Depositary Receipts, Employees' Warrants, and Mergers
and Acquisitions or Transfer of New Issued Shares to Other Companies		 51
4.12 Implementation of Capital Allocation Plans 51
V Operational Highlights 52
5.1 Business Activities 52
5.2 Market and Sales Overview 54
5.3 Employee information in the last two years and up to the date of
publication of the annual report		 59
5.4 Environmental Protection Expenditure 59
5.5 Labor Relations 60
5.6 Important Contracts 63
VI Financial Information 64
6.1 Five-Year Financial Summary 64
6.2 Five-Year Financial Analysis 68
6.3 2020 Audit Committee’s Review Report 72
6.4 Parent Company only Financial Statements for the Years Ended December
31, 2020 and 2019, and Independent Auditors’ Report		 73
6.5 The Consolidated Financial Statements for the Years Ended
December 31, 2020 and 2019, and Independent Auditors’Report		 138
  • � -
6.6 As the End of Latest Year and Annual Publication Date of the
Company and Affiliated Companies, if there is any Financial
Difficulty, it should be Stated the Influence for Financial Position		 207
of the Company.
VII Examination Analysis and Risk Matters of Financial Position and Operating
Results		 208
7.1 Analysis of Financial Status 208
7.2 Analysis of Operation Results 208
7.3 Analysis of Cash Flow 209
7.4 Major Capital Expenditure Items 209
7.5 Investment Policy in the Last Year, Main Causes for Profits or
Losses, Improvement Plans and the Investment Plans for the 209
Coming Year
7.6 Analysis and Evaluation of Risk Management 209
7.7 Other Important Matters 212
VIII Special Disclosure 213
8.1 Summary of Affiliated Companies 213
8. 2 Private Placement Securities in the Most Recent Years 216
8.3 The Shares in the Company Held or Disposed of by Subsidiaries
in the Most Recent Years		 216
8.4 Other necessary supplementary note 216
IX The Significant Impact on Shareholders' Equity or Securities Prices in 2020 and
up to the Date of Publication of the Annual Report		 217
  • � -

I A letter to Shareholders

Dear sir and madam:

The consolidated operating revenue in 2020 was NT$ 4,533,370,000, consolidated gross income from operations was NT$ 447,475,000 and consolidated profit was NT$ 392,269,000. The Company actively renovated the business strategies and operating guidelines to reduce operating costs, and showed results with the team efforts of all our colleagues in 2020. The consolidated revenue has grown by more than 20% compared to 2019, and earnings per share have increased significantly from NT$ 0.11 in 2019 to NT$ 0.97 in 2020.

Looking back in 2020, the world economy has been severely impacted by the COVID-19, the major economies around the world has experienced tremondous decline due to various epidemic prevention measures such as countries and cities lockdown, suspension of social activities and so on. However, Taiwan’s economic activities had little impacted due to appropriate epidemic prevention measures. In the past two years, subjected to the China-US trade war and de-sinicization/de-Americanization, Taiwanese businesses continued to return home and increased investment amount, which driven domestic demand in commercial offices and factory offices up. Because of the low interest rate environment created by the Easy money policy policy of Central Banks in many countries, Taiwan’s real estate market was also showing signs of recovery, caused the price and volume of domestic cement and ready-mixed concrete market went up. Under this circumstance, the Company had aggressively adjusted the operating strategies. The Company performance in 2020 is far better than in 2019.

Looking forward to 2021, according to the forecast of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, Taiwan economic growth rate will be 4.64% in 2021 and the overall economic situation is still looking good. The domestic cement and readymixed concrete market, driven by the emand ofd the housing market, commercial offices, factories and public works, should be able to maintain at stable trend. But the cement industry still faces many challenges. The Company will keep moving forward to all kinds of operating strategies, such as improving factory production equipment, enhancing efficiency, complying with environmental protection requirements, optimizing train logistics, improving production scheduling for cost down, deploying ready-mixed concrete sales channels, and plowing the domestic market. The Company will pay more attention on the issue of sustainable develpment of ESG, hopes through all the strategic operations and all colleagues’ effort, we will continue to have the better performance in 2021.

Lastly, we give best wishes for good health and good luck to all the shareholders. Thank you.

Chairman ： CHEN, LIANG-CHUAN

  • � -

1.2 2020 Business Report

1. Business performance

(1) Major parts of products

(1)Major parts of products
Item 2020 2019 Increase(Decrease) Growth %
Cement and Slag Powder
(Unit: 1,000 tons)		 875 799 76 9.51%
Stone
(Unit: 1,000 tons)		 2,135 1,969 166 8.43%

Status of implementation plan:

Total production of cement and slag powder was 875,000 tons, total planned production was 814,000 tons, and its production achievement rate was 107.5%.

Total production of stone was 2,135,000 tons, total planned production was 2,424,000 tons, and its production achievement rate of stone was 88.1%.

(2) Major parts of Sales

(2) Major parts of Sales
Item 2020 2019 Increase
(Decrease)		 Growth %
Cement and Slag Powder
(Unit: 1,000 tons)		 948 827 121 14.63%
Stone
(Unit: 1,000 tons)		 685 689 (4) (0.58%)
Cement and Slag Powder
(Unit: NT$1,000)		 2,082,244 1,809,209 273,035 15.09%
Stone
(Unit:NT$1,000)		 322,445 281,628 40,817 14.49%

Status of implementation plan:

Total sales of cement and slag powder was 948,000 tons, total planned sales was 821,000 tons, and its sales achievement rate was 115.5%.

Total sales of stone was 685,000 tons, total planned sales was 708,000 tons, and its sales achievement rate of stone was 96.8%.

  • � -

Unit: NT$1,000,000

2. Financial Revenue and Profitability Analysis

Unit: NT$1,000,
Item 2020 2019 Increase
(Decrease)		 Increase
(Decrease) %
Operating revenue 4,530 3,732 798 21.38%
Operating income (loss) 447 78 369 473.08%
Profit (loss) before tax 444 54 390 722.22%
Profit (loss) 392 46 346 752.17%
Item 2020 2019
Individual
profitability		 Operating Income
Margin (%)		 Ratio：
Paid-in capital		 7.78 1.78
Profit (loss) before
Tax Margin (%)		 10.29 1.17
Net Profit (Loss) Margin (%) 11.95 1.57
Earnings Per Share (NT Dollar) 0.97 0.11

3. Research and development

The Company spared no effort in the research of production process in response to the business development of cement, slag powder, stone, and waste disposal. Also, we had simultaneously significant results that achieved the requirements under the environmental protection policy of Government on the research and development of environmental pollution prevention and control. As for the global focus of energy conservation and carbon reduction, the talent and manpower have been committed by the Company in order to achieve the goals of Government policy.

4. Subsidiary business

(1) Dasheng Enterprise Co., Ltd. (“Dasheng Enterprise”)

The company invests the land located in the Daganlin area of Anle Dist., Keelung City. The land is under grading stage. The first phase of the project is planning to build houses with 1+1 to 4 rooms, the building ping is ranging from 18 to 40 pings, and it is estimated that about 520 households can be built in the planning. Due to the request of the Keelung City Government to move the 2 hectare school land to the south area in the second phase of the rezoning area, the process of changing the urban plan is currently in progress.

The company suffered a net loss amount NT$ 14,060,000 in 2020.

  • (2) Lucky Cement Corp., Japan (“Lucky Cement, Japan”)

In 2020, the sales revenue of cement was NT$52,540,000 and net profit was NT$250,000.

  • 5 -

  • (3) Luckicon Ready-mixed Concrete Factory Co., Ltd (“Luckicon Ready mixed Concrete”) In 2020, the sales revenue was NT$1,672,040,000 and net profit was NT$104,900,000.

  • (4) Luckyship Marine Co., Ltd (“Luckyship Co.”)

  • The sales revenue in 2020 was NT$ 68,240,000 and net loss was NT $8,820,000.

  • (5) Fuyu Development Company (“Fuyu Development Co.”) In 2020, the sales revenue was NT$ 83,740,000 and net profit was NT$3,910,000.

1.3 2021 Business Plans

Production & Marketing Plans in 2021 ︰

Unit : tons
Products Production Sales
Cement, Slag Powder 750,000～900,000 900,000～1,200,000
Stone 2,000,000～2,500,000 900,000～2,000,000

In 2020, de to the appropriate epidemic prevention measures of the Taiwan government and the continuous return of Taiwanese businessmen, the real estate market has recovered and the Company has benefited from this. The Company conservatively estimates the cement-related industry market in 2021, it is expected that the Company's production and sales of cement and slag powder will be between 750,000 to 1,200,000 tons, and the production and sales of stone will be between 900,000 to 2,500,000 tons.

  • 6 -

II Company History

1974: “Lucky Cement Corporation” was established on May 7, 1974.

  • 1979: Dongao Plant was commenced civil construction.

  • 1981: The first cement production line in Dongao Plant was completed in operation and its annual production capacity was 600,000 tons.

  • 1983: The second cement production line was commenced in Dongao Plant.

  • 1985: The second cement production line in Dongao Plant was completed in operation and its annual production capacity was 800,000 tons.

  • 1986: Renovated the first cement production line in Dongao Plant and its annual production capacity was increased to 800,000 tons.

  • 1987: Invested in Dasheng Building Enterprise Co., Ltd.

  • Invested in establishment of Lucky Cement Corp., Japan.

  • 1989: Dasheng Building Enterprise Co., Ltd. was renamed to Dasheng Enterprise Co., Ltd.

  • 1990: Class A stock IPO.

Nankang Storage & Transportation Station was completed for operation.

  • 1991: Taichung Storage & Transportation Station was completed for operation, promoting delivery capacity of cement for the central Taiwan.

  • 1992: Acquired the land, plant and equipment of Puxin Cement Plant of Yungkang Industrial Co., with which the cement annual production capacity was 200,000 tons.

  • 1993: Technical renovated the first cement production line of Dongao Plant and annual production capacity was increased to 1 million tons. Established Luckyship Marine Co., Ltd

  • Established Luckicon Ready-mixed Concrete Factory Co., Ltd

  • 1994: The third cement grinding system in Puxin Plant completed construction at the end of year and annual production capacity was increased to 1.4 million tons.

  • 1995: The first rotary kiln equipment of Dongao plant was improved, and clinker annual production capacity was increased to 1.2 million tons. At this point, two cement rotary kiln equipment in the Company's Dongao plant had clinker annual production capacity was 2 million tons; Dongao plant and Puxin plant had a total grinding production capacity of cement was 3 million tons.

Taichung storage & transportation station add a cement silo to improve additional cement delivery capacity to the Central Taiwan.

  • 7 -
Phase 1 expansion construction of Horen mining began, which was used to
reinforce quality of developed mining source.
Puxin Plant researched and developed slag powder product and promote to
customers.
Established Luckyship Navigation S.A.
Established Luckipar Professional Basketball Co., Ltd
1996: Slag powder was firstly available on the market.
Dongao & Puxin Plants ISO9002. certified
1997: Phase 1 expansion construction of Horen mining completed (limestone
transport and crushing equipment).
Dongao Plant production rationalization project completed
1998: Puxin Plant additional slag powder production equipment completed, with
which increase annual production capacity to 300,000 tons.
1999: The production equipment of fly ash in Puxin Plant was completed, with
which annual production capacity was 260,000 tons.
2000: Added waste disposal projects to increase operating revenue.
Established Just Bright�BVI�Co.
Established Hojen Harbour Development Co., Ltd.
2001: Established Changxin photoelectric Co., Ltd.�renamed to ELUMINA
Technology Inc.�.
2002: Kaohsiung Storage & Transportation Station was completed for operation,
promoting cement delivery capacity for the Southern Taiwan.
Luckipar Professional Basketball Co., Ltd was dismissed for liquidation.
2003: Wudu Storage & Transportation Station was completed that replace
Nankang Storage & Transportation Station to be the Delivery Center for
Northern Taiwan.
Luckyship Navigation S.A. was dismissed for liquidation.
2004: Phase 2 expansion construction of Horen mining began, with which to
increase mining source and develop a variety of limestone products for
incremental sales revenue.
2006: Stone product was firstly available on the market.
Luckyship Marine Co., Ltd purchased a vessel from its affiliated Company
named Luckyship Navigation S.A.
2007: The second rotary kiln in Dongao Plant was renovated to reduce the
production cost.
Established Fuyu Development Company to explore and deliver a variety of
limestone products.
2008: Phase 2 expansion construction of Horen mining completed.
The Company passed Quality Certification of ISO9001:2008.
2012: Luckyship Navigation S.A. concluded in the liquidation.
  • 8 -
2015: Luckyship Marine Co., Ltd purchased a vessel
ELUMINA (Xiamen) Technology Inc., the subsidiary of ELUMINA
Technology Inc., conducts dissolution and liquidation procedures
2016: Hojen Harbour Development Co., Ltd. proceeded in dismissal and
liquidation in September 2016.
2018: Elumina Technology Inc. was granted dissolution registration on November
8, 2018.
2019: The board of directors decided to end the operation of Just Bright Ltd (BVI)
on December 27, 2019.
  • 9 -

III Corporate Governance Report

3.1 Organization

1. Organization chart

==> picture [458 x 554] intentionally omitted <==

  • 10 -

2. Major Corporate Functions

ajor Corporate Functions
Department Functions
General Manager's Office Assisting General Manager to handle all affairs.
Dongao and Puxin Plant Production of cement, slag powder and fly ash. Dongao plant is
in charge waste disposal business.
Hojen Mining Excavation, production of limestone, dimension stone and
sandstone and shippingmanagement for all relevantproducts.
Sales Department Sales, dispatch and delivery domestic and export cement, slag
powder, fly ash, dimension stone and sandstone.
Financial Department Fund raising and management.
Accounting Department Accounting and taxation.
Procurement Department Domestic and oversea raw materials, spare parts procurement.
Engineering Department Research and improvement of production facilities and
production procedure and construction.
HR Department Employee recruitment and training and general affairs.
MIS Department Plan, design, Integration and maintenance for company
computerized information.
Audit Department Consistency and appropriateness of auditing and evaluation on
each business operation control.
R&D and Quality Assurance
Department
Research and development for new and relevant products of
cement.
Business Investment
Department		 Domestic and International Investment and management.
  • 11 -

3.2 Directors, Supervisors and Management Team

1. Directors

April, 30, 2021 April, 30, 2021 April, 30, 2021 April, 30, 2021
Title
(Note1)		 Nationality/
County of
Origin		 Name Gender Date Elected Term
(Years)		 Date First
Elected
(Note2)		 Shareholding
When Elected		 Current
Shareholding		 Spouse & Minor
Shareholding		 Shareholding by
Nominee
Arrangement		 Experience
(Education)
�Note3�		 Other Position Executive, Directors or Supervisors who are
spouses or within two degrees of kinship		 Note
(Note4)
Shares % Shares % Shares % Shares % Title Name Relation
Institutional
Director		 ROC Shiyi Cement Co.,
Ltd.		 － June 12, 2019 3 June 13, 2007 3,634,588 0.90 % 6,632,588 1.64 % － － － － － － － － －

ROC		 Representative
：
Chen, Liang-Chuan		 Male June 12, 2019 3 June 6, 1990 6,754,627 1.67 % 6,158,497 1.52 % None － None － Chengzhou Elementary School Chairman of Yungsheng Development Industrial Co.,
Luckicon Ready-mixed Concrete, Luckyship Co.,
Dasheng Enterprise and Lucky Cement, Japan
Chairman & General Manager of LuckyCement Co.		 Executive Deputy
General Manager		 Chen,
Yun-Ju		 Father and
daughter		 Note4
ROC Shiyi Cement Co.,
Ltd.		 － June 12, 2019 3 June 13, 2007 3,634,588 0.90 % 6,632,588 1.64 % － － － － － － － － －
ROC Representative
：
Chen, Yun-Ju		 Female June 12, 2019 3 December 30, 2001 7,951,298 1.96 % 7,951,298 1.96 % None － None － EMBA of Tulane University Chairman of Liguang Construction Co.
Executive Deputy General Manager of Lucky Cement Co.		 Chairman and
General Manager		 Chen,
Liang-
Chuan		 Father and
daughter
Director ROC Zhang, Xiang-Lin Male June 12,2019 3 June 13, 2007 7,539,587 1.86 % 7,539,587 1.86 % None － None － Datong Middle School General Manager of Xuhe Building Materials Co., Ltd None － －
ROC Cheng, Shang-Kai Male June 12,2019 3 June 12, 2019 (Note5) 1,832,666 0.45 % 1,832,666 0.45 % None － None － MBA of Suffolk University Manager of Haihua Investment Co., Ltd. None － －
Independent
Director
ROC		 Chen, Yan Female June 12, 2019 3 June 15, 2016 － － － － None － None － Bachelor of Department of
Accounting, Tamkang
University		 Financial consultant of Eorex corporation
Senior Vice President of ZOYI Management Consulting
Co., Ltd.		 None － －
ROC Wang, Zhi-Cheng Male June 12, 2019 3 June 15, 2016 － － － － None － None － PhD of College of Law,
National Chengchi University		 The dean of the law school, Chinese Culture University
Independent Director of Dyaco International Inc.
Independent Director of CTBC Financial HoldingCo.,Ltd.
None		 － －
ROC Shao, Yang-Wei Male June 12, 2019 3 June 12, 2019 － － － － None － None － Ph. D. Graduate Institute of
Engineering Technology,
National Taipei University of
Technology		 General Manager of Jabes Construction Company Limited
Vice Chairman of Chung Hua Association for Financial and
Economic Strategies
HonoraryChairman of CCIM Taiwan
None		 － －

Note 1 ： The institutional shareholders shall list the names of the institutional shareholders and their representatives separately (a representative of the institutional shareholders shall indicate the name of the institutional shareholder), and shall fill in the following table 1

Note 2 ： Fill in the time when you first served as a company’s director or supervisor. If there is any disruption, it should be noted.

  • Note 3 ： Experiences related to the current position, such as the auditing of a certified public accountant firm or a related company during the period of the previous disclosure, should be stated in terms of their job title and responsible position.

  • Note 4 ： Where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent directors and more than half of the directors should not serve as employees or managers etc.).

  • The chairman of the Company is the establisher and the general manager with rich industry experience, the succession plan is in progress and there are 3 Independent Directors of the 7 seats, more than half of the directors do not serve as employees or managers of the Company.

Note 5 ： The director of the Company Mr. Cheng Shang-Kai was the supervisor of the Company before the re-election of the board of Directors on June 12, 2019.

  • 12 -

(1)Table 1 : Major Shareholders of the institutional shareholders

April 30,2021
Name of Institutional Shareholders (Note 1) Major Shareholders�Note 2�
Shiyi Cement Co., Ltd. Changheng Investment Co. (32.49%), Liguang Construction Co. (20.38%), Chen, Yun-Ju (34.05%)

  • Note 1 ： Directors and supervisors who are representatives of institutional shareholders should fill in the name of the institutional shareholders.

  • Note 2 ： Fill in the name of the major shareholder of the institutional shareholders (its shareholding percentage in the top ten) and its shareholding percentage. If its major shareholder is a juridical person, the following table 2 should be added and filled.

  • Note 3 ： If a institutional shareholder is not a company organizer, the name of the shareholder and the shareholding ratio that should be disclosed are the name of the funder or donor and its contribution or contribution ratio

(2) Table 2 ： Major shareholders of the Company’s major institutional shareholders

Table 2：Major shareholders of the Company’s major institutional shareholders Table 2：Major shareholders of the Company’s major institutional shareholders
April 30,2021
Name of Institutional Shareholders (Note 1) Major Shareholders�Note 2�
Liguang Construction Co. Changrun Water Resources (29.45%), Jinli Investment Co., Ltd. (19.48%),
Changheng Investment Co. (50.63%)
Changheng Investment Co., Shiyi Cement Co., Ltd. (99.85%)

Note 1 ： As listed in Table 1, the major shareholder is a juridical person should be filled in the name of the juridical person.

Note 2 ： Fill in the name of the major shareholder of the institutional shareholders (its shareholding percentage in the top ten) and its shareholding percentage.

  • Note 3 ： If a institutional shareholder is not a company organizer, the name of the shareholder and the shareholding ratio that should be disclosed are the name of the funder or donor and its contribution or contribution ratio

  • 13 -

(3) The information of Directors ： The qualifications of Directors

April 30, 2021

(3) The informat ion of Directors：The qualifications of Directors
 ion of Directors：The qualifications of Directors
 ion of Directors：The qualifications of Directors
 April 30,2021
Criteria
Name
�Note 1�		 Meet One of the Following Professional Qualification Requirements, Together with at Least
Five Years Work Experience		 Independence Criteria�Note 2� Number of Other
Public Companies in
Which the Individual is
Concurrently Serving
as an Independent
Director
An Instructor or Higher Position
in a Department of Commerce,
Law, Finance, Accounting, or
Other Academic Department
Related to the Business Needs of
the Company in a Public or
Private Junior College, College or
University		 A Judge, Public Prosecutor,
Attorney,
Certified
Public
Accountant,
or
Other
Professional
or
Technical
Specialist Who has Passed a
National Examination and been
Awarded a Certificate in a
Profession Necessary for the
Business of the Company







Have Work Experience in
the Areas of Commerce,
Law, Finance, or
Accounting, or
Otherwise Necessary for
the Business of the
Company
1		 2 3 4 5 6 7 8 9 10 11 12
Shiyi Cement Co., Ltd.
Representative：
Chen,Liang-Chuan		 Ｖ Ｖ Ｖ Ｖ Ｖ None
Shiyi Cement Co., Ltd.
Representative：
Chen,Yun-Ju		 Ｖ Ｖ Ｖ Ｖ Ｖ None
Zhang, Xiang-Lin Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None
Cheng, Shang-Kai Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None
Chen, Yan
(Independent Director)		 Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None
Wang, Zhi-Cheng
(Independent Director)		 Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ 2
Shao, Yang-Wei
(Independent Director)		 Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None

Note 1 ： The number of columns can be adjusted to the actual number.

  • Note 2 ： Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office.

  • 1 � Not an employee of the Company or its affiliates.

  • 2 � Not a Director or Supervisor of the Company or its affiliates. (Not applicable in cases where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiaries of the same parent company are set up according to the Act or local laws).

  • 3 � Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of issued shares of he Company or ranking in the top 10 in holdings.

  • 4 � Not a spouse, second-degree relative or third-degree relative of the managers in (1) or persons in (2) or (3).

  • 5 � Not a director, supervisor, or employees of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the Company or that holds shares ranking in the top five in holdings or is the representative being assigned as the director or supervisor of the Company by in accordance with Article 27, Paragraph 1 or 2 of the Company Act, (Not applicable in cases where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiaries of the same parent company are set up according to the Act or local laws).

  • 6 � Not a director, supervisor or employee of other company which has over half of the number of directors’ seats or shares with voting rights of the Company and is controlled by the same person (Not applicable in cases where the person is an independent director of the Company, its parent company, any subsidiary or subsidiaries of the same parent company established in accordance with the Act or local laws).

  • 7 � Not a director, supervisor or employee of other companies or institution which concurrently works as or in a spouse relationship to the chairman, general manager or personnel of relative duties of the Company (Not applicable in cases where the person is an independent director of the Company, its parent company, any subsidiary or subsidiaries of the same parent company established in accordance with the Act or local law).

  • 8 � Not a director, supervisor, manager or a shareholder holing five percent or more of the shares of a company or institution that has a business or financial relationship with the Company(However, not applicable in cases where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to the Act or local laws).

  • 9 � Not a professional who provides auditing, nor a professional who provides commercial, legal, financial, accounting or consulting services to the Company or its affiliates with the cumulated remuneration within the last two years less than NT$500,000, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such service to the Company or its affiliates, however, this does not apply for members of Remuneration Committee, Public Tender Offer review committee or special committee for Merger/ Consolidation and Acquisition who exercise power in accordance with relevant laws and regulations in Securities and Exchange Act or Business Mergers and Acquisitions Act.

  • 10 � Not having a marital relationship or a relative within the second degree of kinship to any other director.

  • 11 � Situation listed in any circumstancesections of Article 30 of the Company Act did not occur.

  • 12 � Not an elect in the name of a government institution, or its representative as defined in Article 27 of the Company Act.

  • 14 -

Board diversity target: more than 25% female directors or 35% independent directors

The composition of the Company's 2020 board of directors is fully in line with the diversification goal, with female directors accounting for 28.6% and independent directors accounting for 42.9%. Board Member Diversity and Core Competency Table

Name Basic information Basic information Industryexperience Industryexperience Professional background / Abilities Professional background / Abilities Professional background / Abilities Professional Skills Abilities(Note 1) Abilities(Note 1)
Gender Employee
of the
Company		 Age
(Note 2)		 Term of
Independent
Director
(Note 3)		 Cement Banking Construction Securities Accounting
/Financing		 Law Marketing/
Sales		 Production
management		 Management Ability to
make
operational
judgments		 Ability to
perform
accounting
and
financial
analysis		 Ability to
conduct
management
administration		 Ability to
conduct crisis
management		 Knowledge of
the industry		 An
international
market
perspective		 Ability to
lead		 Ability to
make policy
decisions
Chen, Liang-Chuan Male V � V V V V V V V V V V V V
Chen, Yun-Ju Female V � V V V EMBA V V V V V V V V
Zhang, Xiang-Lin Male � V V V V V V V V V V
Cheng, Shang-Kai Male � V V MBA V V V V V V V V
Chen, Yan Female � � V V V V * * V * * V
Wang, Zhi-Cheng Male � � V V V Professor of Law V V V V V V V V
Shao, Yang-Wei Male � � V V Doctor of
Engineering		 V V V V V V V V

Note 1 : * means partial ability Note 2 : A is under 60 years old, B is 60-69 years old, C is 70 years Note 3: A is under 3 years, B is 3-9 years, C is 9 years or more

  • 15 -

April 30, 2021 Unit : shares

2. Directors, Supervisors and Management Team

Title
�Note 1�		 Nationality/
Country of
Origin		 Name Gender Date Effective Shareholding Shareholding Spouse & Minor
Shareholding		 Spouse & Minor
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Experience�Education�
(Note 2)		 Other Position Managers who are Spouses or Within Two Degrees of
Kinship		 Managers who are Spouses or Within Two Degrees of
Kinship		 Managers who are Spouses or Within Two Degrees of
Kinship		 Note
(Note 3)
Shares ％ Shares ％ Shares ％ Title Name Relation
General Manager ROC Chen, Liang-Chuan Male December 1, 1994 6,158,497 1.52% 0 － 0 － Chengzhou Elementary School Chairman of Yungsheng Development Industrial Co.,
Luckicon Ready-mixed Concrete, Luckyship Co., Dasheng
Enterprise and LuckyCement, Japan		 Executive Deputy
General Manager		 Chen, Yun-Ju Father and
daughter		 Note 3
Executive Deputy
General Manager		 ROC Chen, Yun-Ju Female April 1, 2001 7,951,298 1.96% 0 － 0 － EMBA of Tulane University Chairman of Liguang Construction Co. General Manager Chen, Liang-Chuan Father and
daughter
Assistant Vice
President		 ROC Huang, Zhen-Ku Male July 11, 2003 33,520 0.01% 0 － 0 － National Taipei Institute of
Technology Industrial
Engineering		 None None － －
Assistant Vice
President		 ROC Fu, Yao-Ying Male January 30,
2020		 0 － 0 － 0 － Ming Hsin Engineering
College
Mechanical Engineering		 None None － －
Financial Manager ROC Weng, Xiu-Chu Female July 1, 2002 13,717 0.00% 0 － 0 － National Taipei Open College
Business Administration
Director of Lucky Cement, Japan and Luckicon Ready-
mixed Concrete
Supervisor ofLuckyshipCo.,		 None － －
Accounting Manager ROC Chang, Ching-Tien Male December27,
2019		 21,000 0.01% 0 － 0 － Chung Yuan Christian
University
Master of Accounting		 None None － －
Auditing Manager ROC Wang, Wei-Ren Male November 18,
2009		 0 － 0 － 0 － Financial Master of Wright
State University		 None None － －

Note 1 ： Should include information of the general manager, deputy general managers, assistant vice president, managers of department and branch office, and where the position is equivalent to the general manager, deputy general manager or assistant vice president, regardless of the title, should also be exposed.

Note 2 ： Experiences related to the current position, such as the auditing of a certified public accountant firm or a related company during the period of the previous disclosure, should be stated in terms of their job title and responsible position.

Note 3 ： Where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent directors and more than half of the directors should not serve as employees or managers etc.).

The chairman of the Company is the establisher and the general manager with rich industry experience, the succession plan is in progress and there are 3 Independent Directors of the 7 seats, more than half of the directors do not serve as employees or managers of the Company.

  • 16 -

3. Remuneration of Directors, General Manager, Deputy General Managers, Assistant Vice President, Managers of Department and Branch office

(1-1) Remuneration of directors(including independent directors) � Individual disclosure of names and emoluments �

Unit: NT$1,000

Unit: NT$1,000
Title Name Remuneration of Directors Ratio of Total
Remuneration
(A+B+C+D) to Net
Income (%)		 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total
Compensation
(A+B+C+D+E+F+G)
to Net Income (%)		 Compensation Paid
to Directors from an
Invested Company
Other than the
Company’s
Subsidiary
Base Compensation
(A)		 Severance Pay (B) Bonus to Directors (C)
(Note 1)
Allowances (D)		 Salary, Bonuses, and
Allowances (E)		 Severance Pay (F)
(Note 2)		 Profit Sharing- Employee
Bonus (G)
(Note 3)		 Exercisable Employee
Stock Options (H)		 New Restricted
Employee Shares (I)
The
Company
All
companies
in the
consolidated
financial
statements
The
Company		 All
companies
in the
consolidated
financial
statements
The
Company		 All
companies
in the
consolidated
financial
statements
The
Company
All
companies
in the
consolidated
financial
statements
The
Company
All
companies
in the
consolidated
financial
statements
The
Company
All
companies
in the
consolidated
financial
statements		 The
Company
All
companies
in the
consolidated
financial
statements
The Company		 All
companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements
The
Company
All
companies
in the
consolidated
financial
statements
The
Company
All
companies
in the
consolidated
financial
statements
Cash Stock Cash Stock
Director Shiyi Cement Co., Ltd. ─ ─ ─ ─ 21,134 21,134
0		 0 5.39% 5.39% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 5.39% 5.39% None
Director Shiyi Cement Co., Ltd.
Representative：
Chen,Liang-Chuan		 ─ ─ ─ ─ 0 0 1,200 1,200 0.31% 0.31% 2,317 4, 815 124 274 1,402 ─ 1,402
─		 ─ ─ ─ ─ 1.29% 1.96%
Director Shiyi Cement Co., Ltd.
Representative：
Chen,Yun-Ju		 ─ ─ ─ ─ 0 0 600
600		 0.15% 0.15% 1,724 1,724 92 92 1,043 ─ 1,043
─		 ─ ─ ─ ─ 0.88% 0.88%
Director Zhang, Xiang-Lin 4 4 ─ ─ 752 752 600
600		 0.35% 0.35% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 0.35% 0.35%
Director Cheng, Shang-Kai 4 4 ─ ─ 752 752 600
600		 0.35% 0.35% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 0.35% 0.35%
Independent
Director		 Chen, Yan ─ ─ ─ ─ 0 0 840
840		 0.21% 0.21% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 0.21% 0.21%
Independent
Director		 Wang, Zhi-Cheng ─ ─ ─ ─ 0 0 840
840		 0.21% 0.21% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 0.21% 0.21%
Independent
Director		 Shao, Yang-Wei ─ ─ ─ ─ 0 0 840
840		 0.21% 0.21% 0 0 0 0 ─ ─ ─ ─ ─ ─ ─ ─ 0.21% 0.21%

Note 1 ： The remuneration committee recommended 2020 proposed remuneration of directors is distributed in accordance with Article 30 of the Company's Articles of Incorporation.

Note 2 ： The amounts revealed by retirement pensions are the withheld amount.

Note 3 ： 2020 proposed remuneration of employees is distributed in accordance with the Company's Articles of Incorporation.

Note 4 : According to the Company’s “Rules of Director’s Remuneration and Remuneration Payment Method”, independent directors shall receive fixed remuneration. The monthly payment shall not exceed NT $ 100,000, and the board of directors shall be authorized to make a decision; and shall not participate in the remuneration of directors for the annual earning distribution.

(2-1) Remuneration of General manager and Deputy General manager � Individual disclosure of names and emoluments �

Unit: NT$1,000

Unit: NT$1,000
Title Name Salary (A) Severance Pay (B)
(Note 1)		 Bonuses and Allowances
(C)		 Profit Sharing- Employee Bonus
(D)
(Note 2)		 Ratio of total
compensation (A+B+C+D)
to net income (%)		 Exercisable Employee
Stock Options		 New Restricted Employee
Shares		 Compensation paid to the
General manager and
Deputy General manager
from an Invested
Company Other Than the
Company’s Subsidiary
The
Company		 All
companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements		 The Company All companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements		 The
Company		 All
companies
in the
consolidated
financial
statements
Cash Stock Cash Stock
General
manager		 Chen, Liang-
Chuan		 2,068 4,564 124 274 250 252 1,402 0 1,402 0 0.98% 1.66% ─ ─ ─ ─ None
Executive
Deputy
General
Manager		 Chen, Yun-
Ju		 1,538 1,538 92 92 185 185 1,043 0 1,043 0 0.73% 0.73% ─ ─ ─ ─ None

Note 1 ： The amounts revealed by retirement pensions are the withheld amount.

Note 2 ： 2020 proposed remuneration of Employee is distributed in accordance with the Company's Articles of Incorporation.

  • 17 -

(3-1) Remuneration of the top five remuneration executives for TWSE/GTSM Listed Companies � Individual disclosure of names and emoluments �

Unit: NT$1,000
Title Name Salary (A)
�Note 2�		 Severance Pay (B) Bonuses and Allowances (C)
(Note 3)		 Profit Sharing- Employee Bonus (D)
�Note 4�		 Ratio of total compensation
(A+B+C+D) to net income
(%)
�Note 6�		 Compensation paid to
managers from an Invested
Company Other Than the
Company’s Subsidiary
(Note 7)
The Company All companies
in the
consolidated
financial
statements
(Note 5)		 The
Company		 All companies
in the
consolidated
financial
statements
(Note 5)		 The
Company		 All companies
in the
consolidated
financial
statements
(Note 5)		 The Company All companies in the
consolidated financial
statements
(Note 5)		 The
Company		 All companies
in the
consolidated
financial
statements
Cash Stock Cash Stock
─ A 2,068 4,564 124 274 250 252 1,402 ─ 1,402 ─ 0.98% 1.66% None
─ B 1,538 1,538 92 92 185 185 1,043 ─ 1,043 ─ 0.73% 0.73% None
─ C 1,504 1,504 91 91 194 194 937 ─ 937 ─ 0.69% 0.69% None
─ D 1,272 1,272 73 73 123 123 792 ─ 792 ─ 0.58% 0.58% None
─ E 1,163 1,163 73 73 126 126 725 ─ 725 ─ 0.53% 0.53% None

  • Note 1 ： "Top five remuneration executives" , the executives refer to the Company ’s managers, the criteria for the identification of managers shall be applied in accordance with the scope of application of "managers" as

  • stipulated in the letter Tái-Cái-Zhèng-Sān-Zì No. 0920001301 issued by the Securities and Futures Commission of the Ministry of Finance on March 27, 2003. For the calculation and determination principle of "the top five remunerations", the managers receive the salaries, retirement pensions, bonuses and special expenses from all companies in the consolidated financial statements, and the total number of employee remuneration ( total number of A+B+C+D), the top five remuneration persons are recognized after the ranking. If the director serves concurrently as the smanager in the preceding paragraph, this table and the preceding table (1-1) should be filled.

  • Note 2 ： Salaries, post supplements and severance pay of the top five remuneration managers in the most recent year.

  • Note 3 ： Fill various kinds of bonuses, incentives, transportation fees, special expenses, various allowances, dormitory, Company car and other physical provision and other remuneration amounts of the top five remuneration managers in the most recent year. If the company provides houses, cars and other transportation or exclusive personal expenses, it should be disclosed the kind and cost of the provided assets, the actual rent or calculated at fair market value, fuel and other payments. In addition, if a personal driver provided by the Company, please note the relevant remuneration of the driver, but it is not included in the manager’s remuneration. Salary expenses recognized in accordance with IFRS 2 "Share-based Payments" including such as granted employee stock warrants, new restricted employee shares and participating in the subscription right to the cash capital increase shall also be included in the remuneration.

  • Note 4 ： The employee remuneration distribution (cash and stock) of the top five managers is approved by the board of directors in the most recent year. If it is impossible to estimate, the proposed distribution amount of this year will be calculated according to the proportion of the actual distribution amount in last year and the Table 1-3 shall be filled.

  • Note 5 ： All companies (including the Company) in the consolidated financial statements pay the total remuneration of the top five remuneration managers.

  • Note 6 ： Net profit after tax refers to net profit after tax in the individual financial statements in the most recent year.

  • Note 7 ： a. The top five remuneration executives of the company should be clearly filled to receive compensation from invested companies other than the Company’s subsidiaries or the parent company (If there is none, please fill in "none" ).

  • b. The remuneration is the remuneration, compensation (including the compensation of the employee, director and supervisor) and business execution fees received by the top five remuneration executives of the Company as directors, supervisors or managers of invested companies other than the Company’s subsidiaries or the parent company.

  • The remuneration disclosed in this table is different from the income concept of the “Income Tax Act”, so the purpose of this table is for information disclosure, not for taxation.

  • 18 -

� 4-1 � Remuneration of Managers

December 31,2020 Unit : NT$1,000
Total
Ratio of Total Amount to Net Income (%)
None
1.56%		 December 31,2020 Unit : NT$1,000
Total
Ratio of Total Amount to Net Income (%)
None
1.56%
Title Name Employee Bonus
- in Stock
(Fair Market Value)		 Employee Bonus
- in Cash		 Total Ratio of Total Amount to Net Income (%)
Manager General manager Chen,Liang-Chuan None 6,112 None 1.56%
Executive DeputyGeneral Manager Chen,Yun-Ju
Assistant Vice President Huang, Zhen-Ku
Assistant Vice President Fu, Yao-Ying
Manager Weng, Xiu-Chu
Manager Chang,Ching-Tien
Manager Wang,Wei-Ren

Note ： 2020 proposed remuneration of Employee is distributed in accordance with the Company's Articles of Incorporation.

4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%		 4.Comparison of Remuneration for Directors, General manager and Deputy General manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General manager and Deputy
General manager
(1)Unit: NT$1,000
Title
2019
2020
~~The Company~~
~~All companies in the consolidated financial statements~~
~~The Company~~
~~All companies in the consolidated financial statements~~
Amount
%
Amount
%
Amount
%
Amount
%
Director
11,372
24.77%
14,019
30.54%
34,868
8.89%
37,516
9.56%
Supervisor *
326
0.71%
326
0.71%
-
-
-
-
General manager and
DeputyGeneral manager
4,134
9.01%
6,782
14.77%
6,702
1.71%
9,350
2.38%
Title 2019 2020
~~The Company~~ ~~All companies in the consolidated financial statements~~ ~~The Company~~ ~~All companies in the consolidated financial statements~~

Amount
%
Amount
%
Amount
%
Amount
%
Director 11,372 24.77% 14,019 30.54% 34,868 8.89% 37,516 9.56%
Supervisor * 326 0.71% 326 0.71% - - - -
General manager and
DeputyGeneral manager		 4,134 9.01% 6,782 14.77% 6,702 1.71% 9,350 2.38%

  • Supervisors resigned on June 12, 2019, and the Audit Committee was set up to replace the supervisor's authority.

  • (2) According to the Company’s Articles of Incorporation, the directors of the Company are paid monthly according to the standards for the same industry payments, regardless of whether the profits and losses are to be paid. In addition, the shareholders or directors of the Company act as managers or employees, and they are regarded as employees of the general staff to receive salary.

  • (3) If the Company has a profit as shown through the annual accounting closing, the Company will provide compensation for the directors' compensation and employee compensation according to the provisions in the Company's Articles of Incorporation. Directors’ remuneration is calculated and reviewed by the Remuneration Committee in accordance with the " Regulations for Performance Evaluation of the Board of Directors ", and submitted to the board of directors for approval so that the occurrence of risk may be minimized in the future. The Director performance evaluation includes 6 items such as alignment of the goals and missions of the company; awareness of the duties of a director; participation in the operation of the company; management of internal relationship and communication; the director's professionalism and continuing education; and internal control. The remuneration of managers is based on the "Articles of Incorporation " and " Regulations for Employee Performance Evaluation " to evaluate the performance including the Company's profitability, work performance, management ability, work attitude, departmental education and training, and employee development plans. The remuneration will be paid after the Remuneration Committee appraisal, and the results will be reported to the board of directors for approval.

  • 19 -

3.3 Implementation of Corporate Governance

1. Board of Directors

Total of 6 (A) meetings of the Board of Directors were held in the previous period. The attendance of director and supervisor were as follows:

Title Name (Note 1) Attendance in
Person (B)		 By Proxy Attendance Rate (%)
��/��
(Note 2)		 Note
Chairman Shiyi Cement Co., Ltd.
Representative：Chen,Liang-Chuan		 6 0 100.00%
Director Shiyi Cement Co., Ltd.
Representative：Chen,Yun-Ju		 6 0 100.00%
Director Zhang,Xiang-Lin 6 0 100.00%
Director Cheng,Shang-Kai 6 0 100.00%
Independent Director Chen,Yan 6 0 100.00%
Independent Director Wang,Zhi-Cheng 6 0 100.00%
Independent Director Shao,Yang-Wei 6 0 100.00%
Other mentionable items:
1. If one of the following situations occurs during the operation of the board of directors, the date, the period, the contents of the proposal, all
independent director’s opinions, and the Company's handling of the opinions of independent director should be clarified:
Participation in the board meetings of independent directors
◎: Attend in person☆: Entrust others to attend✽: Not present
Independent Director
First
Meeting
Second
Meeting
Third
Meeting
4th
Meeting
5th
Meeting
6th
Meeting
Wang,Zhi-Cheng
◎
◎
◎
◎
◎
◎
Chen,Yan
◎
◎
◎
◎
◎
◎
Shao,Yang-Wei
◎
◎
◎
◎
◎
◎
(1) Listed items in the Article 14-3 of the Securities Exchange Act.
Please refer to page 41-42“11”for details in the important resolutions of the meeting of the board of directors in 2020 and as of the publication
of the annual report.
(2) Except for the previous issues, other board meeting decisions that have opposition or reservation opinions by independent director and have
recorded or written statements.
There were 6 board meetings in 2020, three independent directors had many suggestions on the Board of Directors, but there were no
objections or reservations. The suggestions of independent directors are detailed in the minutes of the board of directors.
2. In the implementation of the evasion of the interest-related cases, the directors should clarify the names of the directors, the contents of the
bills, the reasons for avoiding the benefits, and the participation in voting.
Meeting Times
Date
Content of the motion
Resolution situation
Implementation Status
First
2020/1/20
Discussion Matters：
Case 1 :The Company’s 2019 Year-end bonus
payment of managers is proposed and submitted
it
for
verification.
(Proposed
by
the
Remuneration Committee)
1. When the case was voted on, related party
Representatives of juristic person Director
(including Mr. Chen, Liang-Chuan and Ms.
Chen, Yun-Ju) and Managers (including Ms.
Weng Xiu-Chu, Mr. Wang, Wei-Ren and Mr.
Chang, Ching-Tien) evaded. The chairman is
entrusted by the present directors and is
represented by independent director Ms. Chen
Yan.
2. Independent director Mr. Wang Zhi-Cheng
suggested:
(1) Written information should be prepared
according to the number of directors present,
and indicate "confidential documents". The
information will be retrieved after the
meeting.
(2) The employee bonus is allocated according to
the annual budget, and it is hoped that the
Company will allocate a higher proportion of
this year's budget surplus to motivate staff
morale.
3. The case was approved by the acting chairman
and the directors present without objection.
Approved resolution. It
was
distributed
on
January 22, 2020
3. TWSE/GTSM Listed Companies should disclose information such as the evaluation cycle, period, scope, method and content of self-evaluation
or peer evaluation of the Board of Directors and fill the implementation of the Company's board evaluation in the table as below.
  • 20 -
The implementation of the Company's board evaluation The implementation of the Company's board evaluation The implementation of the Company's board evaluation The implementation of the Company's board evaluation The implementation of the Company's board evaluation
Evaluation
Cycle		 Evaluation Period Evaluation scope Evaluation method Evaluation content
Once per year The
Company's
board
performance
evaluation
period is from January 1,
2020 to December 31, 2020.



The Company's board
evaluation
scope
covers the evaluation
of the board as a
whole,
individual
directors
and
functional
committees.





Methods of evaluations include the
internal evaluation of the board, self-
evaluation
by
individual
board
members,
peer
evaluation,
and
evaluation by appointed external
professional institutions, experts, or
other appropriate methods.




1. The Company shall take into consideration its condition and
needs when establishing the criteria for evaluating the
performance of the board of directors, which should cover, at
a minimum, the following five aspects: participation in the
operation of the company; improvement of the quality of the
board of directors' decision making; composition and structure
of the board of directors; election and continuing education of
the directors; and internal control.
2. The criteria for evaluating the performance of the board
members (on themselves or peers), should cover, at a
minimum, the following six aspects: alignment of the goals
and missions of the company; awareness of the duties of a
director; participation in the operation of the company;
management of internal relationship and communication; the
director's professionalism and continuing education; and
internal control.
3. The criteria for evaluating the performance of functional
committees should cover, at a minimum, the following five
aspects: participation in the operation of the company;
awareness of the duties of the functional committee;
improvement of quality of decisions made by the functional
committee; makeup of the functional committee and election
of its members and internal control.

  1. Measures taken to strengthen the functionality of the board in this and recent fiscal years (such as the establishment of an Audit Committee and increase the information transparency) and evaluation of the implementation.

  2. 1 � There were total 6 times of board meetings in 2020 and important motions that are public announced via Market Observation Post System according to the law to ensure the information disclosure.

  3. 2 � Good corporate governance system of board of directors , the supervisory functions and strengthening management mechanisms were established in order to meet the rules of procedure of board of directors.

  4. 3 � The Company’s “Self-Evaluation or Peer Evaluation of the Board of Directors” was approved by the board of directors on November 10, 2015. Since 2020, the performance self-assessment questionnaire was issued to all board members and functional committees before the end of first quarter each year, in addition to assessing the overall operation of the board of directors and functional committees, it also conducted self-assessment on its own for the previous year. After the questionnaires are fully recovered before the end of first quarter each year, the Company’s board of directors and related units organize the analysis according to the previous methods and submits the results to the board of directors. The above methods and evaluation results were also disclosed on the Company's official website. Please check the important regulations of the Company as “Regulations for Performance Evaluation of the Board of Directors” under the section of Corporate Governance and the website address is http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_id=49#.

    • 4 � For the implementation status of the Company’s “The Performance Self-Evaluation of the board members” , please check the website and address is http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_id=73#.. The latest (2020) Director’s performance evaluation results are as follows:

      • A. The performance evaluation of the board of directors: Total average score is 4.00 (Full score is 4.00).

      • B. The performance self-evaluation of the board members: Total average score is 4.00 (Full score is 4.00).

      • C. The performance self-evaluation of functional committees

        • a. The Audit Committee : Total average score is 4.00 (Full score is 4.00).

        • b. The Remuneration Committee : Total average score is 4.00 (Full score is 4.00).

        • c. Corporate Social Responsibility Committee : Total average score is 4.00 (Full score is 4.00).

  5. Note 1 ： Director and Supervisor who is classified as legal person shall disclose the name of legal person shareholder and his representative.

  6. Note 2 ： (1) Any director, supervisor who resigns by the end of the year shall note the date of resignation in the Remark column; the actual rate 

           - (%) shall be calculated by the number of directors who will be held during their term of office and their actual number of seats.

    - (2) If re-election of Director, supervisor is held by the end of the year, new and same Director, Supervisor shall be included, and indicate that the Director, supervisor is the same, On Board or re-elected and re-election date in Remark column. The actual rate (%) is calculated based on the number of meetings held by Director during his term of office and its actual number of seats.

2. The participates in the operation of the Audit Committee : The Company elected 3 independent directors at the regular shareholders meeting on June 12, 2019 and set up the Audit Committee to replace the supervisors’ authority in accordance with the Securities Exchange Act.

Total of 5 (A) meetings of the Audit Committee were held in 2020. The attendance of independent directors was as follows: ：

Title Name Attendance in Person (B) By Proxy Attendance Rate (%)��/�� Note
Independent Director Wang, Zhi-Cheng 5 0 100.00%
Independent Director Chen, Yan 5 0 100.00%
Independent Director Shao, Yang-Wei 5 0 100.00%
Other mentionable items：
1. All matters listed in Article 14-5 of the“Securities and Exchange Act” that has notbeen approved with the consent of one-half or more of all audit
committee members and been undertaken upon the consent of two-thirds or more of all directors, the information should be disclosed including the date
of the board meeting, session, motion content, the resolution of the audit committee and the Company's response to the audit committee's opinion: No
such thing.
2. Implementation of independent directors' avoidance of interest resolutions,the information should be disclosed includingthe name of independent
  • 21 -
3. director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.		 director, motion content, reason of interest avoidance and participation in voting : No such thing.
Communication between independent directors and internal audit managers and accountants(communications include major matters, methods and
results on the Company's financial and business conditions).
(1) Communication with internal audit managers
Meeting
Date
Type
Communication matters
Recommendations of Independent
director
The results of the company's
processingand execution
2020/11/11
Separate
periodical
(At least
once a year)
1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.
1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.
1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date
Type
Communication matters
Recommendations of
Independent director
The results of the company's
processingand execution
2020/3/24
Separate
periodical
(At least
once every
six
months)
1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11
Separate
periodical
(At least
once every
six
months)
1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)
Since the present members have no
objections or reservations, there
are no issues to deal with.
Meeting
Date		 Type Communication matters Recommendations of Independent
director		 The results of the company's
processingand execution
2020/11/11 Separate
periodical
(At least
once a year)		 1. Major tasks in the third quarter
of 2020：
●The investment cycle review was
completed in October.
●There are no major abnormalities
of
information
system
processing.
2.Some directors have not yet
reached 6 hours of training.
3. The audit committee and the
board of directors have many
repetitive motions. How to
judge those motions of the board
meetings
are
unnecessarily
included in the audit committee
meeting.
4. In November, the Company
propagated the prevention of
insider trading in accordance
with Article 157-1 of the
Securities and Exchange Act.		 1. Continuous tracking to improve the
shortcomings and mistakes of the
auditing.
2. For directors who have less than 6
hours of training hours, please
complete the training hours before
12/31.
3. Please refer to Article 14-5 of the
“Securities and Exchange Act” and
the Company's Audit Committee
Charter to determine which motions
of the board meetings should be
submitted to the audit committee
first.。When it is impossible to judge
whether
some
board
meeting
proposals should be submitted to the
Audit
Committee
first,
please
consult independent directors before
deciding whether to include the
proposal in the Audit Committee
meeting.
4. Independent director Mr. Wang Zhi-
Cheng stated that While advocating
the prevention of insider trading in
the future, please do so together with
Article 157 of the Securities and
Exchange Act about Regulation of
Short-term Trading, and remind
insiders not to violate Articles 157
and 157-1 of the Securities and
Exchange Act.		 1.
The
Audit
Department
has
performed SAP authority testing on
the Accounting Department, sales
Department,
and
Purchasing
Department, and the deficiencies
have been improved.
2. All directors completed 6 hours of
advanced
training
before
December 31, 2020.
3.The Audit Committee’s agenda is
handled in accordance with Article
14-5 of the “Securities and Exchange
Act” and the Company’s Audit
Committee Charter.
4. It is scheduled to propagate that
Article 157 prohibits short-term
trading and Article 157-1 prohibits
insider tradingof the “Securities and
Exchange Act”.
(2) Communication with accountants
Meeting
Date		 Type Communication matters Recommendations of
Independent director		 The results of the company's
processingand execution
2020/3/24 Separate
periodical
(At least
once every
six
months)		 1. Communicate with mining margin issues
2.Communicate the Company’s ability to prepare
financial statements on its own.
3. Communicate the .fair value evaluation of financial
assets in the end of period.
4. Communicate inventory valuation losses of
developing real estate and real estate to be
developed.。
5. Communicate the review result of the MIS
operations.
6. Communicate the 2019 audit result with the
governance unit.
7. Description of the improvement of the major issues
in thepreviousperiod.		 Noted
(No opinion)		 Since the present members have no
objections or reservations, there
are no issues to deal with.
2020/11/11 Separate
periodical
(At least
once every
six
months)		 1. Communicate the 2020 audit planning matters with
the governance unit.
2. Identify and communicate key audit items.
3.Communicate the Company’s ability to prepare
financial statements on its own.
4. Communicate the .fair value evaluation of financial
assets in the end of period.。
5. Communicate the accounting process of major
transactions.
6. Communicate the advance payment for equipment
of Lucky Cement Co.
7. Communicate with the reasonableness of the
purchase price of related parties.
8. Communicate the balance sheet of major account.
Noted
(No opinion)		 Since the present members have no
objections or reservations, there
are no issues to deal with.

  1. The focus of the Audit Committee :

  2. 1 � The adoption of or amendments to the internal control system pursuant to Article 14-1 of the Securities and Exchange Act.

  3. 2 � Assessment of the effectiveness of the internal control system.

� 3 � The adoption or amendment, pursuant to Article 36-1 of the Securities and Exchange Act, of the procedures for handling financial or business

  • 22 -
activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or
guarantees for others.
�4�Audit matters in which a director is an interested party.
�5�Audit asset transactions or derivatives trading of a material nature.
�6�Audit loans of funds, endorsements, or provision of guarantees of a material nature.
�7�Audit the offering, issuance, or private placement of equity-type securities.
�8�Audit the hiring or dismissal of a certified public accountant, or their compensation.
�9�Audit the appointment or discharge of a financial, accounting, or internal audit officer.
�10�Audit annual and semi-annual financial reports.
�11�Audit other material matters as may be required by this Corporation or by the competent authority.
Audit Committee
Proposal content and
Subsequent processing
resolution
The Company handles the opinions
of Audit Committee
First Term
First session in
2020
March 24, 2020
Case 1: 2019 Business Report and
Financial Statements.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed distribution of
the
Company's
employees’
and
directors' remuneration for 2019
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that the remuneration
of directors will be directly reported to
the
board
of
directors
by
the
remuneration committee, and the audit
committee will only have to submit
remuneration to employees in next
time.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 3. It is proposed to draft the
Company's 2019 earnings distribution
plan.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to establish the
Company’s “Regulations Governing
the Exercise of Powers by Audit
Committees”.
Independent director Mr. Wang Zhi-
Cheng suggested that there is no
problem with the content, but Article
10-1, please change to Article 11, and
then the article number will be
deferred. All independent directors
presented and passed the case without
objection.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 5. It is proposed to convene the
2020 shareholder meeting.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to increase
investment in the subsidiary Luckicon
Ready-mixed Concrete Factory Co.,
Ltd.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that (1) In addition to
borrowing from the parent company,
the subsidiary Luckicon Ready-
mixed Concrete shall ask the parent
company for assistance in other
required funds.(2) The plant and
equipment to be built on the land
purchased this time should meet the
bidding standards for public projects,
so as to increase the options for bidding
for public projects and help expand
financial resources.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 7. It is proposed to increase
investment in Jonfeng Mining Co.,
Ltd.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Second session in
2020
May 12, 2020
Case 1 The subsidiary, Dasheng
Enterprise Co., Ltd. proposes to apply
to the Company for financing limit
due to business turnover.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. The replacement of the
Company's CPA.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Third session in
2020
August 11, 2020
Case 1. It is proposed to draft the plan
for ex-dividend date, the book closure
period and cash dividend payment
date.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. Amend the Company's Audit
Committee Charter.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng
suggested
that
the
first
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance		 activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or
guarantees for others.
�4�Audit matters in which a director is an interested party.
�5�Audit asset transactions or derivatives trading of a material nature.
�6�Audit loans of funds, endorsements, or provision of guarantees of a material nature.
�7�Audit the offering, issuance, or private placement of equity-type securities.
�8�Audit the hiring or dismissal of a certified public accountant, or their compensation.
�9�Audit the appointment or discharge of a financial, accounting, or internal audit officer.
�10�Audit annual and semi-annual financial reports.
�11�Audit other material matters as may be required by this Corporation or by the competent authority.
Audit Committee
Proposal content and
Subsequent processing
resolution
The Company handles the opinions
of Audit Committee
First Term
First session in
2020
March 24, 2020
Case 1: 2019 Business Report and
Financial Statements.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed distribution of
the
Company's
employees’
and
directors' remuneration for 2019
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that the remuneration
of directors will be directly reported to
the
board
of
directors
by
the
remuneration committee, and the audit
committee will only have to submit
remuneration to employees in next
time.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 3. It is proposed to draft the
Company's 2019 earnings distribution
plan.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to establish the
Company’s “Regulations Governing
the Exercise of Powers by Audit
Committees”.
Independent director Mr. Wang Zhi-
Cheng suggested that there is no
problem with the content, but Article
10-1, please change to Article 11, and
then the article number will be
deferred. All independent directors
presented and passed the case without
objection.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 5. It is proposed to convene the
2020 shareholder meeting.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to increase
investment in the subsidiary Luckicon
Ready-mixed Concrete Factory Co.,
Ltd.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that (1) In addition to
borrowing from the parent company,
the subsidiary Luckicon Ready-
mixed Concrete shall ask the parent
company for assistance in other
required funds.(2) The plant and
equipment to be built on the land
purchased this time should meet the
bidding standards for public projects,
so as to increase the options for bidding
for public projects and help expand
financial resources.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 7. It is proposed to increase
investment in Jonfeng Mining Co.,
Ltd.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Second session in
2020
May 12, 2020
Case 1 The subsidiary, Dasheng
Enterprise Co., Ltd. proposes to apply
to the Company for financing limit
due to business turnover.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. The replacement of the
Company's CPA.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Third session in
2020
August 11, 2020
Case 1. It is proposed to draft the plan
for ex-dividend date, the book closure
period and cash dividend payment
date.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. Amend the Company's Audit
Committee Charter.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng
suggested
that
the
first
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance		 activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or
guarantees for others.
�4�Audit matters in which a director is an interested party.
�5�Audit asset transactions or derivatives trading of a material nature.
�6�Audit loans of funds, endorsements, or provision of guarantees of a material nature.
�7�Audit the offering, issuance, or private placement of equity-type securities.
�8�Audit the hiring or dismissal of a certified public accountant, or their compensation.
�9�Audit the appointment or discharge of a financial, accounting, or internal audit officer.
�10�Audit annual and semi-annual financial reports.
�11�Audit other material matters as may be required by this Corporation or by the competent authority.
Audit Committee
Proposal content and
Subsequent processing
resolution
The Company handles the opinions
of Audit Committee
First Term
First session in
2020
March 24, 2020
Case 1: 2019 Business Report and
Financial Statements.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed distribution of
the
Company's
employees’
and
directors' remuneration for 2019
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that the remuneration
of directors will be directly reported to
the
board
of
directors
by
the
remuneration committee, and the audit
committee will only have to submit
remuneration to employees in next
time.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 3. It is proposed to draft the
Company's 2019 earnings distribution
plan.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to establish the
Company’s “Regulations Governing
the Exercise of Powers by Audit
Committees”.
Independent director Mr. Wang Zhi-
Cheng suggested that there is no
problem with the content, but Article
10-1, please change to Article 11, and
then the article number will be
deferred. All independent directors
presented and passed the case without
objection.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 5. It is proposed to convene the
2020 shareholder meeting.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to increase
investment in the subsidiary Luckicon
Ready-mixed Concrete Factory Co.,
Ltd.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that (1) In addition to
borrowing from the parent company,
the subsidiary Luckicon Ready-
mixed Concrete shall ask the parent
company for assistance in other
required funds.(2) The plant and
equipment to be built on the land
purchased this time should meet the
bidding standards for public projects,
so as to increase the options for bidding
for public projects and help expand
financial resources.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 7. It is proposed to increase
investment in Jonfeng Mining Co.,
Ltd.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Second session in
2020
May 12, 2020
Case 1 The subsidiary, Dasheng
Enterprise Co., Ltd. proposes to apply
to the Company for financing limit
due to business turnover.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. The replacement of the
Company's CPA.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Third session in
2020
August 11, 2020
Case 1. It is proposed to draft the plan
for ex-dividend date, the book closure
period and cash dividend payment
date.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. Amend the Company's Audit
Committee Charter.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng
suggested
that
the
first
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance		 activities of a material nature, such as acquisition or disposal of assets, derivatives trading, loaning of funds to others, and endorsements or
guarantees for others.
�4�Audit matters in which a director is an interested party.
�5�Audit asset transactions or derivatives trading of a material nature.
�6�Audit loans of funds, endorsements, or provision of guarantees of a material nature.
�7�Audit the offering, issuance, or private placement of equity-type securities.
�8�Audit the hiring or dismissal of a certified public accountant, or their compensation.
�9�Audit the appointment or discharge of a financial, accounting, or internal audit officer.
�10�Audit annual and semi-annual financial reports.
�11�Audit other material matters as may be required by this Corporation or by the competent authority.
Audit Committee
Proposal content and
Subsequent processing
resolution
The Company handles the opinions
of Audit Committee
First Term
First session in
2020
March 24, 2020
Case 1: 2019 Business Report and
Financial Statements.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed distribution of
the
Company's
employees’
and
directors' remuneration for 2019
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that the remuneration
of directors will be directly reported to
the
board
of
directors
by
the
remuneration committee, and the audit
committee will only have to submit
remuneration to employees in next
time.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 3. It is proposed to draft the
Company's 2019 earnings distribution
plan.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to establish the
Company’s “Regulations Governing
the Exercise of Powers by Audit
Committees”.
Independent director Mr. Wang Zhi-
Cheng suggested that there is no
problem with the content, but Article
10-1, please change to Article 11, and
then the article number will be
deferred. All independent directors
presented and passed the case without
objection.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 5. It is proposed to convene the
2020 shareholder meeting.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to increase
investment in the subsidiary Luckicon
Ready-mixed Concrete Factory Co.,
Ltd.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that (1) In addition to
borrowing from the parent company,
the subsidiary Luckicon Ready-
mixed Concrete shall ask the parent
company for assistance in other
required funds.(2) The plant and
equipment to be built on the land
purchased this time should meet the
bidding standards for public projects,
so as to increase the options for bidding
for public projects and help expand
financial resources.
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 7. It is proposed to increase
investment in Jonfeng Mining Co.,
Ltd.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Second session in
2020
May 12, 2020
Case 1 The subsidiary, Dasheng
Enterprise Co., Ltd. proposes to apply
to the Company for financing limit
due to business turnover.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. The replacement of the
Company's CPA.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Third session in
2020
August 11, 2020
Case 1. It is proposed to draft the plan
for ex-dividend date, the book closure
period and cash dividend payment
date.
All independent directors presented
and passed the case without objection.
The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. Amend the Company's Audit
Committee Charter.
All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng
suggested
that
the
first
The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
Audit Committee Proposal content and
Subsequent processing		 resolution The Company handles the opinions
of Audit Committee
First Term
First session in
2020
March 24, 2020		 Case 1: 2019 Business Report and
Financial Statements.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed distribution of
the
Company's
employees’
and
directors' remuneration for 2019		 All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that the remuneration
of directors will be directly reported to
the
board
of
directors
by
the
remuneration committee, and the audit
committee will only have to submit
remuneration to employees in next
time.		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 3. It is proposed to draft the
Company's 2019 earnings distribution
plan.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to establish the
Company’s “Regulations Governing
the Exercise of Powers by Audit
Committees”.		 Independent director Mr. Wang Zhi-
Cheng suggested that there is no
problem with the content, but Article
10-1, please change to Article 11, and
then the article number will be
deferred. All independent directors
presented and passed the case without
objection.		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 5. It is proposed to convene the
2020 shareholder meeting.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to increase
investment in the subsidiary Luckicon
Ready-mixed Concrete Factory Co.,
Ltd.		 All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng suggested that (1) In addition to
borrowing from the parent company,
the subsidiary Luckicon Ready-
mixed Concrete shall ask the parent
company for assistance in other
required funds.(2) The plant and
equipment to be built on the land
purchased this time should meet the
bidding standards for public projects,
so as to increase the options for bidding
for public projects and help expand
financial resources.		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 7. It is proposed to increase
investment in Jonfeng Mining Co.,
Ltd.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Second session in
2020
May 12, 2020		 Case 1 The subsidiary, Dasheng
Enterprise Co., Ltd. proposes to apply
to the Company for financing limit
due to business turnover.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. The replacement of the
Company's CPA.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Third session in
2020
August 11, 2020		 Case 1. It is proposed to draft the plan
for ex-dividend date, the book closure
period and cash dividend payment
date.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. Amend the Company's Audit
Committee Charter.		 All independent directors presented
and passed the case without objection.
Independent director Mr. Wang Zhi-
Cheng
suggested
that
the
first		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
  • 23 -
paragraph of Article 5 of the Securities
Act should be amended to the
Securities
and
Exchange
Act
(hereinafter
referred
to
as
the
"Securities Act") to complete the title
of Act.		 directors.
First Term
Forth session in
2020
November 11,2020		 The proposed non-distribution of the
Company's first half of 2020 cash
dividend.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
First Term
Fifth session in
2020
December 28, 2020		 Case 1. It is proposed to formulate
the business budget and capital
expenditure budget for 2021.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 2. It is proposed to authorize the
chairman of the board of directors to
fully handle the credit line cases
between the Company and financial
institutions in 2021.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 3. It is proposed to pre-purchase
forward
exchange
within
the
Company's foreign currency loan
balance.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 4. It is proposed to provide an
endorsement
guarantee
for
the
subsidiary Luckicon Ready-mixed
Concrete Factory Co.,Ltd.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 5. The subsidiary, Luckyship
Marine Co., proposes to apply to the
Company for financing limit due to
business turnover.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 6. It is proposed to authorize the
chairman of the board of directors to
provide an endorsement guarantee to
the Company’s subsidiaries and make
a decision within a certain amount.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 7. It is proposed to schedule
the 2021 internal audit plan.		 Independent director Mr. Wang Zhi-
Cheng suggested adding 3 additional
project audits: (1) Luckicon Ready-
mixed Concrete (2) Luckyship Marine
Co., (3) Capital expenditures related
to waste treatment at the Dongao plant,
and the rest was approved by all
independent directors present after the
chairman’s inquirywithout objection.		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 8. It is proposed to establish the
Company’s “Regulations
for
apointment, dismissal, evaluation and
review, salary and compensation of
internal auditors”.		 Independent director Mr. Wang Zhi-
Cheng suggested that the text of Article
4 and Article 7 in the Regulations
should be partially adjusted, and the
rest was approved by all independent
directors present after the chairman’s
inquirywithout objection.		 The board of directors passed the
resolution as recommended by the
audit committee after the chairman
consulted
with
all
attendance
directors.
Case 9. Regularly (once per year)
evaluate
the
independence
and
suitability of the Company's certified
public accountant (CPA) and submit
them for deliberation		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 10. The replacement of the
Company's CPA.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
Case 11. The 2021 commission
remuneration of CPA.		 All independent directors presented
and passed the case without objection.		 The board of directors passed the
case after the chairman consulted
with all attendance directors.
  • 24 -

3. Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Corporate Governance Implementation
TWSE/TPEx Listed Companies”		 Status and Deviations from “the Corporate Governance Best Status and Deviations from “the Corporate Governance Best Status and Deviations from “the Corporate Governance Best -Practice Principles for
Evaluation Item Implementation Status Deviations from “the
Corporate Social
Responsibility Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation
1. Does the company establish and disclose
the Corporate Governance Best-Practice
Principles based on “Corporate Governance
Best-Practice Principles for TWSE/TPEx
Listed Companies”?



The board of Directors of the Company approved the “Corporate
GovernanceBest Practice Principles” on December 26,2014.
The Company makes timely amendments in accordance with the
regulations of the Competent Authority and disclosures
Corporate Governance Best Practice Principles in the Company’s
website(http://www.luckygrp.com.tw).




No difference.
2. Shareholding structure & shareholders’
rights
(1) Does the company establish an internal
operating
procedure
to
deal
with
shareholders’ suggestions, doubts, disputes
and litigations, and implement based on the
procedure?
(2) Does the company possess the list of its
major shareholders as well as the ultimate
owners of those shares?
(3) Does the company establish and execute
the risk management and firewall system
within its conglomerate structure?
(4) Does the company establish internal rules
against insiders trading with undisclosed
information?




(1) The Company has established the spokesman and acting
spokesperson system and coordinated with the stock affairs
department of SinoPac Securities Corporation as the agent
for stock affairs to deal with the investor relations,
suggestions of shareholders and disputes.
(2) To keep track of the shareholdings of directors,
supervisors, managers, and major shareholders holding
more than 10% of shares at any time.
(3) All dealings or transactions are based on statutory
regulations or legally established systems in the internal
control system.
(4) Internal control system: C2-103 that has regulated the
management procedure to prevent any insiders trading		 (1)No difference.
(2)No difference.
(3)No difference.
(4)No difference.
3. Composition and Responsibilities of the
Board of Directors
(1) Does the Board develop and implement a
diversified policy for the composition of its
members?
(2) Does the company voluntarily establish
other functional committees in addition to
the Remuneration Committee and the
Audit Committee?
(3) Does the company establish a standard to
measure the performance of the Board, and
implement
it
annually?
Does
the





(1)�The Company has established the appropriate policy on
diversity of Directors in according with the Chapter 3 of
the Corporate Governance Best Practice Principles which
approved by the Board of Directors. To make sure the
diversity and independence of Directprs, the nomination
and election of Directors are in accordance with Articles
of Incorporation, Procedures for Election of Directors and
Corporate Governance Best Practice Principles.
� The Company’s Directors shall have diversity professional
background
such
as
sales,
production,
business
management, finance, accounting and law to comply with
relevant regulations. Please refer to Page 15 for the table
of Board Member’s diversified core competency.
�Among the seven members of the Company's board of
directors, 28.6% of the directors are employees, 42.9% of
independent directors (the independent directors are not
employees), 28.6% of the directors are female. 3
independent directors’ terms are less than 6 years. As of
the date of publication, the age distribution of directors is
following: one is above 70 years old, one is among 60 to
69 years old, and 5 are under 60 years old.
(2) Regulations of Remuneration Committee was approved by
the Company’s board of directors on December 23, 2011 to
establish the Remuneration Committee accordingly that
evaluate directors and managers of the salary and
remuneration policy and system by the professional and
objective position and report to the board of directors with
the meeting minutes and implementation status. In addition,
the board of directors passed a resolution setting out the
“Regulations
for
Corporate
Social
Responsibility
Committee” on May 10, 2017, and passed a resolution
about the chairman to appoint members of the Corporate
Social Responsibility Committee on July 10, 2017. The
Company's "Organization Rules for Audit Committee" was
approved by the board of directors on March 22, 2019 and
cooperated with the re-election of directors to set up an
audit committee on June 12, 2019.
(3) �"Self-Evaluation or Peer Evaluation of the Board of
Directors” was approved by the Company’s board of

















(1)No difference.

(2)No difference.

(3)No difference.
  • 25 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social
Responsibility Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation
comppany report the results of the
performance evaluation to the board of
directors and apply it to individual director’s
remuneration and nomination renewal?
\

(4) Does the company regularly evaluate the
independence of CPAs?




directors on November 10, 2015, and the board of directors
approved to amend its name to the ”Regulations for
Performance Evaluation of the Board of Directors”on
August 11, 2020, the Company does regular performance
evaluations every year and makes timely amendments in
accordance with the regulations of the Competent
Authority. The Company disclosures the performance
evaluation
in
the
Company’s
website
(http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_
id=73)
�"Self-Evaluation or Peer Evaluation of the Board of
Directors” was amended by the Company’s board of
directors on March 22, 2019, In addition to the original
“performance evaluation of the board of directors” and “the
performance evaluation of the board members”, added “the
performance evaluation of functional committees”.On
August 11, 2020, the board of directors passed the
amendment and revised the name to " Performance
Evaluation of the Board of Directors", " Performance
Evaluation of Board Members" and " Performance
Evaluation of Functional Committee ".On March 26, 2021,
the board of directors reviewed and approved that the
performance of all board members, the board of directors,
and functional committees are in effective operation in 2020.
�When electing or nominating members of the board of
directors, the Company shall base its election on the
evaluation results of the performance of the board and shall
base its determination of an individual director's
remuneration on the evaluation results of his or her
performance in accordance with Article 9 of the Company’s
Regulations for Performance Evaluation of the Board of
Directors.
(4) The Regulations of Evaluation on Certified Public Accountant
and Performance Assessment were approved by the
Company’s board of directors on November 10, 2015, the
board of directors approved some amendments of the
provisions on March 24, 2020, and the board of directors
evaluated and verified the independence and competency of
CPAs once pre year on December 28, 2020 that was approved
and confirmed.(Note)




























(4)No difference.
4. Whether the company has an adequate
number of corporate governance personnel
with appropriate qualifications and appoint a
chief corporate governance officer, who are
responsible for corporate governance-related
matters (including but not limited to
providing directors and supervisors necessary
information
for
performing
business,
assisting directors and supervisors with legal
compliance, legally handling matters relating
to board meetings and shareholders' meetings,
conducting company registration and change
of registration, making meeting minutes of
board of directors and shareholders' meetings,
etc.)













The Company's corporate governance special (part-time) work
unit is a corporate governance task force, which is composed of
Executive Deputy General Manager and managers of various
departments, and conducts related businesses in accordance with
the
Company's
“Corporate
Governance
Best
Practice
Principles”.
The annual execution is disclosured in the Company’s website
http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_id=97






No difference.
5. Whether
the
company
establishes
communication channels with interested
parties (including but not
limited to
shareholders,
employees,
customers,
suppliers, etc.), and establishes interested
parties’ areas on the company's website, and
appropriately responds to important corporate
social responsibilities of interested parties’
issue?







The Company has established the spokesman and acting
spokesperson system, the designated webpage of the Company
website (http://www.luckygrp.com.tw) is for communication
channels with interested parties including shareholder relations,
client relations, employee relations, customer relations, supplier
relations, community relations and work ethics. The questions
asked by different types of relations have their corresponding
special supervisors to respond. Relevant processing information
is disclosed in the Company's corporate social responsibility
report every year
The Company’s spokesman and acting spokesperson and the
stock affairs department of SinoPac Securities Corporation as the
agent for stock affairs to deal with and react to the suggestions
and disputes of shareholders.
The Companyregularly (at least once ayear)reports to the board



No difference.
  • 26 -
Evaluation Item Implementation Status Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social
Responsibility Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation
of directors on the communication with shareholders and the
Company's handlingsituation.
6.
Does the company appoint a professional
shareholder service agency to deal with
shareholder affairs?

Name, address and telephone of Stock transfer agency.
Name:Stock affairs department of SinoPac Securities Corporation
Address: 3F., 17, Boai Rd., Zhongzheng Dist., Taipei City
Tel: (02)2381-6288
Website: http://www.sinotrade.com.tw		 No difference.
7. Information Disclosure
(1) Does the company have a corporate
website to disclose both financial standings
and the status of corporate governance?
(2) Does the company have other information
disclosure channels (e.g. building an
English website, appointing designated
people to handle information collection and
disclosure, creating a spokesman system,
webcasting investor conferences)?

(3) Is the company advised to publish and report
its annual financial report within two months
after the end of a fiscal year, and publish and
report its financial reports for the first, second
and third quarters as well as its operating
status for each month before the specified
deadline.











(1)
(2)
(3)		 Related information is disclosed on the Company’s website
in accordance with laws. The company website is
http://www.luckygrp.com.tw.
The Company has a spokesperson and an agent spokesperson
responsible for the disclosure of information in accordance
with the regulations, if necessary the synchronous press
release will be issued. The Company held an earning
conference in 2020, the relevant Chinese and English
briefings were uploading to the Market Observation Post
System (MOPS), and it was also announced on the Company
website. The Company has an English website that provides
information of business, finance and corporate governance.
The Company reports financial reports and monthly
operations within the prescribed period.








(1)No difference.
(2)No difference.
(3) The Company only
declares
within
the
prescribed time limit.
1. Is there any other important information to
facilitate a better understanding of the
company’s corporate governance practices
(e.g., including but not limited to employee
rights,
employee
wellness,
investor
relations, supplier relations, rights of
stakeholders, directors’ and supervisors’
training records, the implementation of risk
management policies and risk evaluation
measures, the implementation of customer
relations policies, and purchasing insurance
for directors and supervisors)?










(1)The Company has established Staff Code of Practice and Staff Welfare Committee.
(2)The Company has employee education and training to strengthen employees' professional
knowledge and professional skills.
(3)The important information of the Company is in full compliance with the relevant
regulations from“Taiwan Stock Exchange Corporation Procedures for Verification and
Disclosure of Material Information of Companies with Listed Securities” in order to
guarantee the interest of shareholders, interested parties and investors.
(4)The Company has a sound internal control system and business operations (such as
guarantee the rights of consumers or clients) are conducted by each department in
accordance with the articles of Regulations to fully exercise the duties as the administrator.
(5)Directors and supervisors of the Company conduct the relevant training in accordance
with the reference example of Directions for the Implementation of Continuing Education
for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.
Title
Name
Date
Hrs
Course Title
Institutional
Director
Representative
Chen, Liang-
Chuan
Sep.14,2020
2
Taiwan Construction Research Institute - Seminar
on sand and gravel technology development and
resumepromotion
Sep.21,2020
3
Corporate
Governance
3.0
-Sustainable
Development RoadmapForum
Nov.11.2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Institutional
Director
Representative
Chen, Yun-Ju
Sep.14,2020
2
Taiwan Construction Research Institute - Seminar
on sand and gravel technology development and
resumepromotion
Sep.21,2020
3
Corporate
Governance
3.0
-Sustainable
Development RoadmapForum
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Director
Zhang, Xiang-
Lin
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Nov.30,2020
3
Advanced seminar for directors and supervisors
(including independent directors) and corporate
governance executives- The value of information
security in the post-epidemic era and the Sino-US
trade war.
Director
Cheng,
Shang-Kai
Oct.16,2020
3
2020 Corporate Governance and Anti-corruption
Seminar
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Independent
Director
Chen, Yan
Aug.19,2020
3
2020 Conference for for TWSE/GTSM Listed
Companies - Recognize the hedgingtransaction and
  • 27 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social
Responsibility Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No Abstract Explanation
operation of futures derivatives, and improve the
sustainable operation of the enterprise.
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Independent
Director
Wang,
Zhi-
Cheng
Sep.2,2020
3
Operational Practices of the Board of Directors and
Supervisors and Corporate Governance seminar-
Reflections and Prospects on Risk Management and
Control of Anti-Moneylaundering.
Sep.2,2020
3
Operational Practices of the Board of Directors and
Supervisors and Corporate Governance seminar-
Development of corporate governance practices,
corporate
intellectual
property
management
strategies.
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups.
Feb.23,2021
2
The sustainability trend of the financial industry and
how to internalize the results of TCFD in the
financial business–the TCFD recommendations
from CTBC Financial HoldingCo.,Ltd.
Independent
Director
Shao,
Yang-
Wei
Oct.16,2020
3
2020 Corporate Governance and Anti-corruption
Seminar
Nov.11,2020
3
How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
(6)Directors and supervisors of the Company have frequently read Financial Reports such as
books and magazines and attend to all kinds of seminars in order to achieve the goal of
corporate governance.
(7) The Company has purchased D&O insurance on June 20th 2020 from Cathy Century
Insurance Co., Ltd or the directors and supervisors who are on the scope of business
operations in accordance with the articles of incorporation and the insurance period is from
June 28th 2020 to June 28th 2021 for Policy Number: 1501-09DO01119, it is approved by
the Board of Directors on May 12, 2020.
(8) Supplier relations: Besides the purchase management, construction contract operation, the
accreditation and evaluation of suppliers that were established by the Company, the code
of conduct for suppliers has formulated by the Company due to on the mutually beneficial
relations with the cooperative vendors and suppliers in order for and sustainable operation
and exercise the civic social responsibility and the company is devoted to the corporate
social responsibility, promote the sustainable development of environment, value the rights
and health and safety of labors and maintain the basic human rights.
(9)The Company has established an information security risk management framework,
including the "Network Security Policy", which has detailed specifications for information
security, information security operations and protection, network security management,
system access control management and irregular training of relevant personnel. The
Company has not yet insured Information Security Insurance, but the Company regularly
backups data, establishes firewall, access restrictions and other network security
management, and updates the virus code at any time to ensure that the Company's
information risk is minimized. As the issue of information security risk management
becomes more and more important, the need for insurance security will be carefully
evaluated in the future. Please refer to the Company’s website for details.
(10)The Company's compensation system includes employee performance appraisal methods,
the year-end bonus is issued based on the company's business performance and employee
performance.
(11) The Company has set up a "succession plan for board members and key managers",
please refer to the Company's website for related plans and operations.		 operation of futures derivatives, and improve the
sustainable operation of the enterprise.
Nov.11,2020 3 How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
Independent
Director		 Wang,
Zhi-
Cheng		 Sep.2,2020 3 Operational Practices of the Board of Directors and
Supervisors and Corporate Governance seminar-
Reflections and Prospects on Risk Management and
Control of Anti-Moneylaundering.
Sep.2,2020 3 Operational Practices of the Board of Directors and
Supervisors and Corporate Governance seminar-
Development of corporate governance practices,
corporate
intellectual
property
management
strategies.
Nov.11,2020 3 How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups.
Feb.23,2021 2 The sustainability trend of the financial industry and
how to internalize the results of TCFD in the
financial business–the TCFD recommendations
from CTBC Financial HoldingCo.,Ltd.
Independent
Director		 Shao,
Yang-
Wei		 Oct.16,2020 3 2020 Corporate Governance and Anti-corruption
Seminar
Nov.11,2020 3 How do directors and supervisors assist companies
in promoting the risk management of multinational
enterprisegroups
9. Improvement was described from the evaluation results of corporate governance that was released by the corporate governance center of Taiwan
Stock Exchange in recent fiscal years and strengthening or improving the affairs and measures was prior to promote to the companies without
improvement. ( Not applicable if it is not a listed company)
Improvement for 2020 corporate governance of the company as below:
(1) Based on the mutually beneficial cooperative relationship with partners or suppliers, we are committed to fulfilling our corporate social
responsibilities and promoting sustainable development of the environment. The Company has formulated the "Supplier Code of Conduct" to
pay attention to labor rights and safety and health and protect basic human rights. As of December 25, 2020, 98.79% suppliers signed the
“Supplier Code of Conduct” and the Company reported the implementation to the board of directors.
(2) The Company has set up the contact windows on the corporate website for all related parties in order to understand and response to all the
corporate social responsibility issues they cared and improve in time for problems.
(3) The Company has disclosed the reporting system with the contact windows under the corporation website that is to eradicate any illegal
(including corruption) or unethical actions in order to prevent any illegal (including corruption) or unethical actions from the internal and external
staff. The accepted reports report to the board of directors at least once a year.
(4) On November 5, 2020, the Company held an advocacy activity "Procedures for Preventing Insider Trading Management Operations" for the
heads of various departments,and conductedpublicityon Article 157-1 and Article 171 of the Securities and Exchange Act.

(6)Directors and supervisors of the Company have frequently read Financial Reports such as books and magazines and attend to all kinds of seminars in order to achieve the goal of corporate governance. (7) The Company has purchased D&O insurance on June 20th 2020 from Cathy Century Insurance Co., Ltd or the directors and supervisors who are on the scope of business operations in accordance with the articles of incorporation and the insurance period is from June 28th 2020 to June 28th 2021 for Policy Number: 1501-09DO01119, it is approved by the Board of Directors on May 12, 2020. (8) Supplier relations: Besides the purchase management, construction contract operation, the accreditation and evaluation of suppliers that were established by the Company, the code of conduct for suppliers has formulated by the Company due to on the mutually beneficial relations with the cooperative vendors and suppliers in order for and sustainable operation and exercise the civic social responsibility and the company is devoted to the corporate social responsibility, promote the sustainable development of environment, value the rights and health and safety of labors and maintain the basic human rights.

(9)The Company has established an information security risk management framework, including the "Network Security Policy", which has detailed specifications for information security, information security operations and protection, network security management, system access control management and irregular training of relevant personnel. The Company has not yet insured Information Security Insurance, but the Company regularly backups data, establishes firewall, access restrictions and other network security management, and updates the virus code at any time to ensure that the Company's information risk is minimized. As the issue of information security risk management becomes more and more important, the need for insurance security will be carefully evaluated in the future. Please refer to the Company’s website for details.

(10)The Company's compensation system includes employee performance appraisal methods, the year-end bonus is issued based on the company's business performance and employee performance. (11) The Company has set up a "succession plan for board members and key managers", please refer to the Company's website for related plans and operations. 9. Improvement was described from the evaluation results of corporate governance that was released by the corporate governance center of Taiwan Stock Exchange in recent fiscal years and strengthening or improving the affairs and measures was prior to promote to the companies without improvement. ( Not applicable if it is not a listed company)

(1) Based on the mutually beneficial cooperative relationship with partners or suppliers, we are committed to fulfilling our corporate social responsibilities and promoting sustainable development of the environment. The Company has formulated the "Supplier Code of Conduct" to pay attention to labor rights and safety and health and protect basic human rights. As of December 25, 2020, 98.79% suppliers signed the “Supplier Code of Conduct” and the Company reported the implementation to the board of directors.

(3) The Company has disclosed the reporting system with the contact windows under the corporation website that is to eradicate any illegal (including corruption) or unethical actions in order to prevent any illegal (including corruption) or unethical actions from the internal and external staff. The accepted reports report to the board of directors at least once a year. (4) On November 5, 2020, the Company held an advocacy activity "Procedures for Preventing Insider Trading Management Operations" for the heads of various departments, and conducted publicity on Article 157-1 and Article 171 of the Securities and Exchange Act.

  • 28 -

(Note) Accountant Evaluation and Performance Assessment Table � 2020 �

Item Specific Index Evaluation criteria
Independent Index(60points)
1 CPA and the client have no direct or no significant direct financial interest . Get 5 points if no interest and 0 point if with interest
2 CPA and the client has no any inappropriate interest Get 5 points if no inappropriate interest and 0 point if with inappropriate interest
3 No auditing and certification on the financial statements that is within 2
years of service institutes beforepractice.		 Get 5 points if no violation and 0 point if with the violation
4 The name of CPA is not allowed others to use Get 5 points if no others use the name and 0 point if others use it.
5 CPA and the members of auditing service are not allow to hold the shares of
the client		 Get 5 points if no shares and 0 point if with shares
6 No money is involved with the client Get 5 points if no money is involved and 0 point if involving with the money
7 No relations with the client for common investment or sharing benefit. Get 5 points if it is negative and 0 point if it is positive
8 No part-time job working with the client with the fixed salary. Get 5 points if it is negative and 0 point if it is positive
9 No commission from any relevant business Get 5 points if it is negative and 0 point if it is positive
10 Is CPA’s term of office is more than 7 years Get 5 points if it is negative and 0 point if it is positive
11 Provide the Company with non-audit services that may affect the
independence of the audit.
Get 5 points if it is negative and 0 point if it is positive
12 Does the CPA issue a detached independent declaration. Get 5points if it ispositive and 0point if it is negative
Performance Indicators (40 Points)
1 Official financial report is completed within 45 days before the season ends
for the first 3 quarters or annual financial report is completed with 3months
before the end ofyear.		 Get 4 points if it is 3 days advance , 2 points if on time and 0 point if a delay
2 CPA completes the first 3 quarters account auditing of the Company and
complete the first draft		 Get 4 points if the audit report is within 30 days, 2 points if it is within 40 days
and0 point if it is more than 40days
3 CPA completes the annual account auditing of the Company and complete
the first draft of audit information.		 Get 4 points if the audit report is within 60 days after the end of year, 2 points if
it iswithin 70days and0 point if it is more than 70days
4 CPA completes the annual account auditing of subsidiary and complete the
first draft of audit information.
Get 4 points if the audit report is within 55 days after the end of year, 2 points if it
is within 60 days and 0point if it is more than 60 days
5 Does CPA interact frequently with the managers of the Company (internal
auditingstaff)and keepthe record		 Get 4 points if it is positive and 0 point if it is negative
6 Does CPA have the appropriate interaction with the directors and managers
before the auditing plan and issuingthe opinion of certification		 Get 4 points if it is positive and 0 point if it is negative
7 Does CPA propose the proactive suggestion to Company policy and internal
control and review and keepthe record
Get 4 points if it is positive and 0 point if it is negative
8 Update the taxation and Securities and Exchange Commission and update
revision of IFRS Accountingstandards		 Get 4 points if it is positive and 0 point if it is negative
9 Audit the personnel stability of service team Get 4 points if it is positive and 0 point if it is negative
10 Assist for communication and coordination between the competent
authorities		 Get 4 points if it is positive and 0 point if it is negative
Total (Fullpoints is 100)

NOTE: If there are reasons that can be blamed on the Company and affect the evaluation results, the evaluation criteria for the relevant matters will be adjusted flexibly as appropriate.

  • 29 -

4. The Remuneration Committee

(1) Members of the Remuneration Committee

Position
�Note 1�		 Criteria
Name		 Meet One of the Following Professional Qualification Requirements,
Together with at Least Five Years Work Experience		 Meet One of the Following Professional Qualification Requirements,
Together with at Least Five Years Work Experience		 Meet One of the Following Professional Qualification Requirements,
Together with at Least Five Years Work Experience		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Independence Criteria�Note
2�		 Number of
Other Public
Companies in
Which the
Individual is
Concurrently
Serving as an
Member of the
Remuneration
Committee
 Remark
Meet One of the
Following Professional
Qualification
Requirements, Together
with at Least Five Years
Work Experience		 Meet One of the
Following Professional
Qualification
Requirements,
Together with at Least
Five Years Work
Experience
Meet One of the
Following Professional
Qualification
Requirements, Together
with at Least Five Years
Work Experience		 1 2 3 4 5 6 7 8 9 10
Independent
Director		 Wang, Zhi-Cheng Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ 2
Independent
Director		 Shao, Yang-Wei Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None
Other Cai, Cui-Juan Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ Ｖ None

Note 1 ： Please fill Director, Independent Director or other in Position.

  • Note 2 ： Each member who meets the following conditions during the two years prior to the appointment and during his term of office, please tick " Ｖ " in the space under each condition code.

    •  Not an employee of the Company or its affiliates 。

    •  Not a Director or Supervisor of the Company or its affiliates, (however, this does not apply, in case where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to this Act or local country laws).

    •  Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of issued shares of the Company or ranking in the top ten in holdings.

    •  Not a spouse, second-degree relative or third-degree relative of the managers in (1) or persons in (2) or (3).

    •  Not a director, supervisor, or employees of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the Company or that holds shares ranking in the top five in holdings or is the representative being assigned as the director or supervisor of the Company by in accordance with Article 27, Paragraph 1 or 2 of the Company Act, (However, this does not apply, in case where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to this Act or local country laws).

    • Not a director, supervisor or employee of other company which has over half of the number of directors’ seats or shares with voting rights of the Company and is controlled by the same person (however, this does not apply, in case where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to this Act or local country laws).

    •  Not a director, supervisor or employee of other companies or institution which concurrently works as or in a spouse relationship to the chairman, general manager or personnel of relative duties of the Company (however, this does not apply, in case where the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to this Act or local country laws).

    •  Not a director, supervisor, manager or a shareholder holing five percent or more of the shares of a company or institution that has a business or financial relationship with the Company, (however, this does not apply, in case where the specific company or institution holds over 20% but less than 50% of the total number of issued shares of the Companyand the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary of the same parent company are set up according to this Act or local country laws).

    •  Not a professional who provides auditing, nor a professional who provides commercial, legal, financial, accounting or consulting services to the Company or its affiliates with the cumulated remuneration within the last two years less than NT$500,000, nor is an owner, partner, director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such service to the Company or its affiliates, however, this does not apply for members of Remuneration Committee, Public Tender Offer review committee or special committee for Merger/ Consolidation and Acquisition who exercise power in accordance with relevant laws and regulations in Securities and Exchange Act or Business Mergers and Acquisitions Act.

    •  Situation listed in any circumstancesections of Article 30 of the Company Act did not occur.

  • (2) The Operational Situation of the Remuneration Committee

    • I. There are three committees in the Company’s Remuneration Committee.

    • II. The current term of committee is from June 12, 2019 to June 11, 2022. Total of 3(A) meetings of the Remuneration Committee were held in the revious eriod. The attendance of Committee member were as follows: p p

Title Name Name Attendance in
Person (B)		 By Proxy Attendance Rate (%)��/��(Note) Attendance Rate (%)��/��(Note) Remark
Convener Wang,Zhi-Cheng 3 0 100.00%
Committee Shao,Yang-Wei 3 0 100.00%
Committee Cai, Cui-Juan 3 0 100.00%
Remuneration
Committee
Fourth Session,
2020 First Meeting
2020.01.20
Fourth Session,
2020 Second Meeting
2020.03. 20
Fourth Session,
2020 Third Meeting
2020.08.11		 The Company handles the
opinions of Remuneration
Committee
Proposed to Board of Directors
and approved resolution by all
Directors.
Proposed to Board of Directors
and approved resolution by all
Directors.
Proposed to Board of Directors
and approved resolution by all
Directors.
Proposed to Board of Directors
and Approved resolution by all
Directors.
Proposed to Board of Directors
Proposal content and
Subsequent processing		 resolution The Company handles the
opinions of Remuneration
Committee
The Company’s 2019 Year-end bonus
payment of managers

 Approved resolution by all the members present
at the meeting.		 Proposed to Board of Directors
and approved resolution by all
Directors.
Case 1. Amend the Company's
“Governing the Appointment and
Exercise
of
Powers
by
the
Remuneration Committee”.

 Amend the texts of paragraph 1, 2 , and 3 of
Article 6.		 Proposed to Board of Directors
and approved resolution by all
Directors.
Case 2. 2019 Directors'
Remuneration Distribution Proposal.		 All
the present
members approved to
appropriate Directors' Remuneration according
to theCompany’s “Articles ofIncorporation”		 Proposed to Board of Directors
and approved resolution by all
Directors.
Case 1. 2019 Directors'
Remuneration Distribution Proposal.		 All the present members agreed to apply
in accordance with the "Regulation for the
remuneration payment of Directors and
Supervisors".		 Proposed to Board of Directors
and Approved resolution by all
Directors.
Case 2. Amend the Company's Approved resolution byall the members Proposed to Board of Directors
  • 30 -

“Remuneration Committee Charter”. present at the meeting. and Approved resolution by all Directors

Other mentionable items:

  1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the response of the company to the opinion of remuneration committee (e.g., the remuneration was approved by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None

  2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all opinions of members and the response to the opinion of members should be specified: None

  3. Scope of the remuneration committee’s duties:

  4. (1) Establishing and periodically reviewing the performance assessment standards and the policies, systems, standards, and structure for the compensation of the directors, independent directors of audit committee, managerial officers of the Company.

  5. (2) Periodically reviewing the compensation levels of directors, independent directors of audit committee, managerial officers of the Company. 。

Note ：

  • (1) At the end of the year, if there is a remuneration committee member who leaves the Company, the date of separation shall be noted in the remarks column, and the actual attendance rate (%) is calculated based on the number of meetings of the remuneration committee and its actual attendance during his/her job tenure.

  • (2) At the end of the year, if there is a re-election of the remuneration committee, the new and former members of the remuneration committee shall be filled in, and that the member is an old, new or re-elected member and the re-election date shall be noted in the remarks column. The actual attendance rate (%) is calculated based on the number of meetings of its remuneration committee and his/her actual attendance.

5.Implementation Status of Corporate Social Responsibility and Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons

Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social Responsibility
Best-Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No
Abstract Explanation
1. Does
the
Company
conduct
risk
assessments on environmental, social and
corporate governance issues related to the
Company’s operations in accordance with
the principle of materiality, and formulate
relevant risk management policies or
strategies?





The Company has actively conducted risk assessments on
environmental, social and corporate governance issues
related to the Company’s operations in accordance with the
principle of materiality, and formulate relevant risk
management policies according to the amendment of the “
Corporate Social Responsibility Best Practice Principles”.
The policies are implemented after the resolution approved
by the board of directors. The scope of the Company's risk
management includes "strategic risk", "operational risk",
"financial risk", "information security risk", and "the risk
of climate change and non-compliance with environmental
protection,
climate-related
regulations
and
other
international regulatory agreements".
The Company has established a risk management team to
identify risks, measure risks, and control risks within an
acceptable range according to the scope of work of each
department on a regular basis every year. Report to the
board of directors at least once a year on the risk
environment and the risk control measures adopted and the
operation of the risk management.
Please refer to the Company's website for the
implementation of the 2020 risk management policy
http://www.luckygrp.com.tw/tw/index.asp?au_id=11&sub
_id=120。

















No difference.
2. Does the company establish exclusively (or
concurrently) dedicated first-line managers
authorized by the board to be in charge of
proposing
the
corporate
social
responsibility policies and reporting to the
board?		 The Company has established the part-time unit that is in
charge by the Quality Assurance Center for promoting
Corporate Social Responsibility. It executed relative
operating in accordance with the Company’s ”Corporate
Social Responsibility Best Practice Principles”, please
check the Company website for details. The implement
status will be reported to Corporate Social Responsibility
Committee and the board of directors at least one time
yearly.







No difference.
3. Topic of Environment
(1) Does the company establish proper
environmental
management
systems
based on the characteristics of their
industries?
(2) Does the company endeavor to utilize all
resources more efficiently and use
renewable materials which have low
impact on the environment?
(3)Does the Companyevaluate thepotential

(1) The Company has established the safety environment
section and rules of the labor safety and health and
exclusively dedicated staff authorized to be in charge
of detection on air pollution and wastewater on a
regular basis.
(2) Announcement of waste from other plants has been
recycling in order to achieve the policy goals of
sustainable resources development and more resources
can be kept for next generation by reducing excessive
exploitation of natural resources.
(3) Climate change has current and future potential risks to








(1)No difference.
(2)No difference.
(3)No difference.
  • 31 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social Responsibility
Best-Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No
Abstract Explanation
risks and opportunities of climate change
to the Company now and in the future, and
take measures to deal with climate-related
issues.
(4) Does the Company count the greenhouse
gas emissions, water consumption and
total weight of waste in previous two
years, and formulate policies for energy
saving and carbon reduction, greenhouse
gas
reduction,
water
consumption
reduction or other waste management.









the production of the Dongao plant, including
abnormal weather, drought and heavy rain affecting the
normal water supply of the cooling cycle of rotary
kilns, mills and other equipment, and equipment
shutdowns cause production losses. Specific response
measures:short termStrengthen the unobstructed
return pipeline of the plant area.Check for leaks
in the water collection pipeline in the plant area.
Regularly patrol the catchment area and remove debris
from water pipes. Mid-termAdd two sets of water
filters to filter weeds and sundries before entering the
water tank.Apply for an additional groundwater
pumping facility under the permission of the law. Long
term: Design and transform the closed circulation
cooling system of the rotary kiln syste.
(4) Since 2014, the Company has participated in the
voluntary greenhouse gas reduction report of the
Industrial Development Bureau of the Ministry of
Economic Affairs every year, and annually calculates
and reports greenhouse gas emissions. The Company's
greenhouse gas emissions have obtained ISO-14064
third-party verification.
The Company has relevant energy-saving and carbon-
reduction policies, including greenhouse gas emission
reduction policy and energy management policy and
the use of recycled water to wash vehicles to reduce
water use policy. The relevant goals are as follows: 1%
annual electricity saving policy and The total annual
greenhouse gas emissions are reduced by more than
10% compared to 2013 (base year) emissions. All
targets for 2020 have been achieved.

























(4)No difference.
4. Topic of Social
(1) Does the company formulate appropriate
management policies and procedures
according to relevant regulations and the
International Bill of Human Rights?


(1) The Company has established relevant human resource
management rules such as the "Employees' Work
Rules" in accordance with the Labor Standards Act
and relevant government laws and regulations, and
recognizes and supports the United Nations Global
Compact, the Universal Declaration of Human Rights,
the ILO Declaration of Fundamental Principles and
Rights at Work and other internationally recognized
human rights standards, and formulate a " Human
Rights Policy", the specific management measures are
as follows:
�Respect for human rights and implement gender
equalit.
�Do not hire people under the 16 years old.
�Give female employees the time to breastfeed,
physiology, maternity leave, maternal leave,
maternity leave, etc.
�Give workers reasonable rest and not force labor in
accordance with law.
�Objects of employee hiring, promotion, exhortation,
and rewards are prohibited from any type of
discrimination.
�Respect for employees are freedom of association,
join labor unions, seek representation and
participate in the labor committee according to the
law.
�Comply with the laws and regulations of labor
health and occupational safety and health, reduce
the dangers and potential hazards in the work
environment, and prevent occupational disasters.
�The salary policy is in compliance with relevant
laws and regulations. Employees' salaries must
not be lower than the basic salary, and they enjoy
statutory benefits, reasonable rest and overtime
pay.
�Prevention of sexual harassment and sexual assault
policies.
























(1)No difference.
  • 32 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Corporate Social Responsibility
Best-Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
Yes No
Abstract Explanation
(2)Does
the
Company
formulate
and
implement reasonable employee welfare
measures (including salary, vacation and
other benefits etc.), and appropriately reflect
the corporate business performance or
achievements in the employee remuneration
policy?
(3) Does the Company provide a healthy and
safe working environment and organize
training on health and safety for its
employees on a regular basis?
(4)Does the Company provide its employees
with career development and training
sessions?
(5)Does the Company follow relevant laws and
international standards for customer health
and safety, customer privacy, marketing and
labeling of products and services, and
formulate relevant consumer protection
policies and appeal procedures?

(6)Does the Company formulate supplier
management policies that require suppliers
to follow relevant regulations on issues such
as environmental protection, occupational
safety and health, or labor human rights and
its implementation?
























(2)The Company formulates and implements reasonable
employee welfare measures, including salary, vacation
and other benefits. For details, please refer to Chapter 5
Labor
Relations
and
the
Company's
website
(http://www.luckygrp.com.tw/tw/index.asp?au_id=7&s
ub_id=99)。
If the company makes a profit, it should allocate 3% to
employees' compensation according to the Company's
"Articles of Incorporation".
(3)In order to ensure the safe and healthy working
environment of the employees, the Company has
formulated the "Safety and Health work rules " in
accordance with the “Occupational Safety and Health
Act” and the “Enforcement Rules of the Occupational
Safety and Health Act”. The announcement implements
regulations on safety and health management matters,
provides employees to follow, and regularly implements
safety and health automatic inspections to protect the
personal safety of workers.
The Company has held the labors health checkup and
health and safety seminar on a regular basis. Please refer
to the Company website for the related information.
(http://www.luckygrp.com.tw/tw/index.asp?au_id=7&s
ub_id=101)
(4)The
Company
reviews
the
employees’
career
development plans with the employees’ performance
appraisal yearly. The training coordinated by the heads
of various departments to implement.
(5)Portland cement must meet the standards of CNS and
has obtained the CNS Mark and ISO certification.
All departments of the Company can accept the
complaints, the Company's website also has contact
windows for related parties to accept opinions and
suggestions, relevant opinions and appeal cases will be
forwarded to the releealvant department for processing
as soon as possible.
The Company discloses the number of related customer
complaints and the resolution status in the corporate
social responsibility report every year.
(6) The Company has established a supplier management
policy, including five dimensions:
Supplier development and management.
Supplier evaluation and assessment.
Supplier Code of Conduct and Commitment to
Ethics and Integrity.
Supplier review, training, communication and
coaching.
Operation Mode.
Every year, the purchasing department organizes a task
force to conduct supplier self-evaluation and inspection,
and provide guidance, follow-up and improvement in
accordance with the relevant supplier regulations of the
Company and major issues such as environmental
protection, occupational safety and health, and labor
human rights. Suppliers whose results are not up to the
standard will be audited every year, and those who have
not achieved improvement after more than three years
are classified as suspended or rejected. Report the
implementation status to the board of directors at least
once a year.
In the contract signed between the Company and the
supplier, the supplier is required to comply with the
relevant provisions of the "Labor Standards Act". In
terms of environment, the "Air Pollution Control Act"
and other relevant environmental protection laws and
regulations should be followed, and appropriate
preventive measures should be taken. In terms of labor
safety,suppliers should abide bytheprovisions of the


















































(2)No difference.
(3)No difference.

(4)No difference.

(5)No difference.


(6)No difference.
  • 33 -
Implementation Status Deviations from “the
Corporate Social Responsibility
Evaluation Item Yes No
Abstract Explanation		 Best-Practice Principles for
TWSE/TPEx Listed
Companies” and Reasons
"Occupational Safety and Health Act", and must take
necessary protective measures in advance for various
possible disasters or accidents, and must insure labor
insurance or accident insurance for employees. In terms
of information security, it is not allowed to infringe on
the intellectual property rights of others or the rights and
interests of others.
Since 2016, the Company has started to promote the
"Supplier Code of Conduct", which includes major
issues such as ethical corporate management, human
rights and environmental protection. The Company
requires suppliers to comply together. If the supplier
violates and damages the Company's goodwill or
corporate image, the contract may be terminated at any
time.
The Company has set up "Supplier evaluation and
assessment methods" to regularly conduct supplier
evaluations to ensure that suppliers comply with
relevant specifications.
The Company disclosed the implementation of
"Supplier Code of Conduct" in the corporate social
responsibilityreport.
5.Does the Company make reference to general The Company prepares its corporate social responsibility
No difference.
international reporting standards or report based on Standards issued by Global Reporting
guidelines for preparing corporate social
Initiative (GRI).
responsibility reports and other reports that
disclose non-financial information? Has the
aforementioned
report		 obtained the
confidence or assurance opinion of the third-
partyverification unit?
6. If the Company has established thecorporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles
for TWSE/TPEx Listed Companies”, please describe anydiscrepancybetween the Principles and their implementation: None.

  1. Other important information to facilitate better understanding of corporate social responsibility practices of the Company ： The Company has focused on environmental protection and frequently participated in and sponsored the community activities, promoted traditional culture and aboriginal culture, assisted community development, participated in local environmental protection activities (e.g., Greening, adoption and purification of beaches and maintenance of the community public facilities ), sponsored the scholarships for outstanding students of elementary and junior high schools, taken environmental protection as the core competency and handled actively the resources recycling and conservation.

  2. (1) The Company's recycling of waste is the re-use of the client plant through the announcement and government permits to reduce the impact of waste on the social environment, to fully re-use resources, and reduce the over-exploitation of natural resources.

  3. (2) The Company has provided the assistance timely to the communities nearby such as maintenance and support of machines and power for Dongao fishing port, beautification and purification of Dongao bay, the scholarships for Dongao community, expressed sympathy for the elderly, and Cháng Qīng canteen.

  4. (3) The factories and mines of the Company spare no effort in water pollution prevention and control, stationary pollution source prevention and control, soil and water conservation, environmental monitoring, greening and beautification of re-vegetation and periodic environmental inspection due to the consideration of energy efficiency and carbon reduction and environmental protection and input the necessary manpower and material resources.

  5. (4) The Company has utilized the reconstruction of No.2 kiln that is to upgrade the preheated cyclone from the level 4 to level 5 to increase heat transfer efficiency and reduce the carbon and lower the consumption of natural resources. The Company has adopted the production process of low-NOx to reduce the emissions of NOx to lower the impact on the natures and set up continuous and automatic monitoring system in the exhaust chimney for controlling air quality strictly.

  6. (5) Total expenditure on giving back to the local due to fulfilling social responsibilities is NT$1,071,000 in 2020. Related activities include sponsoring 2 community activities, participating in 23 community (neighboring residents) care activities, and 3 donating to humanities education and traditional culture.

  7. (6) The goal of the Company for electricity saving: the goal of 1% electricity saving annually from 2015 to 2020, more than 1% each year. (7) The Company's greenhouse gas emission reduction policy

  8. Committed to the registration of the company's greenhouse gas inventory.

  9. Really grasp the company's greenhouse gas emission status.

  10. Propose feasible solutions for greenhouse gas reduction.

  11. Really implement the greenhouse gas reduction work plan.

  12. Fulfill the social responsibility of circular economy.

  13. Sustainable development of green environment.

  14. Energy policy：

  15. Use high-efficiency energy-saving equipment.

  16. Improve energy efficiency.

  17. All employees participate in energy saving and carbon reduction.

  18. Comply with relevant government laws and regulations.

  19. Achieve the energy goals.

  20. (8) The specific results of the 2020 energy saving measures improvement plan and the 2021 energy saving measures and implementation plans are detailed as bellow:

  21. 34 -

Im lementation Status Deviations from “the p Corporate Social Responsibility Evaluation Item Best-Practice Principles for Yes No Abstract Explanation TWSE/TPEx Listed Com anies” and Reasons p 2020 2021 The specific results of the energy saving measures improvement plan energy saving measures and implementation plans 1.The constant frequency spiral air compressor in the packaging room 1. No. 2 coal mill liner replaced. (cross-year effect) was replaced with a frequency conversion spiral air compressor. 2. Clinker Roller Refurbishment. (cross-year effect) (cross-year effect) 3. The pump of the spray tower tower of the No. 2 preheater is changed 2.The pump of the humidifying tower of No. 2 preheater was changed to frequency conversion operation4. No.2 raw mill liner replaced and into frequency conversion operation. the ratio of steel balls was adjusted. 3.No. 2 coal mill liner replaced. 5. In No.1 bin of No. 2 cement mill, the liner replaced and the ratio of 4.Clinker Roller Refurbishment. steel balls was adjusted. 5.Non-hazardous sludge and waste oil blends are used as alternative 6. .Organic sludge is used as an alternative fuel. fuels. 7. Non-hazardous sludge and waste oil blends are used as alternative 6.Organic sludge is used as an alternative fuel. fuels. 7.Management measures are in response to Government Demand 8. Management measures are in response to Government Demand Response(DR). Response. 878,190 KW electricity savings in 2020. 5196 tons of coal savings in 2020.


fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
fuels.
6.Organic sludge is used as an alternative fuel.
7.Management measures are in response to Government Demand
Response(DR).

7. Non-hazardous sludge and waste oil blends are used as alternative
fuels.
8. Management measures are in response to Government Demand
Response.
878,190 KW electricity savings in 2020.
5196 tons of coal savings in 2020.
(8) The statistical data of the Company's greenhouse gas emissions, water consumption and total waste treatment weight in the past two years are as
follows:
Year Totalgreenhousegas emissions Water consumption Total waste treatment weight *
2019 646,473.84 TonsCO2e/Year 953,036 M3 65,190.76 Tons
2020 673,832.54 TonsCO2e/Year 1,004,104 M3 73,992.22 Tons
  • The Company is committed to a circular economy and conducts waste treatment business. (9)The Company has a corporate social responsibility committee composed of three directors, including two independent directors, whose responsibilities include:

A.Declaring the corporate social responsibility policy and systems.

B.Review annual plan and strategic direction of corporate social responsibility. C.Review projects and activity plans of corporate social responsibility.

D.Approval of corporate social responsibility report. E.Other board of directors entrusts the review of corporate social responsibility and public affairs participation. The Corporate Social Responsibility Committee meets at least once a year. Please refer to our website for its operation = = (http://www.luckygrp.com.tw/tw/index.asp?au_id 11&sub_id 102) CSR Committee Member Information ：

Name Position Title Relatedprofessions
Chen,Yun-Ju Director Chairman EMBA,Over 20years experience in the cement industry
Chen,Yan Independent Director Committee Financial management expertise
Wang, Zhi-Cheng Independent Director Committee Juris Doctor, Director of Securities and Futures Investors Protection Center,
Director of Financial Ombudsman Institution and Advisory Committee of Central
Deposit insurance Corporation.

6. Ethical Corporate Management and Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons ：

The Board of Directors of the Company has approved and developed the "Ethical Corporate Management Best Practice Principles" on November 7, 2014; and the ISO operations and related management practices have been fulfilled the terms of Ethical Corporate Management Best Practice Principles, such as the terms of Service Discipline set forth in the employees work rules and a variety of relevant norms set forth in regulations for procurement, so the performance of the ethical corporate management and the operation of the measures is still good.

Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Ethical Corporate
Management Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
1.Establishment
of
ethical
corporate
management policies and programs
(1) Does the Company formulate ethical
corporate management policies
that
approved by the board of directors, and
declare the policies and practices of
operating in the regulations and external
documents, as well as the commitment from
its board and executives to implement the
policies?







(1)The Company formulated the " Ethical Corporate Management Best
Practice Principles " which approved by the Board of Directors
with reference to the “Ethical Corporate Management Best Practice
Principles for TWSE/GTSM Listed Companies “ on November 7,
2014. The Principles serve as the underlying basic premise to
facilitate ethical corporate management and timely make
amendments in accordance with the requirements of the competent
authority. The Company promotes the policy of ethical corporate
management through education and training and the signing of the
“Supplier Code of Conduct”. The implementation status is reported
to the board of directors at least once a year. For related work plans
and implementation status, please refer to our website
(http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_id=51).
The Board of Directors approved the Company's " Regulations












(1)No difference.
  • 35 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Ethical Corporate
Management Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
(2) Does the Company establish a risk
assessment mechanism against unethical
conduct, analyze and assess on a regular
basis business activities within their
business scope which are at a higher risk of
being involved in unethical conduct, and
establish prevention programs accordingly,
and the preventive measures cover at least
the circumstances of Article 7 paragraph
2 of the " Ethical Corporate Management
Best Practice Principles for TWSE/GTSM
Listed Companies "?
(3) Does the Company establish policies to
prevent unethical conduct with clear
statements regarding relevant procedures,
guidelines of conduct, punishment for
violation, rules of appeal, and the
commitment to implement the policies and
regularly review and revise the previous
policies?


















Governing for Reporting Case of Illegal and Unethical or Dishonest
Conduct" on March 28, 2016. Actively implement the promises of
business policies.
(2) Through the establishment of good corporate governance, risk
control and management mechanism, and consummated internal
regulations, the Company actually implements the prevention of
the circumstances of Article 7 paragraph 2 of the " Ethical
Corporate Management Best Practice Principles” and prevents the
occurrence of dishonesty to create a sustainable business
environment.
(3) The Company has the working rules for employees, which
stipulates that employees shall not use their power to seek illegal
benefits, and accept entertainment, gifts, rebates, embezzlement of
public funds, or other illegal interests, hoping to prevent
dishonesty from affecting business relations or trading behavior.
The Company has a report webpage and appeal system, and reports
the implementation status to the board of directors at least once a
year and as the basis for review and amendment.














(2)No difference.

(3)No difference.
2.Fulfill operations ethical policy
(1) Does the Company evaluate business
partners’ ethical records and include
ethics-related
clauses
in
business
contracts?
(2) Does the Company establish a dedicated
unit that is under the board of directors and
regularly (at least once a year) report the
Ethical Corporate Management policy and
the plan to prevent dishonesty, and
supervise the implementation?
(3) Does the Company establish policies to
prevent conflicts of interest and provide
appropriate communication channels, and
implement it?
(4) Has the Company established effective
systems for both accounting and internal
control to facilitate ethical corporate
management, based on the assessment
results of the dishonesty risk, the internal
audit unit prepares the relevant audit plan
and checks the compliance with the plan to
prevent dishonesty, or entrusts CPAs to
perform an audit?





















(1) The Company has to ensure factuality via Department of
Commerce, Ministry of Economic Affairs R.O.C. (MOEA) while
trading and purchasing and check the transaction performance of
vendors by all kinds of channels (such as credit investigation) in
order to be sure the business ethics of the vendors who is trading
with.
The Company has to summarize and report the conditions of
clients and suppliers at sales and operation meetings, the Company
will immediately control credit transaction if trading partners are
found to be involved with unethical conduct and the Company will
seriously evaluate if it is necessary to terminate the contract with
the clients after the knowledge of risk management for the
Company.
(2) The Chairman Office is responsible for ethical corporate
management policy and human resources department part-time
promotes and implements in order for a sound ethical corporate
management. It is reported to the board of directors at least one
time yearly and released the results on the Company website.
(3) Base on the board of directors meetings regulations of the
Company , any director or a juristic person represented by a
director is an interested party with respect to the below agenda
items, the director shall state the important aspects of the
interested party relationship at the respective meeting. When the
relationship is likely to prejudice the interests of the Company, the
director may not participate in discussion or voting on that agenda
item, and further, shall enter recusal during discussion and voting
on that item and may not act as another director's proxy to exercise
voting rights on that matter.
� The relationship or the interested party relationship is likely
to prejudice the interests of the company.
� Directors shall enter recusal voluntarily.
� Recusal is determined by the board of directors.。
(4) The Company has established the strict accounting system, all the
financial statements with auditing and certification by Certified
Public Accountants to ensure the fairness for each statement. The
Company has an exclusively dedicated audit unit to conduct all
kinds of internal auditing by the annual auditing plan on a regular
basis, the audit manager reports the auditing status to Independent
Director at least once a year.



















(1)No difference.
(2)No difference.
(3)No difference.

(4)No difference.
  • 36 -
Evaluation Item Implementation Status Implementation Status Implementation Status Deviations from “the
Ethical Corporate
Management Best-
Practice Principles for
TWSE/TPEx Listed
Companies” and
Reasons
Yes No Abstract Illustration
(5) Does the Company regularly hold internal
and external educational trainings on
ethical corporate management?

(5) The Company continued to hold ethical corporate management
education training for new recruits from time to time and reported
implementation situation to the board of directors.
The implementation of education and trainingin 2020:

(5)No difference.
Course theme Training
hours		 Total attendance
Ethical Corporate Management
Best Practice Principles		 30
mins/each		 24
3. Operation
of
the
Company's
whistleblowing system.
(1)Does the Company establish specific
whistleblowing and reward system, and
establish a convenient reporting channel,
and assign appropriate personnel to accept
the complaint?
(2) Does the Company establish standard
operating procedures for the investigation of
the complaint, the follow-up measures to be
taken after the investigation is completed,
and the relevant confidentiality mechanism?
(3) Does
the
Company
provide
proper
whistleblower protection?












(1)
(2)
(3)		 The Company has an evaluation and reward/punishment rules. If
any employee violates the ethical corporate rules, the Company's
authority and responsibility department mana`gers will jointly
review the employee's rewards and penalties, and the relevant
awards and penalties will be announced to relevant colleagues
through personnel orders.
The Company's standard operating procedures for the investigation
of accused matters are handled in accordance with the "Procedures
for reporting cases of illegal and unethical or dishonest conduct".
After investigation, the Company wil take corresponding measures
and appropriate protective measures in accordance with the law to
protect the personal information and privacy of the whistleblower.
The company handles whistleblowing cases. We will keep the
personal information of the whistleblower confidential, unless
otherwise provided by law. Take appropriate protective measures
in accordance with the law to protect the whistleblower’s personal
information and privacy, and avoid improper punishment for the
whistleblowing.














(1)No difference.

(2)No difference.
(3)No difference.
4.Strengthening information disclosure
(1)Does the Company disclose its “Ethical
Corporate
Management
Best
Practice
Principles” andthe implementation results
on the Company’s website and MOPS?


The eEthical corporate management policies have been expressly
disclosed on the Company website http://www.luckygrp.com.tw.		 No difference.
5.If the Company has established the ethical corporate management policies based on the Ethical Corporate Management Best Practice Principles for
TWSE/TPEx Listed Companies, please describe anydiscrepancybetween thepolicies and their implementation.：None
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its
policies): None

7. Corporate Governance Guidelines and Regulations ：

The Board of Directors of the Company has passed and developed the "Corporate Governance Best Practice Principles " on December 26, 2014, please refer to the Company’s website at http://www.luckygrp.com.tw/tw/index.asp?au_id=7&sub_id=49# for other relevant regulations under the “Corporate Governance” for important company regulations and other content.

8. Other Important Information Regarding Corporate Governance ：

The Board of Directors of the Company has passed and developed the “Corporate Social Responsibility Best Practice Principles”, “Ethical Corporate Management Best Practice Principles” and “Guidelines for the Adoption of Codes of Ethical Conduct” on November 7, 2014. The Board of Directors has also passed and developed the “Corporate Governance Best Practice Principles”, and the amendments of “Corporate Social Responsibility Best Practice Principles” and “Ethical Corporate Management Best Practice Principles” on December 26, 2014. The Board of Directors has also passed the amendments of “Corporate Governance Best Practice Principles” and “Guidelines for the Adoption of Codes of Ethical Conduct” on March 24, 2015. The Board of Directors has also passed the amendments of “Ethical Corporate Management Best Practice Principles” on December 21, 2015. In addition, the Board of Directors of the Company has passed and developed “Procedures for reporting cases of illegal and unethical or dishonest conduct” on March 28, 2016

The Company amended some provisions of the “Corporate Social Responsibility Best Practice Principles” in accordance with the letter Tái-ZhèngZhì-Lǐ-Zi No.1090002299 issued on February 13, 2020, the amendment has been proposed by Corporate Social Responsibility Committee and amended by the resolution of the Board of Directors’ meeting on March 24, 20, 2020.

The Company amended some provisions of the “Ethical Corporate Management Best Practice Principles ” in accordance with the letters Tái-ZhèngZhì-Lǐ-Zi No.10800083781 issued on May 23, 2019 and Tái-Zhèng-Zhì-Lǐ-Zi No.1090002299 issued on February 13, 2020. The amendments have been amended by the resolution of the Board of Directors’ meeting on August 12, 2019 and March 24, 2020

The Company amended some provisions of the “Codes of Ethical Conduct” in accordance with the letter Tái-Zhèng-Zhì-Lǐ-Zi No. 10900094681 issued on June 3, 2020. The amendments have been amended by the resolution of the Board of Directors’ meeting on August 11, 2020.

  • 37 -

9. Implementation of internal control system

  • (1) The Internal Control statement

Lucky Cement Corporation The Internal Control statement

March 26, 2021

The Company’s 2020 internal control statement according to self-assessment is as bellow:

  1. The Company is sure that establishing, implementing and maintaining the internal control system is the responsibility of the board of directors and managers of the Company. The Company has established this system. its purpose is to provide reasonable assurance of the achievement of performance and efficiency on operations (including profitability, performance and security of assets, etc.), reliability, timeliness, transparency, compliance with relevant regulations, and compliance with relevant laws and regulations.

  2. The internal control system has its inherent limitations. Regardless of how well the design is completed, an effective internal control system can only provide reasonable assurance on the achievement of the above three goals. Moreover, due to changes in the environment and circumstances, the effectiveness of the internal control system may vary change. However, the Company’s internal control system has a self-monitoring mechanism. Once the lack is identified, the Company will take corrective action.

  3. The company determines the effectiveness of the design and implementation of the internal control system based on the judgment items of the effectiveness of the internal control system as stipulated in the " Regulations Governing Establishment of Internal Control Systems by Public Companies " (hereinafter referred to as the "Processing Guidelines"). The judgment items of the internal control system adopted by the “Processing Guidelines” are based on the process of management control. The internal control system is divided into five components: (1) Control environment, (2) Risk assessment, (3) Control operation, (4) Information and communication, and (5) Supervision of operations. Each component includes several items. For the aforementioned items, please refer to the provisions of the "Processing Guidelines"

  4. The Company has adopted the above-mentioned judgment items of the internal control system to assess the effectiveness of the design and implementation of the internal control system.

  5. Based on the above assessment results, the Company believes that the Company's internal control system (including the supervision and management of its subsidiaries) as of December 31, 2020 is effective in its design and execution, and can reasonably ensure the achievement of the target. Which is Including the understanding of the achievement of operational effectiveness and efficiency, the report is reliable, timely, transparent and in compliance with relevant regulations and compliance with relevant laws and regulations.

  6. 38 -

  7. This statement will become the main content of the Company's annual report and public statement, and will be made public. If any of the above disclosed content is false or hidden, it will involve the legal obligations of Article 20, Article 32, Article 171, and Article 174 of the Securities Exchange Act.

  8. This statement was approved by the board of directors of the Company on March 26, 2021. Among seven directors, no one held any objection. All of them agreed with the contents of this statement and made this statement.

Lucky Cement Corporation

Chairman ： Chen, Liang-Chuan

General Manager ： Chen, Liang-Chuan

  • (2) The Company did not commission an accountant project to audit the internal control system in this year

10. In the most recent year and as of the printing date of the annual report, the company and its internal personnel were punished according to law, and the company internal personnel violated the internal control system regulations for penalties, major defects, and improvements ： Please refer to Environmental Protection Expenditure Information on page 60 (5.4) for the details.

11. The important resolutions of the shareholders' meeting and the meeting of the board of directors in the most recent year and up to the publication date of the annual report:

  • (1) Contents and Implementation of Important Resolutions of the 2020 Shareholders' Meeting:
Date Important Resolutions
2020/06/18 1. Approved 2019 Business Report and Financial Statements.
2. Approved the 2019 earnings distribution proposal.
3. Approved to amend some Articles of “Rules of Procedure for Shareholders Meetings”
of theCompany.
Implementation
1. The Company’sBusiness Report, Financial Statements and Earnings Distribution
Proposal of 2019, theprofit after taxation is NT$45,904,871. Except for the
amount of NT$ 912,776, which was used to make up the losses of previous
years in accordance with laws and “Articles of Incorporation” , the proposed
cash dividend per share is NT$ 0.15, calculated as NT $ 60,710,707. On August
11, 2020, the board of directors passed a resolution to set the relevant cash
dividend ex-dividend date, the book closure period and the cash dividend
payment date.
2. The amendments of “Rules of Procedure for Shareholders Meetings”were
approved and announced in the Company website.
  • 39 -

(2) The important resolutions of the meeting of the board of directors in 20 20 and as of the publication of the annual report

Times
Date		 Important Resolutions Listed items in the
Article 14-3 of the
Securities
Exchange Act.
1st 2020/01/20 1. Approved the 2019 year-end bonuses distribution of the Company’s managers that was proposed and audited by the
remuneration committee.
V
2nd 2020/03/24 1. Approved to recognize an endorsement guarantee case of the subsidiary Dasheng Enterprise Co., Ltd. to provide the
loan commitments NT$60,000,000 for commercial papers issued by Ta Ching Bills Finance corporation.
V
2. Approved the Business report and financial statements in 2019. V
3. Approved to distribute the remuneration of the Company's employees and directors and supervisors in 2019.
4. Approved the company's 2019 earnings distribution proposal. V
5. Approved to issue the 2019 Internal Control statement. V
6. Approvedthe Company's performance evaluation case of “Self-Evaluation or Peer Evaluation of the Board of
Directors”.
7. Approved to amend some Articles of the "Regulations for Accountant assessment and Performance Evaluation “.
8. Approved to amend some Articles of the“Rules of Procedure for Board of Directors Meetings”.
9. Approved to amend some Articles of the“Corporate Governance Best Practice Principles”.
10. Approved to amend some Articles of the“Ethical Corporate Management Best PracticePrinciples”.
11. Approved to establish the“Regulations Governing Appointment of Independent Directors and Compliance
Matters”.
12. Approved to amend some Articles of the “Corporate Social Responsibility Best Practice Principles”.
13. Approved to establish the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration
Committee”.
14. Approved to establish the“Regulations Governing the Exercise of Powers by Audit Committees”.
15. Approved to amend some Articles of the“Rules of Procedure for Shareholders Meetings”.
16. Approved the date of the Company's 2020 regular shareholders meeting and related issues
17. Approved the Shareholders' proposal right.
18. Approve to increase the investment amount of NT$ 250,000,000 to the subsidiary Luckicon Ready-mixed Concrete
Factory Co., Ltd..
V
19. Approve to increase the investment to Jonfeng Mining Co., Ltd.. V
3rd 2020/05/12 1. Approved to recognize an endorsement guarantee case of the subsidiary Luckicon Ready-mixed Concrete Factory
Co., Ltd. provided a short-term turnover guarantee amount of NT$70,000,000 for Mega International commercial
Bank Tianmu Branch.

V
2. Approved an endorsement guarantee case of the subsidiary Lucky Cement Corp., Japan to provide short-term loan
commitments at JPY￥50,000,000 for Mega International commercial Bank Osaka Branch.
V
3.
Approved the case of subsidiary, Dasheng Enterprise Co., Ltd. to apply to the Company for loan commitments at
NT$ 200,000,000 due to business turnover needs.
V
4. Approved to continuously insure Directors’ andImportant Staffs’Liability Insurance forthe Company’s directors.
5. Approved the Company's CPA replacement case (due to the need for internal adjustments of the accounting firm) V
6. Approved the formulation of the company's "Risk Management Policy".
4th 2020/08/11 1. Approved to recognize an endorsement guarantee case of the subsidiary Dasheng Enterprise Co., Ltd. to provide
the loan commitments at NT$ 60,000,000 for commercial papers issued by Grand Bills Finance Corp.
V
2. Approved the renewal of Directors’ and Important Staffs’ Liability Insurance for the Company’s directors.
3. Approved to set the relevant cash dividend ex-dividend date, the book closure period and the cash dividend payment
date.
V
4. Approved the 2019 director governance scoring proposal submitted by the Remuneration Committee.
5. Approved the 2019 directors' remuneration distribution proposal submitted by the Remuneration Committee.
6. Approved the formulation of the Company's "Rules Governing Financial and Business Matters Between the
Corporation and its Affiliated Enterprises ".
7. Approved to amend some Articles of “Rules of Procedure for Shareholders Meetings” of the Company.
8. Approved to amend some Articles of “Rules Governing the Scope of Powers of Independent Directors” of the
Company.
9. Approved to amend some Articles of“Self-Evaluation or Peer Evaluation of the Board of Directors”.
10. Approved to amend some Articles of” Codes of Ethical Conduct”.
11. Approved to amend some Articles of” Remuneration Committee Charter” by the Remuneration Committee”.
12.Approved to amend some Articles of” Audit Committee Charter” by the Audit Committee”.
5th 2020/11/11 1. Approved to the Company's cash dividends in first half of 2019 be not distributed. V
2. Approved to amend some Articles of the “Rules of Procedure for Board of Directors Meetings”.
  • 40 -
Times
Date
Date		 Important Resolutions Listed items in the
Article 14-3 of the
Securities
Exchange Act.
6th 2020/12/28 1. Approved the Company's operating budget and capital expenditure budget in 2021. V
2. Approved to authorize Chairman of the Board of Directors to fully handle the Company's credit line with financial
institutions in 2021.
V
3. Approved that within the amount of the foreign currency loan balance of the Company, foreign exchange forward
contract can be pre-ordered.
V
4. Approved an endorsement guarantee case of NT$300 million for KGI Bank’s short-term project loan for the
subsidiary Luckicon Ready-mixed Concrete Factory Co., Ltd.
V
5. Approved the case of the subsidiary Luckyship Marine Co., Ltd to apply to the Company for loan commitments at
NT$ 20,000,000 due to business turnover needs.
V

6. Approved to authorize Chairman of the Board of Directors to provide an endorsement guarantee for the Company's
subsidiary, and to execute the case within a certain amount.
V
7. Approved the proposal of internal audit plans of 2021.
8. Approved to establish the “Regulations for appointment, dismissal, evaluation and review, salary and
compensation of internal auditors”.
9. Evaluated the independence and suitability of the Company's certificated accountants on a regular basis (once a
year).
10. Approvedthe replacement of the Company's CPA (Due to the need of internal adjustment of the
accountingfirm).
V
11. Approved accountant appointment remuneration of the Company in 2021. V
Times
Date		 Important Resolutions Listed items in th
Article 14-3 of th
Securities Exchang
Act.
1st 2021/02/01 1. Approved the 2020 year-end bonuses distribution of the Company’s managers that was proposed and
audited bythe remuneration committee.
V
2. Approved the 2019 employee compensation distribution of the Company’s managers that was proposed
and audited bythe remuneration committee.
V
2nd 2021/3/26 1. Approved to recognize an endorsement guarantee case of the subsidiary Dasheng Enterprise Co., Ltd. to provide the
loan commitments NT$60,000,000 for commercial papers issued by Ta Ching Bills Finance corporation.
V
2. Approved the Business report and financial statements in 2020. V
3. Approved to distribute the remuneration of the Company's employees and directors in 2020.
4. Approved the company's 2020 earnings distribution proposal. V
5. Approved to issue the 2020 Internal Control statement. V
6. Approved the proposal for2020 “Performance evaluation of the board of directors ''.
7. Approved to amend some Articles of “Rules of Procedure for Shareholders Meetings” of the Company.
8. Approved the date of the Company's 2020 regular shareholders meeting and related issues.
9. Approved the case of Shareholders' proposal rights.

12. Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors ： None

13. A summary of the dismissal of the company's relevant personnel

April 30,2021
Title Name Date of Appointment Date of Termination Reasons for Resignation or Dismissal

Note 1 : From January 1, 2020 to April 30, 2021, relevant persons of the Company have not been dismissed.

Note 2 :The relevant personnel refer to Chairman, General manager, Accounting Manager, Financial Manager, Audit Manager, Corporate Governance Manager and R&D Manager.

  • 41 -

3.4 Information Regarding the Company’s Audit Fee and Independence

1. Audit Fee

udit Fee udit Fee
Accounting Firm Name of CPA Period Covered by CPA’s Audit Remark
Deloitte & Touche Huang, Hai-Yue Chao-Mei Chen. 2020/01/01~2020/12/31 Due to the need of internal adjustment of the
accounting firm
Unit：NT$1,000

Fee Range		 Fee Item Audit Fee Non-Audit Fee Total
1 Under NT$2,000,000
2 NT$2,000,001 ~ NT$4,000,000
3 NT$4,000,001 ~ NT$6,000,000
4 NT$6,000,001 ~ NT$8,000,000
5 NT$8,000,001 ~ NT$10,000,000
6 Over NT$100,000,000
Unit：NT$1,000 Unit：NT$1,000
Accounting
Firm		 Name of CPA Audit Fee Non-Audit Fee Period Covered by
CPA’s Audit		 Remark
System of
Design		 Company
Registration		 Human
Resource		 Others Subtotal
Deloitte
& Touche		 Huang, Hai-Yue
Chao-Mei Chen.		 3,710 - - - 320 3,710 2020/01/01 ~ 2020/12/31 Others are public
expenses for the
transfer pricing
report

2. When non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any affiliated enterprise of such accounting firm is one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees as well as details of non-audit services shall be disclosed : None

3. When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: None

4. When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed: None

5. Information on replacement of certified public accountant: None

The accounting firm that audited the financial report for the Company is Deloitte & Touche. Du e to the needs of the internal business adjustment of the accounting firm, CPA Hai-Yueh Huang and CPA Yung-Fu Liu were originally responsible for the audit. Starting from the first quarter of 2020, the certified accountants have been replaced by CPA Hai -Yueh Huang and CPA Chao-Mei Chen in charge of audit.

3.5 Other matters to be clarified

1. Where the company's chairperson, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm: None

2. The personnel who are related to the transparency of the financial information and obtained the relevant license designated by the competent authority is as follows:

  • (1) Certified Internal Auditor (CIA) ： 1 person in audit department.

  • 42 -

3. Changes, Transfers and pledges in Shareholding of Directors, Supervisors, Managers and Major Shareholders

(1) Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Title�Note� Name 2020 2020 As of April 30, 2021 As of April 30, 2021
Holding
Increase
(Decrease)		 Pledged
Holding
Increase
(Decrease)		 Holding
Increase
(Decrease)
Pledged
Holding
Increase
(Decrease)
Chairman Shiyi Cement Co., Ltd. 0
0
0
0
Representative：Chen, Liang-
Chuan		 (291,000)
(2,000,000)
0
0
Director Shiyi Cement Co.,Ltd. 0
0
0
0
Representative：Chen,Yun-Ju 0
2,000,000
0
0
Director Zhang, Xiang-Lin 0
0
0
0
Director Cheng, Shang-Kai 0
0
0
0
Independent Director Chen, Yan 0
0
0
0
Independent Director Wang, Zhi-Cheng 0
0
0
0
Independent Director Shao, Yang-Wei 0
0
0
0
General manager Chen, Liang-Chuan (291,000)
(2,000,000)
0
0
Executive Deputy General
 Chen, Yun-Ju 0
2,000,000
0
0
~~M~~
Assistant Vice President		 Huang, Zhen-Ku 0
0
0
0
Assistant Vice President Fu, Yao-Ying 0
0
0
0
Manager Weng Xiu-Chu 0
0
0
0
Manager Wang, Wei-Ren 0
0
0
0
Manager Chang, Ching-Tien 15,000
0
0
0
Major Shareholders Changheng Investment Co., 0
0
0
0

Note ： Shareholders holding more than 10% of the total shares of the company should be marked as major shareholders and listed separately. Note ： Those who are related to the transfer of equity or equity pledges should still fill in the following table.

(2) Shares Trading with Related Parties:

Shares Trading with Related Parties: Shares Trading with Related Parties:
April 30,2021
Date of
Transaction
Transferee
Relationship between Transferee
and Directors, Supervisors,
Managers and Major Shareholders
Shares
Transaction
Price (NTD)
April,2020
Xiao Wei-Ju
Grandparents andgrandchild
145,500
－
April,2020
Xiao Yu-Xiang
Grandparents andgrandchild
145,500
－
Name (Note 1) Reason for Transfer
(Note 2)		 Date of
Transaction		 Transferee Relationship between Transferee
and Directors, Supervisors,
Managers and Major Shareholders		 Shares Transaction
Price (NTD)
Chen,Liang-Chuan Disposition(Gift) April,2020 Xiao Wei-Ju Grandparents andgrandchild 145,500
－
Chen,Liang-Chuan Disposition(Gift) April,2020 Xiao Yu-Xiang Grandparents andgrandchild 145,500
－

Note 1 ： Fill the Name of Director, Supervisor, Manager and Shareholders with a shareholding of more than 10%. Note 2 ： Fill in the acquisition or disposition

  • (3) Shares Trading with Related Parties: None
Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None Shares Trading with Related Parties: None
April 30,2021
Name
(Note 1)
Reason of
collateral
change
�Note 2�
Date of
Transaction
Opposite Party
of Trade
The Relationship between
the opposite Party of trade
and the company, Director,
Supervisor, manager and
shareholders with more than
10% of shares held
Number of
Share
Shareholding
ratio
Collateral
ratio
Amount of loan
with collateral
�redemption�
－
－
－
－
－
－
－
－
－
Name
(Note 1)
Reason of
collateral
change
�Note 2�		 Date of
Transaction
Opposite Party
of Trade		 The Relationship between
the opposite Party of trade
and the company, Director,
Supervisor, manager and
shareholders with more than
10% of shares held		 Number of
Share		 Shareholding
ratio		 Collateral
ratio		 Amount of loan
with collateral
�redemption�
－ － － － － － － － －

Note 1 ： Fill the Name of Director, Supervisor, Manager and Shareholders with a shareholding of more than 10% Note 2 ： Fill in pledge or redemption

  • 43 -

4. Relationship among the Top Ten Shareholders

Name (Note 1) Current Shareholding Current Shareholding Spouse’s/minor’s
Shareholding		 Spouse’s/minor’s
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Name and Relationship Between the Company’s
Top Ten Shareholders, or Spouses or Relatives
Within Two Degrees(Note 3)		 Name and Relationship Between the Company’s
Top Ten Shareholders, or Spouses or Relatives
Within Two Degrees(Note 3)		 Remark
Shares % Shares % Shares % Name Relationship
Changheng Investment Co., 52,631,034 13.00% 0 0% 0 0% － － －
Changheng Investment Co.,
Responsibleperson：Li Ji		 855 0.00% 0 0% 0 0% － － －
Changrun Water Resources
TechnologyCo.,Ltd.		 30,378,008 7.51% 0 0% 0 0% Chen, Yun-Ju Major Shareholders －
Changrun Water Resources
Technology Co., Ltd.
Responsible person：
Liu Jun-Lin		 0 0% 0 0% 0 0% － － －
Jinli Investment Co.,Ltd. 25,230,451 6.23% 0 0% 0 0% Chen,Liang-Chuan Major Shareholders －
Jinli Investment Co., Ltd.
Responsible person：
Lin Zheng-Liang		 69,228 0.02% 0 0% 0 0% － － －
Liguang Construction Co.
(Note4)		 22,658,066 5.60% 0 0% 0 0% Yungsheng Development
Industrial Co.,Ltd.		 Responsible person’s
relatives within one
degree		 －
TakmingUniversity
Lucky construction Co., Ltd The same person as the
responsibleperson
Yungsheng Development
Industrial Co.,Ltd.		 22,514,509 5.56% 0 0% 0 0% Takming University The same person as the
responsible person		 －
Yungsheng Development
Industrial Co., Ltd.
Responsible person：
Chen, Liang-Chuan		 6,158,497 1.52% 0 0% 0 0% Chen, Yun-Ju Relatives within one
degree		 －
Luckyconstruction Co.,Ltd Responsible persons of
these two companies
are relatives within one
degree
Liguang Construction Co.
Lucky construction Co., Ltd
(Note4)		 22,091,152 5.46% 0 0% 0 0% Yungsheng Development
Industrial Co.,Ltd.		 Responsible person’s
relatives within one
degree		 －
Takming University
Liguang Construction Co. The same person as the
responsibleperson
Takming university of
Science and Technology
(“TakmingUniversity”)		 11,794,250 2.91% 0 0% 0 0% Yungsheng Development
Industrial Co., Ltd.		 The same person as the
responsible person		 －
Takming University
Responsible person：
Chen, Liang-Chuan		 6,158,497 1.52% 0 0% 0 0% Chen, Yun-Ju Relatives within one
degree		 －
Lucky construction Co., Ltd Responsible persons of
these two companies
are relatives within one
degree
Liguang Construction Co.
DazhongInvestment Co. 10,868,294 2.69% 0 0% 0 0% － － －
Dazhong Investment Co.
Responsible person:
ChengHai-Bin		 7,203,724 1.78% 5,307,053 1.31% 0 0% － － －
Lin Zhi-Sheng. 8,071,000 1.99% 0 0% 0 0% － － －
Chen, Yun-Ju 7,951,298 1.96% 0 0% 0 0% Yungsheng Development
Industrial Co.,Ltd.		 Responsibleperson’s
relatives within one
degree		 －
Takming University
Luckyconstruction Co., Ltd Responsible person
Liguang Construction Co.

Note 1 ： The top ten shareholders should be listed in full, and the juristic person shareholders should list the names of juristic person shareholders and the names of their representatives.

Note 2 ： The calculation of the shareholding ratio refers to the calculation of the shareholding percentage in the name of themselves, their spouse, their minor children or the use of others.

Note 3 ： The shareholders listed above, including juristic persons and natural persons, shall disclose their relationship with each other in accordance with the criteria for the preparation of the issuer’s financial report.

Note 4 ： Chen, Yun-Ju is the responsible person of Lucky construction Co., Ltd and Liguang Construction Co., She has been listed as the top ten shareholders not listed again.

  • 44 -

5. Ownership of Shares in Affiliated Enterprises

Unit: Shares; %

5. Ownership of Shares in Affiliated Enterprises Unit: Shares; % Unit: Shares; %
Affiliated Enterprises Ownership by the Company Direct or Indirect Ownership by
Directors,Supervisors,Managers		 Total Ownership
Shares % Shares % Shares %
Dasheng Enterprise Co., Ltd. 157,295,283 99.99% 2,359 0.00% 157,297,642 99.99%
Luckicon Ready-mixed Concrete Factory Co., Ltd 47,000,000 100.00% 0 0.00% 47,000,000 100.00%
Luckyship Marine Co., Ltd 8,499,994 99.99% 2 0.00% 8,499,996 99.99%
Lucky Cement Corp., Japan 6,800 100.00% 0 0.00% 6,800 100 .00%
Just Bright Ltd.(Note) 50,000 100.00% 0 0.00% 50,000 100 .00%

(Note) The Company’s board of directors decided to end the operation of Just Bright Ltd (BVI) on December 27, 2019. The cancellation procedure has not yet been completed.

  • 45 -

IV Fund Raising

Capital and shares

4.1 Source of Capital

1. Source of Capital

April 18, 2021 The date for suspension of share transfer for a shareholder meeting Unit:Shares


Unit:Shares
Unit:Shares
Unit:Shares
Month/
Year		 Par
Value
(NT$)		 Authorized Capital Paid-in Capital Remark
Shares Amount Shares Amount Sources of Capital Capital
Increased by
Assets Other
than Cash

Other
3/1974 100
4,000,000
400,000,000
1,000,000
100,000,000		 Capital Increased byCash
8/1976 100
4,000,000
400,000,000
1,500,000
150,000,000		 Capital Increased byCash
7/1977 100
4,000,000
400,000,000
2,500,000
250,000,000		 Capital Increased byCash
9/1977 100
2,500,000
250,000,000
2,500,000
250,000,000		 Capital Increased byCash
11/1977 100
8,000,000
800,000,000
4,000,000
400,000,000		 Capital Increased byCash
6/1978 100
8,000,000
800,000,000
4,500,000
450,000,000		 Capital Increased byCash
9/1979 100
8,000,000
800,000,000
5,500,000
550,000,000		 Capital Increased byCash
12/1979 100
8,000,000
800,000,000
6,500,000
650,000,000		 Capital Increased byCash
3/1980 100
8,000,000
800,000,000
8,000,000
800,000,000		 Capital Increased byCash
12/1980 10 80,000,000
800,000,000		 80,000,000
800,000,000		 Changepar Value
12/1985 10 130,000,000 1,300,000,000 130,000,000 1,300,000,000 Capital Increased by Cash
10/1986 10 136,000,000 1,360,000,000 136,000,000 1,360,000,000 Capital Increased by Cash
5/1990 10 200,000,000 2,000,000,000 200,000,000 2,000,000,000 Capital Increased by Cash 334,000,000，earnings
transferred to capital 306,000,000
8/1990 10 215,000,000 2,150,000,000 215,000,000 2,150,000,000 earnings
transferred
to
capital
8/1991 10 225,750,000 2,257,500,000 225,750,000 2,257,500,000 capital surplus transferred to
capital
8/1992 10 248,325,000 2,483,250,000 248,325,000 2,483,250,000 earnings transferred to capital 112,875,000，capital
surplus transferred to capital 112,875,000
9/1993 10 273,157,500 2,731,575,000 273,157,500 2,731,575,000 earnings transferred to capital 124,162,500，capital
surplus transferred to capital 124,162,500
8/1994 10 314,131,125 3,141,311,250 314,131,125 3,141,311,250 earnings transferred to capital 191,210,250，capital
surplus transferred to capital 218,526,000
8/1995 10 329,837,682 3,298,376,820 329,837,682 3,298,376,820 earnings transferred to capital
8/1996 10 346,329,567 3,463,295,670 346,329,567 3,463,295,670 earnings transferred to capital
7/1997 10 520,000,000 5,200,000,000 363,646,046 3,636,460,460 earnings transferred to capital
7/1999 10 498,646,046 4,986,460,460 385,434,809 3,854,348,090 earnings transferred to capital Note1
9/2000 10 498,646,046 4,986,460,460 404,738,049 4,047,380,490 earnings transferred to capital Note2

Note1 ： 7/21/1999(88) Tai-Cai-Zheng(1) No. 67585 Official Letter

Note2 ： 7/19/2000(89) Tai-Cai-Zheng (1)No. 62554 Official Letter

  • 46 -

2. Type of Stock

2. Type of Stock Type of Stock Type of Stock Type of Stock
April 18, 2021
The date for suspension of share transfer for a shareholder meeting
Unit:shares
Share
Type		 Authorized Capital Remark
Issued Shares (Note) Un-issued Shares Total Shares
Ordinary
Shares		 404,738,049(Listed) 93,907,997 498,646,046 －

Note: Please Indicate whether the stock is listed or OTC stock (if it is a restricted listing or an OTC trader, it should be remarked.

3. Information for Shelf Registration

April 30,2021 April 30,2021
Securities
Type		 Preparingto Issue Amount Issued Amount Purpose and Effect for
Issued Shares
 Issue Period for
Unissued Shares		 Remarks
Total Shares Authorized
Amount		 Shares Price

Note ： This table is not applicable to the Company.

4.2 Composition of Shareholders

April 18, 2021 Base date: The date for suspension of share transfer for a shareholder meeting Unit:shares


Unit:shares
Status of
Shareholders
Amount

Government
Agencies
Financial
Institutions		 Other Juridical
Persons		 Domestic
Natural Persons		 Foreign
Institutions &
Natural Persons
Total
Number of Shareholders 0 4 29 18,275 39 18,347
Shareholding (shares) － 16,003 212,229,110 184,895,266 7,597,670 404,738,049
Percentage 0% 0% 52.44% 45.68% 1.88% 100.00%

Note ： The first listing (OTC) company and Emerging Stock company shall disclose the proportion of the

holdings of the capital investment from Mainland China. Capital Investments from Mainland China means the people, juridical persons, organizations, other institutions of the mainland area as stipulated in Article 3 of the Investment Permit Rule for People invest in Taiwan from Mainland China.

  • 47 -

4.3 Shareholding Distribution Status

April 18, 2021 Base date: The date for suspension of share transfer for a shareholder meeting

Class of Shareholding
(Unit: Share)		 Number of
Shareholders		 Shareholding (Shares) Percentage
1 ~ 999 7,579 1,166,311 0.29%
1,000 ~ 5,000 8,117 18,130,161 4.48%
5,001 ~ 10,000 1,467 12,593,379 3.11%
10,001 ~ 15,000 281 3,635,785 0.90%
15,001 ~ 20,000 316 6,073,632 1.50%
20,001 ~ 30,000 187 5,087,042 1.26%
30,001 ~ 50,000 155 6,443,091 1.59%
50,001 ~ 100,000 113 8,394,581 2.07%
100,001 ~ 200,000 49 7,104,572 1.76%
200,001 ~ 400,000 20 5,497,808 1.36%
400,001 ~ 600,000 10 5,163,000 1.28%
600,001 ~ 800,000 5 3,386,360 0.84%
800,001 ~ 1,000,000 3 2,769,041 0.68%
1,000,001 or over 45 319,293,286 78.89%
Total 18,347 404,738,049 100.00%

4.4 List of Major Shareholders

April 18, 2021

Base date: The date for suspension of share transfer for a shareholder meeting

Shares
Major
Shareholders
Shareholding
(Shares)		 Percentage
Changheng Investment Co., 52,631,034 13.00%
Changrun Water Resources Technology Co., Ltd 30,378,008 7.51%
Jinli Investment Co., Ltd. 25,230,451 6.23%
Liguang Construction Co. 22,658,066 5.60%
Yungsheng Development Industrial Co., Ltd. 22,514,509 5.56%
Lucky construction Co., Ltd 22,091,152 5.46%
Takming university of Science and Technology 11,794,250 2.91%
Dazhong Investment Co. 10,868,294 2.69%
Lin Zhi-Sheng. 8,071,000 1.99%
Chen, Yun-Ju 7,951,298 1.96%

The shareholders' names, amount and proportion of shares held of the shareholders with more than 5% shareholdings or shareholder proportions representing the top ten shareholders.

  • 48 -

4.5 Market Price, Net Worth, Earnings, and Dividends per Share

Year
Item		 Year
Item		 Year
Item
2019		 2020 As of March
2021
�Note8�
Market Price per
Share (Note1)		 Highest Market Price 8.81 13.30 13.50
Lowest Market Price 6.67 5.31 10.45
Average Market Price 7.27 9.54 11.88
Net Worth per
Share�Note2�		 Before Distribution 10.68 11.51 －
After Distribution 10.53 10.81 －
Earnings per
Share		 Weighted Average Shares 404,738 404,738 404,738
Earnings per Share�Note3� 0.11 0.97 －
Dividends per
Share		 Cash Dividends�Note9� 0.15 0.70 －
Issuance of Bonus
Shares		 － － － －
－ － － －
Accumulated Undistributed Dividends�Note4� － － －
Return on
Investment		 Price / Earnings Ratio (Note 5 ) 66.09 9.84 －
Price / Dividend Ratio(Note 6) 48.47 13.63 －
Cash Dividend Yield Rate (Note 7 ) 2.06% 7.34% －

  • ＊ When issuance of shares with earnings or capital surplus transferred to capital , the Information of market price and cash dividend adjusted retrospectively based on the number of issued shares shall be disclosed.

  • Note 1 ： List the highest and lowest market prices for common stock for each year, and calculate the

  • average market price for each year based on the annual transaction value and trading volume.

  • Note 2 ： Please specify the number of shares that have been issued at the end of the year and the distribution of the resolutions of the shareholders meeting of the next year.

  • Note 3 ： If there are retrospective adjustments due to circumstances such as issuance of bonus shares,

  • the pre-adjustment and adjusted earnings per share should be presented.

  • Note 4 ： If there is a requirement for issuance of equity securities that does not release dividends for the year to be accumulated in the surplus year, the accumulated unpaid dividends for the current year shall be disclosed separately.

  • Note 5 ： Price / Earnings Ratio ＝ Average closing price per share in current year ／ Earnings per share

  • Note 6 ： Price / Dividend Ratio ＝ Average closing price per share in current year ／ Cash dividends per share

  • Note 7 ： Cash Dividend Yield Rate ＝ Cash dividends per share ／ Average closing price per share in current year

  • Note 8 ： Before the publication date of the annual report, there was no latest financial information audited (reviewed) by the accountants. Therefore, no disclosure of the net asset value of each share and earnings per share was made.

  • Note 9 ： The distribution of cash dividends in 2020 was approved by the board of directors on March 26, 2021.

  • 49 -

4.6 Dividend Policy and Implementation Status

1. Dividend Policy ：

To taking into account the future funding needs and long-term financial planning of the Company, and to meet the cash inflow demand of the shareholders, if net profit is available at the end of a fiscal year, in addition to making up for losses, 10% of net profit shall be set aside as legal earnings reserve and the special surplus reserve shall be withdrawn in respect of the decrease in the other shareholders' equity of the fiscal year, and the 40%-80% of the total of the balance and the overdue earnings of the previous year and the adjusted amount of earnings which is not allocated for the current year shall be allocated. If the distributed amount of dividends per share calculated at the rate of 80% is still less than NT$ 0.1, it shall be retained and not distributed, and then the board of directors shall proposed an allocation motion for the shareholders to recognize.

The above ratio of the earnings distribution and the cash ratio of the shares shall be decided by the board of directors based on the actual profit and financial situation of the current year, and the investment capital needs and the dilution degree of earning per share shall be considered as well, which will be paid appropriately in cash dividend or stock dividends. However, the allotment of dividends of the Shares shall not be more than 20% of the issued share capital.

When the Company assigns the apportionable earnings, except for the calculation provided in paragraph 2, if the retention of earnings transferred in or the earnings after tax in the current year which is not enough to be listed in the amount of the deduction from other shareholders' equity, the earnings shall still be allotted after the retention of earnings or the overdue earnings for the previous year has been withdrawn or re-withdrawn as special capital reserve based on the provisions of the acts.

  1. Proposed Dividend Distribution of the Shareholders' Meeting: Proposed to distribute cash dividend NT$ 0.70 per share.

4.7 The effect of this issuance of bonus shares on company’s operating performance and earnings per share : Not applicable

4.8 Employee Compensation and Directors' Remuneration ：

1. The compensation proportion of employees and directors set forth in the articles of incorporation:

The compensation of employees, directors, supervisors set forth in the articles of incorporation: If any profit after the annual accounts, the Company shall allocate 3% for employees' compensation, and the Board of Directors shall decide that the distribution shall be in stock or cash, and the objects include the employees in the subsidiary companies who comply with a certain conditions; based on the above profit amount, the Board of Directors of the Company may resolve to allocate not more than 5 % as the compensation of directors.

2. The estimated basis of the current allocation of employees’ compensation and directors’ compensation amount, the basis for calculating the number of shares of the stock compensation distribution and the accounting treatment when the actual amount of the allocation is different from the estimated amount:

  • 50 -

It is distributed in accordance with the percentage of the compensation of the employees, directors and supervisors set forth in the articles of incorporation, which means if there is any profit after the annual accounts, 3 % of which shall be allocated for employees’ compensation, and the board of directors shall resolve to distribute in stock or cash, and the objects include the employees in the subsidiary companies who comply with a certain conditions; based on the above profit amount, the Board of Directors of the Company may resolve to allocate not more than 5 % as the compensation of directors. If the actual distribution amount differs from the estimated amount, it will be deemed as changes in accounting estimates, which will be included as profit or loss for the year of distribution.

3. The board of directors adopted the proposed distribution of employees' compensation:

  • (1) This year (2021), in accordance with Article 30 of the Company’s Articles of Incorporation, the board of directors has resolved to allocate NT$13,582,983 for 2020 employee compensation and the Remuneration Committee recommended that 5% of the surplus in the 2020 final accounts to allocate to director remuneration and the amount is NT$ 22,638,305, all above amounts are paid in cash

  • (2) The proposed distribution of stock compensation and the ratio of net profit after tax and the total amount of employee compensation: Not applicable.

4. The actual distribution of the compensation of the directors for the previous year:

On March 24, 2020, the board of directors approved the distribution NT$ 2,569,738 for director remuneration and NT$1,541,843 for employee remuneration. The proposal was submitted to the shareholders meeting on June 18, 2020. When the actual distribution is made, the director remuneration and employee remuneration are fully paid and total amount is same as the estimated amount on the account.

4.9 Buyback of Shares of the Company ： None

4.10 Bonds and Preferred Stock Issued ： None

  • 4.11 Status of Overseas Depositary Receipts, Employees' Warrants, and Mergers and Acquisitions or Transfer of New Issued Shares to Other Companies ： None

4.12 Implementation of Capital Allocation Plans ：

The Company has not issued or private equity securities have not been completed in the last three years.

  • 51 -

V Operational Highlights

5.1 Business Activities

1. Business Scope

  • 1 � The main contents of the business:

  • C901050 cement and concrete products manufacturing industry.

  • C901990 other non-metallic mineral products manufacturing industry.

  • B202010 non-metallic mining industry.

  • J101030 Waste removal industry.

  • J101040 Waste disposal industry.

  • In addition to the permitted business, a business which is not prohibited or restricted by acts may be operated.

  • 2 � Main business and its proportion

Main business and its proportion
Items Product Proportion in 2020
Cement and Clinker 46.14%
Cement Product 36.85%
Other 17.01%

  • 3 � The current commodity projects and new products development

  • A. Existing products: ：

    • Portland Type I Cement

    • Portland Type II Cement

    • Slag powder

    • Cement Product � Ready Mixed Concrete �

    • Stone � Limestone, Specification stone, Gravel �

  • B. New products Development ： None

2. Industry Overview

  • (1) Industry Status and Development

Cement industry have reached maturity, and there is still a certain demand under the economic policy and civil construction of the government plans.

Cement industry is the basic industry of people's livelihood and the national construction, from residential to various public works, defense facilities are all based on cement as the basic building materials. With the bulky volume, high transport costs, not durable storage, the sale of the cement is mainly domestic sales, so it is a domestic demand industry, the prosperity and decline of the industry depends on the driving of the business of the construction industry and public works.

  • 52 -

The prosperity in the cement products market which is downstream of the cement industry is highly related to the cement market. The sandstone price which is the highest proportion of the production cost is deeply affected by the import sandstone volume from Mainland China and also affected the final sales price of cement products.

The production plant of the Company is located in Dongao, Yilan County, and the limestone source is from Heren, Hualien County. In recent years, due to the impact of the environmental and resource constraints, local tax increase and related cost in accordance with tightened Mining Law, thereby the cost of limestone raw materials has been increasing.

Looking forward to 2021, due to Taiwanese firms leave China and bring their investments home, which is conducive to the increase in domestic demand, and the government's promotion of public works and the appropriate measures to prevent the Covid-19, the 2021 cement market is still optimistic.

  • (2) The relevance of the upstream, middle stream and downstream of cement industry The cement industry includes the upper reaches of the provision of limestone, clay, silica sand, iron slag, gypsum and other soil and stone mining industry, metal mining and steel smelting industry, as well as the power supply industry, railway and road transport industry, fuel gas supply industry and other industries which cooperate during the process; and the downstream industries which have the direct demand for cement products supply such as construction industry, concrete industry, cement products industry (such as cement tiles, asbestos board, cement culvert, etc.).

The combination of the Company and its subsidiary companies of Dasheng Enterprise Co., Ltd., Luckicon Ready-mixed Concrete Factory Co., Ltd. and Luckyship Marine Co., Ltd. is a business strategy with vertical integration.

  • (3) Product Trends and Competition

  • For a long time, there has not been a considerable product can completely replace the use of cement, but in order to reduce costs, the ready mixed concrete industry adds slag powder, and besides the production of cement, the Company also produces slag powder to supply the needs of the industry to make up for reduced cement sales.

The mass and weight of cement and slag powder products are heavy, which is a local industry. In addition to improving production efficiency, reducing cost and maintaining quality. In order to provide customers with products quickly, the Company will continue to optimize logistics conditions, improve capabilities of product scheduling and increase overall competitiveness.

3. Overview of Technology and R&D

  • 1 � The Company has no technical and R&D expenses incurred during the year of 2020.

  • 2 � No R&D plan in the next three years.

4. Long-term and Short-term Development

  • 1 � Short-term development ：

  • 53 -

Taiwan has entered the developed country stage, the domestic cement industry is not easy to grow substantially. The Company will continue to optimize logistics conditions, improve product despatching capabilities to satisfy customer's request. In addition, cooperate with the distribution-channel creation of the ready-mix plant to maintain market share, and continuously promote the land development projects of the Subsidiary Dasheng Enterprise Co., Ltd. to increase return on investment.

  • 2 � Long-term Development ：

  •  For sustainable operation, actively invest in capital expenditures, improve equipment to increase production efficiency, and reduce production costs. Fully use the advantages of the rich and fine limestone in the Horen Mine Plant, and develop sandstone and other raw material-related products to increase revenue and profits.

  •  Apply the three high process characteristics of cement kiln "high temperature, high residence time, high turbulence", combine with the waste disposal business, strive for high gross profit orders, and increase the use of alternative fuels and raw materials for renewable resources, continue to develop the value chain of circular economy and increase profitability.

5.2 Market and Sales Overview

1. Market Analysis

(1) Sales Region

Sales Region
Region The proportion of major commodity sales regions in 2020
Northern 72.96%
Central 15.84%
Hualien & Taitung 9.46%
Others 1.74%

The Company has two cement plants, located in Dongao, Yilan County and Puxin, Taoyuan City and three ready-mixed concrete plants, and a mine to produce the cement of Lucky brand, slag powder, cement goods, limestone and stones. Wherein there are a number of delivery centers and business locations for cement in Taiwan, and the domestic sales are to mainly supply the military, public and private customers in north, central, south and Hualien-Taitung of Taiwan. The sale volume is ranked the third in domestic cement producers, only less than Taiwan Cement Corporation and Asia Cement Corporation. The ready mixed concrete are mainly supplied and sold in the northern Taiwan.

(2) Market Share

The cement and cement goods of the Company dominate the domestic market, and the market share of cement products is about 8 to 10%, 1~2 % for cement goods.

  • 54 -

  • (3) The situation and growth of market future supply and demand

  • The domestic cement market is mature, the increases of import cement with the lower cost and capture the domestic market. Moreover, the demand of the civil construction industry is still stable, plus the onging government's strategic public construction, the supply and demand of cement may still be balanced between each other.

  • (4) Advantages and disadvantages of development prospects

  • The favorable and unfavorable factors in the development prospects of the cement industry are as follows ：

  • Favorable factors ： Taiwan has entered the developed country stage, the demand growth is not easy to increase significantly. For the long term, Taiwanese firms leave China and bring their investments home, the demand of the civil construction industry is still stable, plus the onging government's public construction plan and urban renewal program etc., the operation of the cement industry should still maintain stable and sustainable development. The Company has a ready-mix plant, the Horen mine plant and other factories in the cement industry-related value chain, which also helps the Company's sustainable development in the cement industry.

  • Unfavorable factors ：

    • Imported cement continues to seize the market with its cost advantage.

    • Due to the domestic CO2 emissions restrictions and the rising environmental awareness, it is not easy to expand.

    • Cargo taxes, air pollution charges and raw material local taxes and other taxes have a negative impact on the cement industry.

2. Important Application and Production Procedures of Main Products

  • 1 � Important Application

  • Product ： Portland Type I Cement

Application ： For general civil and construction works.

  • Product ： Portland Type II Cement

  • Application ：

  • Underground infrastructure works such as sewers, underground roads, tunnels, underground MRT and etc.

  • Mass concrete works: bridges, water tyrants, reservoirs and etc.

  • Works which may be eroded by sea water and sea breeze: wharfs, breakwater, caissons, harbor works and etc.

  • Product ： Slag Powder

  • Application ： For general civil and construction, normally for ready mixed concrete industry.

  • Product ： Cement product � Ready Mixed Concrete �

  • Application ： For a variety of construction

  • Product ： Stone � Limestone, Specification stone, Gravel �

  • Application ： Limestone is the main raw material for the cement industry, specification stone is for steel mills and petrochemical plants, and gravel is one of the main materials for ready mixed concrete industry.

  • 55 -

� 2 � Process

==> picture [503 x 367] intentionally omitted <==

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

Cement Slag power Ready-Mixed Concrete
Clay/Silica Cement + Aggregate +
Limestone Sand/Iron Slag Slag Gypsum Slag powder fly ash
Raw Mill Grinding Mixer
Kiln Burn Burne Slag Loading to
powder the truck
Silo for delivery
Clinker / Gypsum
Cement Mill
Silo Loading
----- End of picture text -----

3. Supply Status of Main Materials

Materials Supply status Note
Limestone A smallpart of self-miningand majorityof Domesticpurchasing －
Clay Domesticpurchasing －
Iron Slag Apartial of domesticpurchasingand apartial of importingfrom Japan －
Silica Sand Domesticpurchasing －
Gypsum Domesticpurchasing －
Coal Importingfrom Australia and Russia －
Slag Importingfrom Japan －
FlyAsh Domesticpurchasing －
Gravel Apartial of domesticpurchasingand apartial of importingfrom Japan －

All major raw materials except limestone and gravel were self-manufactured, and some of them were purchased domestically; others had more than two suppliers to stabilize their sources of supply.

  • 56 -

4. Major Suppliers and Clients in the last Two Years

� 1 � Major Suppliers in the Last Two Calendar Years

Unit: NT$1,000,000 Unit: NT$1,000,000 Unit: NT$1,000,000 Unit: NT$1,000,000
2019 2020 (Note1) As of March 31, 2021 (Note3)
Item Company
Name
(Note2)		 Amount Percent Relation
with
Issuer		 Company
Name
(Note2)		 Amount Percent Relation
with
Issuer		 Company
Name
(Note2)		 Amount Percent Relation
with
Issuer
1 M Company
254		 16.3 Raw
Material
Supplier		 M Company
297		 14.7 Raw
Material
Supplier
2 D Company 190 12.2 Raw
Material
Supplier		 D Company 233 11.5 Raw
Material
Supplier
3
4
5
6
7 Other 1,112 71.5 Other 1,495 73.8
Net
purchase		 1,556 100.0 Net
purchase		 2,025 100.0

Note 1 ： Cause of change ： None.

Note 2 ： The procurement contract stipulates that the name of the supplier cannot be disclosed.

Note 3 ： As of the date of publication of the annual report, there was no recent financial information audited

(reviewed) by the accountants and it was not disclosed.

� 2 � Major Clients in the Last Two Calendar Years Unit: NT$1,000,000

�2� M ajor Clients in ajor Clients in the Last T wo Calend ar Years ar Years Unit: NT$1,000,000 Unit: NT$1,000,000 Unit: NT$1,000,000 Unit: NT$1,000,000
2019 2020 (Note1) As of March 31, 2021 (Note3)
Item
Company
Name
(Note2)		 Amount Percent Relation
with
Issuer		 Company
Name
(Note2)		 Amount Percent Relation
with
Issuer		 Company
Name
(Note2)		 Amount Percent Relation
with
Issuer
1 H Company 256 6.9 Customer H Company 248 5.5 Customer
2
3
4
5 Other 3,476 93.1 Other 4,282 94.5
Net Sales 3,732 100.0 Net Sales 4,530 100.0

Note 1: Cause of change ： None.

Note 2: The sales contract stipulates that the customer name cannot be disclosed.

Note 3: As of the date of publication of the annual report, there was no recent financial information audited (reviewed) by the accountants and it was not disclosed.

  • 57 -

5. The Most Recent Biennial Production

Cement, Slag Powder Unit ： 1,000 tons ； Cement Product Unit ： 1,000M³ ； Output value Unit ： NT$1,000

Cement Product Unit：1,000M³；
Output value Unit：NT$1,000		 Cement Product Unit：1,000M³；
Output value Unit：NT$1,000		 Cement Product Unit：1,000M³；
Output value Unit：NT$1,000
Year
Production
Quantity
Value
Main Products		 2019 2020
Capacity Quantity Output Value Capacity Quantity Output Value
Cement, Slag Powder 2,000 799 1,205,723 2,000 875 1,166,657
Cement Product - 616 1,058,591 - 578 1,015,427
Other - 1,934 478,422 - 2,135 452,943

Note 1 ： Capacity refers to the quantity that can be produced under normal operation using existing production equipment after the company has measured the necessary shutdown, holidays and other factors.

  • Note 2 ： If the production of each product is substitutable, it can be combined to calculate its production capacity and note it.

6. Sales in the Last Two years

Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000		 Cement, Slag Powder Unit：1,000 tons；
Cement Product Unit：1,000 M³；
Output value Unit：NT$1,000
Sales
Main Products
Year		 2019 2020
Domestic sales Export Domestic sales Export
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Cement,SlagPowder 827 1,809,209
－		 － 948
2,082,244
－		 －
Cement Product － 1,242,991
－		 － － 1,669,310
－		 －
Stone 689
281,628
－		 － 685
322,445
－		 －
Other － 397,868
－		 － － 456,173
－		 －
Total － 3,731,696
－		 － － 4,530172
－		 －
  • 58 -

5.3 Employee Information in the Last Two Year and up to the Date of Publication of the Annual Report

April 30, 2021 April 30, 2021 April 30, 2021 April 30, 2021
Year 2019 2020 As of
April 30,
2021
Number of
Employees		 Direct Labor in factory 256 249 251
Indirect Labor in factory 112 112 115
Administration Staff in the Company 126 129 128
Total 494 490 494
Average Age 49.62 49.49 49.52
Average Years of service 12.69 12.40 12.31
Education Ph.D. 0.61 0.61 0.61
Masters 2.63 2.65 2.63
Bachelor's degree 30.77 34.90 33.81
Senior High School 42.31 39.59 40.89
Below Senior High School 23.68 22.25 22.06

5.4 Environmental Protection Expenditure

1. Loss due to environmental pollution in the most recent year and as of the date of publication of the annual report ：

2019 2020 As of April 30, 2021
Pollution status
(Category, Condition)		 Stacking
and
conveying fugitive
Particulate Matter
Pollution.		 A
large
amount
of
pollutants
were
discharged
due
to
careless
operation,
which was not notified
in
accordance
with		 The
automatic
monitoring
efficiency
of
the
discharge
pipeline is not up to the
standard.
Object of compensation
or competent authority		 Environmental
Protection Bureau		 Environmental Protection
Bureau		 Environmental
Protection Bureau
Compensation amount
orpunishment		 NT$100,000 NT$100,000 NT$100,000
Other Losses None None None

2. Countermeasures ：

  • 1 � In order to make the sewage treatment operates efficiently, in addition to improving the equipment, the Company also added new facilities for sewage diversion and one more layer for precipitation, so that the discharge of water may reach the standard provided by the acts and regulations.

  • 2 � In order to keep the machinery in the plants maintain the normal situation from time to time to reduce the cost of folding replacement, the Company has established the "Regulations Governing the Mechanical Maintenance and Maintenance" for the machinery to which plant

  • 59 -

it belongs, and the maintenance shall be conducted according to a certain maintenance procedures and inspection.

3. Improvement plan:

  • 1 � Strengthen the maintenance and update of mechanical parts to reduce sudden failure.

  • 2 � Strengthen professional training and management to reduce human negligence and enhance the competence to emergencies.

  • 3 � Stop the treatment of sludge with strong odor and add sludge treatment system to reduce the odor.

  • 4 � When the on-site unit installs new equipment, it is necessary to inform the safety and environmental department to change the relevant operation permit or apply for a license.

4. Future Environmental Key Works ：

  • 1 � To strengthen the operation and maintenance of equipment to ensure the normal operation of environmental protection equipment and execute earnestly the industrial waste reduction to avoid pollutants.

  • 2 � Strengthen the study of waste recycling technology.

  • 3 � Strengthen the cleanliness of the environment the green plant environment.

  • 4 � Conduct a sewage separation system to improve the pollution of the discharged water.

  • 5 � Strengthen management to ensure that all operations are executed in accordance with the quality assurance plan, and implement the application and change of various licenses.

  • 6 � The total amount of environmental protection expenditure in 2020 was NT$21,329,000.

5.5 Labor Relations

1. Employee benefits policy ：

  • (1) Employee benefits measures:：

  •  The Company has set a staff welfare committee, and allocates the welfare fund for the welfare activities based on the laws. The annual staff welfare fund allocated of the year of 2020 is NT$6,054,000.

  •  Award the gold memorial medal and diploma to praise outstanding colleagues.

  •  Issue three Chinese festival bonus and education grant.

  •  Continuously enhance the improvement of the working environment on site.

  •  Conduct employee group insurance and employee health check. The related expenditure for the year of 2020 was NT$1,337,000.

  • 2 � Implementation of improvement and training system ：

  • The Company has a staff training program that provides staff training and implementation. The company's on-the-job training includes organizing various workshops, training courses and the cooperative appointment training with other training institutions or schools, or the Company may hold short-term work exercises based on job needs. The training fees for various types of training were NT$ 375,000.

  • 3 � Retirement system ：

  • The "Labor Pension Act" has been in operation since 1 July 2005, Those who were employed before June 30 and still served on July 1 may choose to continue to apply the

  • 60 -

pension provisions of the Labor Standards Act, or the pension system to which the ordinance applies and retain the job tenure before the application of the conditions. After July 1, 2005, new employees may only apply to the pension system of the "Labor Pension Act".

The Company developed the regulations of employee pension in accordance with the "Labor Pension Act", which are the regulations of determining allocating the pension. Since July 1, 2005, 6% of each employee's monthly salary has been allocated to the individual pension accounts of Bureau of Labor Insurance.

The Company developed the regulations of employee retirement based on the "Labor Standards Act", which are the regulations of determining paying the pension. The payment of employee pension is calculated on the basis of the service year and the average salary of the last six months before retirement, and the company contributes pension reserves monthly based on the provisions, which is submitted to the Labor Retirement Reserve Monitoring Committee for management, and the pension is saved in the Central Trust of China in the name of such committee

In the current year, 13 people retired and the pensions totaled NT$ 23,287,000.

2. Protection measures of employee rights :

A harmonious labor relation is the cornerstone of enterprise development, and the labor relations of the Company have been in a harmonious, stable and prosperous relationship over the years. In addition to promoting employee benefits, welfare and improving the working environment, the Company also maintains the smooth flow of labor communication channels, and provided the general discussion of the trade union in the factory to understand the difficulties and needs of employees. All levels of executives attached importance to each problems and responses and helped for the solutions.

3. Labor dispute situation:

  • 1 � No labor dispute occurred during the latest year and up to the printing date of this annual report.

  • 2 � Estimative the amount of current and future possible losses: None

4. Social Responsibility Implementation:

  • 1 � Coordinate labor relations, promote labor management cooperation, and improve work efficiency, labor-management conferences are held regularly.

  • 2 � Human resources department handles employees' complaints and cases related to employees who are not satisfied with the punishment.

  • 3 � The Company has established the Regulations on the Prevention of Sexual Harassment (which has already submitted to the county government).

  • 4 � Encourage employees to participate in external sexual abuse and sexual harassment prevention and related educational training, and the participants will be provided with business trip registration and budget subsidy, and the relevant information will be disclosed in an obvious place of the workplace publicly as well.

Service Line ： 03-9986110 #103 or #109

02-25092188 #2517

  • 61 -

Service Fax: ： 03-9986066 02-25093033

Service dedicated mailbox or e-mail ： [email protected]

[email protected]

  • 5 � The Company shall handle safety and hygiene work in accordance with the relevant laws and regulations on labor safety and hygiene.

  • 6 � Employees shall comply with the relevant provisions of safety and health, and yield to the guidance of the personnel of safety and health management.

  • 7 � Safety and hygiene of labors ：

  •  Each on-site worker is provided with a hard hat and safety shoes, and according to the work nature, the appropriate protective equipment that meets the needs of the work is provided. For example, high temperature, dust, and noise workplaces are equipped with fireproof clothing, fireproof shoes, dust masks, earplugs, etc., to ensure the health and safety of employees.

  •  The Company has formulated the occupational safety and health policy, requiring all employees to abide by occupational safety and health laws and regulations, and providing employees with the necessary education and training, including the new employee orientation, regular on-the-job training, disaster prevention and fire fighting, first aid, escape and other drills, In each workplace, an obvious notice board is used to inform and remind employees of what hazards exist in the workplace, how to prevent and use what kind of protective equipment, in order to predict and take the correct safety protection measures.

  •  In order to protect the safety of employees and reduce accidents, the Company not only strengthened equipment maintenance to ensure safe operation, but also improved the surrounding equipment, such as the installation of safety nets, stairs, railings improvement, and required the contractor to perform the work in accordance with the Company’s management regulations and relevant safety and health regulations. Moreover, an inspection team composed by the security environment division carried out the dynamic inspection to enable employees and contractors to work in compliance with safety regulations.

  •  The total expenditure on labor safety in 2020 amounted to approximately NT$4,923,000.

  • To build a sound safety and health management system, the Company hired a consulting company in December 2018 to provide guidance on the establishment of the ISO 45001: 2018 Occupational Health and Safty Management Systems. In July 2019, the system certification was implemented by TUV NORD International Verification Agency, and. obtained ISO 45001: 2018 certificate on August 26, 2019. Validity period of the certification is from August 26, 2019 to August 25, 2022

5. Specific measures to enhance employee benefits or rights compared to those in the previous year ： None

  • 62 -

5.6 Important Contracts

Important Contracts
April 30,2021
Major Contents
Restrictions
Mid-term land building mortgage loan
－
Mid-term land mortgage loan
－
Mid-term land mortgage loan
Self-provided trucks’four-level
overhaul renewal parts
－
Self-provided trucks’four-level
overhaul renewal project
－
Self-provided trucks’ third-level
maintenance material fee
－
The second phase of Keelung's Self-
hosted city re-division project
－
Agreement Counterparty Period Major Contents Restrictions
Loan Agreement Taiwan Cooperative Bank
Ximen Branch		 4/12/2018-4/12/2023 Mid-term land building mortgage loan －
Loan Agreement O-Bank Sales Department 11/21/2017-11/21/2022 Mid-term land mortgage loan －
Loan Agreement Bank of Taiwan,
Zhongshan Branch		 11/12/2019-11/12/2022 Mid-term land mortgage loan
Sale and Purchase Agreement Shi-Jia Industrial Ltd. 9/28/2018-9/30/2021 Self-provided trucks’four-level
overhaul renewal parts		 －
Construction Contract Shi-Jia Industrial Ltd. 9/28/2018-9/30/2021 Self-provided trucks’four-level
overhaul renewal project		 －
Sale and Purchase Agreement Shi-Jia Industrial Ltd. 1/1/2019-12/31/2022 Self-provided trucks’ third-level
maintenance material fee		 －
Construction Contract Hao Hong Construction Company 02/01/2018-12/31/2021 The second phase of Keelung's Self-
hosted city re-division project		 －
  • 63 -

VI Financial Information

6.1 Five Year Financial Summary

1. Condensed Balance Sheet & the statements of Comprehensive Income

(1) Consolidated Condensed Balance Sheet

Unit：NT$1,000 Unit：NT$1,000 Unit：NT$1,000 Unit：NT$1,000 Unit：NT$1,000 Unit：NT$1,000
Year
Item
Financial Summary for the last Five Year�Note1�		 As of
March
31, 2021
(Note 3)
2016 2017 2018 2019 2020
Current assets 5,360,762 5,121,071 4,938,529 5,087,148 5,259,278












Property, Plant and Equipment
�Note 2�		 1,899,736 1,648,561 1,877,077 1,711,806 2,223,887
Intangible assets － － － － －
Other assets(Note2) 492,146
467,220
477,891
529,923
544,142
Total assets 7,752,644 7,236,852 7,293,497 7,328,877 8,027,307
Current
liabilities		 Before distribution 2,604,897 1,925,148 1,736,069 1,617,131 2,151,262
After distribution
(Note 4)		 2,847,740
－		 － 1,677,842
－
Non-current liabilities 345,911
883,162		 1,330,430 1,390,809 1,219,126
Total
liabilities		 Before distribution 2,950,808 2,808,310 3,066,499 3,007,940 3,370,388
After distribution
(Note 4)		 3,193,651
－		 － 3,068,651
－
Equity attributable to owners of
parent		 4,771,695 4,402,119 4,226,920 4,320,860 4,656,845
Share capital 4,047,380 4,047,380 4,047,380 4,047,380 4,047,380
Capital surplus 8
8
8
8
9
Retained
earnings		 Before distribution 696,907
357,972
182,653
269,466
605,001
After distribution
(Note 4)		 454,064
－		 － 208,755 －
Other equityinterest 27,400
(3,241)		 (3,121) 4,006
4,455
Treasuryshares － － － － －
Non-controllinginterest 30,141
26,423
78
77
74
Total
equity		 Before distribution 4,801,836 4,428,542 4,226,998 4,320,937 4,656,919
After distribution
(Note 4)		 4,558,993
－		 － 4,260,226
－

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020. Note 2 : Asset revaluation has not been handled in 2020.

Note 3 : As of the date of publication of the annual report, there was no recent financial information audited (reviewed) by the accountants and it was not disclosed.

Note 4 : The proposal to earning distribution in 2020 is still waiting for shareholders' resolution, so the number of “after distribution” is missing.

  • 64 -

(2) Consolidated Condensed Statement of Comprehensive Income

Unit : NT$1,000

Year
Item
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�		 As of
March
31, 2021
(Note 2)
2016 2017 2018 2019 2020
Operatingrevenue 4,251,061 3,434,454 3,330,601 3,731,696 4,530,172










Grossprofit from operations 662,493
128,501
46,767
298,881
716,675
Net operatingincome(loss) 426,326 (100,344) (155,142) 77,882
447,475
Non-operating income and
expenses		 (24,996)
(18,667)
(36,520)
(23,968)
(3,067)
Profit(loss)before tax 401,330 (119,011) (191,662) 53,914
444,408
Profit (loss) from continuing
operations		 324,202 (102,303) (200,942)
45,904
392,269
Loss from discontinued operations (9,125) (775) (672) － －
Profit(loss) 315,077 (103,078) (201,614) 45,904
392,269
Other comprehensive income
[abstract]		 (11,471)
(25,623)
4,965
48,035
4,426
Comprehensive income 303,606 (128,701) (196,649) 93,939
396,695
Profit (loss), attributable to owners
ofparent		 315,334 (101,111) (176,971)
45,905
392,269
Profit (loss), attributable to non-
controllinginterests		 (257)
(1,967)
(24,643)
(1)
－
Comprehensive income, attributable
to owners ofparent		 303,872 (126,733) (172,004)
93,940
396,695
Comprehensive income, attributable
to non-controllinginterests		 (266)
(1,968)
(24,645)
(1)
－
Earningsper share(Note 3) 0.78
(0.25)		 (0.44) 0.11
0.97

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020. Note 2 : As of the date of publication of the annual report, there was no recent financial information audited (reviewed) by the accountants and it was not disclosed.

Note 3 : Calculated by the number of shares after retrospective adjustment. 

。
  • 65 -

(3) Parent Company Only Consolidated Condensed Balance Sheet

Unit ： NT$1,000

Year
Item		 Year
Item
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�
Financial Summary for The Last Five Years�Note 1�		 As of
March
31, 2021
(Note 2)
2016 2017 2018 2019 2020
Current assets 2,022,199 1,845,673 1,492,830 1,579,785 1,574,530











Property, Plant and Equipment
�Note 2�		 1,787,670 1,557,708 1,786,763 1,628,604 1,586,499
Intangible assets － － － － －
Other assets(Note2) 3,333,405 3,054,914 3,268,057 3,257,170 3,581,028
Total assets 7,143,274 6,458,295 6,547,650 6,465,559 6,742,057
Current
liabilities		 Before distribution 2,087,743 1,717,161 1,548,661 1,319,757 1,428,277
After distribution
(Note 3)		 2,330,586
－		 － 1,380,468 －
Non-current liabilities 283,836
339,015
772,069
824,942
656,935
Total
liabilities		 Before distribution 2,371,579 2,056,176 2,320,730 2,144,699 2,085,212
After distribution
(Note 3)		 2,614,422
－		 － 2,205,410
－
Equity attributable to owners of
parent		 4,771,695 4,402,119 4,226,920 4,320,860 4,656,845
Share capital 4,047,380 4,047,380 4,047,380 4,047,380 4,047,380
Capital surplus 8
8
8
8
9
Retained
earnings		 Before distribution 696,907
357,972
182,653
269,466
605,001
After distribution
(Note 3)		 454,064
－		 － 208,755 －
Other equityinterest 27,400
(3,241)		 (3,121) 4,006
4,455
Treasuryshares － － － － －
Non-controllinginterest － － － － －
Total
equity		 Before distribution 4,771,695 4,402,119 4,226,920 4,320,860 4,656,845
After distribution
(Note 3)		 4,528,852
－		 － 4,260,149
－

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020 Note 2 : Asset revaluation has not been handled in 2020.

Note 3 : The proposal to earning distribution in 2020 is still waiting for shareholders' resolution, so the number of “after distribution” is missing.

  • 66 -

(4) Parent Company Only Consolidated Condensed Statement of Comprehensive Income

Unit : NT$1,000

Year
Item		 Financial Summary for The Last Five Years�Note1� Financial Summary for The Last Five Years�Note1� Financial Summary for The Last Five Years�Note1� Financial Summary for The Last Five Years�Note1� Financial Summary for The Last Five Years�Note1� As of
March
31, 2021
2016 2017 2018 2019 2020
Operatingrevenue 3,507,773 2,957,370 2,810,497 2,931,247 3,282,149










Grossprofit from operations 603,150
244,893
150,288
244,861
524,148
Net operatingincome(loss) 416,288
70,426
(22,019)		 72,054
314,697
Non-operating income and
expenses		 (34,586) (186,473) (138,161)
(24,771)
101,848
Profit(loss)before tax 381,702 (116,047) (160,180) 47,283
416,545
Profit (loss) from continuing
operations		 315,334 (101,111) (176,971)
45,905
392,269
Loss from discontinued
operations		 － － － － －
Profit(loss) 315,334 (101,111) (176,971) 45,905
392,269
Other comprehensive income
[abstract]		 (11,462)
(25,622)
4,967
48,035
4,426
Comprehensive income 303,872 (126,733) (172,004) 93,940
396,695
Profit (loss), attributable to
owners ofparent		 303,872 (126,733) (172,004)
93,940
396,695
Profit (loss), attributable to non-
controllinginterests		 － － － － －
Comprehensive income,
attributable to owners ofparent		 303,872 (126,733) (172,004)
93,940
396,695
Comprehensive income,
attributable to non-controlling
interests		 － － － － －
Earningsper share(Note 2) 0.78
(0.25)		 (0.44) 0.11
0.97

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020. Note 2 : Calculated by the number of shares after retrospective adjustment.

2. CPAs and their’s Audit Opinions from 2015 to 2019

Year CPA CPA Audit Opinion
2016 (Note1) Huang, Hai-Yue Liu, Yong-Fu Unreserved opinions
2017 Huang, Hai-Yue Liu, Yong-Fu Unreserved opinions
2018 Huang, Hai-Yue Liu, Yong-Fu Unreserved opinions
2019 Huang, Hai-Yue Liu, Yong-Fu Unreserved opinions
2020 (Note 2) Huang, Hai-Yue Chen, Chao-Mei Unreserved opinions

Note 1: Coordinated with the internal rotation of the certified accounting firm in 2016.

Note 2. Coordinated with the internal rotation of the certified accounting firm in 2020.

  • 67 -

6.2 Five Year Financial Analysis

� 1-1 � Consolidated Financial Analysis

Item
�Note 3�		 Year�Note1� Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years As of
March 31,
2021
�Note2�
2016 2017 2018 2019 2020
Financial
structure
�％�		 Debt Ratio 38.06
38.81
42.04
41.04
41.99




















Ratio of long-term capital to property,
plant and equipment		 270.97
322.20		 296.07
333.67
264.22
Solvency
％		 Current ratio 205.80
266.01		 284.47
314.58
244.47
Quick ratio 60.17
61.47
66.03
86.96
72.19
Times Interest Earned 13.85
(2.87)
(4.91)
2.36
14.91
Operating
performance		 Accounts receivable turnover(times) 5.05
4.98
5.57
4.94
4.56
Average collectionperiod 72.27
73.29
65.52
73.88
80.04
Inventoryturnover(times) 1.01
0.89
0.89
0.96
1.08
Accountspayable turnover(times) 7.84
7.21
8.91
9.45
7.31
Average days in sales 361.38
410.11		 410.11
380.20
337.96
Property, plant and equipment turnover
(times)		 2.24
2.08
1.77
2.18
2.04
Total assets turnover(times) 0.55
0.47
0.46
0.51
0.56
Profitability Return on asset(%) 4.37
(1.03)		 (2.40) 1.06
5.44
Return on equity (%) 6.53
(2.23)		 (4.66) 1.07
8.74
Pre-tax income topaid-in capital(%) 9.92
(2.94)		 (4.74) 1.33
10.98
Profit ratio(%) 7.41
(3.00)		 (6.05) 1.23
8.66
Earningsper share(NTD) 0.78
(0.25)		 (0.44) 0.11
0.97
Cash flow Cash flow ratio (%) 9.46
4.21
2.99
16.25
38.68
Cash flow adequacyratio (%) 180.69
152.00		 100.18
88.69
68.15
Cash reinvestment ratio (%) (0.58)
(0.95)
0.29
1.64
4.74
Leverage Operating leverage 4.30
(11.65)
(7.14)
18.63
4.74
Financial leverage 1.08
0.77
0.83
2.04
1.08
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%)
This year, due to increased market demand and cost control, both revenue and gross profit have increased
compared with last year. Related profitability indicators such as return on asset, return on equity, ratio of net
profit before tax to paid-in capital, profit ratio, and earnings per share have all increased significantly compared
with last year. The growth of operating activities has led to a substantial increase in net cash flows from
operating activities, leading to an increase in the cash flow ratio. The growth in revenue and net operating
income and the decrease in overall borrowing also increased the interest coverage ratio, while the operating
leverage and the financial leverage decreased.
In terms of investment activities, the Company’s capital expenditures increased due to the construction of
factories, fixed assets and related short-term payables increased, resulting in a decline in the ratio of long-term
capital to fixed assets and the current ratio, which also led to a decline in the cash flow adequacy ratio and an
increase in the cash reinvestment ratio.

This year, due to increased market demand and cost control, both revenue and gross profit have increased compared with last year. Related profitability indicators such as return on asset, return on equity, ratio of net profit before tax to paid-in capital, profit ratio, and earnings per share have all increased significantly compared with last year. The growth of operating activities has led to a substantial increase in net cash flows from operating activities, leading to an increase in the cash flow ratio. The growth in revenue and net operating income and the decrease in overall borrowing also increased the interest coverage ratio, while the operating leverage and the financial leverage decreased.

In terms of investment activities, the Company’s capital expenditures increased due to the construction of factories, fixed assets and related short-term payables increased, resulting in a decline in the ratio of long-term capital to fixed assets and the current ratio, which also led to a decline in the cash flow adequacy ratio and an increase in the cash reinvestment ratio.

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020.

Note2 : As of the date of publication of the annual report, there was no recent financial information audited (reviewed) by the accountants and it was not disclosed.

Note 3 : The calculation formula is listed at the end of this table.

  • 68 -

� 1-2 � Parent Company Only Financial Analysis

Item
�Note 3�		 Year�Note 1� Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years Financial Summary for The Last Five Years As of
March 31,
2021
�Note2�
2016 2017 2018 2019 2020
Financial
structure
�％�		 Debt Ratio 33.20
31.84
35.44
33.17
30.93




















Ratio of long-term capital to
property,plant and equipment		 282.80
304.37
279.78
315.96
334.94
Solvency
％		 Current ratio 96.86
107.48
96.39
119.70
110.24
Quick ratio 68.50
62.38
55.48
80.88
73.21
Times Interest Earned 18.04
(5.09)
(6.71)
2.66
21.91
Operating
performance		 Accounts receivable turnover
(times)		 6.04
5.88
6.39
5.60
5.30
Average collectionperiod 60.43
62.07
57.12
65.17
68.86
Inventoryturnover(times) 8.10
5.20
4.93
6.46
7.38
Accountspayable turnover(times) 7.66
7.25
9.44
10.57
9.62
Average days in sales 45.06
70.19
74.03
56.50
49.45
Property, plant and equipment
turnover(times)		 1.96
1.90
1.57
1.80
2.07
Total assets turnover(times) 0.49
0.46
0.43
0.45
0.49
Profitability Return on asset(%) 4.65
(1.25)		 (2.46) 1.06
6.18
Return on equity (%) 6.58
(2.20)		 (4.10) 1.07
8.74
Pre-tax income to paid-in capital
(%)		 9.43
(2.87)
(3.96)
1.17
10.29
Profit ratio(%) 8.99
(3.42)		 (6.30) 1.57
11.95
Earningsper share(NTD) 0.78
(0.25)		 (0.44) 0.11
0.97
Cash flow Cash flow ratio (%) 10.76
17.83
24.47
21.23
47.95
Cash flow adequacyratio (%) 145.18
136.63
110.51
106.15
118.34
Cash reinvestment ratio (%) (0.63)
0.34
1.96
1.85
4.05
Leverage Operating leverage 2.62
9.83
(26.70)
9.03
2.78
Financial leverage 1.06
1.37
0.51
1.66
1.07
Analysis of financial ratio differences for the last two years. (Not required if the difference does not exceed 20%)
This year, due to increased market demand and cost control, both revenue and gross profit have increased
compared with last year. Related profitability indicators such as return on asset, return on equity, ratio of net
profit before tax to paid-in capital, profit ratio, and earnings per share have all increased significantly
compared with last year. The growth of operating activities has led to a substantial increase in net cash flows
from operating activities, leading to an increase in the cash flow ratio. The growth in revenue and net operating
income and the decrease in overall borrowing also increased the interest coverage ratio, while the operating
leverage and the financial leverage decreased.
In terms of investment activities, the Company’s capital expenditures increased due to the construction of
factories,and the cash reinvestment ratio increased.

Note 1 : All financial statements have been audited by a certified public accountant from 2016 to 2020. Note 2 : As of the date of publication of the annual report, there was no recent financial information audited (reviewed) by the accountants and it was not disclosed. Note 3 : The calculation formula is listed at the end of this table. Calculation Formula

  • 69 -

  • Financial structure

  • (1) Debt ratio ＝ Total liabilities ／ Total assets

  • (2) Ratio of long-term capital to property, plant and equipment ＝� Total equity ＋ Non-current liabilities �／ property, plant and equipment, Net.

  • Solvency

  • (1) Current ratio ＝ Current assets ／ Current liabilities

  • － －

  • (2) Quick ratio ＝� Current assets Inventory Prepayments �／ Current liabilities

  • ＝

  • (3) Times Interest Earned Earnings before interest and taxes ／ total interest expense in the current period

  • Operating performance

  • (1) Accounts receivable turnover (including accounts receivable and notes receivable from operating) ＝ Net sales revenue ／ Balance of average accounts receivable in each period(including accounts receivable and notes receivable from operating)

  • (2) Average collection period ＝ 365 ／ Accounts receivable turnover

  • (3) Inventory turnover ＝ Cost of sales ／ Average Inventory

  • (4) Accounts payable turnover (including accounts payable and notes payable from operating) ＝ Cost of sales ／ Balance of average accounts payable in each period(including accounts payable and notes payable from operating)

  • (5) Average days in sales ＝ 365 ／ Inventory turnover

  • (6) Property, plant and equipment turnover ＝ Net sales revenue ／ Average net of Property, plant and equipment turnover

  • (7) Total assets turnover ＝ Net sales revenue ／ Average total assets

  • Profitability

  • －

  • (1) Return on asset ＝� post-tax profit or loss ＋ interest expense× � 1 tax rate ��／ Average total assets

  • ＝

  • (2) Return on equity Post-tax profit or loss ／ Average total equity

  • (3) Profit ratio ＝ Post-tax profit or loss ／ Net sales revenue

  • －

  • (4) Earnings per share ＝� Profit (loss), attributable to owners of parent preference dividends �／ Weighted average number of issued shares � Note5 �

  • Cash flow

  • (1) Cash flow ratio ＝ Net cash flows from (used in) operating activities ／ Current liabilities

  • ＝

  • (2) Cash flow adequacy ratio Net cash flows from (used in) operating activities in the last five years ／

    • (Capital expenditure ＋ Increase in Inventory ＋ cash dividends) in the last five years

  • ＝ －

  • (3) Cash reinvestment ratio (Net cash flows from (used in) operating activities cash dividends) ／ (Gross amount of Property, plant and equipment ＋ long-term investment ＋ other non-current assets ＋ Working capital) (Note6)

  • Leverage ：

  • ＝ －

  • (1) Operating leverage (Net sales revenue variable operating cost and expenses) ／ Operating income (Note7) 。

  • ＝ －

  • (2) Financial leverage Operating income ／ (Operating income interest expense)

Note 4 ： The formula for above earnings per share should pay special attention to the following matters when

measuring:

  • 1 � It is based on the weighted average number of ordinary shares, not based on the number of issued shares at the end of the year.

  • 2 � Where there is a capital increased by cash or a treasury share transaction , the weighted average number of shares shall be calculated during the period of circulation.

  • 3 � Where there are an earnings transferred to capital or a capital surplus transferred to capital, when

  • 70 -

calculating the earnings per share for previous years and semi-annual earnings per share, it should be adjusted retrospectively according to the proportion of capital increase, and there is no need to consider the issuance period of such capital increase.

  • 4 � If the special shares are non-convertible accumulation special shares, their current year dividends (whether distributed or not) shall be calculated by subtracting the after-tax net profit or increasing the after-tax net loss. If the special shares are non-cumulative, there are net profits after tax, the special share dividends shall be deducted from the net profit after tax; if there are losses that will not have to be adjusted.

Note 5 ： When measuring cash flow, special attention should be paid to the following items:

  • 1 � Net cash flow from operating activities refers to the net cash inflow from operating activities in the statement of cash flows

  • 2 � Capital expenditure refers to the number of cash outflows per year of capital investment.

  • 3 � The increase of inventories is only included when the balance in the end of period is greater than the balance in the beginning of period , and if the inventory at the end of the year decreases, it is calculated as zero.

  • 4 � Cash dividends include cash dividends from ordinary shares and special shares.

  • 5 � Gross amount of property, plant and equipment refers to the total amount of property, plant and equipment before deducting accumulated depreciation.

  • Note 6 ： The issuer should classify the various operating costs and operating expenses into fixed and variable categories. If there is an estimate or subjective judgment, the issuer should pay attention to its reasonableness and maintain consistency.

  • Note 7 ： If the company’s shares are no par value stocks or if the denomination of each share is not NT$10, the previous calculation of the ratio of Pre-tax income to paid-in capital was calculated based on the ratio of equity attributable to owners of parent in the balance sheet.

  • 71 -

6.3 Audit Committee’s Review Report on the 2020 Financial Statements

Audit Committee’s Review Report

The Board of Directors has perepared the Company’s 2020 Business Report, Financial Statements and the proposal for allocation of earnings. The CPA firm of Deloitte & Touche was retained to the audit the Company’s Financial Statement and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements and earnings allocation proposal have been reviewed and determined to be correct and accurated by the Audit Committee of the Company. Therefore, this report is presented in accordance with Article 14-4 of the “Securities and Exchange Act “and the Article 219 of the “Company Act”, please proceed to approve.

With kind regards

2021 The Shareholders’ Meeting of the Company

Lucky Cement Corporation

Convener of the Audit Committee: Chin-Cheng, Wang March 26, 2021

  • 72 -

6.4 2020 Parent Company Only Financial Statements

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders Lucky Cement Co.

Opinion

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

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis 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 Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matters of the financial statements for the year ended December 31, 2020 are as follows:

The Existence of Sales Revenue from Key Customers

The Company’s sales revenue mainly comes from merchandise sales of cement, stone materials and other cement subsidiary products. The amount of the sales revenue in 2020

  • �� -

arising from the new key customers or customers whose sales revenue increased over Performance Materiality is NT$634,069,000, as 19% of the total sales revenue. Since the sales revenue from key customers fluctuates and whether the revenue has truly occurred is the presumed significant risk of the ISA, the key audit matters are listed.

Please refer to Note 4 (11) of the financial statement for accounting policies of the revenue recognition; Note 22 (1) for the disclosure related to the revenue.

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

  1. Understood the internal control system of the sale of goods and assessed the design and effectiveness of the implementation of the internal control.

  2. Gained the summary of sales transactions of the key customers across the year, adjusted and ensured the completeness of related transactions. In addition, selecting the samples from the summary, and reviewing the evidence and vouchers to verify the existence of sales revenue.

  3. Obtained the post-period general ledger of sales revenue, inspecting whether significant sales return and allowance incurred, to ensure the accuracy of the revenue recognition.

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

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

  • �� -

statements.

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

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

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

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

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

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

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

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

  • �� -

independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Hai-Yueh Huang and Chao-Mei Chen.

Deloitte & Touche Taipei, Taiwan Republic of China March 26, 2021

Notice to Readers

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

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

  • �� -

LUCKY CEMENT CO.

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (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, 7 and 28)
Financial assets at fair value through other comprehensive income - current (Notes 4, 8 and 28)
Financial assets at amortized cost - current (Notes 4, 9 and 30)
Notes receivable (Notes 4, 10 and 22)
Notes receivable from related parties (Notes 4, 10, 22 and 29)
Accounts receivable (Notes 4, 10 and 22)
Accounts receivable from related parties (Notes 4, 10, 22 and 29)
Other receivables (Notes 4 and 10)
Other receivables from related parties (Notes 4 and 29)
Current tax assets (Note 24)
Inventories (Notes 4 and 11)
Prepayments (Note 12)

Total current assets

NON-CURRENT ASSETS
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 30)
Investments accounted for using the equity method (Notes 4 and 13)
Property, plant and equipment (Notes 4, 14, 29 and 30)
Right-of-use assets (Notes 4 and 15)
Deferred tax assets (Notes 4 and 24)
Refundable deposits (Note 29)
Other non-current assets (Note 16)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term borrowings (Notes 17 and 30)

Short-term bills payable (Notes 17 and 30)
Contract liabilities (Note 22)
Notes payable (Note 18)
Notes payable to related parties (Notes 18 and 29)
Accounts payable (Note 18)
Accounts payable to related parties (Notes 18 and 29)
Other payables (Note 19)
Other payables to related parties (Note 29)
Current income tax liabilities (Note 24)
Lease liabilities - current (Notes 4 and 15)
Current portion of long-term borrowings (Notes 17 and 30)
Other current liabilities

Total current liabilities

NON-CURRENT LIABILITIES
Long-term borrowings (Notes 17 and 30)
Deferred tax liabilities (Notes 4 and 24)
Lease liabilities - non-current (Notes 4 and 15)
Net defined benefit liabilities (Notes 4 and 20)
Guarantee deposits received

Total non-current liabilities

Total liabilities

EQUITY (Note 21)
Share capital
Common stock

Capital surplus

Retained earnings
Legal reserve
Special reserve
Unappropriated earnings

Total retained earnings

Other equity

Total equity

TOTAL
 2020
Amount
%
$ 256,364
4
6,290
-
28,213
1
72,155
1
487,705
7
26,948
-
74,085
1
18,868
-
13,670
-
61,398
1
-
-
381,467
6

147,367

2


1,574,530
23

14,703
-
164,062
3
2,980,403
44
1,586,499
24
73,400
1
96,040
1
175,506
3

76,914

1


5,167,527
77

$ 6,742,057
100

$ 150,000
2
99,941
1
342,967
5
115,973
2
32,635
1
142,921
2
20,006
-
169,913
3
9,290
-
20,722
-
33,548
1
290,000
4

361

-


1,428,277
21

540,000
8
20,663
-
40,475
1
23,294
-

32,503

1


656,935
10


2,085,212
31


4,047,380
60


9

-

170,899
3
14,135
-

419,967

6


605,001

9


4,455

-


4,656,845
69

$ 6,742,057
100
 2019








































































Amount
%
$ 165,724
3

980
-

15,962
-

90,165
1

413,731
6

59,119
1

92,559
2

64,786
1

87,240
1

59,595
1

17,519
-

365,885
6

146,520

2

1,579,785
24

19,465
-

106,908
2

2,649,638
41

1,628,604
25

115,920
2

102,042
2

174,728
3

88,469

1

4,885,774
76
$ 6,465,559
100
$ 226,700
3

99,820
2

267,633
4

128,089
2

30,823
-

70,584
1

32,138
-

105,252
2

4,060
-

1,201
-

42,993
1

310,000
5

464

-

1,319,757
20

670,000
10

23,792
-

74,069
1

26,481
1

30,600

1

824,942
13

2,144,699
33

4,047,380
63

8

-

166,309
3

17,256
-

85,901

1

269,466

4

4,006

-

4,320,860
67
$ 6,465,559
100

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

  • �� -

LUCKY CEMENT CO.

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

OPERATING REVENUES (Notes 4, 22 and 29)
Sales

Less: Discounts and allowances

Total operating revenues
OPERATING COSTS (Notes 11, 23 and 29)

GROSS PROFIT

OPERATING EXPENSES (Notes 10, 23 and 29)
Selling and marketing expenses
General and administrative expenses
Expected credit gain

Total operating expenses

OTHER OPERATING INCOME AND EXPENSES
(Note 23)

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES
(Notes 4, 8, 14, 23 and 29)
Interest income
Rental income
Other income
Gain on disposal of non-current assets held for sale
Foreign exchange gain
Fair value changes of financial assets
Other losses
Interest expense
Share of profit of loss of subsidiaries

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 24)

NET PROFIT FOR THE YEAR
 2020
Amount
%
$ 3,283,042
100
(893)

-

3,282,149
100
2,758,001
84

524,148
16

101,652
3
107,879
3
-

-

209,531

6

80

-

314,697
10

2,041
-
18,256
1
10,392
-
15,724
-
2,227
-
330
-
(8,823)
-
(19,921) (1)
81,622

3

101,848

3

416,545
13
(24,276)
(1)

392,269
12
 2019


































Amount
%
$ 2,931,465
100

(218)

-

2,931,247
100

2,686,386
92

244,861

8

99,093
3

78,048
3

(214)

-

176,927

6

4,120

-

72,054

2

2,932
-

18,886
1

9,437
-

-
-

1,896
-

124
-

(9,209)
-

(28,524) (1)

(20,313)
(1)

(24,771)
(1)

47,283
1

(1,378)

-

45,905

1
(Continued)
  • �� -

LUCKY CEMENT CO.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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:
Unrealized gain on investments in equity
instruments at fair value through other
comprehensive income
Remeasurement of a defined benefit plan (Note
20)
Share of the other comprehensive income/(loss) of
subsidiaries accounted for using the equity
method
Items that may be reclassified subsequently to profit
or loss:
Exchange differences on translating the financial
statements of foreign operations
Share of the other comprehensive income/(loss) of
subsidiaries accounted for using the equity
method

Other comprehensive income, net of income tax
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

EARNINGS PER SHARE (Note 25)
Basic
Diluted		 2020
Amount
%
2,114
-
3,172
-
(909)
-
25
-
24

-

4,426

-

$ 396,695
12

$ 0.97
$ 0.97		 2019








Amount
%

18,855
1

8,232
-

20,350
1

(210)
-

808

-

48,035

2
$ 93,940

3
$ 0.11
$ 0.11
$ $


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

  • �� -

LUCKY CEMENT CO.

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

Common Stock Capital Surplus
BALANCE AT JANUARY 1, 2019
$ 4,047,380
$ 8

Appropriation of 2018 earnings
Special reserve

-

-

Net profit for the year ended December 31, 2019
-
-
Other comprehensive income (loss) for the year ended December 31, 2019

-

-

Total comprehensive income (loss) for the year ended December 31, 2019

-

-

Disposal of investments in equity instruments designated as at fair value
through other comprehensive income (Note 21)

-

-

BALANCE AT DECEMBER 31, 2019

4,047,380

8

Appropriation of 2019 earnings
Legal reserve

-

-

Cash dividends distributed by Lucky Cement Co.

-

-

Special reserve

-

-

Net profit for the year ended December 31, 2020
-
-
Other comprehensive income (loss) 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 13)

-

1

Disposal of investments in equity instruments designated as at fair value
through other comprehensive income (Note 21)

-

-

BALANCE AT DECEMBER 31, 2020
$ 4,047,380
$ 9
 Retained Earnings
Legal Reserve Special Reserve
Unappropriated
Earnings
$ 166,309
$ 17,376
$ (1,032)


-

(120)

120

-
-
45,905

-

-

5,442


-

-

51,347


-

-

35,466


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
 Other Equity
Exchange
Differences on
Translating
Unrealized
Gain on
Financial Assets
at Fair Value
through Other
Foreign
Operations
Comprehensive
Income
$ 7,660
$ (10,781)


-

-

-
-

(210)

42,803


(210)

42,803


-

(35,466)


7,450

(3,444)


-

-


-

-


-

-

-
-

25

2,021


25

2,021


-

-


-

(1,597)

$ 7,475
$ (3,020)
 Total Equity
$ 4,226,920

-
45,905

48,035

93,940

-

4,320,860

-

(60,711)

-
392,269

4,426

396,695

1

-
$ 4,656,845

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

  • �� -

LUCKY CEMENT CO.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 property, plant and equipment
Share of (profit)/loss of subsidiaries accounted for using the equity
method
Gain on disposal of non-current assets held for sale
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
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

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES		 2020
$ 416,545

175,604
12,460
-
(330)
19,921
(2,041)
(3,720)
(80)
(81,622)
(15,724)
(4,980)
(73,974)

32,171
18,474
45,918
(65)
(7)
(15,582)
(847)
75,334
(12,116)
1,812
72,337
(12,132)
34,134
5,230
(103)

(15)

686,602
2,724
(20,151)

15,637


684,812
 2019
$ 47,283
218,882
11,750
(214)
(124)
28,524
(2,932)
(5,169)
(4,120)
20,313
-
-
(161,680)
(19,767)
(4,605)
(27,817)
170
62
100,082
21,095
68,300
29,841
(12,874)
(10,505)
8,481
12,668
2,513
(47)

(14,233)
305,877
2,947
(28,499)

(179)

280,146

(Continued)

  • 81 -

LUCKY CEMENT CO.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 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 other receivables
Increase in other receivables from related parties
Decrease in other receivables from related parties
Increase in refundable deposits
Decrease in refundable deposits
Increase in other non-current assets
Other dividends received
Proceeds from capital reduction of subsidiaries

Net cash (used in) generated from investing activities

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

Increase in guarantee deposits received
Repayment of the principal portion of lease liabilities
Cash dividends paid
Acquisition of subsidiary

Net cash used in financing activities

NET INCREASE IN CASH
CASH AT THE BEGINNING OF YEAR

CASH AT THE END OF YEAR
 2020
$ (39,081)

37,158
5,125
(39,144)
-
20,741
(46,361)
80
65,000
(1,800)
-
(778)
-
(17,775)
3,099

-


(13,736)

(76,700)

-
200,000
(350,000)
1,903
(44,926)
(60,711)
(250,002)

(580,436)

90,640

165,724

$ 256,364
 2019
$ (56,924)
143,479
-
-
15,066
-
(17,968)
4,120
-
-
10,650
-
876
(13,186)
58,076

1,593

145,782
(621,500)
(60,000)
320,000
-
1,368
(42,609)
-

-
(402,741)
23,187

142,537
$ 165,724

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

(Concluded)

  • 82 -

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Amounts in Thousands of New Taiwan Dollars, Unless Stated Otherwise)

LUCKY CEMENT CO.

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 financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 26, 2021.

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 Company’s accounting policies.

  • b. The IFRSs endorsed by the FSC for application starting from 2021
New IFRSs
Amendments to IFRS 4“Extension of the Temporary Exemption from
Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform- Phase 2”

Amendment to IFRS 16 “Covid-19 -Related Rent Concessions”
 Effective Date
Announced by IASB
Effective immediately upon
promulgation by the IASB
January 1, 2021
June 1, 2020

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

  • 83 -

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

New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments to IFRS 3 “Reference to the Conceptual Framework”

Amendments to IFRS 10 and IAS 28 “Sale or Contribution ofAssets
between an Investor and its Associate or Joint Venture”

IFRS 17 “Insurance Contracts”

Amendments to IFRS 17

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 16 “Property, Plant and Equipment- Proceeds
beforeIntended Use”

Amendments to IAS 37 “Onerous Contracts- Cost of Fulfilling a
Contract”
 Effective Date
Announced by IASB (Note 1)
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 4)
January 1, 2023 (Note 5)
January 1, 2022 (Note 6)
January 1, 2022 (Note 7)

  • 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 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 3: 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.

  • Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

  • Note 5: 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 6: 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 7: 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 financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

  • 84 -

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  • a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

  • b. Basis of preparation

The 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 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.

When preparing the Company’s financial statements, the Company accounts for its investments in subsidiaries by using the equity method. In order for the amounts of the net profit and other comprehensive income and equity for the year in the Company’s financial statements to be the same as the amounts attributable to the parent company in its consolidated financial statements, adjustments arising from the differences in the accounting treatment between the parent company only basis and the consolidated basis were made to the investments accounted for by the equity method, the share of other comprehensive income of subsidiaries and the related equity items, as appropriate, in the parent company only financial statements.

  • 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 Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period.

  • 85 -

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

d. 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 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.

e. Inventories

Inventories consist of raw materials, supplies and spare parts, finished goods and work-in-process 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. 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.

  • f. Investment in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution of earnings received. The Company also recognizes the changes in the Company’s share of equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investments and the fair value of the consideration paid or received.

When the Company’s share of losses of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses, if any.

  • 86 -

Profits or losses resulting from downstream transactions are eliminated in full only in the parent company’s financial statements. Profits and losses resulting from upstream transactions and transactions between subsidiaries are recognized only in the parent company’s financial statements only to the extent of interests in the subsidiaries that are not related to the Company.

  • 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 assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and right-of-use assets 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 Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cashgenerating 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.

j. Financial instruments

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

  • 87 -

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 equity instruments at FVTOCI.

i. Financial asset at FVTPL

Financial asset is classified as at FVTPL when such financial asset is mandatorily classified or designated 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 28.

  • 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, trade receivables and other 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.

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

  • 88 -

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 equity instruments at FVTOCI

On initial recognition, the Company 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.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’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 Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Company 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 Company 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 Company determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Company):

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

  • 89 -

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

The Company recognizes an 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.

c) Derecognition of financial assets

The Company 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. 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 that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

  • 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 Company 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 Company assesses whether the contract is, or contains, a lease.

  • 1) The Company as lessor

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

  • 90 -

2) The Company as lessee

The Company 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 Company uses the lessee’s incremental borrowing rate.

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 Company 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 balance sheets.

m. 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 costs, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs (including current service costs and past service cost) and net interest on the net defined benefit liability are recognized as employee benefits expense in the period they occur. 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.

The net defined benefit liability represents the actual deficit in the Company’s defined benefit plans.

  • n. Taxation

  • 91 -

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 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.

  • 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 Company 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 Company 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

  • 92 -

In the application of the Company’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 Company did not have critical accounting judgments and key sources of estimation uncertainty that need to be reported.

6. CASH

CASH
Cash on hand and revolving funds

Checking accounts and demand deposits
Foreign currency demand deposits

 December 31


2020
$ 1,114

255,105

145

$ 256,364
 2019
$ 1,139
163,644

941
$ 165,724

Market interest rate range for cash in banks at the end of the reporting period is as follows:

Bank deposits
 December 31
2020
2019
0.001%-0.35% 0.001%-0.33%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Current
Financial assets mandatorily classified as at FVTPL - mutual funds		 **December ** **31 **
2020

$ 6,290		 2019
$ 980
  • 93 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in Equity Instruments at FVTOCI

Investments in Equity Instruments at FVTOCI
Current
Domestic investments-common stock
Taiwan Cement Corp.
Far Eastern New Century Corporation
U-Ming Marine Transport Corporation
Winbond Electronics Corp.
United Microelectronics Corp.
Medigen Biotechnology Corp.
China Development Financial Holding
First Financial Holding Co., Ltd.
Capital Securities Corp.
Hua Nan Financial Holdings Co., Ltd.
Non-current
Domestic investments-common stock
Jonfeng Mining Co., Ltd.
WK Technology Fund
Global Securities Finance Corp.		 December 31





2020
$ 8,646

5,790
4,723
3,782
3,411
1,695
126
20
12

8

$ 28,213

$ 8,879

5,824

-

$ 14,703
 2019
$ 6
5,970
4,301
2,545
1,190
1,778
131
21
10

10
$ 15,962
$ 8,175
6,433

4,857
$ 19,465

For information on the above investments, refer to Note 34 Schedule 3 “Market Securities Held”.

For other relevant information on financial assets measured at FVTOCI, refer to Note 21(5) and Note 28.

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 Company’s strategy of holding these investments for long-term purposes.

Dividends of $3,720 thousand and $5,169 thousand were recognized in 2020 and 2019, respectively.

The Company received return of capital of $5,125 thousand when the invested company reduced capital in 2020.

  • 94 -

9. FINANCIAL ASSETS AT AMORTIZED COST

FINANCIAL ASSETS AT AMORTIZED COST
Current
Time deposits with original maturities of more than 3 months

Restricted assets


Non-current
Restricted assets
 December 31



2020
$ 7,155


65,000

$ 72,155

$ 164,062
 2019
$ 6,904

83,261
$ 90,165
$ 106,908

  • a. The interest rates of time deposits with original maturities of more than 3 months were approximately 2.35% and 2.65% per annum as of December 31, 2020 and 2019, respectively.

  • b. The restricted assets - current are savings deposits and certificate of deposit that are provided as guarantees for bank loan; market interest rate ranges were approximately 0.04%-0.56% and 0.04%0.81% per annum as of December 31, 2020 and 2019, respectively.

  • 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% and 0.13%-1.07% per annum as of December 31, 2020 and 2019, respectively.

  • d. Refer to Note 30 for information relating to investments in financial assets at amortized cost pledged as security.

10. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Notes receivable
At amortized cost
Gross carrying amount

Notes receivable from related parties
At amortized cost
Gross carrying amount

Trade receivables
At amortized cost
Gross carrying amount

Less: Allowance for impairment loss

 December 31 December 31




2020
$ 487,705

$ 26,948

$ 74,354


(269)

$ 74,085
 2019
$ 413,731
$ 59,119
$ 92,828

(269)
$ 92,559
(Continued)
  • 95 -
Trade receivables from related parties
At amortized cost
Gross carrying amount

Other receivables
Non-related parties
Sale of securities

Deposits
Other

 December 31



2020
2019
$ 18,868
$ 64,786
$ 12,816
$ 21,393
-
65,162

854

685
$ 13,670
$ 87,240
(Concluded)

a. Notes receivable

The average credit period of sales of goods is 90-150 days. No interest is charged on notes receivable. In order to minimize credit risk, the management of the Company 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 Company reviews the recoverable amount of each individual note receivable at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk was significantly reduced.

The Company applies the simplified approach under IFRS 9 to measure the loss allowance for notes receivable at an amount equal to lifetime ECLs. The expected credit losses on notes receivable 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. As the Company’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 Company’s different customer base. The expected created loss rate is based on the overdue days of the note receivable. However, the expected credit loss rate of the Company based on the provision matrix at the end of reporting period was zero because it did not recognize the expected credit losses of the notes receivable.

b. Trade receivables

The average credit period of sales of goods is 90-150 days. No interest is charged on trade receivables. In order to minimize credit risk, the management of the Company 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 Company 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 Company applies the simplified approach under IFRS 9 to 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.

  • 96 -

The Company’s provision matrixes are prepared by reference to the customer’s financial condition. The Group provides 100% loss allowance when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. Since there are various customer segments, the Company uses provision matrixes based on customer segments and determines the expected credit loss rate by reference to past due days of accounts receivable.

The Company writes off 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 Company 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 notes receivable, trade receivables, and overdue receivables based on the Company’s provision matrix.

December 31, 2020



Expected credit loss rate

Gross carrying amount

Loss allowance (Lifetime
ECLs)


Amortized cost

December 31, 2019


Expected credit loss rate

Gross carrying amount

Loss allowance (Lifetime
ECLs)


Amortized cost
 Not Past Due
w
-
$ 561,790


-

$ 561,790

Not Past Due
w
-
$ 506,290


-

$ 506,290
 Past due
ithin 30 Days
P
-
$ -


-

$ -

Past due
ithin 30 Days
P
-
$ -


-

$ -
 ast due 31 to
60 Days
P
-
$ -


-

$ -

ast due 31 to
60 Days
P
-
$ -


-

$ -
 ast due 61 to
180 Days
P
-
$ -


-

$ -

ast due 61 to
180 Days
P
-
$ -


-

$ -
 ast due Over
181 Days
Assessed
Individually
100%
100%
$ 269
$ -


(269)

-

$ -
$ -

ast due Over
181 Days
Assessed
Individually
100%
100%
$ 269
$ -


(269)

-

$ -
$ -
 Total
$ 562,059

(269)
$ 561,790
Total
$ 506,559

(269)
$ 506,290

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


Balance at January 1
Less: Net remeasurement of loss allowance
Balance at December 31		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2020
$ 269


-

$ 269
 2019
$ 483

(214)
$ 269

c. Other receivables

Other receivables mainly include proceeds from sales of securities and guarantee deposits. The Company adopted a policy of only dealing with high credit ratings 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 Company’s exposure and the credit ratings of its counterparties are continuously monitored.

The Company considers the current financial condition of debtors to determine the expected credit losses for debt instrument investments. As December 31, 2020 and 2019, the expected credit loss rate of other receivables was both 0%.

  • 97 -

11. INVENTORIES

INVENTORIES
Raw materials

Work in progress
Finished goods
Supplies and spare parts

 December 31


2020
$ 231,976

29,975
87,339

32,177

$ 381,467
 2019
$ 134,698
91,310
107,472

32,405
$ 365,885

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 was $2,758,001 thousand and $2,686,386 thousand, respectively.

12. PREPAYMENTS

PREPAYMENTS
Office supplies

Prepaid expenses
Prepayments for purchases of materials
Other

 December 31


2020
$ 105,243

33,147
8,918

59

$ 147,367
 2019
$ 103,704
37,871
4,837

108
$ 146,520

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investment in subsidiary
Domestic unlisted companies
Dasheng Enterprise Co., Ltd. (“Dasheng Enterprise”)

Luckicon Ready-mixed Concrete Factory Co., Ltd. (“Luckicon
Ready-mixed Co.”)
Lucky Cement Corp., Japan (“Lucky Cement Japan”)
Luckyship Marine Co., Ltd. (“Luckyship Co.”)
Just Bright Ltd.

 December 31 December 31


2020
$ 2,280,677

639,954
24,851
34,921
-

$ 2,980,403
 2019
$ 2,294,648
286,548
24,578
43,864
-
$ 2,649,638

The Company’s proportion of ownership and voting rights in the associates on the balance sheet date were as follows:

Dasheng Enterprise
Luckicon Ready-mixed Co.
Lucky Cement Japan
Luckyship Co.
Just Bright Ltd.		 December 31
2020
2019
99.99%
99.99%
100.00%
99.99%
100.00%
100.00%
99.99%
99.99%
100.00%
100.00%
  • 98 -

In the years 2020 and 2019, the share of profit (loss) of subsidiaries and the share of other comprehensive income of subsidiaries for using equity method were recognized based on audited financial statements for the same periods.

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.

In 2020 and 2019, the Company received cash dividends from the subsidiaries in the amounts of $0 and $52,907 thousand, respectively.

On December 27, 2019, the board of directors resolved to discontinue the operation of the subsidiary Just Bright Ltd.; the cancellation procedures are in progress.

Refer to Table 6 and Note 34 for more information on the investees.

14. PROPERTY, PLANT AND EQUIPMENT

Cost
Balance at January 1, 2020
Additions
Reclassification
Disposals

Balance at December 31,
2020

Accumulated depreciation
and impairment
Balance at January 1, 2020
Depreciation expense
Disposals

Balance at December 31,
2020

Carrying amount at
December 31, 2020

Cost
Balance at January 1, 2019
Additions
Disposals

Balance at December 31,
2019

Accumulated depreciation
and impairment
Balance at January 1, 2019
Depreciation expense
Disposals

Balance at December 31,
2019

Carrying amount at
December 31, 2019
 Land
$ 1,058,345
-
(5,017 )

-

$ 1,053,328

$ -
-

-

$ -

$ 1,053,328

$ 1,058,345
-

-

$ 1,058,345

$ -
-

-

$ -

$ 1,058,345
 Buildings
Machinery and
Equipment
$ 2,188,452 $ 6,055,683

-
1,379

-
5,098

-

-

$ 2,188,452
$ 6,062,160

$ 1,815,681 $ 5,930,396

52,240
44,450

-

-

$ 1,867,921
$ 5,974,846

$ 320,531
$ 87,314

$ 2,188,452 $ 6,044,503

-
11,180

-

-

$ 2,188,452
$ 6,055,683

$ 1,755,143 $ 5,852,736

60,538
77,660

-

-

$ 1,815,681
$ 5,930,396

$ 372,771
$ 125,287
 Electrical
Equipment
Transportation
Equipment
$ 1,196,322 $ 663,009

-
68,189

-
-

-

(38,316)

$ 1,196,322
$ 692,882

$ 1,178,305 $ 615,734

5,213
24,849

-

(38,316)

$ 1,183,518
$ 602,267

$ 12,804
$ 90,615

$ 1,196,322 $ 700,244

-
2,465

-

(39,700)

$ 1,196,322
$ 663,009

$ 1,170,392 $ 629,277

7,913
26,157

-

(39,700)

$ 1,178,305
$ 615,734

$ 18,017
$ 47,275
 Other
Equipment
$ 489,372

4,731

14,712

(995)

$ 507,820

$ 482,463

4,445

(995)

$ 485,913

$ 21,907

$ 485,832

4,323

(783)

$ 489,372

$ 480,383

2,863

(783)

$ 482,463

$ 6,909
 Total
$ 11,651,183

74,299

14,793

(39,311)
$ 11,700,964
$ 10,022,579

131,197

(39,311)
$ 10,114,465
$ 1,586,499
$ 11,673,698

17,968

(40,483)
$ 11,651,183
$ 9,887,931

175,131

(40,483)
$ 10,022,579
$ 1,628,604

a. Refer to Note 14 (b) for assets reclassified to non-current assets held for sale; some additions to machinery and equipment and other equipment were reclassifications from long-term prepaid expenses.

  • 99 -

  • 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 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.

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

  • d. The Company’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 3-10 years Office equipment 3-10 years

  • e. For the years ended December 31, 2020 and 2019, the Company evaluated impairment and concluded that the assets had no impairment loss.

  • f. Property, plant and equipment used by the Company and pledged as collateral for bank borrowings are set out in Note 30.

15. LEASE ARRANGEMENTS

  • a. Right-of-use assets
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
2020
$ 21,060

52,182

158

$ 73,400

For the Year Ended		 2019
$ 32,702
81,159

2,059
$ 115,920
December 31
2020
$ 1,887
$ 13,529
28,977

1,901
$ 44,407		 2019
$ 2,672
$ 12,833
29,017

1,901
$ 43,751
  • 100 -

b. Lease liabilities

c. Carrying amount
Current
Non-current
Range of discount rate for lease liabilities was as follows:
Land
Buildings
Transportation equipment
Other lease information

Expenses relating to short-term leases
Expenses relating to low-value asset leases
Interest on leases liabilities
Principal of lease liabilities
Total cash outflow for leases		 December 31

2020
$ 33,548

$ 40,475

December		 2019
$ 42,993
$ 74,069
31
2020
2019
1.55%-1.68%
1.55%
1.55%
1.55%
1.55%
1.55%
For the Year Ended December 31


2020
$ 373

567
1,408

44,926

$ 47,274
 2019
$ 476
341
1,999

42,609
$ 45,425

The Company’s leases of certain buildings qualify as short-term leases and leases of certain office equipment qualify as low-value asset leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

16. OTHER NON-CURRENT ASSETS

OTHER NON-CURRENT ASSETS
Long-term prepaid expenses
Prepayment for equipment
Net limestone mining rights		 December 31


2020

$ 55,200

2,940

18,774

$ 76,914
 2019
$ 69,690
-

18,779
$ 88,469
  • 101 -

17. BORROWINGS

a. Short-term borrowings

b. Secured borrowings (Note 30)
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, 2020
Guarantee/Promissory
Institution
Par Value
Discount
Amount
Commercial paper
Ta Ching Bills Finance
Corporation
$ 50,000
$ 18

Grand Bills Finance
Corporation

50,000

41

$ 100,000
$ 59
 December 31


2020
2019
$ -
$ 200,000

150,000

26,700
$ 150,000
$ 226,700
December 31
2020
2019
-
1.60%
1.25%-1.30%
1.465%
**December 31 **





2020
2019
$ 100,000
$ 100,000

(59)

(180)
$ 99,941
$ 99,820
Carrying
Amount
Interest Rate
$ 49,982
1.10%

49,959
1.28%
$ 99,941
  • 102 -

December 31, 2019

Guarantee/Promissory
Institution
Commercial paper
Ta Ching Bills Finance
Corporation

Grand Bills Finance
Corporation

 Par Value
$ 50,000


50,000

$ 100,000
 Discount
Amount
$ 126


54

$ 180
 Carrying
Amount
Interest Rate
$ 49,874
1.46%

49,946
1.64%
$ 99,820

For information on assets pledged as collateral of the short-term bills payable, refer to Note 30.

  • c. Long-term borrowings
December 31
2020
2019
Secured borrowings (Note 30)
Bank loans
$ 550,000
$ 750,000
Unsecured borrowings
Loans from bank
280,000
230,000
Less: Current portion
(290,000)
(310,000)
$ 540,000
$ 670,000
December 31
Details
2020
2019
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 Jan, Apr, Jul,
Oct) with $40 million each quarter and
the remaining $60 million payable on
maturity date. The repayment started
in July 2020.
$ 300,000 $ 500,000
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 2020 and
the balance payable in 7 quarters
(ending Feb, May, Aug, Nov) with $30
million each quarter.
250,000
250,000
(Continued)		 December 31 December 31
2020
2019
$ 300,000 $ 500,000
250,000
250,000
(Continued)
  • 103 -
Details
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 14, 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 June 14, 2019 to
July 14, 2020; the principal was paid
one time on maturity date.
O-Bank
The original loan period was from April
23, 2018 to April 23, 2020; the
principal was due on maturity date.
New borrowing contract with loan
period from March 23, 2020 to March
23, 2022 was signed for repayment of
previous debt.
KGI Bank
Revolving loan; credit period is from
September 7, 2020 to September 7,
2022.
KGI Bank
Revolving loan; credit period is from
September 7, 2020 to September 7,
2022.
KGI Bank
The loan period is from March 9, 2018 to
March 9, 2020; the principal was
repaid one time on maturity date.

Less: Current portions

Long-term borrowings
 December 31 December 31



2020
$ 50,000
50,000
-
80,000
50,000
50,000

-

830,000
(290,000)

$ 540,000
 2019
$ -

-

70,000

80,000

-

-
80,000

980,000
(310,000)
$ 670,000

The annual interest rates of long-term borrowings were 1.24%-1.70% and 1.40%-1.92% as of December 31, 2020 and 2019, respectively.

18. NOTES PAYABLE AND TRADE PAYABLES

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



2020
$ 115,973

$ 32,635

$ 142,921

$ 20,006
 2019
$ 128,089
$ 30,823
$ 70,584
$ 32,138
  • 104 -

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

19. OTHER PAYABLES

OTHER PAYABLES
Payables for salaries and bonuses

Payables for taxes
Payables for purchases of equipment
Payables for utilities expense
Others

 **December 31 **


2020

$ 74,124

32,698
30,878
18,190

14,023

$ 169,913
 2019
$ 36,300
40,996
-
15,050

12,906
$ 105,252

20. RETIREMENT BENEFIT PLANS

  • a. Defined contribution plan

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plan

The defined benefit plan adopted by the Company 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 contributes 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 Company 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 Company 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 Company has no right to influence the investment policy and strategy.

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

Present value of funded defined benefit obligation

Fair value of plan assets

Net defined benefit liabilities
 December 31 December 31


2020
$ 215,305

(192,011)

$ 23,294
 2019
$ 235,945
(209,464)
$ 26,481
  • 105 -

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, 2019 $ 247,654
 $ (198,708)
 $
48,946
Service costs
Current service costs 1,641 - 1,641
Net interest expense (income)
2,167
(1,746)
 421
Recognized in profit or loss
3,808
(1,746)
 2,062
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (8,055) (8,055)
Actuarial (gain) loss
Changes in financial assumptions 4,330 - 4,330
Experience adjustments
(4,507)
-
 (4,507)
Recognized in other comprehensive income
(177)
(8,055)
 (8,232)
Contributions from the employer
-
(16,295)
 (16,295)
Benefit paid
(15,340)
15,340
 -
Balance at December 31, 2019 $ 235,945
 $ (209,464)
 $
26,481
Balance at January 1, 2020 $ 235,945
 $ (209,464)
 $
26,481
Service costs
Current service costs 1,435 - 1,435
Net interest expense (income)
1,461
(1,301)
 160
Recognized in profit or loss
2,896
(1,301)
 1,595
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (7,248) (7,248)
Actuarial loss
Changes in financial assumptions 3,857 - 3,857
Experience adjustments
219
-
 219
Recognized in other comprehensive income
4,076
(7,248)
 (3,172)
Contributions from the employer
-
(1,610)
 (1,610)
Benefit paid
(27,612)
27,612
 -
Balance at December 31, 2020 $ 215,305
 $ (192,011)
 $
23,294

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
2020
$ 1,284
156

155
$ 1,595		 2019
$ 1,500
240

322
$ 2,062
  • 106 -

Through the defined benefit plans under the Labor Standards Act, the Company 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.

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
2020
2019
0.375%
0.625%
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



2020
$ (3,857)

$ 3,963

$ 3,858

$ (3,774)
 2019
$ (4,330)
$ 4,455
$ 4,345
$ (4,245)

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.


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 **
2020
$ 1,486

7.3 years		 2019
$ 1,712
7.6 years
  • 107 -

21. EQUITY

  • a. Share capital

Ordinary shares

Ordinary shares
Number of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 December 31



2020
498,646

$ 4,986,460

404,738

$ 4,047,380
 2019
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
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 13)
May be used only to offset a deficit
Changes in percentage of ownership interests in subsidiaries		 December 31


2020
$ 1


8

$ 9
 2019
$ -

8
$ 8

  • 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).

  • 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

  • 108 -

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 make appropriation to a reserve based on financial statements audited or reviewed by an independent accountant.

The Company’s Articles stipulate that in the allocation of annual earnings, the Company 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 23 (h), 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 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. 1010012865, Letter No. Jin-Kuang-Fa-Tzi No. 1010047490 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.

In their meeting on June 12, 2019, the Company’s shareholders adopted a loss recovery plan for 2018 and there was no distribution of dividends.

On November 12, 2019, the Company’s board of directors decided not to distribute dividends from the first half of 2019.

The appropriations of 2019 earnings have been resolved in the board of directors’ meeting held on March 24, 2020 and approved in the shareholders’ meeting held on June 18, 2020. The appropriation of earnings and dividend per share were as follows:

Appropriation Appropriation Dividend Per
of Earnings Share
Legal reserve $
4,590
Special reserve (3,121)
Cash dividends 60,711 $0.15

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.

  • 109 -

The appropriation of earnings and dividend per share for 2020 that were approved in the board of directors’ meeting on March 26, 2021 were as follows:

Appropriation Appropriation Dividend Per
of Earnings Share
Legal reserve $
39,625
Cash dividends 283,317 $0.70

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 16, 2021.

  • d. Special reserve
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


2020
$ 17,256


(3,121)

$ 14,135
 2019
$ 17,376

(120)
$ 17,256

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

  • 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


2020
$ 7,450


25

$ 7,475
 2019
$ 7,660

(210)
$ 7,450
  • 2) Unrealized valuation gain (loss) on financial assets at FVTOCI

Balance at January 1
Recognized for the year
Unrealized gain (loss) - equity instruments
Share from subsidiaries accounted for using the equity
method
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




2020
$ (3,444)

2,114

(93)


2,021


(1,597)

$ (3,020)
 2019
$ (10,781)
18,855

23,948

42,803
(35,466)
$ (3,444)
  • 110 -

22. REVENUE

a. Segmentation of customer contract revenue


Cement

Stone materials
Others

 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31


2020
$ 2,211,093

643,862
427,194

$ 3,282,149
 2019
$ 1,941,630
559,145

430,472
$ 2,931,247
  • b. Balance of assets and liabilities related to the sales contracts
December 31, December 31, December 31, December 31,
2020 2019 January 1, 2019
Notes receivable (Note 10) $ 487,705
 $ 413,731 $ 252,051
Notes receivable from related parties
(Note 10) $ 26,948
 $ 59,119 $ 39,352
Trade receivables (Note 10) $ 74,085
 $ 92,559 $ 87,740
Trade receivables from related parties
(Note 10) $ 18,868
 $ 64,786 $ 36,969
Contract liability
Cement sales $ 342,967
 $ 267,633 $ 199,333

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 as follows:



Contract liability at the beginning of the year

Cement sales
 For the Year Ended For the Year Ended December 31


2020
$ 267,633
 2019
$ 199,333

23. NET PROFIT

a. Other operating income and expenses

Other operating income and expenses

Gains on disposals of property, plant and equipment		 For the Year Ended December 31
2020
$ 80		 2019
$ 4,120
  • 111 -

b. Interest income


Bank deposits
c. Other income

Revenue from dividends
Others
d. Other expenses

Depreciation of leased assets
Others
e. Interest expense

Bank loan
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
2020
$ 2,041
For the Year Ended		 2019
$ 2,932
December 31
2020
$ 3,720

6,672
$ 10,392
For the Year Ended		 2019
$ 5,169

4,268
$ 9,437
December 31
2020
$ 6,150

2,673
$ 8,823
For the Year Ended		 2019
$ 6,207

3,002
$ 9,209
December 31
2020
$ 18,513

1,408
$ 19,921
For the Year Ended		 2019
$ 26,525

1,999
$ 28,524
December 31





2020
$ 131,197

44,407
12,455

5

$ 188,064

$ 124,805

44,649

6,150

$ 175,604

 2019
$ 175,131
43,751
11,748

2
$ 230,632
$ 168,142
44,533

6,207
$ 218,882
(Continued)
  • 112 -

Amortization by function
Operating costs

Operating expenses


Depletion by function
Operating costs
 For the Year Ended For the Year Ended December 31



2020
2019
$ 6,236
$ 5,240

6,219

6,508
$ 12,455
$ 11,748
$ 5
$ 2
(Concluded)

g. Employee benefits expense

Employee benefits expense

Post-employment benefits
Defined contribution plan

Defined benefit plan

Salary expenses
Labor and health insurance costs
Other employee benefits

Total employee benefits expense

An analysis of employee benefits expense by function
Operating costs

Operating expenses

 **For the Year Ended ** **December 31 **






2020
$ 8,070


1,595

9,665
254,538
22,448

15,256

$ 301,907

$ 188,995


112,912

$ 301,907
 2019
$ 7,766

2,062
9,828
216,107
22,973

14,177
$ 263,085
$ 182,123

80,962
$ 263,085
  • h. Compensation of employees and remuneration of directors

The Company shall appropriate 3% and not less than 5% of the profit before 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, 2020 and 2019 are estimated as follows:

Accrual rate

Accrual rate

Compensation of employees
Remuneration of directors		 For the Year Ended December 31
2020
2019
3%
3%
5%
5%
  • 113 -

Amount

Amount

Compensation of employees
Remuneration of directors		 For the Year Ended December 31
2020
2019
Cash
Cash
$ 13,583
$ 1,542
22,638
2,570

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, 2019 and 2018.

Information on compensation of employees and remuneration of directors resolved by the Company’s board of directors in 2020 and 2019 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


2020
$ 2,745


(518)

$ 2,227
 2019
$ 3,665

(1,769)
$ 1,896

24. INCOME TAXES

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

Major components of income tax expense are as follows:

Major components of income tax expense are as follows:

Current tax
In respect of the current year
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



2020
$ 21,396


7

21,403

2,873

$ 24,276
 2019
$ 1,380

(2)
1,378

-
$ 1,378
  • 114 -

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
Land value increment tax
Unrecognized deductible temporary differences and loss
carryforwards
Tax-exempt income
Basic tax payable difference
Adjustments for prior years’ tax

Income tax expense recognized in profit or loss
 For the Year Ended For the Year Ended December 31



2020
$ 416,545

$ 83,309

(20,218)
565
(35,497)
(3,890)
-

7

$ 24,276
 2019
$ 47,283
$ 9,457
2,240
-
(8,262)
(3,435)
1,380

(2)
$ 1,378

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

b. Current tax assets and liabilities

Current tax assets and liabilities
Current tax assets
Tax refund receivable
Current tax liabilities
Income tax payable		 December 31
2020
$ -
$ 20,722		 2019
$ 17,519
$ 1,201

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2020

For the year ended December 31, 2020
Opening Recognized in
Balance Profit or Loss Closing Balance
Deferred tax assets
Temporary differences
Pension limit exceeded $ 13,174 $ (3) $ 13,171
Investment loss under equity method 57,295 4,528 61,823
Unrealized inventory valuation loss 13,935 (196) 13,739
Impairment loss on financial assets at
FVTOCI 4,700 - 4,700
(Continued)
  • 115 -
Gross profit from advance receipts with an
issued bill of lading

Unrealized foreign exchange loss

Tax loss


Deferred tax liabilities
Temporary differences
Accelerated depreciation of fixed assets

Unrealized foreign exchange gain


For the year ended December 31, 2019
Deferred tax assets
Temporary differences
Pension limit exceeded

Investment loss under equity method
Unrealized inventory valuation loss
Impairment loss on financial assets at
FVTOCI
Gross profit from advance receipts with an
issued bill of lading
Unrealized foreign exchange loss

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
$ 2,102
$ 505
$ 2,607

2

(2)

-
91,208
4,832
96,040

10,834

(10,834)

-
$ 102,042
$ (6,002)
$ 96,040
$ 23,792
$ (3,162)
$ 20,630

-

33

33
$ 23,792
$ (3,129)
$ 20,663
(Concluded)
Opening
Balance
Recognized in
Profit or Loss Closing Balance
$ 16,050
$ (2,876)
$ 13,174
43,100
14,195
57,295
15,547
(1,612)
13,935
4,700
-
4,700
387
1,715
2,102

(27)

29

2
79,757
11,451
91,208

32,384

(21,550)

10,834
$ 112,141
$ (10,099)
$ 102,042
$ 33,847
$ (10,055)
$ 23,792

44

(44)

-
$ 33,891
$ (10,099)
$ 23,792
  • d. Income tax assessments

The income tax returns of the Company through 2018 have been assessed by the tax authorities and there is no significant difference between the reported amounts and the assessed amounts.

  • 116 -

25. 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

Net profit for the year

Earnings Per Share

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
2020
2019
$ 392,269
$ 45,905
(In Thousands of Shares)
For the Year Ended December 31
2020
404,738

1,131
405,869		 2019
404,738

184
404,922

The Company may settle the compensation of employees in cash or shares; therefore, the Company 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.

26. CASH FLOW INFORMATION

a. Partial cash transactions

The Company entered into the following partial cash investing activities for the years ended December 31, 2020 and 2019:


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


2020
$ 28,581


8,577

$ 37,158
 2019
$ 164,872

(21,393)
$ 143,479
(Continued)
  • 117 -

For the Year Ended December 31

Partial cash payments for purchase of PP&E
Acquisition of property, plant and equipment

Net changes in prepayment for equipment
Net changes in payable for purchase of land (reported as notes
payable)

Cash paid

Partial cash generated from dividends income
Dividend income

Net changes in dividends receivable (reported as other
receivables)

Cash received
 2020
2019
$ 74,299
$ 17,968
2,940
-

(30,878)

-
$ 46,361
$ 17,968
$ 3,720
$ 5,393

(621)

-
$ 3,099
$ 5,393
(Concluded)
  • b. Changes in liabilities arising from financing activities

For the year ended December 31, 2020

Short-term borrowings

Short-term bills payable
Long-term borrowings
Guarantee deposits received
Lease liabilities

 Balance at
January 1,
2020

$ 226,700
99,820
980,000
30,600

117,062

$ 1,454,182
 Cash Flows
$ (76,700)

-

(150,000)

1,903

(44,926)

$ (269,723)
 Non-cash Changes
Balance at
New Lease
Discount
Amortization
December 31,
2020
$ - $ - $ 150,000

-
121
99,941

-
-
830,000

-
-
32,503

1,887

-

74,023
$ 1,887
$ 121
$ 1,186,467






For the year ended December 31, 2019

Short-term borrowings

Short-term bills payable
Long-term borrowings
Guarantee deposits received
Lease liabilities

 Balance at
January 1,
2019

$ 848,200
159,912
660,000
29,232

156,999

$ 1,854,343
 Cash Flows
$ (621,500)

(60,000)

320,000

1,368

(42,609)

$ (402,741)
 Non-cash Changes
Balance at
New Lease
Discount
Amortization
December 31,
2019
$ - $ - $ 226,700

-
(92)
99,820

-
-
980,000

-
-
30,600

2,672

-

117,062
$ 2,672
$ (92)
$ 1,454,182






27. CAPITAL MANAGEMENT

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

  • 118 -

28. 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 asset and financial liability 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, 2020

Financial assets at FVTPL
Mutual funds

Financial assets at FVTOCI
Investments in equity
instruments
Listed shares and emerging
market shares

Unlisted shares


December 31, 2019
Financial assets at FVTPL
Mutual funds

Financial assets at FVTOCI
Investments in equity
instruments
Listed shares and emerging
market shares

Unlisted shares

 Level 1
$ 6,290

$ 28,213

-

$ 28,213

Level 1
$ 980

$ 15,962

-

$ 15,962
 Level 2
$ -

$ -

-

$ -

Level 2
$ -

$ -

-

$ -
 Level 3
$ -

$ -

14,703

$ 14,703

Level 3
$ -

$ -

19,465

$ 19,465
 Total
$ 6,290
$ 28,213

14,703
$ 42,916
Total
$ 980
$ 15,962

19,465
$ 35,427

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

  • 119 -

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


Balance at January 1
Purchases
Return of shares after capital reduction
Sale/settlements
Recognized in other comprehensive income (included in
unrealized valuation (loss) gain on financial assets at
FVTOCI)
Balance at December 31		 Financial Assets at FVTOCI -
Equity Instruments		 Financial Assets at FVTOCI -
Equity Instruments		 Financial Assets at FVTOCI -
Equity Instruments
For the Year Ended December 31


2020
$ 19,465

4,232
(5,125)
(326)

(3,543)

$ 14,703
 2019
$ 18,702
-
-
-

763
$ 19,465
  • 3) Valuation techniques and inputs applied for Level 3 fair value measurement

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.

  • c. Categories of financial instruments
Categories of financial instruments
Financial assets
FVTPL
Mandatorily classified as at FVTPL

Financial assets at amortized cost (1)
Financial assets at FVTOCI
Equity instruments
Financial liabilities
FVTPL
Amortized cost (2)		 December 31
2020
2019
$ 6,290
$ 980
1,350,761
1,314,555
42,916
35,427
1,496,360
1,633,340

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

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

  • 120 -

d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, trade receivables, trade payables, borrowings and lease liabilities. The Company’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 Company 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 Company’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 Company and the management and measurement of the exposure have not changed.

a) Foreign currency risk

For the carrying amounts of monetary assets denominated in foreign currencies on the balance sheet date, refer to Note 33.

Sensitivity analysis

The Company is mainly exposed to the USD and RMB.

The following table shows the sensitivity analysis of the Company 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 Company; the management believes it is the reasonably acceptable range of fluctuation of foreign currency rate. The negative amounts on the table below indicate a decrease in pre-tax income when the New Taiwan dollar strengthens by 5% relative to the relevant currency.

Profit or loss
 USD Impact
For the Year Ended
December 31
2020
2019
$ (6)
$ (46)
 RMB Impact
For the Year Ended
**December 31 **
2020
2019
$ (359)
$ (347)

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

b) Interest rate risk

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


to interest rates at the end of the year were as follows:

Cash flow interest rate risk
Financial assets

Financial liabilities		 December 31
2020
2019


$ 379,393
$ 342,062
1,079,941
1,306,520
  • 121 -

Sensitivity analysis

The following sensitivity analysis shows the effect of a 25 basis points change in interest rates of non-derivative instruments at the balance sheet date. The 25 basis points 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 2020 and 2019 would have decreased/increased by $1,751 thousand and $2,411 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 Company. At the end of the year, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Company, could be equal to the total assets shown on the balance sheets.

The policy of the Company is to only trade with counterparties with high reputation, and to require sufficient guarantee to reduce the financial loss from default.

The following table shows the maximum exposure to endorsement made by the Company:

Off-balance sheet commitments
and guarantee
Endorsement for subsidiary
 December 31 December 31
2020
Carrying
Amount
Largest
Exposed
Amount
$ - $ 1,003,815		 2019
Carrying
Amount
Largest
Exposed
Amount
$ - $ 703,800

As of December 31, 2020 and 2019, receivable accounts that each has a balance that represents 5% or higher of total receivables, when accumulated account for 42.15% and 45.95%, respectively, of total receivables.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash deemed adequate to finance the Company’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.

  • 122 -

The Company relies on bank borrowings as a significant source of liquidity. The Company 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 Company’s remaining contractual maturities for its nonderivative 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 Company is required to pay.

December 31, 2020

Weighted-
average
Effective
Interest Rate
(%)
Non-interest bearing
liabilities

Lease liabilities
1.55-1.68
Variable interest rate
liabilities
1.50

 On Demand
or Less than
1 Month
$ 156,920
7,858

289,941

$ 454,719
 1-3 Months
$ 226,591

2,443

40,000

$ 269,034
 3 Months to
1 Year
$ 15,458

24,567

210,000

$ 250,025
 1-5 Years
$ 750

41,458

540,000

$ 582,208
 5+ Years
$ 16,700

-

-
$ 16,700

December 31, 2019

Weighted-
average
Effective
Interest Rate
(%)
Non-interest bearing
liabilities

Lease liabilities
1.55
Variable interest rate
liabilities
1.79

 On Demand
or Less than
1 Month
$ 142,446
8,233

49,946

$ 200,625
 1-3 Months
$ 148,765


3,036

49,874

$ 201,675
 3 Months to
1 Year
$ 14,582


33,065

536,700

$ 584,347
 1-5 Years
$ 257


75,246

670,000

$ 745,503
 5+ Years
$ 18,200

-

-
$ 18,200

b) Financing facilities

Unsecured facilities
Amount used

Amount unused


Secured facilities
Amount used

Amount unused




December 31 December 31
2020
$ 491,543

160,665

$ 652,208

$ 650,000

1,424,800

$ 2,074,800
 2019
$ 410,000
625,896
$ 1,035,896
$ 896,700
793,100
$ 1,689,800
  • 123 -

29. TRANSACTIONS WITH RELATED PARTIES

a. Related party name and category

Besides information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed as follows.

Related Party Name Related Party Category Subsidiary Dasheng Enterprise Subsidiary of the Company Luckicon Ready-mixed Co. Subsidiary of the Company Lucky Cement Japan Subsidiary of the Company Luckyship Co. Subsidiary of the Company Fuyu Development Co., Ltd. Subsidiary of Luckicon Ready-mixed Co. Other related party Yung-Sheng Development Enterprise Co., Ltd. The chairman is also the chairman of the (“Yung-Sheng Development”) Company Liang-Chuan Cultural and Educational The chairman is also the chairman of the - Foundation (“Liang Chuan Foundation”) Company Fudong Freight Co., Ltd. (“Fudong Freight”) The chairman is first-degree relative of the chairman of the Company East Life Biotech Co., Ltd. (“East Life Biotech”) The chairman is also the Company the chairman of the Company Jia Fu Entertainment Co., Ltd. (“Jia Fu The chairman is first-degree relative of the Entertainment”) chairman of the Company Wantong Product Insurance Brokerage Co., Ltd. The chairman is first-degree relative of the (“Wantong Product Insurance”) chairman of the Company Lucky Construction Co., Ltd. (“Lucky The chairman is first-degree relative of the Construction”) chairman of the Company Kuochuan Development Co., Ltd. (“Kuochuan The chairman is first-degree relative of the Development”) chairman of the Company Changheng Investment Co. (“Changheng The company is major shareholder of the Investment”) Company Jinli Investment Co., Ltd. (“Jinli Investment”) The company is major shareholder of the Company Fuan Mining Co., Ltd. (“Fuan Mining”) A manger in the company is spouse of a firstdegree relative of the chairman of the Company

b. Business transaction


Line Item
Related Party Name

Sale of goods
Subsidiary

Other related parties





Purchases of goods
Fuan Mining

Subsidiary
Other related parties




 For the Year Ended December 31
2020
$ 605,122


905

$ 606,027

$ 297,363

1,598

41,671

$ 340,632

For the Year Ended		 2019
$ 641,814

7
$ 641,821
$ 253,837
2,861

39,682
$ 296,380
(Continued)
December 31
  • 124 -
Line Item
Related Party Name

Operating costs -
Subsidiary

transportation expenses
Other related parties





Operating costs -
Other related parties

manufacturing expenses


Operating expenses
Other related parties


Non-operating income - other
revenue
Other related parties
 2020
$ 19,248


46,730

$ 65,978

$ 307

$ 2,698

$ 1,200
 2019
$ 7,523

15,713
$ 23,236
$ -
$ 2,599
$ 1,200

(Concluded)

The prices of purchases and sales between the Company 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
Luckicon Ready-mixed Co.

Subsidiary
Other related parties





Trade receivables
Luckicon Ready-mixed Co.


Other payables - current
Subsidiary

(excluding loan from related Other related parties

parties)


 December 31 December 31






2020
$ 26,948

-

-

$ 26,948

$ 18,868

$ 147


6

$ 153
 2019
$ 58,913
7

199
$ 59,119
$ 64,786
$ 130

16
$ 146

The outstanding trade receivables from related parties are unsecured. As of December 31, 2020 and 2019, no impairment losses were recognized for trade receivables from related parties.

d. Payables to related parties

Line Item
Related Party Name

Notes payable
Fuan Mining

Other related parties
Subsidiary



 December 31 December 31


2020
$ 23,763

7,833

1,039

$ 32,635
 2019
$ 28,810
2,000

13
$ 30,823
(Continued)

December 31

  • 125 -
Line Item
Related Party Name

Trade payables
Fuan Mining

Other related parties





Other payables
Subsidiary

Other related parties



 2020
2019
$ 16,876
$ 26,000

3,130

6,138
$ 20,006
$ 32,138
$ 1,001
$ 2,779

8,289

1,281
$ 9,290
$ 4,060
(Concluded)

The outstanding trade payables to related parties are unsecured.

  • e. Contract liabilities
Contract liabilities
Related Party Name
Subsidiary
 December 31
2020
$ 9,872
f. Refundable deposits
Related Party Name
Dasheng Enterprise
 December 31
2020
$ 159,000
 2019
$ 159,000


Acquisition of property, plant and equipment

Related Party Name
Subsidiary
For the Year Ended December 31
2020
$ 680
 2019
$ -
Subsidiary $ 9,872
 $ 8,201
f. Refundable deposits
December 31
Related Party Name 2020 2019
Dasheng Enterprise $ 159,000
 $ 159,000
  • g. Acquisition of property, plant and equipment

The Company purchased transportation equipment from its subsidiary, and the purchase price was negotiated.

  • h. Lease arrangements

  • Lease arrangements the Company is lessor under operating leases

Future lease payments receivable are as follows:

Related Party Name
Fuyu Development

Fudong Freight
Subsidiary
Other related parties

 December 31 December 31


2020
$ 8,136

1,968
1,891

144

$ 12,139
 2019
$ 8,060
2,323
1,861

132
$ 12,376
  • 126 -

Lease income was as follows:

Lease income was as follows:

Related Party Name
Fuyu Development

Fudong Freight
Subsidiary
Other related parties

 For the Year Ended December 31


2020
$ 8,060

2,323
1,861

132

$ 12,376
 2019
$ 8,060
2,274
1,861

132
$ 12,327

The rental amounts and collection methods are negotiated.

  • i. Loans from related parties (including interest receivable)
Line Item
Related Party Name

Other receivables related
Dasheng Enterprise

parties
Luckyship Co.





Interest revenue
Subsidiary
 December 31 December 31



2020
$ 61,236


9

$ 61,245

$ 948
 2019
$ 47,433

12,016
$ 59,449
$ 1,449

The Company provides loans to its subsidiaries. The interest rate ranges were 1.68%-1.91% and 1.79%1.88% in 2020 and 2019, respectively.

  • j. Endorsement guarantee
Related Party Name

Endorsement guarantee for
others
Subsidiary

Remunerations of key management personnel

Type of Remuneration
Short-term employee benefits

Post-employment benefits

 December 31 December 31 December 31
2020
2019
$ 1,003,815
$ 703,800
**For the Year Ended December 31 **


2020
$ 38,641


429

$ 39,070
 2019
$ 16,752

386
$ 17,138
  • k. Remunerations of key management personnel

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

  • 127 -

30. ASSETS PLEDGED AS COLLATERAL

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

Property, plant and equipment - long-term guarantee

Restricted assets (reported as financial assets at amortized cost -
current)
Short-term guarantee
Restricted assets (reported as financial assets at amortized cost - non-
current)
Mining rights guarantee

 December 31 December 31


2020
$ 732,873

65,000

164,062

$ 961,935
 2019
$ 745,001
83,261

106,908
$ 935,170

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

  • a. As of December 31, 2020, the Company has signed a contract for purchase of transportation equipment; the unpaid amount is $270,705 thousand.

  • b. As of December 31, 2020 and 2019, unused letters of credit for purchases of raw materials amounted to approximately $61,543 thousand and $0, respectively.

32. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD: NONE

33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than the functional currency of the Company 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, 2020

December 31, 2020
Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD
$		 5 28.48 (USD:NTD)
$		 129
RMB 1,641 4.3770 (RMB:NTD) 7,181
JPY 26 0.2763 (JPY:NTD) 7
Non-monetary items - investments
accounted for using equity method
JPY 89,942 0.2763 (JPY:NTD) 24,851
  • 128 -

December 31, 2019

December 31, 2019
Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD
$		 31 29.98 (USD:NTD)
$		 925
RMB 1,610 4.3050(RMB:NTD) 6,930
JPY 26 0.276 (JPY:NTD) 7
Non-monetary items - investments
accounted for using equity method
JPY 89,051 0.276 (JPY:NTD) 24,578

Foreign exchange gains (realized and unrealized) of the Company in 2020 and 2019 were $2,227 thousand and $1,896 thousand, respectively. Because of the variety of foreign currency transactions, it is not practical to disclose exchange gains and losses by foreign currency.

34. 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;

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: Please see Table 4 attached;

  • 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 5 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;

  • b. Information on investees: Please see Table 6 attached.

  • 129 -

  • 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.

  • 130 -

TABLE 1

LUCKY CEMENT CO.

FINANCINGS PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (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		 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
Marine Co.
Lucky Cement
Corp., Japan		 Other receivables
from related
parties
Other receivables
from related
parties
Other receivables
from related
parties		 $ 200,000
30,000
30,000		 Yes
Yes
Yes

$ 200,000
20,000
-
$ 220,000		 $ 61,150

-
-		 1.6798%
1.6798%
-		 b.
b.
b.		 $ -
-
-		 Operating
turnover
Operating
turnover
Operating
turnover		 $ -
-
-		 -
-
-		 -
-
-		 $ 465,685
465,685
465,685		 $ 1,862,738

1,862,738

1,862,738
1 Luckicon
Ready-mixed
Co.,		 Dasheng
Enterprise		 Other receivables
from related
parties		 20,000 Yes $ -
-		 - b. - Operating
turnover		 - - - 128,115
256,229

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. Financing of Luckicon Ready-mixed Co. should not be more than 20% of net value 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.

  • 131 -

TABLE 2

LUCKY CEMENT CO.

ENDORSEMENT/GUARANTEE PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (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.
Luckyship Marine
Co.
Lucky Cement Corp.,
Japan		 Subsidiary
Subsidiary
Subsidiary

Subsidiary		 $ 1,862,738
1,862,738
1,862,738
1,862,738		 $ 620,000

370,000

45,000

14,115



$ 620,000

370,000

-

13,815
$ 1,003,815		 $ 590,000

135,000

-
-		 $ 120,000
(Note 3)

-

-
-		 13.31%
7.95%
-
0.30%		 $ 2,328,423
2,328,423
2,328,423
2,328,423		 Y
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$60,000,000 thousand is provided as collateral which is recognized as financial assets at amortized cost - restricted asset.

  • 132 -

TABLE 3

LUCKY CEMENT CO.

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Holding Company Name Marketable Securities Type and Name Relationship with
the Company		 Financial Statement Account December 31, 2020 December 31, 2020 Note
Shares/Units Carrying Value
(%)		 Fair Value
(Notes 1 and 2)
Lucky Cement Co.
Luckyship Marine Co.
Luckicon Ready-mixed Co.		 Fund
FSITC Global Vedio Gaming & eSports Fund
O-Bank No.1 Real Estate Investment Trust
Non-listed common stock
Jonfeng Mining Co., Ltd
WK Technology Fund
Listed common stock
Taiwan Cement Corp.
Far Eastern New Century Corporation
U-Ming Marine Transport Corporation
Winbond Electronics Corp.
United Microelectronics Corporation
Excelsior Medical 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
TSG Phnom Penh Real Estate Development Fund
Corporate bond
The Cathay United Jenai EMC USD Fixed Interest Allocation Bond		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTOCI - noncurrent
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 - noncurrent
Financial assets at FVTPL - current
Financial assets at FVTPL - noncurrent
Financial assets at FVTOCI - current		 500,000
100,000
1,494,708
1,156,000
200,148
200,000
128,000
130,181
72,351
28,628
13,496
917
875
446

49,007
500,000

500
-		 $ 5,320
970
8,879
5,824
8,646
5,790
4,723
3,782
3,411
1,695
126
20
12
8
291
5,006
8,734
5,913		 -
-
10.58
2.22
-
-
0.02
-
-
0.02
-
-
-
-
0.35
-
6.10
-		 $ 5,320
970
8,879
5,824
8,646
5,790
4,723
3,782
3,411
1,695
126
20
12
8
291
5,006
8,734
5,913

Note 1: Financial assets at FVTPL: Fair value is based on the net asset value of funds on December 31, 2020.

Note 2: Financial assets at FVTOCI: Fair value of listed stocks is based on stock closing price on December 31, 2020. Fair value of corporate bond is based on market price on December 31, 2020. Fair value of non-listed stocks is estimated by the fair value evaluation method.

  • 133 -

TABLE 4

LUCKY CEMENT CO.

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer Property Event Date Transaction
Amount		 Payment Status Counterparty Relationship Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Pricing Reference Purpose of
Acquisition		 Other Terms
Property
Owner		 Relationship Transaction
Date		 Amount
Luckicon Ready-Mixed Co. 24 lots of land with land
serial No. 470, etc.
located in Sanjiaopu
Shulin District of New
Taipei City		 March 20, 2020
(Note 1)		 $ 590,129
(Note 2)		 Paid Natural person who
is not a related
party		 N/A - - - $ - Negotiated based on the
appraisal report and
later resolved in the
board of directors’
meeting.		 Factory use N/A

Note 1: It is the date of the resolution of the board of Luckicon Ready-mixed Co.

Note 2: Refer to Note 14(b).

  • 134 -

TABLE 5

LUCKY CEMENT CO.

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, 2020

(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
Lucky Cement Co. Luckicon Ready-mixed Co.
Fuan Mining Co., Ltd.		 Subsidiary
Other related parties		 Sale
Purchase		 $ (605,122)
297,363		 (18.44)
22.86		 About 90 days
About 90 days		 Quite
Agreed		 Quite
Quite		 Accounts receivable
$ 18,868
Notes receivable
26,948
Accounts payable
(16,876)
Notes payable
(23,763)		 20.30
5.24
(8.71)
(15.99)
  • 135 -

TABLE 6

LUCKY CEMENT CO.

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (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 31, 2020 as of December 31, 2020 Net Income
(Loss) of the
Investee		 Investment
Income (Loss)
Recognized		 Note
December 31,
2020		 December 31,
2019		 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.)		 Real estate sales and lease
Ready-mixed concrete manufacture and trades
Investment business
Cement trading
Shipping agent
Mine gravel		 $ 2,167,473

350,000
-
82,300
88,615
12,571		 $ 2,167,473
99,998
-
82,300
88,615
12,571		 157,295,283
47,000,000
50,000
6,800
8,499,994
1,000,000		 99.99
100.00
-
100.00
99.99
100.00		 $ 2,280,677
639,954
-
24,851
34,921
8,725		 $ (14,061)
104,903
-
248
(8,824)
3,911		 $ (14,061)
104,261
(Note 4)
-
248

(8,826)
(Note 5)
3,911		 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 is in progress.

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 unrealized gain of $642 thousand.

Note 5: The difference is downstream transactions realized loss of $2 thousand.

  • 136 -

TABLE 7

LUCKY CEMENT CO.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

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 and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) 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.

  • 137 -

6.5 2020 The Consolidated Financial Statements

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, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

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, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (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, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The descriptions of the key audit matters of the consolidated financial statements for the year ended December 31, 2020 are as follows:

The Existence of Sales Revenue from Key Customers

The Group’s sales revenue mainly comes from merchandise sales of cement, stone materials and other cement subsidiary products. The amount of the sales revenue in 2020 arising from the new key customers or customers whose sales revenue increased over Performance Materiality is NT$687,383,000, as 15% of the total sales revenue. Since the sales revenue from key customers fluctuates and whether the revenue has truly occurred is the presumed significant risk of the ISA, the key audit matters are listed.

  • 138 -

Please refer to Note 4 (11) of the consolidated financial statement for accounting policies of the revenue recognition; Note 23 (1) for the disclosure related to the operating revenue.

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

  1. Understood the internal control system of the sale of goods and assessed the design and effectiveness of the implementation of the internal control.

  2. Gained the summary of sales transactions of the key customers across the year, adjusted and ensured the completeness of related transactions. In addition, selecting the samples from the summary, and reviewing the evidence and vouchers to verify the existence of sales revenue.

  3. Obtained the post-period general ledger of sales revenue, inspecting whether significant sales return and allowance incurred, to ensure the accuracy of the revenue recognition.

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, 2020 and 2019, 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.

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,

  2. 139 -

forgery, intentional omissions, misrepresentations, or the override of internal control.

  1. 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.

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

  3. 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.

  4. 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.

  5. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2020 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Hai-Yueh Huang and Chao-Mei Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

March 26, 2021

  • 140 -

LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(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 31)
Notes receivable (Notes 4, 10 and 23)
Notes receivable from related parties (Notes 4, 10, 23 and 30)
Accounts receivable (Notes 4, 10 and 23)
Accounts receivable from related parties (Notes 4, 10, 23 and 30)
Other receivables (Notes 4, 10 and 30)
Current tax assets (Note 25)
Inventories (Notes 4, 11 and 31)
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 31)
Property, plant and equipment (Notes 4, 15 and 31)
Right-of-use assets (Notes 4 and 16)
Deferred tax assets (Notes 4 and 25)
Refundable deposits
Other non-current assets (Notes 4 and 17)

Total non-current assets

TOTAL

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Short-term borrowings (Notes 18 and 31)

Short-term bills payable (Notes 18 and 31)
Contract liabilities (Note 23)
Notes payable (Note 19)
Notes payable to related parties (Notes 19 and 30)
Accounts payable (Note 19)
Accounts payable to related parties (Notes 19 and 30)
Other payables (Note 20)
Other payables to related parties (Note 30)
Current tax liabilities (Note 25)
Lease liabilities - current (Notes 4 and 16)
Current portion of long-term borrowings (Notes 18 and 31)
Other current liabilities

Total current liabilities

NON-CURRENT LIABILITIES
Long-term borrowings (Notes 18 and 31)
Deferred tax liabilities (Notes 4 and 25)
Lease liabilities - non-current (Notes 4 and 16)
Other payables to related parties (Note 30)
Net defined benefit liabilities (Notes 4 and 21)
Guarantee deposits received

Total non-current liabilities

Total liabilities

EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 22)
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 Corporation
NON-CONTROLLING INTERESTS (Note 22)

Total equity

TOTAL
 2020
Amount
%
$ 320,535
4
11,296
-
34,126
1
75,655
1
573,958
7
235
-
492,996
6
5,764
-
15,735
-
-
-
3,545,586
44
160,658
2

22,734

1


5,259,278
66

8,734
-
14,994
-
189,742
2
2,223,887
28
79,560
1
120,156
2
20,580
-

110,376

1


2,768,029
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
 2019












































































Amount
%
$ 233,426
3

15,562
-

22,038
-

93,165
1

488,761
7

4,972
-

412,120
6

7,450
-

88,101
1

17,607
-

3,516,072
48

164,806
2

23,068

1

5,087,148
69

9,598
-

19,733
-

132,588
2

1,711,806
24

129,591
2

127,645
2

20,908
-

89,860

1

2,241,729
31
$ 7,328,877
100
$ 232,700
3

219,465
3

259,431
4

202,062
3

34,656
-

124,131
2

35,532
-

142,714
2

1,281
-

2,149
-

50,494
1

310,000
4

2,516

-

1,617,131
22

1,170,000
16

23,792
-

80,289
1

45,800
1

40,128
1

30,800

-

1,390,809
19

3,007,940
41

4,047,380
55

8

-

166,309
3

17,256
-

85,901

1

269,466

4

4,006

-

4,320,860
59

77

-

4,320,937
59
$ 7,328,877
100

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

  • ��� -

LUCKY CEMENT CO. AND SUBSIDIARIES

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

OPERATING REVENUES (Notes 4, 23 and 30)
Sales

Less: Discounts and allowances

Total operating revenues
OPERATING COSTS (Notes 11, 24 and 30)

GROSS PROFIT

OPERATING EXPENSES (Notes 10, 24 and 30)
Selling and marketing expenses
General and administrative expenses
Expected credit loss

Total operating expenses

OTHER OPERATING INCOME AND EXPENSES
(Note 24)

PROFIT FROM OPERATIONS

NON-OPERATING INCOME AND EXPENSES
(Notes 15, 24 and 30)
Interest income
Rental income
Other income
Foreign exchange gain
Fair value changes of financial assets
Gain on disposal of non-current assets held for sale
Other losses
Interest expense

Total non-operating income and expenses

PROFIT BEFORE INCOME TAX
INCOME TAX EXPENSE (Notes 4 and 25)

NET PROFIT FOR THE YEAR

OTHER COMPREHENSIVE INCOME (LOSS)		 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
-
1,865
-
(538)
-
15,724
1
(10,448)
-

(31,946)
(1)


(3,067)

-

444,408
10

(52,139)
(1)


392,269

9
 2019

































Amount
%
$ 3,733,161
100
(1,465)

-

3,731,696
100
3,432,815
92
298,881

8

114,748
3

105,438
3
4,933

-
225,119

6
4,120

-
77,882

2

2,072
-

8,965
-

8,930
-

1,742
-

3,685
-

-
-

(9,584)
-
(39,778)
(1)
(23,968)
(1)

53,914
1
(8,010)

-
45,904

1

(Continued)

  • ��� -

LUCKY CEMENT CO. AND SUBSIDIARIES

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

Items that will not be reclassified subsequently to
profit or loss:
Remeasurement of defined benefit plans (Note 21)
Unrealized 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 for the year, net of
income tax

TOTAL COMPREHENSIVE INCOME FOR THE
YEAR

NET PROFIT ATTRIBUTABLE TO:
Shareholders of the Parent

Non-controlling interests


TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Shareholders of the Parent

Non-controlling interests


EARNINGS PER SHARE (Note 26)
Basic
Diluted		 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		 2019




















Amount
%

5,442
1

41,995
1

(210)
-
808

-
48,035

2
$ 93,939

3
$ 45,905
1
(1)

-
$ 45,904

1
$ 93,940
3
(1)

-
$ 93,939

3
$ 0.11
$ 0.11
$ $
$ $
$ $
$ $
$ $


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

  • ��� -

LUCKY CEMENT CO. AND SUBSIDIARIES

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

BALANCE, JANUARY 1, 2019

Appropriation of 2018 earnings
Special reserve

Net profit for the year ended December 31, 2019
Other comprehensive income (loss) for the year ended
December 31, 2019

Total comprehensive income (loss) for the year ended
December 31, 2019

Disposal of investments in equity instruments designated as
at fair value through other comprehensive income (Notes
22)

BALANCE AT DECEMBER 31, 2019

Appropriation of 2019 earnings
Legal reserve

Cash dividends distributed by Lucky Cement Co.

Special reserve

Net profit for the year ended December 31, 2020
Other comprehensive income (loss) 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 (Notes 12)

Disposal of investments in equity instruments designated as
at fair value through other comprehensive income (Notes
22)

BALANCE AT DECEMBER 31, 2020
 **Equity Attributable to Owners of the Corporation ** **Equity Attributable to Owners of the Corporation ** Total
Non-controlling
Interests
$ 4,226,920
$ 78


-

-

45,905
(1)

48,035

-


93,940

(1)


-

-


4,320,860

77


-

-


(60,711)

-


-

-

392,269
-

4,426

-


396,695

-


1

(3)


-

-

$ 4,656,845
$ 74
 Total Equity
$ 4,226,998

-
45,904

48,035

93,939

-

4,320,937

-

(60,711)

-
392,269

4,426

396,695

(2)

-
$ 4,656,919
Common Stock Capital Surplus
$ 4,047,380
$ 8


-

-

-
-

-

-


-

-


-

-


4,047,380

8


-

-


-

-


-

-

-
-

-

-


-

-


-

1


-

-

$ 4,047,380
$ 9
 Retained Earnings

Legal Reserve
Special Reserve
Unappropriated
Earnings
$ 166,309
$ 17,376
$ (1,032)


-

(120)

120

-
-
45,905

-

-

5,442


-

-

51,347


-

-

35,466


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
 Other Equity
Exchange
Differences on
Translating
Unrealized Gain
on Financial
Assets at Fair
Value through
Other
Foreign
Operations
Comprehensive
Income
$ 7,660
$ (10,781)


-

-

-
-

(210)

42,803


(210)

42,803


-

(35,466)


7,450

(3,444)


-

-


-

-


-

-

-
-

25

2,021


25

2,021


-

-


-

(1,597)

$ 7,475
$ (3,020)

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

  • ��� -

LUCKY CEMENT CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 loss/(gain) on fair value changes of financial assets at fair value
through profit or loss
Interest expense
Interest income
Dividend income
Loss/(gain) on disposal of property, plant and equipment
Gain on disposal of non-current assets held for sale
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
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 received

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES		 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
32
(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
 2019
$ 53,914
238,636
11,750
4,933
(3,685)
39,778
(2,072)
(5,393)
(4,120)
-
-
28,430
(170,840)
198
(154,549)
3,690
3,988
94,898
16,467
6,891
(311)
60,625
53,716
(8,938)
9,272
11,992
24,323
124
(1,253)

(15,256)
297,208
2,210
(39,831)

3,160

262,747

(Continued)

  • 145 -

LUCKY CEMENT CO. AND SUBSIDIARIES

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

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 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 receivable
Increase in other non-current assets
Other dividends received

Net cash (used in) generated from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings
Decrease in short-term borrowings
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
Increase 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 INCREASE IN CASH
CASH AT THE BEGINNING OF YEAR

CASH AT THE END OF YEAR
 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
 2019
(56,924)
197,806
-
-
15,067
-
(22,195)
4,120
4,281
-
(14,267)

5,393

133,281
-
(619,951)
-
320,000
(11,638)
1,369
-
-
(51,014)
-
-
(361,234)

(170)
34,624

198,802
$ 233,426

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

(Concluded)

  • 146 -

LUCKY CEMENT CO. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (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 26, 2021.

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 2021
New IFRSs
Amendments to IFRS 4“Extension of the Temporary Exemption from
Applying IFRS 9”

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
“Interest Rate Benchmark Reform- Phase 2”

Amendment to IFRS 16 “Covid-19-Related Rent Concessions”
 Effective Date
Announced by IASB
Effective immediately upon
promulgation by the IASB
January 1, 2021
June 1, 2020

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.

  • 147 -

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

New IFRSs
“Annual Improvements to IFRS Standards 2018-2020”

Amendments toIFRS 3 “Reference to the Conceptual Framework”

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 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 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 (Note 1)
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 4)
January 1, 2023 (Note 5)
January 1, 2022 (Note 6)
January 1, 2022 (Note 7)

  • 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 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 3: 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.

  • Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

  • Note 5: 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 6: 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 7: 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 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.

  • 148 -

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.

  • 149 -

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 35(6) 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

  • 150 -

inventories is calculated according to the proportion of an area to the total area of a building floor; the 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 cashgenerating unit to which the asset belongs. Corporate assets are allocated to the individual cashgenerating 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.

  • 151 -

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 29.

  • 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.

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

  • 152 -

  • 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.

  • 153 -

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.

  • 154 -

  • 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.

  • 155 -

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

  • 156 -

provision.

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.

  • 157 -

6. CASH

7.
8.		 December 31
2020
2019
Cash on hand and revolving funds
$ 1,432
$ 1,528
Checking accounts and demand deposits
309,601
224,498
Foreign currency demand deposits

9,502

7,400
$ 320,535
$ 233,426
Market interest rate range for cash in banks at the end of the reporting period is as follows:
December 31
2020
2019
Bank deposits
0.001%-0.35%
0.01%-0.48%
FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31
2020
2019
Current

Financial assets mandatorily classified as at FVTPL - mutual funds
$ 11,296
$ 15,562
Non-current
Financial assets mandatorily classified as at FVTPL - mutual funds
$ 8,734
$ 9,598
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME		 December 31
Current
Investments in equity instruments
Investments in debt instruments
Non-current
Investments in Equity instruments		 December 31



2020
$ 28,213


5,913

$ 34,126

$ 14,994
 2019
$ 15,977

6,061
$ 22,038
$ 19,733
  • 158 -

a. Investments in Equity instruments at FVTOCI

Current
Domestic investments-common stock
Taiwan Cement Corp.
Far Eastern New Century Corporation
U-Ming Marine Transport Corporation
Winbond Electronics Corp.
United Microelectronics Corp.
Medigen Biotechnology Corp.
China Development Financial Holding
First Financial Holding Co., Ltd.
Capital Securities Corp.
Hua Nan Financial Holdings Co., Ltd.
Non-current
Domestic investments-common stock
Jonfeng Mining Co., Ltd.
WK Technology Fund
Global Securities Finance Corp.		 December 31





2020
$ 8,646

5,790
4,723
3,782
3,411
1,695
126
20
12

8

$ 28,213

$ 9,170

5,824

-

$ 14,994
 2019
$ 6
5,970
4,301
2,545
1,190
1,793
131
21
10

10
$ 15,977
$ 8,443
6,433

4,857
$ 19,733

For information on the above investments, refer to Note 35 Schedule 3 “Marketable Securities Held”.

For other relevant information on financial assets measured at FVTOCI, refer to Note 22(5) and Note 29.

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.

Dividends of $3,720 thousand and $5,393 thousand were recognized in 2020 and 2019, respectively.

The Group received return of capital of $5,125 thousand when the invested company reduced capital in 2020.

b. Investments in debt instruments at FVTOCI

Current
Domestic investment
Bond investment		 December 31
2020
$ 5,913
 2019
$ 6,061

The bonds held by the Group have a coupon rate of 3.375%.

  • 159 -

9. FINANCIAL ASSETS AT AMORTIZED COST

FINANCIAL ASSETS AT AMORTIZED COST
Current
Time deposits with original maturities of more than 3 months

Restricted assets


Non-current
Restricted assets
 December 31



2020
$ 7,155


68,500

$ 75,655

$ 189,742
 2019
$ 6,904
86,261
$ 93,165
$ 132,588

  • a. The interest rates of time deposits with original maturities of more than 3 months were approximately 2.35% and 2.65% per annum as of December 31, 2020 and 2019, respectively.

  • b. The restricted assets - current are savings deposits and certificate of deposit that are provided as guarantees for bank loan; market interest rate ranges were approximately 0.02%-0.56% and 0.04%0.81% per annum as of December 31, 2020 and 2019, respectively.

  • 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 0.07%-0.82% and 0.13%-1.07% per annum as of December 31, 2020 and 2019, respectively.

  • d. Refer to Note 31 for information relating to investments in financial assets at amortized cost pledged as security.

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


RECEIVABLES
Notes receivable
At amortized cost
Gross carrying amount

Notes receivable from related parties
At amortized cost
Gross carrying amount

Trade receivables
At amortized cost
Gross carrying amount

Less: Allowance for impairment loss

 December 31




2020
$ 573,958

$ 235

$ 508,199


(15,203)

$ 492,996
 2019
$ 488,761
$ 4,972
$ 424,728
(12,608)
$ 412,120
(Continued)
  • 160 -
Trade receivables from related parties
At amortized cost
Gross carrying amount

Other receivables
Sale of securities

Deposits
Other


Overdue receivables
Overdue receivables

Less: Allowance for impairment loss

 December 31






2020
2019
$ 5,764
$ 7,450
$ 12,816
$ 21,393
-
65,162

2,919

1,546
$ 15,735
$ 88,101
$ 28,743
$ 32,096

(28,743)

(32,096)
$ -
$ -
(Concluded)

a. Notes receivable

The average credit period of sales of goods is 90-150 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. In addition, the Group reviews the recoverable amount of each individual note receivable at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group applies the simplified approach under IFRS 9 to measure the loss allowance for notes receivable at an amount equal to lifetime ECLs. The expected credit losses on notes receivable 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. 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 expected credit loss rate is based on the overdue days of the notes receivable. However, the expected credit loss rate of the Group based on the provision matrix at the end of reporting period was zero because it did not recognize the expected credit losses of the notes receivable.

b. Trade receivables

The average credit period of sales of goods is 90-150 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.

  • 161 -

The Group applies the simplified approach under IFRS 9 to 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. 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 notes receivable, trade receivables, and overdue receivables based on the Group’s provision matrix.

December 31, 2020

Expected credit loss rate

Gross carrying amount

Loss allowance (Lifetime ECLs)


Amortized cost

December 31, 2019		 Not Past Due
P
0%-0.19%
$ 1,037,398


(726)

$ 1,036,672
 ast Due within
30 Days

4.90%
$ 14,118


(692)

$ 13,426
 Past Due 31 to
60 Days

7.85%
1
$ 14,077


(1,105)

$ 12,972
 Past Due 61 to
180 Days

4.32%-58.86%
$ 5,186


(1,302)

$ 3,884
 Past Due Over
181 Days
100%
$ 4,422


(4,422)

$ -
 Assessed
Individually
100%
$ 35,699


(35,699)

$ -
 Total
$ 1,110,900

(43,946)
$ 1,066,954
Expected credit loss rate

Gross carrying amount

Loss allowance (Lifetime ECLs)


Amortized cost
 Not Past Due
P
0%-0.95%
$ 874,277


(2,684)

$ 871,593
 ast Due within
30 Days

2.77%
$ 11,309


(313)

$ 10,996
 Past Due 31 to
60 Days

4.63%

$ 8,979


(416)

$ 8,563
 Past Due 61 to
180 Days

9.95%-68.60%
$ 11,682


(1,953)

$ 9,729
 Past Due Over
181 Days
100%
$ 286


(286)

$ -
 Assessed
Individually
100%
$ 39,052


(39,052)

$ -
 Total
$ 945,585

(44,704)
$ 900,881

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


2020
$ 44,704

2,042

(2,800)

$ 43,946
 2019
$ 43,985
4,933

(4,214)
$ 44,704
  • c. Other receivables

Other receivables mainly include proceeds from sales of securities and guarantee deposits. 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, 2020 and 2019, the expected credit loss rate of other receivables was both 0%.

  • 162 -

11. INVENTORIES

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



2020
$ 3,153,571

234,118
87,339
29,975
32,633

7,950

$ 3,545,586
 2019
$ 3,133,578
141,493
107,472
91,310
33,218
9,001
$ 3,516,072

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 was $3,813,497 thousand and $3,432,815 thousand, respectively. The cost of goods sold included losses on inventory write-downs of $21,986 thousand for the year ended December 31, 2019.

The Group’s property appraisal report issued by external experts on each balance sheet date evaluated the net realizable value of the real estate under development and real estate to be developed.

As of December 31, 2020 and 2019, the inventories expected to be recovered after more than 12 months were $3,153,571 thousand and $3,133,578 thousand, which were mainly real estate under development and real estate to be developed.

The inventories pledged as collateral for bank borrowings are set out in Note 31.

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
2020
2019
Explanation
99.99
99.99
100.00
99.99 a.
100.00
100.00
99.99
99.99
100.00
100.00 b.
100.00
100.00

Notes:

  • a. 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

  • 163 -

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.

  • b. The Company’s board of directors resolved in its meeting on December 27, 2019 to discontinue the operations of its subsidiary, Just Bright Ltd., and the cancellation is in process.

13. PREPAYMENTS

PREPAYMENTS
Office supplies

Prepaid expenses
Prepayments for purchases of materials
Other

 December 31


2020
$ 106,920

44,745
8,918

75

$ 160,658
 2019
$ 105,474
54,366
4,837
129
$ 164,806

14. OTHER CURRENT ASSETS

OTHER CURRENT ASSETS
Offset against business tax payable
Other		 December 31
2020
$ 22,733

1
$ 22,734		 2019
$ 23,067

1
$ 23,068

15. PROPERTY, PLANT AND EQUIPMENT

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

Cost
Balance at January 1, 2019
Additions
Disposals
Net exchange difference

Balance at December 31,
2019
 Land
$ 1,084,102

571,264
(5,017 )
-

-

$ 1,650,349

$ -

-
-

-

$ -

$ 1,650,349

$ 1,084,102

-

-

$ 1,084,102

Land		 Buildings
Machinery and
Equipment
$ 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

$ 2,291,624
$ 6,095,913

3,503
11,731
(85 )
-

(693)

(93)

$ 2,294,349
$ 6,107,551

Buildings
Machinery and		 Electrical
Equipment
Transportation
Equipment
$ 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

$ 1,196,322
$ 918,627

-
2,641
-
(62,881 )

-

(2)

$ 1,196,322
$ 858,385

Electrical
Transportation		 Other
Equipment
Total
$ 499,954
$ 12,040,663
5,053
650,577
14,712
14,793

(2,546 )
(76,956 )

-

107
$ 517,173
$ 12,629,184
$ 493,038
$ 10,328,857
4,536
142,959

(2,546 )
(66,617 )

-

98
$ 495,028
$ 10,405,297
$ 22,145
$ 2,223,887
$ 496,420
$ 12,083,008
4,320
22,195

(783 )
(63,749 )

(3)

(791)
$ 499,954
$ 12,040,663
(Continued)
Other
Total
  • 164 -
Accumulated depreciation
and impairment
Balance at January 1, 2019
Depreciation expense
Disposals
Net exchange difference

Balance at December 31,
2019

Carrying amount at
December 31, 2019
 $ -

-
-

-

$ -

$ 1,084,102
 $ 1,852,828

61,377
(85 )

(669)

$ 1,913,451

$ 380,898
 Equipment
$ 5,892,324

79,386

-

(77)

$ 5,971,633

$ 135,918
 Equipment
$ 1,170,392

7,913
-

-

$ 1,178,305

$ 18,017
 Equipment
$ 800,718

34,595
(62,881 )

(2)

$ 772,430

$ 85,955
 Equipment
$ 490,665
$ 10,206,927
3,159
186,430

(783 )
(63,749 )

(3)

(751)
$ 493,038
$ 10,328,857
$ 6,916
$ 1,711,806
(Concluded)

  • a. Some additions to machinery and equipment and other equipment were reclassifications from longterm prepaid expenses.

  • 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 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.

  • c. Luckicon Ready-mixed Co. demolished the Wugu plant and related equipment on October 5, 2020, in response to the New Taipei City Urban Development policy, and purchased another land to build a new plant. Its sales orders were transferred to other plants to continue the shipment process. On March 20, 2020, the board of directors of Luckicon Ready-mixed Co. held a meeting and resolved to acquire a total of 24 lots of land with serial number 470 and others located in Sanjiaopu, Shulin District of New Taipei City from non-related parties. The contract price of the land totaled $590,129 thousand. Since the land is classified as for agricultural use, Luckicon Ready-mixed Co. could not obtain the land ownership. Luckicon Ready-mixed Co. signed an agreement with key management personnel of the Company. According to the agreement, the Company’s key management personnel acquired part of the land for $19,651 thousand and completed the transfer of ownership as of May 2020.

  • d. 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.

  • e. 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 3-10 years Office equipment 3-10 years

  • f. For the years ended December 31, 2020 and 2019, the Group evaluated impairment and concluded that the assets had no impairment loss.

  • g. Property, plant and equipment used by the Group and pledged as collateral for bank borrowings are set out in Note 31.

  • 165 -

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
2020
$ 21,060

58,341

159

$ 79,560

**For the Year Ended **		 2019
$ 35,847
91,684
2,060
$ 129,591
**December 31 **



2020
$ 1,887

$ 16,150

33,202

1,901

$ 51,253
 2019
$ 13,232
$ 15,979
34,327

1,900
$ 52,206

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

b. Lease liabilities

Carrying amount
Current
Non-current
Range of discount rate for lease liabilities was as follows:		 December 31

2020
$ 37,081

$ 43,161
 2019
$ 50,494
$ 80,289
Range of discount rate for lease liabilities was as follows:
Land
Buildings
Transportation equipment		 December 31
2020
2019
1.55%-1.68%
1.55%
1.55%
1.55%
1.55%
1.55%
  • 166 -

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
Long-term prepaid expenses

Prepayments for business facilities
Net limestone mining rights
Net defined benefit assets (Note 21)
Overdue receivables (Note 10)

 For the Year Ended December 31 For the Year Ended December 31






2020

$ 56,723

34,466
18,774
413

-

$ 110,376

17. OTHER NON-CURRENT ASSETS

18. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 31)
Bank loans

Unsecured borrowings
Line of credit borrowings


The interest rates of the bank loans were as follows:
Secured borrowings
Unsecured borrowings		 December 31


2020
2019
$ 105,000
$ 200,000

215,000

32,700
$ 320,000
$ 232,700
December 31
2020
2019
1.39%-1.59%
1.60%
1.25%-1.70%
1.47%-1.70%
  • 167 -

b. Short-term bills payable

Commercial paper

Less: Unamortized discounts on bills payable


Outstanding short-term bills payable were as follows:
December 31, 2020
Guarantee/Promissory
Institution
Par Value
Discount
Amount
Commercial paper
Ta Ching Bills Finance
Corporation
$ 110,000
$ 251

Grand Bills Finance
Corporation

80,000

161

$ 190,000
$ 412

December 31, 2019
Guarantee/Promissory
Institution
Par Value
Discount
Amount
Commercial paper
Ta Ching Bills Finance
Corporation
$ 110,000
$ 302

Grand Bills Finance
Corporation

110,000

233

$ 220,000
$ 535
 December 31








2020
2019
$ 190,000
$ 220,000

(412)

(535)
$ 189,588
$ 219,465
Carrying
Amount
Interest Rate
$ 109,749
1.10%-1.65%

79,839
1.28%-1.70%
$ 189,588
Carrying
Amount
Interest Rate
$ 109,698
1.46%-1.70%

109,767
1.64%-1.73%
$ 219,465

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 31.

  • 168 -

  • c. Long-term borrowings

Secured borrowings (Note 31)
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 and the remaining $60
million payable on maturity date. The
repayment started in July 2020.

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 2020 and
the balance payable in 7 quarters
(ending February, May, August,
November) with $30 million each
quarter.
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.		 December 31
$ 2020
2019
1,050,000
$ 1,250,000
280,000
230,000
(290,000)

(310,000)
1,040,000
$ 1,170,000
December 31
$
2020
2019
$ 300,000 $ 500,000
250,000
250,000
250,000
250,000
250,000
250,000
50,000
-
(Continued)
  • 169 -
Details
The Export-Import Bank
of the Republic of
China
The loan period is from December 14,
2020 to January 14, 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 June 14, 2019 to
July 14, 2020; the principal was paid
one time on maturity date.
O-Bank
The original loan period was from
April 23, 2018 to April 23, 2020; the
principal was due on the maturity date.
New borrowing contract with loan
period from March 23, 2020 to
March 23, 2022 was signed for
repayment of previous debt.
KGI Bank
Revolving loan; credit period is from
September 7, 2020 to September 7,
2022.
KGI Bank
Revolving loan; credit period is from
September 7, 2020 to September 7,
2022.
KGI Bank
The loan period is from March 9, 2018 to
March 9, 2020; the principal was
repaid one time on maturity date.

Less: Current portions

Long-term borrowings
 December 31



2020
2019
$ 50,000 $ -
-
70,000
80,000
80,000
50,000
-
50,000
-

-

80,000
1,330,000
1,480,000

(290,000)

(310,000)
$ 1,040,000
$ 1,170,000
(Concluded)

The annual interest rates of long-term borrowings were 1.24%-1.72% and 1.40%-1.92% as of December 31, 2020 and 2019, respectively.

19. NOTES PAYABLE AND TRADE PAYABLES

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



2020
$ 345,327

$ 39,596

$ 241,920

$ 20,006
 2019
$ 202,062
$ 34,656
$ 124,131
$ 35,532

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.

  • 170 -

20. OTHER PAYABLES

OTHER PAYABLES
Payables for salaries and bonuses

Payables for taxes
Payables for purchases of equipment
Payables for utilities expense
Payables for maintenance fee
Others

 December 31


2020

$ 87,318

34,498
30,878
18,285
12,570

24,791

$ 208,340
 2019
$ 48,604
41,599
-
15,536
9,759
27,216
$ 142,714

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.

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.

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


2020
$ 234,543

(198,158)

$ 36,385
 2019
$ 255,484
(215,667)
$ 39,817
  • 171 -

The above net defined benefit liabilities are the net amount of defined benefit assets (reported as other non-current assets) of $413 thousand and $311 thousand and defined benefit liabilities of $36,798 thousand and $40,128 thousand as of December 31, 2020 and December 31, 2019, 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, 2019 $ 269,426
 $ (208,600)
 $
60,826
Service costs
Current service costs 1,909 - 1,909
Net interest expense (income)
2,357
(1,833)
 524
Recognized in profit or loss
4,266
(1,833)
 2,433
Remeasurement
Return on plan assets (excluding amounts
included in net interest) - (8,440) (8,440)
Actuarial (gain) loss
Changes in financial assumptions 4,676 - 4,676
Experience adjustments
(1,678)
-
 (1,678)
Recognized in other comprehensive income
2,998
(8,440)
 (5,442)
Contributions from the employer - (18,000) (18,000)
Benefit paid
(21,206)
21,206
 -
Balance at December 31, 2019 $ 255,484
 $ (215,667)
 $
39,817
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

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 **
2020
$ 1,436
179

226
$ 1,841		 2019
$ 1,695
275

463
$ 2,433
  • 172 -

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.

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
2020
2019
0.375%
0.625%
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



2020
$ (4,199)

$ 4,316

$ 4,202

$ (4,110)
 2019
$ (4,677)
$ 4,814
$ 4,696
$ (4,586)

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.


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
2020
2019
$ 1,910
$ 1,995
3.7-7.3 years
4.6-7.6 years
  • 173 -

22. EQUITY

  • a. Share capital

Ordinary shares

Ordinary shares
Number of shares authorized (in thousands)

Shares authorized

Number of shares issued and fully paid (in thousands)

Shares issued
 December 31



2020

498,646

$ 4,986,460


404,738

$ 4,047,380
 2019
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

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’ netassets during
actual acquisition (Note 12)
May be used only to offset a deficit
Changes in percentage of ownership interests in subsidiaries		 December 31


2020
$ 1


8

$ 9
 2019
$ -

8
$ 8
  • 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).

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

  • 174 -

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 24 (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. 1010012865, Letter No. Jin-Kuang-Fa-Tzi No. 1010047490 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.

In their meeting on June 12, 2019, the Company’s shareholders adopted a loss recovery plan for 2018 and there was no distribution of dividends.

On November 12, 2019, the Company’s board of directors decided not to distribute dividends from the first half of 2019.

The appropriations of 2019 earnings have been resolved in the board of directors’ meeting held on March 24, 2020 and approved in the shareholders’ meeting held on June 18, 2020. The appropriation of earnings and dividend per share were as follows:

Appropriation Appropriation Dividend Per
of Earnings Share
Legal reserve $
4,590
Special reserve (3,121)
Cash dividends 60,711 $0.15

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.

  • 175 -

The appropriation of earnings and dividend per share for 2020 that were approved in the board of directors’ meeting on March 26, 2021 were as follows:

Appropriation Appropriation Dividend Per
of Earnings Share
Legal reserve $
39,625
Cash dividends 283,317 $0.70

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 16, 2021.

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


2020
$ 17,256


(3,121)

$ 14,135
 2019
$ 17,376

(120)
$ 17,256

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.

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


2020
$ 7,450


25

$ 7,475
 2019
$ 7,660

(210)
$ 7,450

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
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




2020
$ (3,444)

24

1,997


2,021


(1,597)

$ (3,020)
 2019
$ (10,781)
808

41,995

42,803
(35,466)
$ (3,444)
  • 176 -

f. Non-controlling interest


Balance at January 1
Attributable to non-controlling interests
Share of losses for the year
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
2020
$ 77
-

(3)
$ 74		 2019
$ 78
(1)

-
$ 77

23. REVENUE

  • a. Segmentation of customer contract revenue

Cement

Cement products
Stone materials
Others


Balance of assets and liabilities related to the sales contracts
December 31,
2020
Notes receivable (Note 10)
$ 573,958

Notes receivable from related parties
(Note 10)
$ 235

Trade receivables (Note 10)
$ 492,996

Trade receivables from related parties
(Note 10)
$ 5,764

Contract liability
Cement sales
$ 333,095
 For the Year Ended December 31
2020
2019
$ 2,074,180
$ 1,805,498
1,669,310
1,242,991
322,445
281,628

464,237

401,579
$ 4,530,172
$ 3,731,696
December 31,
2019
January 1, 2019
$ 488,761
$ 317,921
$ 4,972
$ 5,170
$ 412,120
$ 262,504
$ 7,450
$ 11,140
$ 259,431
$ 198,806

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

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
 For the Year Ended For the Year Ended December 31


2020
$ 259,431
 2019
$ 198,806
  • 177 -

24. NET PROFIT

a. Other operating income and expenses


(Loss) gains on disposals of property, plant and equipment
b. Interest income

Bank deposits
Investments in debt instruments at FVTOCI
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		 For the Year Ended December 31 For the Year Ended December 31 For the Year Ended December 31
2020
2019
$ (8,959)
$ 4,120
For the Year Ended December 31
2020
2019
$ 1,291
$ 1,759

300

313
$ 1,591
$ 2,072
For the Year Ended December 31
2020
2019
$ 3,720
$ 5,393

8,629

3,537
$ 12,349
$ 8,930
For the Year Ended December 31
2020
2019
$ 6,150
$ 6,207

4,298

3,377
$ 10,448
$ 9,584
For the Year Ended December 31


2020
$ 30,389


1,557

$ 31,946
 2019
$ 37,634

2,144
$ 39,778
  • 178 -

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


Amortization by function
Operating costs

Operating expenses


Depletion by function
Operating costs

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
2020
$ 142,959

51,253
12,455

5

$ 206,672

$ 142,625

45,437

6,150

$ 194,212

$ 6,236


6,219

$ 12,455

$ 5

For the Year Ended		 2019
$ 186,430
52,206
11,748
2
$ 250,386
$ 187,071
45,358
6,207
$ 238,636
$ 5,240
6,508
$ 11,748
$ 2
December 31






2020
$ 13,062


1,841

14,903

414,942

$ 429,845

$ 284,195


145,650

$ 429,845
 2019
$ 12,493
2,433
14,926
367,581
$ 382,507
$ 273,565
108,942
$ 382,507

  • 179 -

  • 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, 2020 and 2019 are estimated as follows:

Accrual rate


Compensation of employees
Remuneration of directors
Amount

Compensation of employees
Remuneration of directors		 For the Year Ended December 31 For the Year Ended December 31
2020
2019
3%
3%
5%
5%
For the Year Ended December 31
2020
Cash
$ 13,583
22,638		 2019
Cash
$ 1,542
2,570

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, 2019 and 2018.

Information on compensation of employees and remuneration of directors resolved by the Group’s board of directors in 2020 and 2019 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


2020
$ 2,853


(988)

$ 1,865
 2019
$ 3,553

(1,811)
$ 1,742
  • 180 -

25. 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
2020
$ 47,009
684

86
47,779

4,360
$ 52,139		 2019
$ 2,419
-

13
2,432

5,578
$ 8,010

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
 For the Year Ended For the Year Ended December 31



2020
$ 444,408

$ 88,882

(20,488)
(13,700)
(3,890)
684
565
-

86

$ 52,139
 2019
$ 53,914
$ 10,783
2,680
(3,411)
(3,435)
-
-
1,380
13
$ 8,010

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

b. Current tax assets and liabilities

Current tax assets
Tax refund receivable
Current tax liabilities
Income tax payable		 December 31
2020
$ -
$ 46,463		 2019
$ 17,607
$ 2,149
  • 181 -

c. Deferred tax assets and liabilities

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

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


For the year ended December 31, 2019
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
$ 18,458
$ (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
Opening
Balance
Recognized in
Profit or Loss Closing Balance
$ 22,004
$ (3,546)
$ 18,458
43,100
14,195
57,295
15,603
(1,642)
13,961
27
3
30
7,751
(1,111)
6,640
5,847
(1,147)
4,700

387

1,715

2,102
94,719
8,467
103,186

48,647

(24,188)

24,459
$ 143,366
$ (15,721)
$ 127,645

(Continued)

  • 182 -
Deferred tax liabilities
Temporary differences
Accelerated depreciation of fixed assets

Unrealized foreign exchange gain

 Opening
Balance
Recognized in
Profit or Loss Closing Balance
$ 33,847
$ (10,055)
$ 23,792

88

(88)

-
$ 33,935
$ (10,143)
$ 23,792
(Concluded)

d. Income tax assessments

The income tax returns through 2018 of the Company and its subsidiaries, Luckicon Ready-mixed 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 2019 of Dasheng Enterprise Co. and Fuyu Development Co. have been assessed by the tax authorities and there is no significant difference between the reported amounts and the assessed amounts.

26. 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

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 ** **For the Year Ended ** December 31
2020
2019
$ 392,269
$ 45,905
(In Thousands of Shares)
For the Year Ended December 31
2020
404,738

1,131
405,869		 2019
404,738

184
404,922

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.

  • 183 -

27.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, 2020 and 2019:


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

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 (reported as notes
payable)

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











2020
$ 28,596


8,577

$ 37,173

$ 650,577

34,466

(30,878)

$ 654,165

$ 1,380


(1,300)

$ 80

$ 3,720


(621)

$ 3,099
 2019
$ 219,199
(21,393)
$ 197,806
$ 22,195
-
-
$ 22,195
$ 4,120
-
$ 4,120
$ 5,393
-
$ 5,393

Changes in Liabilities Arising from Financing Activities

For the year ended December 31, 2020

January 1, 2020
Short-term borrowings
$ 232,700

Short-term bills payable
219,465
Long-term borrowings
1,480,000
Other payables to related parties
47,081
Guarantee deposits received
30,800
Lease liabilities

130,783

$ 2,140,829
 Cash Flows
$ 87,300

(30,000 )
(150,000 )
70,000
1,904

(51,753)

$ (72,549)
 No n-cash Changes Discount
Amortization
$ -

123
-
-
-

-

$ 123
 Others
$ -
-
-
7,057
-

-

$ 7,057
 Balance at
December 31,
2020
$ 320,000
189,588
1,330,000
124,138
32,704

80,242
$ 2,076,672




New Lease

$ -


-

-
-
-

1,887

$ 1,887
 Lease Decrease
$ -

-
-
-
-

(675)

$ (675)
  • 184 -

For the year ended December 31, 2019

For the year ended December 31, 2019
Short-term borrowings

Short-term bills payable
Long-term borrowings
Other payables to related parties
Guarantee deposits received
Lease liabilities

 Balance at
January 1,
2019
$ 852,651
219,736
1,171,638
46,957
29,431

168,565

$ 2,488,978
 Cash Flows
$ (619,951 )

-

308,362

-

1,369

(51,014)

$ (361,234)
 Non-cash Changes
New Lease
Discount
Amortization
$ - $ -

-
(271 )

-
-

-
-

-
-

13,232

-

$ 13,232
$ (271)
 Balance at
Others
December 31,
2019
$ - $ 232,700

-
219,465

-
1,480,000

124
47,081

-
30,800

-

130,783
$ 124
$ 2,140,829






New Lease
$ -

-

-

-

-

13,232

$ 13,232

28. CAPITAL MANAGEMENT

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

29. 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 asset and financial liability 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, 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
$ 11,296

$ 28,213

-

5,913

$ 34,126
 Level 2
$ -

$ -

-

-

$ -
 Level 3
$ 8,734

$ -

14,994

-

$ 14,994
 Total
$ 20,030
$ 28,213
14,994

5,913
$ 49,120
  • 185 -

December 31, 2019

December 31, 2019
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
$ 15,562

$ 15,977

-

6,061

$ 22,038
 Level 2
$ -

$ -

-

-

$ -
 Level 3
$ 9,598

$ -

19,733

-

$ 19,733
 Total
$ 25,160

$ 15,977
19,733

6,061
$ 41,771

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

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

For the year ended December 31, 2020

Financial Assets
at FVTPL -
Beneficiary
Certificates
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
$ 29,331
4,371
(5,125)
(326)
(864)

(3,659)
$ 23,728
  • 186 -

For the year ended December 31, 2019

Financial Assets
at FVTPL -
Beneficiary
Certificates
Financial Assets
at FVTOCI -
Equity
Instruments
Balance at January 1, 2019

$ 6,535
$ 19,015

Recognized in profit or loss (included in
gain on financial assets at FVTPL)

3,063
-
Recognized in other comprehensive
income (included in unrealized
valuation gain on financial assets at
FVTOCI)


-

718


Balance at December 31, 2019

$ 9,598
$ 19,733
 Total
$ 25,550
3,063

718
$ 29,331
  • 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.

  • 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 **
2020
2019
$ 20,030
$ 25,160
1,695,200
1,481,491
43,207
35,710
5,913
6,061
2,729,803
2,458,938

  • 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.

  • 187 -

  • 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 34.

Sensitivity analysis

The Group is mainly exposed to the USD and RMB.

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 pretax income and equity amount when the New Taiwan dollar weakens (strengthens) by 5% relative to the relevant currency.

Profit or loss

Equity		 USD Impact
For the Year Ended
December 31
2020
2019
$ 1,062
$ (419)

(296)
(303)		 RMB Impact
For the Year Ended
December 31
2020
2019
$ (359)
$ (347)
-
-

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.

  • 188 -

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
2020
2019


$ 456,409
$ 386,965
1,917,588
1,932,165

The following sensitivity analysis shows the effect of a 25 basis points change in interest rates of non-derivative instruments at the balance sheet date. The 25 basis points 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 2020 and 2019 would have decreased/increased by $3,653 thousand and $3,863 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.

The following table shows the maximum exposure to endorsement made by the Group:

Off-balance sheet commitments
and guarantee
Endorsement for subsidiary
 December 31 December 31
2020
Carrying
Amount
Largest
Exposed
Amount
$ - $ 1,003,815		 2019
Carrying
Amount
Largest
Exposed
Amount
$ - $ 703,800

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.

  • 189 -

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, 2020

December 31, 2020
Weighted-
average
Effective
Interest Rate
(%)

Non-interest bearing liabilities

Lease liabilities
1.55-1.68
Variable interest rate liabilities
1.63

 On Demand or
Less than
1 Month
$ 381,225
8,158

297,941

$ 687,324
 1-3 Months
$ 347,293

3,043

129,647

$ 479,983
 3 Months to
1 Year
$ 20,447

27,267

450,000

$ 497,714
 1-5 Years
$ 750

44,158

1,040,000

$ 1,084,908
 5+ Years
$ 62,500

-

-
$ 62,500

December 31, 2019

Weighted-
average
Effective
Interest Rate
(%)

Non-interest bearing liabilities

Lease liabilities
1.55
Variable interest rate liabilities
1.82

 On Demand or
Less than
1 Month
$ 260,664
8,870

1,000

$ 270,534
 1-3 Months
$ 180,887

4,311

124,645

$ 309,843
 3 Months to
1 Year
$ 20,765

38,803

636,520

$ 696,088
 1-5 Years
$ 457

81,546

1,170,000

$ 1,252,003
 5+ Years
$ 64,000

-

-
$ 64,000

b) Financing facilities

Unsecured facilities
Amount used

Amount unused


Secured facilities
Amount used

Amount unused

 December 31 December 31





2020
$ 556,543

160,665

$ 717,208

$ 1,345,000

1,819,800

$ 3,164,800
 2019
$ 410,000
625,896
$ 1,035,896
$ 1,602,050
1,266,551
$ 2,868,601
  • 190 -

30. 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”) Fudong Freight Co., Ltd. (“Fudong Freight”) 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”) Jinli Investment Co., Ltd. (“Jinli 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 The chairman is first-degree relative of the chairman 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 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

  • 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







2020
$ 84,450

$ 297,363


52,422

$ 349,785

$ 46,730

$ 307

$ 2,987

$ 586
 2019
$ 72,797
$ 253,837
53,160
$ 306,997
$ 15,713
$ -
$ 2,862
$ -
  • 191 -

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

Yung-Sheng
Development




Trade receivables
Fuan Mining

Yung-Sheng
Development




Other receivables
Other related parties		 December 31 December 31






2020
$ 235


-

$ 235

$ 4,651


1,113

$ 5,764

$ 313
 2019
$ 199
4,773
$ 4,972
$ 7,342
108
$ 7,450
$ 155

The outstanding trade receivables from related parties are unsecured. As of December 31, 2020 and 2019, no impairment losses were recognized for trade receivables from related parties.

  • 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








2020
$ 23,763

7,828

5

$ 31,596

$ 16,876


3,130

$ 20,006

$ 8,145


144

$ 8,289
 2019
$ 28,810
5,846
-
$ 34,656
$ 26,000
9,532
$ 35,532
$ 1,203
78
$ 1,281

The outstanding trade payables to related parties are unsecured.

  • 192 -

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




2020
$ 8,000

$ 70,049

$ 45,800

$ 381
 2019
$ -
$ -
$ 45,800
$ 102

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
Lease income was as follows:

Related Party Category/Name
Fudong Freight
Other related parties		 December 31
2020
2019
$ 1,968
$ 2,274

144

132
$ 2,112
$ 2,406
For the Year Ended December 31
2020
$ 2,323

132
$ 2,455		 2019
$ 2,274

132
$ 2,406

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
2020
$ 43,057

519
$ 43,576		 2019
$ 21,169

463
$ 21,632

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

  • 193 -

31. 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, shortterm 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


2020
$ 3,093,669

935,824

258,242

$ 4,287,735
 2019
$ 3,073,626
782,986
218,849
$ 4,075,461

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

  • a. As of December 31, 2020, the Group has signed a contract for purchase of machinery and equipment and transportation equipment; the unpaid amount is $328,805 thousand.

  • b. As of December 31, 2020 and 2019, unused letters of credit for purchases of raw materials amounted to approximately $61,543 thousand and $0, respectively.

33. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD: NONE

34. 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, 2020

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
  • 194 -

December 31, 2019

December 31, 2019
Foreign Carrying
Currency Exchange Rate Amount
Financial assets
Monetary items
USD
$		 279 29.98 (USD:NTD)
$		 8,373
RMB 1,610 4.305 (RMB:NTD) 6,930
Non-monetary item
USD 320 28.48 (USD:NTD) 9,598

Foreign exchange gains (realized and unrealized) of the Group in 2020 and 2019 were $1,865 thousand and $1,742 thousand, respectively. Because of the variety of foreign currency transactions, it is not practical to disclose exchange gains and losses by foreign currency.

35. 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;

  • 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: Please see Table 4 attached;

  • 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 5 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 7 attached.

  • b. Information on investees: Please see Table 6 attached.

  • 195 -

  • 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 8 attached.

36. 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.

  • 196 -

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
Other expenses
Interest expense
Profit before tax		 Income of Segments
2020
2019
$ 4,481,068 $ 3,666,258

49,104

65,438

$ 4,530,172
$ 3,731,696

 Profit/Loss of Segments


2020
$ 4,481,068

49,104

$ 4,530,172


2020
$ 476,777

(29,302)

447,475
1,591
8,336
12,349
1,865
(538)
15,724
(10,448)

(31,946)

$ 444,408
 2019
$ 116,243

(38,361)

77,882

2,072

8,965

8,930

1,742

3,685

-

(9,584)

(39,778)
$ 53,914

The revenue of segments reported above is generated from external client exchange. There is no selling between segments in 2020 and 2019.

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

Segment liabilities
Operating segment
Cement segment

Other segment

Total liabilities
 December 31 December 31





2020
$ 4,772,255

3,255,052

$ 8,027,307

$ 2,649,731

720,657

$ 3,370,388
 2019
$ 4,081,748
3,247,129
$ 7,328,877
$ 2,337,236
670,704
$ 3,007,940

c. Geographic information

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

  • 197 -

d.Main customer’s information

The sales revenue amounted to NT$4,530,172 thousand and NT$3,731,696 thousand in 2020 and 2019. In 2020 and 2019, there was no revenue from a single customer that exceeded 10% of the Group’s total revenue.

  • 198 -

TABLE 1

LUCKY CEMENT CO. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (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		 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
Marine Co.
Lucky Cement
Corp., Japan		 Other receivables
from related
parties
Other receivables
from related
parties
Other receivables
from related
parties		 $ 200,000
30,000
30,000		 Yes
Yes
Yes

$ 200,000
20,000
-
$ 220,000		 $ 61,150

-
-		 1.6798%
1.6798%
-		 b.
b.
b.		 $ -
-
-		 Operating
turnover
Operating
turnover
Operating
turnover		 $ -
-
-		 -
-
-		 -
-
-		 $ 465,685
465,685
465,685		 $ 1,862,738

1,862,738

1,862,738
1 Luckicon
Ready-mixed
Co.		 Dasheng
Enterprise		 Other receivables
from related
parties		 20,000 Yes $ -
-		 - b. - Operating
turnover		 - - - 128,115
256,229

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. Financing of Luckicon Ready-mixed Co. should not be more than 20% of net value 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.

  • 199 -

TABLE 2

LUCKY CEMENT CO. AND SUBSIDIARIES

ENDORSEMENT/GUARANTEE PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (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.
Luckyship Marine
Co.
Lucky Cement Corp.,
Japan		 Subsidiary
Subsidiary
Subsidiary

Subsidiary		 $ 1,862,738
1,862,738
1,862,738
1,862,738		 $ 620,000

370,000

45,000

14,115




$ 620,000

370,000

-

13,815

$ 1,003,815		 $ 590,000

135,000

-
-		 $ 120,000
(Note 3)

-

-
-		 13.31%
7.95%
-
0.30%		 $ 2,328,423
2,328,423
2,328,423
2,328,423		 Y
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 asset at amortized cost - restricted asset.

  • 200 -

TABLE 3

LUCKY CEMENT CO. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Holding Company Name Marketable Securities Type and Name Relationship with
the Company		 Financial Statement Account December 31, 2020 December 31, 2020 Note
Shares/Units Carrying Value
(%)		 Fair Value
(Notes 1 and 2)
Lucky Cement Co.
Luckyship Marine Co.
Luckicon Ready-mixed Co.		 Fund
FSITC Global Vedio Gaming & eSports Fund
O-Bank No.1 Real Estate Investment Trust
Non-listed common stock
Jonfeng Mining Co., Ltd
WK Technology Fund
Listed common stock
Taiwan Cement Corp.
Far Eastern New Century Corporation
U-Ming Marine Transport Corporation
Winbond Electronics Corp.
United Microelectronics Corporation
Excelsior Medical 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
TSG Phnom Penh Real Estate Development Fund
Corporate bond
The Cathay United Jenai EMC USD Fixed Interest Allocation
Bond		 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Financial assets at FVTPL - current
Financial assets at FVTPL - current
Financial assets at FVTOCI - noncurrent
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 - noncurrent
Financial assets at FVTPL - current
Financial assets at FVTPL - noncurrent
Financial assets at FVTOCI - current		 500,000
100,000
1,494,708
1,156,000
200,148
200,000
128,000
130,181
72,351
28,628
13,496
917
875
446

49,007
500,000

500
-		 $ 5,320
970
8,879
5,824
8,646
5,790
4,723
3,782
3,411
1,695
126
20
12
8
291
5,006
8,734
5,913		 -
-
10.58
2.22
-
-
0.02
-
-
0.02
-
-
-
-
0.35
-
0.61
-		 $ 5,320
970
8,879
5,824
8,646
5,790
4,723
3,782
3,411
1,695
126
20
12
8
291
5,006
8,734
5,913

Note 1: Financial assets at FVTPL: Fair value is based on the net asset value of funds on December 31, 2020.

Note 2: Financial assets at FVTOCI: Fair value of listed stocks is based on stock closing price on December 31, 2020. Fair value of corporate bond is based on market price on December 31, 2020. Fair value of non-listed stocks is estimated by the fair value evaluation method.

Note 3: Please refer to Table 6 for information regarding subsidiaries.

  • 201 -

TABLE 4

LUCKY CEMENT CO. AND SUBSIDIARIES

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer Property Event Date Transaction
Amount		 Payment Status Counterparty Relationship Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Information on Previous Title Transfer If Counterparty Is A
Related Party		 Pricing Reference Purpose of
Acquisition		 Other Terms
Property
Owner		 Relationship Transaction
Date		 Amount
Luckicon Ready-mixed Co. 24 lots of land with land serial
No. 470, etc. located in
Sanjiaopu Shulin District of
New Taipei City
March 20, 2020
(Note 1)		 $ 590,129
(Note 2)		 Paid Natural person who
is not a related
party of the Group		 N/A - - - $ - Negotiated based on the
appraisal report and later
resolved in the board of
directors’ meeting.		 Factory use N/A

Note 1: It is the date of the resolution of the board of Luckicon Ready-mixed Co.

Note 2: Refer to Note 15(c).

  • 202 -

TABLE 5

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, 2020

(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
Lucky Cement Co. Luckicon Ready-mixed Co.,
Fuan Mining Co., Ltd.		 Subsidiary
Other related parties		 Sale
Purchase		 $ (605,122)
297,363		 (18.44)
22.86		 About 90 days
About 90 days		 Quite
Agreed		 Quite
Quite		 Accounts receivable
$ 18,868
Notes receivable
26,948
Accounts payable
(16,876)
Notes payable
(23,763)		 20.30
5.24
(8.71)
(15.99)		 Note

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

  • 203 -

TABLE 6

LUCKY CEMENT CO. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (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, 2020 Net Income
(Loss) of the
Investee		 Investment
Income (Loss)
Recognized		 Note
December 31,
2020		 December 31,
2019		 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.)		 Real estate sales and lease
Ready-mixed concrete manufacture and trades
Investment business
Cement trading
Shipping agent
Mine gravel		 $ 2,167,473
350,000
-
82,300
88,615
12,571		 $ 2,167,473
99,998
-
82,300
88,615
12,571		 157,295,283
47,000,000
50,000
6,800
8,499,994
1,000,000		 99.99
100.00
-
100.00
99.99
100.00		 $ 2,280,677
639,954
-
24,851
34,921
8,725		 $ (14,061)
104,903
-
247
(8,824)
3,911		 $ (14,061)
104,261
(Note 4)
-
247

(8,826)
(Note 5)
3,911		 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 is in progress.

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 unrealized gain of $642 thousand.

Note 5: The difference is downstream transactions realized loss of $2 thousand.

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

  • 204 -

TABLE 7

LUCKY CEMENT CO. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (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.
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.
Luckyship Marine Co.
Luckyship Marine Co.
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
a		 Notes receivable
Accounts receivable
Other receivables
Contract liabilities
Acquisition of transportation equipment
Sales
Rental income
Other receivables
Notes payable
Other payables
Cost of sales
Rental income
Other income
Other receivables
Notes payable
Other payables
Cost of sales
Rental income
Interest income
Refundable deposits
Other receivables - financing
Other receivables
Rental income
Interest income		 $ 26,948
18,868
128
9,872

680
605,122
1,525
4
11
491
1,598
8,060
1,200
14
1,028
510
19,248
256
184
159,000
61,150
96
80
764		 About 90 days
About 90 days
About 90 days
About 90 days
Negotiated respectively
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
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
30 days
30 days		 0.34
0.24
-
0.12
0.01
13.36
0.03
-
-
0.01
0.04
0.18
0.03
-
0.01
0.01
0.42
0.01
-
1.98
0.76
-
-
0.02
1 Luckicon Ready-mixed Co. Dasheng Enterprise
Dasheng Enterprise		 c
c		 Sales
Interest income		 425
74		 About 90 days
30 days		 0.01
-

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.

  • 205 -

TABLE 8

LUCKY CEMENT CO.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

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 and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) 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.

  • 206 -

6.6 The Company and its affiliates shall disclose the impact on the financial status of the Company in the most recent year and up to and including the date of publication of the annual report: None

  • 207 -

VII Examination Analysis and Risk Matters of Financial Position and Operating Results

7.1 Analysis of Financial Status

Analysis of Financial Status (Consolidated) ：

Analysis of Financial Status
Analysis of Financial Status (Consolidated)：		 Analysis of Financial Status
Analysis of Financial Status (Consolidated)：		 Analysis of Financial Status
Analysis of Financial Status (Consolidated)：		 Analysis of Financial Status
Analysis of Financial Status (Consolidated)：		 Analysis of Financial Status
Analysis of Financial Status (Consolidated)：
Year
Item
2020		 2019 Difference
Amount ％
Current Assets $5,259,278
$5,087,148
$172,130
3.38
Property, Plant and Equipment 2,223,887
1,711,806
512,081
29.91
Other Assets 544,142
529,923
14,219
2.68
Total Assets 8,027,307
7,328,877
698,430
9.53
Current Liabilities 2,151,262
1,617,131
534,131
33.03
Non-Current Liabilities 1,219,126
1,390,809
(171,683)
(12.34)
Total Liabilities 3,370,388
3,007,940
362,448
12.05
Paid–in Capital 4,047,380
4,047,380
0
0.00
Capital Surplus 9
8
1
12.50
Retained Earnings 605,001
269,466
335,535
124.52
Other Equity 4,455
4,006
449
11.21
Non-controllinginterests 74
77
(3)
(3.90)
Total Equity 4,656,919
4,320,937
335,982
7.78
1. The increase in property, plant and equipment was mainly due to the purchase of land and related equipment for the new plant.
2. The increase in current liabilities was mainly due to the increase in bills payable and advance receipts arising from the business, and the
increase in equipment purchases incurred by the construction of the factory.
3. The increase in retained earnings was from the higher surplus in this year.

7.2 Analysis of Financial Performance

Analysis of Financial Performance (Consolidated) ：

Unit: NT$1,000

2020 2020 2020 2020 2020 2020 2020 2019 2019 2019 2019 2019 2019 2019 Difference
Amount		 Difference
�％�
Subtotal Total Subtotal Total
Total operating revenue
Less：Sales discounts and allowances
Net operating revenue
Operating costs
Gross profit (loss) from operations
Operating expenses
Net other income (expenses)
Net operating income (loss)
Non-operating income and expenses
Profit (loss) before tax from continuing operations
Total tax expense (income)
Profit (loss) from continuing operations
Profit (loss) from discontinued operations
Profit (loss)
Other comprehensive income (net)
Comprehensive income		 $4,533,370
3,198

4,530,172
3,813,497		 $3,733,161
1,465

3,731,696
3,432,815		 $800,209
1,733

798,476
380,682

417,794

35,122
(13,079)

369,593
20,901

390,494
44,129

346,365

0

346,365
(43,609)

302,756
21.44

118.29

21.40

11.09

139.79

15.60

(317.45)

474.56

(87.20)

724.29

550.92

754.54

-

754.54

(90.79)

322.29
716,675
260,241
(8,959)
447,475
(3,067)
444,408
52,139
392,269
0
392,269
4,426
$396,695		 716,675
260,241
(8,959)
447,475		 298,881
225,119
4,120
77,882
(23,968)
(3,067)
444,408		 (3,067)
53,914
8,010
45,904
0
45,904
48,035
$93,939		 53,914
52,139
392,269
8,010
45,904
8,010
0
392,269
0
45,904
4,426
48,035
Analysis of changes in financial ratio：
1. The main reason of the increase in operating gross profit and operating net profit was the increased revenue from booming market and the
decreased unit cost from production capacity increased.
2. The net other income (expenses) was negative, mainly because of the loss in disposaling of real property recognized by the relocation of the
factory.
3. The decrease in the negative value of non-operating income and expenses was mainly from the disposal of idle land to generate benefits.

  1. The main reason of the increase in operating gross profit and operating net profit was the increased revenue from booming market and the decreased unit cost from production capacity increased.

  2. The net other income (expenses) was negative, mainly because of the loss in disposaling of real property recognized by the relocation of the factory.

  3. 208 -

7.3 Analysis of Cash Flow

Review and Analysis of Consolidated Cash Flows Analysis of Cash Flow

alysis of Cash Flow
Review and Analysis of Consolidated Cash Flows
Analysis of Cash Flow		 alysis of Cash Flow
Review and Analysis of Consolidated Cash Flows
Analysis of Cash Flow		 alysis of Cash Flow
Review and Analysis of Consolidated Cash Flows
Analysis of Cash Flow		 alysis of Cash Flow
Review and Analysis of Consolidated Cash Flows
Analysis of Cash Flow
Unit：NT$1,000
The Balance of Cash Flow in the
Beginningof Year		 Net Cash Flow from Operating
Activities		 Cash Outflow
(Inflow)		 Cash Surplus
(Deficit)		 Leverage of Cash Surplus(Deficit)
Investment Plans FinancingPlans
233,426 832,057 744,948 320,535 － －
1. Analysis of change in cash flow in the current year:：
�1�Operating activities: Mainly from operating profit, etc.
�2�Investment activities：Mainly because of the purchase of real property, plant and equipment.
�3�Financing activities: Mainly because of the payment of dividends and debt repayment.
2. Remedy for cash shortages and liquidity analysis：None
3. Analysis of cash liquidity for the coming year：
�The Balance of Cash flow in the beginning of the year＝NT$320,535,000
�Estimated Net Cash Flow from Operating Activities＝NT$807,341,000
Estimated Cash Outflow (Inflow)＝NT$884,327,000
Estimated Cash Surplus(Deficit) ＋－＝NT$243,549,000

7.4 Major Capital Expenditure Items:

In addition to the Company’s routine capital expenditures in 2020, the subsidiary, Luckicon Ready-mixed Concrete Factory Co., Ltd., purchased a total of 24 plots of land located at No. 470, Sanjiapu Section, Shulin District, New Taipei City from non-related parties for the construction of a new plant. The total contract price is approximately NT$590,000,000.

The total amount of capital expenditure in 2020 is NT$650,000,000, which is expected to increase revenue and save costs.

7.5 Investment Policy in the Last Year, Main Cause for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

The most recent year was the development of an industry related to the Company's business. To expand the scale of operations and achieve a vertical separation or horizontal integration, the increase in operating niche was the Company's investment policy. Reinvestment situation in 2020:

  1. The reason for the loss of Dasheng Enterprise Co., Ltd. is that the newly-built development project of real estate has not yet been promoted, resulting in no operating income and bearing the interest expense of the development stage.

  2. Luckicon Ready-mixed Concrete Factory Co., Ltd. benefited from the stabilization of the real estate industry, the increase in demand has turned it into a profit; the Huilong factory is currently under construction and is expected to be completed in the second half of 2022.

  3. There was still a loss of Luckyship Marine Co., Ltd. in 2020. The company is actively strengthening business expansion to increase revenue, strictly control costs, and expect to turn into profit.

7.6 Analysis and Evaluation of Risk Management

1. Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future

Response Measures ：

  • (1) Foreign exchange rates ：：

  • Except that some of the materials of the Company are imported, the rest are domestic purchases, and our products are domestic sales. Therefore, the foreign currency of the Company’s accounts for a small proportion of the Company's total assets and it is short-term loans within one year. At the end of 2020, there were no liabilities for foreign currency borrowings, and foreign exchange gains for the year were NT$1,865,000. In order to reduce risks arising from changes in exchange rates, the Company, in addition to long-term tracking of changes in the international economy and finance, irregularly reviews the risk exposure of the Company's foreign currency position, and plans foreign currency demand to circumvent or reduce the possibility of future changes. The Company's financial hedging strategy is aimed at achieving a goal of avoiding most market price or cash flow ri sks.

  • (2) Interest rate ：

In 2020, except that the short-term and long-term borrowings in the previous period had been repaid on time, the Company increased short-term borrowings by NT$37,423,000 and reduced long-term borrowings by NT$130,000,000. The total loan amount of NT$1,839,588,000 accounted for 22.92% of total assets, a decrease of 3.44% from 2019. The annual interest expense was NT$31,946,000, and the interest expense accounted for 0.71% of the net revenue. As the fluctuation of interest rates is closely related to economic prosperity, it is still safe for the Company's current financial structure. Although there is regional growth in the global economy, the kinetic energy is still uncertain, the domestic political and economic environment is disturbed, and it is unlikely to raise interest rates in the short term. In order to

  • 209 -

ensure that the future interest expense due to rising interest rates is reduced, the Company will continue to improve its financial structure and will adopt more meticulous and effective capital planning and use measures.

(3) Inflation:

The Company has a positive correlation with product prices and inflation, so the impact on the company's profit and loss should not be excessive.

2. Policies, Main Causes of Gain or Loss and Future Response Measures with Respect to High-risk, High-leveraged Investments, Lending or Endorsement Guarantees, and Derivatives Transactions ：

  • The Company does not engage in high-risk, high-leverage investments. For acquisition or disposal of major assets, loans to others, endorsement guarantees, and derivative commodity transactions, all are based on the Company’s policies and procedures, such as “Regulations Governing the Acquisition and Disposal of Assets”, “Procedures for Lending of Capital”, “Procedures for Endorsements and Guarantees” and “Procedures for Engaging in Derivatives Trading”.

3. Future Research & Development Projects and Corresponding Budget ：

  • The Company is in the cement manufacturing industry, and the products are mature products used in general building materials. Therefore, the Company will actively optimize the production equipment, improve the operation rate, and improve the product quality to provide customers with better products and services. In addition, more active use of waste resources to reduce the use of natural resources has led to the recycling of economic resources.

4. Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Sales ：

  • (1) With the policies and laws, such as Corporate Governance, Company Act, Securities and Exchange Act modified by the competent authority, the Company has been in cooperation, so there is no large impact for financial business currently.

  • (2) For the implementation of the new system for retirement, the Company has been pension in accordance with the law, so the new system has no impact for financial business.

  • (3) Another choice for pension reserve of retired employees in accordance with old system of retirement, the p ension reserve has saved in pension fund account on March 31, 2016. At the end of March each year, the amount of insufficient funds is saved according to the actuary’s report.

  • (4) The revision of the Mining Law and the sharp increase in the special tax on mini ng will inevitably increase the burden on costs and reduce the gross profit, the Company is intended to more stringently control costs in order to achieve a breakthrough.

5. Effects of and Response to Changes in Technology and the Industry Relating to C orporate Finance and Sales ：

  • The products of the Company are used for general public constructions and civil construction projects; but the construction methods and inspection standards have not changed largely, there is no impact for financial business of the Company.

6. The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures ：

  • The Company has operating principles in steady and conservative and attentions to the image and risk management, so there is no any foreseeable crisis. Although the cement industry has entered a mature period with limited growth, the Company is actively transforming and looking for business opportunities.

7. Expected Benefits from, Risks Relating to and Response to Merger and Acquisition Plans ： None

8. Expected Benefits from, Risks Relating to and Response to Factory Expansion Plans ： Fortunately, the Wugu Plant of the Company's subsidiary Luckicon Ready-mixed Concrete ceased operation at the end of September 2020. This is in line with the New Taipei City Government’s "Trial plan before the release of the Expanding Wugu District Urban Plan” and the demolition will be carried out and completed in Octo ber 2019. In order to make up for the lost production capacity, it has signed a contract to lease a ready-mix concrete plant from the same industry manufacturer in 2021 to establish the New Taipei City Sanxia Plant. In order to expand the distribution channels and continue to deepen the domestic cement market, we have purchased land in the Sanjiapu section of Shulin District, New Taipei City. Currently, we are actively planning and constructing a new plant in Shulin. It is expected to complete the construct ion of the plant and start operations in the second half of 2022. The plant is located at the junction of Shulin, New Taipei City and Huilong, Taoyuan City. After the completion of the plant, it can form a better supply network with the existing New Taipei City Sanxia Plant and Taoyuan Puxin Plant, which can provide better delivery service quality and improve the market share. The cement industry belongs to the business cycle industry. Through the establishment of this new plant, the impact of market fluctuations during the business cycle can be reduced.

9. Risks Relating to and Response to Excessive Concentration of Purchasing Sources and Excessive Customer Concentration ：

  • The Company knows the risk of focusing on purchase/sales, so the purchase has adopted diversified procurement policy, except for purchases by special minerals and fixed suppliers, the rest is no focus on purchase from the same supplier. In terms of sales, it also spreads risks and implements credit management. The transactions are according to the characteristics of the industrial market transactions and it is based on the advance sales receipts method, except there are some give credit to the evaluation of the operations and financial status of domestic listed (OTC) companies and the sales of the affiliates of the Company. Therefore, the Company's assessment of the risk of recovery of accounts, in the listed (OTC) companies

  • 210 -

and the affiliates of the Company, the account recovery situation is generally good. As for the customers that belong to the advance payment, because the creditor's right has not yet been generated, it does not evaluate the Transaction Instruments received by the Company. After the customer picks up the goods, the creditor's right of the Company occurs. If the Transaction Instrument has not been cashed, the Company will estimate the Company’s bad debt provision for the actual amount that has not been cashed

  • .

10. Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10% ： None

11. Effects of, Risks Relating to and Response to the Changes in Management Rights ： None

12. Litigation or Non-litigation Matters ： None

13. Other Major Risks ：

  • The Company stipulate countermeasures by structuring informal organization system for general day -to-day operations and emergency events to strengthen the management of business risks ：

  • (1) Operation of Meeting ：

    • Accounting department takes charge of the preparation of business review information monthly, and the Chairman acts as the host to convene managers of units including but not limited to business department and factories to review the Company's operations, production and marketing issues for current month, tracking the implementation of the budget and developing improvement program.

  • (2) Meeting of the Head ：

    • The Chairman convenes first level supervisors of each unit to attend the monthly meeting and each unit pre sents business situation in the meeting, in addition to review, tracking the implementation of work by each unit, and evaluate the impact of internal and external economic or non-economic environment changes on the Company's established operating principles and strategies and objectives, further stipulating adjusted strategy and program after joint discussion.

  • (3) Emergent Event Reporting System ：

    • For the purposes of handling any Significant emergent event and reducing any potential damages, the Company establishes “Emergency Reporting System Measures”, a guideline of reporting process and on -site contingency treatment for each unit and staffs of the Company.

  • (4) Information security risks

    • The Company has formulated a clear policy on network security; the strict control and management of information security authority and responsibility and education and training, information security operations and protection, network security management, and system access control are as follows:

    • “Information Security Rights and Responsibilities” and “Education and Training”

      • For personnel handling sensitive and confidential information and those who need to be assigned system management authority due to work needs, appropriate division of work, decentralization of powers and responsibilities, establishment of an evaluation and assessment system, and establishment of a mutual support system for personnel as needed.

      • For retired (off, suspended) personnel, follow the procedures for handling personnel resignation (off, suspended), and immediately cancel all rights to use various system resources.

      • For personnel at different levels, based on roles and functions, conduct information security education, training and advocacy according to actual needs, so that employees can understand th e importance of information security and various possible security risks, so as to improve employees' awareness of information security, and encourage employees to comply with information security regulations.

      • Regularly participate in information security seminars to improve the information security technology for information staffs, and review the Company's internal security gap at any time to strengthen the defense mechanism.

    •  Information security operation and protection.

      • Establish operating procedures for handling information security incidents, and give relevant personnel necessary responsibilities to handle information security incidents quickly and effectively.

      • Establish operating procedures for handling information security incidents, and give relevant personnel necessary responsibilities to handle information security incidents quickly and effectively.

      • Handle and protect personal information prudently in accordance with the relevant provisions of the Personal Data Protection Act.

      • Establish the system backup facility to regularly perform necessary information, software backup and backup operations, so that when a disaster occurs or media storage fails, the normal operations can be quickly restored.

      • Regularly backup the SAP ERP system database and perform SAP system disaster recovery drills every year, and establish remote data backup and system backup to ensure that the system environment can be quickly rebuilt when a disaster occurs and maintain the Company's normal operation.

      • The Company e-mail system policy: We refuse to receive external compressed files and executable files.

      • When entering and leaving the control area of the computer room, relevant access control should be implemented.

    •  Network security management

      • For branches connected to the external network, firewalls are set up to control data transmission and resource access between the external and internal networks, and perform rigorous identification operations to block internal and external network access services without permission.

  • 211 -

  • Confidential and sensitive information or documents are not allowed to be stored in open information systems, and confidential documents are not allowed to be sent by e-mail.

  • Regularly check the internal network information security facilities and anti-virus, install anti-virus software on the user side to reduce the infection risk, and update the virus code and scan engine of the anti-virus system and various security measures in a timely manner.

  •  System access control

  • The procedures for approving, issuing, and changing passwords shall be determined according to the operating system and security management, and recorded.

  • When logging in to each operating system, in accordance with the system access permissions required by personnel at all levels to perform tasks, the account and password set and authorized by the system administrator of the information department, and updated regularly.

  • The Company needs to strictly control the login account permissions and file access permissions of each system, and non-related personnel are prohibited from using it to ensure the confidentiality of the Company data.

  • When setting the password of the account, specify the appropriate strength and number of characters, and it must contain a mixture of alphanumerics and special symbols in order to pass.

  • Add USB control software to register and control the use of external access devices that can be used by various departments. Only storage devices authenticated by the Information Department can access data to avoid computer infected due to users plugging and unplugging USB devices at will.

7.7 Other Important Matters ： None

  • 212 -

VIII Special Disclosure

8.1 Summary of Affiliated Companies

1. Organization

==> picture [687 x 239] intentionally omitted <==

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

Lucky
CnLucky Cement
Corporationt
Corporation
Dasheng Luckyship Luckicon Ready-mixed Lucky Cement Corp., Just Bright Ltd.
Enterprise Co., Ltd. Marine Co., Ltd. Concrete Factory Co., Ltd. Japan 100.00%
99.99% 99.99% 100.00% 100.00% (Note)
Fuyu Development
Company
100.00%
----- End of picture text -----

(Note) The parent company's board of directors resolved on December 27, 2019 to terminate the operation of its subsidiary JustBright Ltd., but the cancellation process has not yet been completed.

2. Subsidiaries’ information

Comapany
Name		 Date of
establishment		 Address Paid in capital Main business items
Dasheng Enterprise
Co., Ltd.
December, 1969		 14F, 237 Songjiang Rd.,
Zhongshan Dist., Taipei City		 NT$1,573,000,000 Construction Business
Luckyship Marine
Co.,Ltd.		 July, 1993 13F, 237 Songjiang Rd.,
Zhongshan Dist.,Taipei City		 NT$85,000,000 Shipping Agent and Transportation
Luckicon Ready-
mixed Concrete		 May, 1993 191 Meishi Rd., Sec. 1,
Yangmei Dist.,Taoyuan City		 NT$470,000,000
Ready-mixed Concrete
Manufacturing& Trades
Lucky Cement
Corp.,Japan		 June, 1987 Aichi, Japan hekinan Yu Jin-Pu-
cho 12gu		 ￥100,000,000 Cement Trading
Just Bright Ltd. December, 2000 Tropic Isle Building,Po
Box438,RoadTwon,Tortola,




 US$50,000 Investment Business
Fuyu Development
Company		 November, 2007 ~~i i h~~
~~i~~
~~i~~
~~l~~
~~d~~
13F, 237 Songjiang Rd.,
Zhongshan Dist., Taipei City		 NT$10,000,000 Mine Gravel

3. Presumed to have control and affiliation, their same shareholder information: None

  • 213 -

4. Information of subsidiaries’ directors and supervisors

December 31, 2020 December 31, 2020
Company Name Title Name or Representative Holding Shares
Shares Shareholding
Ratio
Dasheng Enterprise
Co., Ltd.		 Chairman Chen, Liang-Chuan (Lucky Cement Co.� 157,295,283
99.99%
Director Xiao, Jing-Qi (Lucky Cement Co.� 157,295,283 99.99%
Director Chen, Yun-Ju (Lucky Cement Co.� 157,295,283 99.99%
Supervisor Lin, Zheng-Liang － －
Luckyship Marine
Co., Ltd.		 Chairman Chen, Liang-Chuan (Lucky Cement Co.��Lucky Cement� 8,499,994
99.99%
Director Guo, Qing-Shui (Lucky Cement Co.� 8,499,994
99.99%
Director Chen, Yun-Ju (Lucky Cement Co.� 8,499,994
99.99%
Supervisor Weng, Xiu-Chu － －
Luckicon Ready-
mixed Concrete
Factory Co., Ltd		 Chairman Chen, Liang-Chuan (Lucky Cement Co.� 47,000,000
100.00%
Director Chen, Yun-Ju (Lucky Cement Co.� 47,000,000 100.00%
Director Weng Xiu-Chu (Lucky Cement Co.� 47,000,000 100.00%
Supervisor Liu, Chia-Jui (Lucky Cement Co.� 47,000,000 100.00%
Lucky Cement
Corp., Japan		 Chairman Chen, Liang-Chuan (Lucky Cement Co.� 6,800
100.00%
Director Chen, Yun-Ju (Lucky Cement Co.� 6,800
100.00%
Director Weng, Xiu-Chu (Lucky Cement Co.� 6,800
100.00%
Supervisor Lin, Jia-Hui (Lucky Cement Co.� 6,800
100.00%
Just Bright Ltd. Director Chen, Liang-Chuan (Lucky Cement Co.� － －
Fuyu Development
Company		 Chairman Chen, Qing-Hong (Luckicon Ready-mixed Concrete Co.) 1,000,000
100.00%
Director Chen, Jun-Ren (Luckicon Ready-mixed Concrete Co.) 1,000,000
100.00%
Director Lin, Jia-Hui (Luckicon Ready-mixed Concrete Co.) 1,000,000
100.00%
Supervisor Zhang, Long-Xiong(Luckicon Ready-mixed Concrete Co.) 1,000,000
100.00%

5. The industries covered by all subsidiaries’ business operations

  • 1 � Manufacturing, processing, sales and distribution of cement and cement products.

  • 2 � Mining, manufacturing, processing, sales and distribution of raw materials for cement and raw materials for cement products and various ores.

� 3 � Construction business.

� 4 � Ship transportation.

� 5 � Ready-mixed concrete manufacturing and trades.

� 6 � Investment business.

� 7 � Shipping agent.

� 8 � Mine gravel.

6. Business overview of affiliated companies

Unit: In Thousands of New Taiwan Dollars ， except Earnings (Loss) Per Share December 31 , 2020


December
31,2020
Company Name Paid-in
Capital		 Total
Assets		 Total
Liabilities		 Net Worth Operating
Revenue		 Net
Operating
Income
(Loss)		 Profit/Loss
(after Tax)		 Earnings
(Loss) Per
Share
(after Tax)
(NTD)
Dasheng Enterprise Co., Ltd. 1,573,000
3,209,031
928,280
2,280,751
114
(2,089)
(14,062)
(0.09)
Luckyship Marine Co., Ltd. 85,000
48,364
13,442
34,922		 68,238
(8,721)
(8,824)
(1.04)
Luckicon Ready-mixed Concrete
FactoryCo.,Ltd		 470,000
1,244,261
603,688
640,573		 1,669,735
127,230
104,903
2.23
LuckyCement Corp.,Japan 24,165
29,350
4,499
24,851		 52,543
380		 247
－
Just Bright Ltd. － － － － － － － －
Fuyu Development Company 10,000
24,430
15,705
8,725
83,737
4,809		 3,911
3.91
  • 214 -

7. The Consolidated Financial Statements of affiliated enterprises

Declaration for the Consolidated Financial Statements of Affiliated Enterprises of the Company

March 26, 2021

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 the same as the companies required to be included in the consolidated financial statements of the Company and subsidiaries as of and for the years ended December 31, 2020 and 2019, as provided in International Accounting Standard 10 “Consolidated and Separate 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 the Company and subsidiaries as of and for the years ended December 31, 2020 and 2019. Hence, we did not prepare a separate set of consolidated financial statements of affiliates for the year ended December 31, 2020.

Very truly yours,

Lucky Cement Corporation

By

Chen, Liang-Chuan Responsible Person

  • 215 -

  • 8.2 Private Placement Securities in the Most Recent Years: None

  • 8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years: None

8.4 Other Necessary Supplementary Note: None

  • 216 -

IX The Significant Impact on Shareholders' Equity or Securities Prices in 2020 and up to the Date of Publication of the Annual Report: None

  • 217 -

More from LUCKY CEMENT

AGM Information 2026
May 26
AGM Information 2026
May 26
AGM Information 2026
May 26
Proxy Solicitation & Information Statement 2026
May 26
Proxy Solicitation & Information Statement 2026
May 26
Notice of Dividend Amount 2026
May 26
Declaration of Voting Results & Voting Rights Announcements 2026
May 26
Audit Report / Information 2026
May 21
Audit Report / Information 2026
May 21
Regulatory Filings 2026
May 13
View all filings →