SE CEMENT - Annual Report 2021 | FinancialReports.eu

[Stock code 1110]

Southeast Cement Corporation and Subsidiaries Consolidated Financial Report and Independent Auditor’s Report

2021 and 2020

Company address: Floor 4-1, No. 21 Wufu 3rd Road, Qianjin District, Kaohsiung

Tel: (07)2711121

Southeast Cement Corporation Statement

In the year of 2021 (from January 1 to December 31, 2021), the companies that should be included in the preparation of the consolidated financial statements of affiliated enterprises in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” and the companies that should be included in the preparation of consolidated financial statements of parent and subsidiary companies in accordance with the International Financial Reporting Standards No. 10 are the same, and the relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has been disclosed in the consolidated financial statements of the parent and subsidiary companies previously mentioned, so the consolidated financial statements of affiliated enterprises will not be prepared separately.

We hereby declare the above.

Company name: Southeast Cement Corporation

Responsible person: Min-Tuan Chen

March 15, 2022

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Independent Auditor’s Report

To Southeast Cement Corporation

Audit

Opinion

We have audited the consolidated balance sheet of Southeast Cement Corporation and its subsidiaries (hereinafter Southeast Group) as of December 31, 2021 and 2020, the consolidated comprehensive income statement, consolidated statement of changes in equity and consolidated cash flow statement from January 1 to December 31, 2021 and 2020 and the notes to the consolidated financial report (including the summary of significant accounting policies).

In our opinion, based on our audit results and the audit reports of other accountants (please refer to Other Matters), the consolidated financial report above was prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, as well as the International Financial Reporting Standards, International Accounting Standards, and the interpretations and explanations of International Financial Reporting Standards approved and issued by the Financial Supervisory Commission, and are sufficient to properly express the consolidated financial status of Southeast Group as of December 31, 2021 and 2020, and the consolidated financial performance and consolidated cash flow from January 1 to December 31, 2021 and 2020.

Basis of Our Audit Opinion

The audit is conducted in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accounts and the auditing standards generally accepted in the Republic of China. Our responsibility under these standards is further explained in the responsibility section of the audited consolidated financial report. We are subject to the code of independence of the accounting firm that we belong to, have maintained our independence from Southeast Group in accordance with the code of professional ethics for accountants, and have fulfilled other responsibilities of the code. Based on our audit results and the audit reports of other accountants, we believe that we have obtained sufficient and appropriate audit evidence as the basis for expressing the audit opinion.

Key Audit Items

Key audit items refer to the most important items in the audit of the consolidated financial report of Southeast Group for 2021 based on our professional judgment. These items have been reflected in the process of auditing the consolidated financial report as a whole and the process of forming the audit opinion. We do not express our opinion on these items separately.

The key audit items of the consolidated financial report of Southeast Group for 2021 are described as follows:

I. Sales revenue recognition

For the accounting policies related to revenue recognition, please refer to Note 4(19) to the consolidated financial statements; for the significant accounting judgments, estimates and assumptions related to revenue recognition, please refer to Note 5(1) 2. to the consolidated financial statements; for the revenue recognition, please refer to Note 6(31) to the consolidated financial statements.

Description of key audit items:

As the Southeast Group is principally engaged in the manufacture and sale of various cementrelated products, which may be affected by raw material prices, market supply and demand, and the economic climate, and the revenue from cement sales is recognized when the cement is actually collected by the customer to satisfy the performance obligation, the revenue from cement sales will be recognized as a critical audit in 2021.

Corresponding audit procedures:

Our auditing procedures included understanding and testing the design and effectiveness of internal controls relevant to the revenue from cement sales, taking samples from the sales ledger, verifying the related certificates to the transactions to verify the authenticity of the revenue recognition, obtaining subsequent sales details, reviewing whether significant sales returns and discounts had occurred to confirm whether there were any significant exceptions to the revenue recognition, and performing sales revenue cutoff tests.

Other Matters

For some subsidiaries included in the consolidated financial report above and investments by equity method, their financial reports have not been audited by us, but by other accountants. Therefore, in our opinion on the consolidated financial report above, the amounts listed in the financial reports of these companies are based on the audit reports of other accountants. The total assets of these subsidiaries as of December 31, 2021 and 2020 were NT$87,068 thousand and NT$81,969 thousand, respectively, accounting for 0.79% and 0.83% of the total consolidated assets, respectively; the total liabilities were NT$23,455 thousand and NT$23,456 thousand, respectively, accounting for 1.04% and 1.78% of the total liabilities; the operating income in 2021 and 2020 was NT$114 thousand and NT$114 thousand, respectively, accounting for 0.01% and 0.01% of the consolidated operating income, respectively; the total comprehensive income was NT$5,100 thousand and NT$816 thousand, respectively, accounting for 2.76% and 4.63% of the total consolidated comprehensive income, respectively. In addition, as of December 31, 2021 and 2020, the amount of investment in these related enterprises by equity method was NT$461,327 thousand and NT$442,933 thousand, accounting for 4.21% and 4.49% of the total consolidated assets, respectively; the share of profit and loss of affiliated enterprises and joint ventures by equity method recognized in 2021 and 2020 was NT$18,336 thousand and NT$5,158 thousand, respectively, accounting for 12.30% and 69.42% of the consolidated net profit before tax, respectively; the share of other comprehensive income of affiliated enterprises and joint ventures recognized by equity method was NT$2,544 thousand and NT$3,306 thousand, respectively, accounting for 4.99% and 479,83% of the net other comprehensive income, respectively.

Southeast Cement Corporation has prepared the individual financial reports for 2021 and 2020, which have been audited by us with an unqualified opinion plus the paragraph of other matters on file for reference.

Responsibilities of the Management and Governance Unit for the Consolidated Financial Report

The management is responsible for the preparation of the properly expressed consolidated financial report in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, as well as the International Financial Reporting Standards, International Accounting Standards, and the interpretations and explanations of International Financial Reporting Standards approved and issued by the Financial Supervisory Commission, and responsible for maintaining the necessary internal control related to the preparation of consolidated financial report, so as to ensure that there is no material misrepresentation in consolidated financial report due to fraud or error.

In the preparation of the consolidated financial report, the management’s responsibilities include the assessment of the ability of Southeast Group to continue to operate, the disclosure of relevant matters, and the adoption of the accounting basis for continuing operations, unless the management

intends to liquidate or suspend the business of Southeast Group and its subsidiaries, or there is no practical plan other than liquidation or suspension of business.

The governance unit (including the audit committee) of Southeast Cement Corporation is responsible for supervising the financial reporting process.

The Accountants’ Responsibility for Auditing the Consolidated Financial Report

The purpose of our audit of the consolidated financial report is to obtain reasonable assurance as to whether the consolidated financial report as a whole contains any material untruthful expression resulting from fraud or error, and issue an audit report accordingly. Reasonable assurance means a high degree of assurance, but an audit conducted in accordance with Generally Accepted Auditing Standards cannot guarantee that significant misrepresentation in the consolidated financial report will be detected. Misrepresentation may be due to fraud or error. An individual or aggregate amount that is misrepresented is considered significant if it can be reasonably expected to affect the economic decisions made by the users of the consolidated financial report.

I. Identifying and assessing the risks of material misrepresentation of the consolidated financial report due to fraud or error, designing and implementing appropriate countermeasures for the assessed risks, and obtaining sufficient and appropriate audit evidence as the basis of audit opinions. Because fraud may involve collusion, forgery, intentional omission, false statement or internal control overstepping, the risk of not detecting material misrepresentation caused by fraud is higher than that caused by error.
II. We acquire necessary understanding of the internal control system related to the audit, so as to design appropriate audit procedures at that time, but the purpose is not to express opinions on the effectiveness of internal control of Southeast Group.
III.[We evaluate the appropriateness of accounting policies adopted by the management, as well as] the reasonableness of accounting estimates and related disclosures.
IV. Based on the audit evidence obtained, we make a conclusion on the appropriateness of the accounting basis for continuing operations adopted by the management, and whether there is significant uncertainty in an event or situation that may cause significant doubt about the ability of Southeast Group to continue operations. If we are of the opinion that there is significant uncertainty in such an event or situation, we shall in the audit report remind the users of the consolidated financial report to pay attention to the relevant disclosure in the consolidated financial report, or amend our audit opinion when such disclosure is inappropriate. Our conclusions are based on the audit evidence obtained as of the audit report date. However, future events or circumstances may cause Southeast Group to no longer have the ability to continue to operate.
V. We evaluated the overall presentation, structure and content of the consolidated financial report (including related notes), and whether the consolidated financial report properly expresses related transactions and events.
VI. We obtained sufficient and appropriate audit evidence for the financial information of the constituent entities of Southeast Group, in order to express opinions on the consolidated financial report. We are responsible for the guidance, supervision and implementation of the audit case, and for forming audit opinions on the Group.

Matters communicated between us and the governance unit include the planned audit scope and time, and major audit findings (including significant lack of internal control identified in the audit process).

We also provided the governance unit with the statement that the persons involved who are subject to the independence standard of our accounting firm have complied with the professional ethics of accountants, and communicated with the governance unit all relations and other matters (including relevant protective measures) that may affect our independence.

We determined the key audit matters for the audit of the consolidated financial report of Southeast Group in 2021 from the matters communicated with the governance unit. We state such matters in the audit report; unless it is prohibited by law to disclose specific matters publicly, or in rare cases, we decide not to communicate specific matters in the audit report as it can be reasonably expected that the negative impact of such communication will be greater than the public interest promoted.

Crowe (TW) CPAs

CPA: Shu-Man Tsai

CPA: Ching-Lin Li

Approval No.: Jin-Guan-Cheng-Shen No. 10200032833

March 15, 2022

Southeast Cement Corporation and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

Unit: NT$ thousand

Code	Asset	December 31,2021	December 31,2021	December 31, 2020	December 31, 2020
		Amount	%	Amount	%
1100 1110 1150 1170 1180 1200 1220 130x 1410 1476 1480 11xx 1517 1550 1600 1755 1760 1780 1840 1920 1990 15xx 1xxx	Current assets Cash and cash equivalents (note 6(1)) Financial assets measured at fair value through income statement – current (note 6(2)) Net notes receivable (note 6(3)) Net accounts receivable (note 6(4)) Accounts receivable – related parties net (note 7) Other receivables (note 6(5)) Current income tax assets Inventory (note 6(6)) Prepayments (note 6(7)) Other financial assets – current (note 6(8)) Incremental cost of contract acquisition – current (note 6(9)) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income – non-current (note 6(10)) Investment by equity method (note 6(11)) Property, plant and equipment (note 6(12)) Right-of-use assets (note 6(13)) Net amount of investment property (note 6(14)) Intangible assets (note 6(15)) Deferred income tax assets Refundable deposits (note 6(16)) Other non-current assets – others (note 6(5)) Total non-current assets Total assets	$ 419,504 248,685 196,923 110,157 34,424 2,214 502 841,074 36,265 161,625 2,000	4 2 2 1 - - - 9 - 1 -	$ 176,743 232,667 286,533 92,498 36,827 5,092 529 884,310 68,140 174,598 5,842	2 2 3 1 - - - 9 1 2 -
		2,053,373	19	1,963,779	20
		1,259,476 611,626 1,201,139 357,661 5,379,924 - 81,137 12,749 1,415	11 6 11 3 49 - 1 - -	1,178,923 590,646 249,698 389,171 5,382,732 23 97,415 10,118 2,815	12 6 3 4 55 - - - -
		8,905,127	81	7,901,541	80
		$ 10,958,500	100	$ 9,865,320	100

(Continued)

Code	Liabilities and equity	December 31,2021	December 31,2021	December 31, 2020	December 31, 2020
		Amount	%	Amount	%
2100 2110 2130 2150 2170 2200 2230 2250 2280 2300 21xx 2570 2580 2645 25xx 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3500 31xx 36xx 3xxx	Current liabilities Short term loans (note 6(17)) Short-term notes payable (note 6(18)) Contractual liabilities – current (note 6(19)) notes payable Accounts payable Other accounts payable (note 6(20)) Current income tax liabilities Provision for liabilities – current (note 6(21)) Lease liabilities – current (note 6(13)) Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities (note 6(37)) Lease liabilities – non-current (note 6(13)) Guarantee deposits received (note 6(23)) Total non-current liabilities Total liabilities Equity Equity attributable to owners of the parent company Share capital (note 6(24)) Ordinary share capital Capital reserve (note 6(25)) Retained earnings Legal reserve Special reserve (note 6(27)) Undistributed earnings (note 6(26)) Other equity (note 6(28)) Treasury shares (note 6(29)) Total equity attributable to owners of the parent company Non-controlling interests (note 6(30)) Total equity Total liabilities and equity	$ 1,240,000 81,969 30,532 1,696 194,523 71,665 - 1,572 52,946 8,528	11 1 - - 2 1 - - - -	$ 235,000 - 90,425 1,798 223,854 89,625 2,220 1,553 65,651 13,794	2 - 1 - 2 1 - - 1 -
		1,683,431	15	723,920	7
		304,612 235,791 23,957	3 2 -	303,366 265,358 23,957	3 3 -
		564,360	5	592,681	6
		2,247,791	20	1,316,601	13
		5,720,008 188,373 1,055,689 810,918 309,626 551,296 (12,185)	52 2 10 7 3 5 -	5,720,008 188,267 1,052,057 810,918 230,224 500,520 (12,185)	58 2 11 8 2 5 -
		8,623,725 86,984	79 1	8,489,809 58,910	86 1
		8,710,709	80	8,548,719	87
		$ 10,958,500	100	$ 9,865,320	100

(please refer to the notes to the consolidated financial statements) Chairman: Min-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Comprehensive Income January 1 to December 31, 2021 and 2020

Unit: NT$ thousand

2021	% 100 (93) 7 (2) (5) - (7) - - 6 - (1) 1 6 7 (1) 6 3 - 3 9 6 - 6 9 - 9	2020
Amount	%	Amount	%
$ 1,846,785 (1,712,217)	100 (93)	$ 1,590,986 (1,523,614)	100 (96)
134,568 (35,069) (90,452) 3,007	7 (2) (5) -	67,372 (15,073) (82,636) (236)	4 (1) (5) -
(122,514)	(7)	(97,945)	(6)
12,054	-	(30,573)	(2)
3,805 108,504 8,714 (11,102) 27,153	- 6 - (1) 1	6,228 56,996 (32,047) (6,126) 12,952	- 4 (2) - -
137,074	6	38,003	2
149,128 (15,317)	7 (1)	7,430 9,519	- 1
133,811	6	16,949	1
47,502 3,513	3 -	(2,598) 3,287	- -
51,015	3	689	-
$ 184,826	9	$ 17,638	1
$ 139,985 (6,174)	6 -	$ 22,158 (5,209)	1 -
$ 133,811	6	$ 16,949	1
$ 191,010 (6,184)	9 -	$ 22,729 (5,091)	1 -
$ 184,826	9	$ 17,638	1
$ 0.25		$ 0.04
$ 0.25		$ 0.04

(please refer to the notes to the consolidated financial statements) Chairman: Min-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Changes in Equity January 1 to December 31, 2021 and 2020

		Equity attributable to own	Equity attributable to own	ers of the parent company	ers of the parent company		Unit: NT$ thousand Non- controlling interests Total equity $ 46,809 $ 8,570,984 - - - (57,200) (5,209) 16,949 118 689 (5,091) 17,638 - 105 17,192 17,192 - - 58,910 8,548,719 - - - (57,200) (6,174) 133,811 (10) 51,015 (6,184) 184,826 - 106 34,258 34,258 - - $ 86,984 $ 8,710,709
Ordinary share capital $ 5,720,008 - - - - - - - - 5,720,008 - - - - - - - - $ 5,720,008	Capital reserve $ 188,162 - - - - - 105 - - 188,267 - - - - - 106 - - $ 188,373		Retained earnings	Undistributed earnings $ 254,425 (3,313) (57,200) 22,158 (98) 22,060 - - 14,252 230,224 (3,632) (57,200) 139,985 (5) 139,980 - - 254 $ 309,626	Other equity items Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensive income $ 514,103 - - - 669 669 - - (14,252) 500,520 - - - 51,030 51,030 - - (254) $ 551,296	Treasury shares $ (12,185) - - - - - - - - (12,185) - - - - - - - - $ (12,185)
		Legal reserve $ 1,048,744 3,313 - - - - - - - 1,052,057 3,632 - - - - - - - $ 1,055,689	Special reserve $ 810,918 - - - - - - - - 810,918 - - - - - - - - $ 810,918
							$ 8,570,984 - (57,200) 16,949 689
							17,638
							105 17,192 -
							8,548,719 - (57,200) 133,811 51,015
							184,826
							106 34,258 -
							$ 8,710,709

(please refer to the notes to the consolidated financial statements) Chairman: Min-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow January 1 to December 31, 2021 and 2020

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow January 1 to December 31, 2021 and 2020
Item 2021 Cash flow from operating activities Net profit (net loss) before tax of the current period $ 149,128 Adjustments Income, expense and loss items Depreciation expense 74,503 Amortization expense 23 Expected credit impairment loss (profit) (3,007) Net loss (profit) of financial assets and liabilities measured at fair value through income statement (18,033) Interest expense 11,102 Interest income (3,805) Dividend income (51,560) Share of losses (profits) of affiliated enterprises and joint ventures recognized by equity method (27,153) Loss (profit) from disposal and retirement of property, plant and equipment - Impairment loss of non-financial assets - Profit from lease revision (232) Other items 106 Total income, expense and loss items (18,056) Change in assets/liabilities related to operating activities Net change in assets related to operating activities Decrease (increase) in financial assets measured at fair value through income statement 2,015 Decrease (increase) in notes receivable 90,751 Decrease (increase) in accounts receivable (15,035) Decrease (increase) in other receivables 4,717 Decrease (increase) in inventory 40,976 Decrease (increase) in prepayments 31,875 Decrease (increase) in other financial assets 12,973 Decrease (increase) in incremental cost of contract acquisition 3,842 Total net change in assets related to operating activities 172,114 Net change in liabilities related to operating activities Increase (decrease) in contractual liabilities (59,893) Increase (decrease) in notes payable (102) Increase (decrease) in accounts payable (29,331) Increase (decrease) in other accounts payable 3,957 Increase (decrease) in provision for liabilities 19 Increase (decrease) in other current liabilities (5,266) Total net change in liabilities related to operating activities (90,616) (Continued)	Unit: NT$ thousand 2020
	$ 7,430 75,323 35 236 (4,086) 6,126 (6,228) (46,500) (12,952) - - (7) 105
	12,052
	22,291 (11,955) (5,434) 21,263 (237,560) (27,221) 273,093 (3,789)
	30,688
	(17,309) (2,985) 24,041 (11,207) 113 13,794
	6,447

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(Continued)

Item Total net changes in assets and liabilities related to operating activities Total adjustments Cash inflow (outflow) from operations Interest received Dividends received Interest paid Income tax refunded (paid) Net cash inflow (outflow) from operating activities Cash flow from investment activities Acquisition of financial assets measured at fair value through other comprehensive income Disposal of financial assets measured at fair value through other comprehensive income Return of share capital from capital reduction of financial assets measured at fair value through other comprehensive income Acquisition of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Acquisition of right-of-use assets Acquisition of investment property Decrease in long-term lease payments receivable Net cash inflow (outflow) from investment activities Cash flow from financing activities Increase in short-term loans Increase in short-term notes payable Increase in guarantee deposits received Repayment of lease principal Cash dividend payment Changes in non-controlling interests Net cash inflow (outflow) from financing activities Increase (decrease) in cash and cash equivalents in the current period Opening balance of cash and cash equivalents Ending balance of cash and cash equivalents	2021 $ 81,498 63,442 212,570 3,627 61,246 (10,853) 14 266,604 (39,164) 4,635 1,478 (933,647) (2,631) - (55,091) (1,434) 1,384 (1,024,470) 1,005,000 82,000 - (63,431) (57,200) 34,258 1,000,627 242,761 176,743 $ 419,504	2020
		$ 37,135
		49,187
		56,617 6,297 54,500 (6,094) (611)
		110,709
		(16,010) 15,587 10,583 (30,013) - 1,632 (58,668) (5,535) 1,368
		(81,056)
		35,000 - 917 (56,750) (57,200) 17,192
		(60,841)
		(31,188) 207,931
		$ 176,743

(please refer to the notes to the consolidated financial statements) Chairman: Min-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

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Southeast Cement Corporation and Subsidiaries

Notes to consolidated financial report

January 1 to December 31, 2021 and 2020

(unless otherwise specified, all amounts are in the unit of NT$1000)

I. Company History

Southeast Cement Corporation (hereinafter referred to as the Company) was established in December 1956. Its main business items are manufacturing and sales of cement, hearthstone, cement processed products and premixed concrete. For the main business activities of the company and its subsidiaries (hereinafter referred to as the Group), please refer to note 4(3)B. The Company is the ultimate parent company of the Group.

This consolidated financial report is expressed in New Taiwan dollars, the functional currency of the Company.

II. Date and Procedure of Adoption of the Financial Report

This consolidated financial report is issued after the approval of the board meeting on March 15, 2022.

III. Application of New and Revised Standards and Interpretations
(I) Impact of adopting the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, Interpretations and Explanatory Announcements (hereinafter IFRSs) approved and announced by the Financial Supervisory Commission (hereinafter the “FSC”):

The following table summarizes the newly released, amended and revised standards and interpretations of IFRSs applicable in 2021 which are approved by the FSC.

Standards and interpretations of the new release, Effective date of IASB amendment and revision release Amendment to “Temporary exemption from the extension[June 25, 2020 ] of IFRS 9” of IFRS 4 (effective the date of issue) Amendment to “Interest rate indicator reform – phase II” of January 1, 2021 IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Amendment to “Rent concession related to COVID-19 after April 1, 2021 (note) June 30” in IFRS 16

(Note) The FSC allows enterprises to apply them in advance on January 1, 2021.

The company has assessed that the standards and interpretations above have no significant impact on the financial status and financial performance of the company.

(II) Impact of not adopting the newly released and revised international financial reporting standards approved by the FSC:
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The following table summarizes the newly released, amended and revised standards
and interpretations of IFRSs applicable in 2022 which are approved by the FSC.
Standards and interpretations of the new release, amendment and Effective date of IASB
revision release
Amendment to “Property, plant and equipment: the price of reaching the intended state of use of IAS 16 January 1, 2022(note 2)
Amendment to “Loss contract – cost of contract performance” of IAS 37 January 1, 2022(note 3)
Amendment to “Introduction to conceptual architecture”of IFRS 3 January 1, 2022(note 4)
2018–2020 annual improvement of IFRS January 1, 2022(note 5)
(Note1) Unless otherwise noted, the newly issued/amended/revised standards or
interpretations shall take effect during the annual reporting period beginning
after each such date.
(Note 2) The enterprise shall retroactively apply the amendments, but only for the
property, plant and equipment items which can meet the necessary location
and state of the expected operation mode of management after the start date of
the earliest period (January 1, 2021) expressed in the financial statements for
the first time.
(Note 3) This amendment applies to contracts of which not all obligations have been
fulfilled on 1 January, 2022.
(Note 4) This amendment applies to business mergers during the annual reporting
period beginning after January 1, 2022.
(Note 5) The amendment to IFRS 9 applies to the swap of financial liabilities or term
changes of financial liabilities incurred during the annual reporting period
beginning after January 1, 2022; the amendment to IAS 41 applies tothe
measurement of fair value during the annual reporting period beginning after
January 1, 2022; the amendment to IFRS 1 applies retroactively in the annual
reporting period beginning after January 1, 2022.
1. Amendment to “Property, plant and equipment: the price for reaching the intended
state of use” of IAS 16
The amendment stipulates that the sales price of the output item to make the
property, plant and equipment meet the necessary location and state of the expected
operation mode of management shall not be regarded as a cost reduction item of the
asset. The above-mentioned output item shall be measured in accordance with IAS 2
“Inventory,” and the sales price and cost shall be recognized as profit according to
the
applicable standards. In addition, the amendment clarifies that the cost of testing
whether an asset is functioning properly is the cost of assessing whether the technical
and physical characteristics of the asset are sufficient to enable it to be used in the

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production or supply of goods or services, leased to others, or used for management purposes.

The amendment applies to plants, property and equipment which meet the management expected operation after January 1, 2021 (the beginning date of the earliest expression period). When the amendment is first applied, the company will recognize the cumulative influence number of the initial application of the amendment as an adjustment to the opening balance of retained earnings (or other components of equity, if applicable) at the beginning of the earliest expression period,

and recompile the information of the comparative period.

Amendment to “Loss contract – cost of contract performance” of IAS 37 The amendment states that in assessing whether the contract is loss-oriented, the “cost of contract performance” shall include the apportionment of the increased cost of contract performance (e.g. direct labor and raw materials) and other costs directly related to the contract performance (e.g. the apportionment of depreciation costs of property, plant and equipment items used in contract performance).

The company will recognize the cumulative influence number as retained earnings on the first applicable date when the amendment is first applied.

Amendment to “Introduction to conceptual framework” of IFRS 3

The amendment is to update the index of the conceptual structure, and add the application of IFRIC 21 “Public section” by the new acquirer to determine whether there is any obligation generated as the liability of payment of the public section on the acquisition date.

2018–2020 annual improvement of IFRS

The annual improvement of IFRS 2018–2020 includes several standards. Among them, the amendment to IFRS 9 is to assess whether there is any significant

difference

in the swap or term revision of financial liabilities. When comparing whether there is

10% difference in the cash flow discount value (including the net amount of the fees received or paid when signing new contracts or revising contracts) between the old and the new terms, the above-mentioned expenses shall only include the expenses received or paid between the borrower and the lender.

(III) The impact of International Financial Reporting Standards issued by the IASB but not approved by the FSC:

The following table lists the recently released, amended and revised standards and interpretations of International Financial Reporting Standards issued by the IASB but not yet approved by the Financial Supervisory Commission:

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Standards and interpretations of the new release, amendment and Effective date of IASB revision release (note 1) Amendment to “Sale or investment of contingent assets between the Undecided investor and its affiliated enterprises or joint ventures” IFRS 10 and IAS 28 Amendment to “Insurance contract” of IFRS 17 January 1, 2023 Amendment to IFR 17 January 1, 2023 Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - January 1, 2023 Comparative Information Amendment to “Liabilities classified as current or non-current” of IAS 1 January 1, 2023 Amendment to “Disclosure of accounting policies” of IAS 1 January 1, 2023 Amendments to IAS 8 "Definition of Accounting Estimates January 1, 2023 Amendment to IAS 12, "Deferred Income Taxes Related to Assets and January 1, 2023 Liabilities Arising from a Single Transaction

As of the date of this individual financial report, the Company is continuing to evaluate the impact of the above standards and interpretations on the Company's financial position and financial performance, which will be disclosed upon completion of the evaluation."

IV. Summary of Major Accounting Policies

The major accounting policies adopted in the preparation of this consolidated financial report are as follows. Unless otherwise stated, these policies apply consistently throughout all reporting periods.

(I) Compliance statement

This consolidated financial report is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, Interpretations and Explanatory Announcements (hereinafter IFRSs) approved and announced by the FSC.

(II) Basis of preparation

Except for the following important items, the consolidated financial report is prepared at historical cost:
(1) Financial assets and liabilities (including derivatives) measured at fair value through income statement.
(2) Financial assets and liabilities measured at fair value through other comprehensive income.
(3) Liabilities for cash settled share-based payment agreements measured at fair value.
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Some important accounting estimates need to be used in the preparation of the individual financial report in line with the IFRSs approved by the FSC. In the process of applying the Group’s accounting policies, the management also needs to use their judgment. For items involving intensive judgment or complexity, or items involving major assumptions and estimates of the consolidated financial reports, please refer to note 5 for details.
(III) Basis of consolidation
Principles for preparation of the consolidated financial report:
- (1) All subsidiaries of the Group are included in the consolidated financial report. A subsidiary refers to an entity (including a structured entity) controlled by the Group. When the Group is exposed to or entitled to variable remuneration from participation in the entity and has the ability to influence such remuneration through its power over the entity, the Group controls the entity. The subsidiary is included in the consolidated financial report from the date when the Group gains control over it, and the merger is terminated from the date when the Group loses the control.
- (2) The transactions, balances and unrealized gains and losses between companies within the Group have been eliminated. The accounting policies of the subsidiaries have been adjusted as necessary to be consistent with those adopted by the Group.
- (3) Profit and other comprehensive income components belong to the owners of the parent company and non-controlling interests; the total amount of comprehensive income also belongs to the owners of the parent company and non-controlling interests, even if it results in a loss balance of non-controlling interests.
- (4) If a change in the shareholding of a subsidiary does not result in loss of control (a transaction with a party with non-controlling interest), it is treated as an equity transaction, that is, a transaction with the owner. The difference between the adjusted amount of non-controlling interests and the fair value of the consideration paid or received is directly recognized under equity.
- (5) When the Group loses control over the subsidiary, the remaining investment in the subsidiary is remeasured at fair value and is regarded as the fair value of the originally recognized financial assets or the cost of the originally recognized investment in the affiliated enterprise or joint venture. The difference between the fair value and the book amount is recognized as the profit/loss of the current period. For all amounts previously recognized in other comprehensive income and related to the subsidiary, the accounting treatment is the same as if the Group directly disposes of the relevant assets or liabilities; that is, if the profit/loss previously recognized in other comprehensive income is reclassified as profit/loss when disposing of the relevant assets or liabilities, when the control over the subsidiary is lost, the profit/loss will be reclassified as profit/loss from equity.
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2. The subsidiaries included in the consolidated financial statements are as follows:

Investment company/subsidiary A. Southeast Cement Corporation Southeast investment Co., Ltd. Southeast Paper Co., Ltd. Southeast Asset Development Co., Ltd. Southeast Gaoliang Recycling Co., Ltd. B. Southeast Investment Co., Ltd. Southeast Gaoliang Recycling Co., Ltd.	Main business items Reinvestment business Property leasing business (note) Development, rental and sale of residential and office buildings Waste removal treatment Waste removal treatment	Shareholdingor capital contribution ratio	Shareholdingor capital contribution ratio
		December 31,2021 99.29% 49.71% 100.00% 50.00% 1.00%	December 31,2020
			99.29% 49.71% 100.00% 50.00% 1.00%

(Note) The parent company gained control over Southeast Paper Co., Ltd. due to the appointment of its assigned person as the president of Southeast Paper Co., Ltd.
(1) Some of the subsidiaries listed in the consolidated financial statements of 2021 and 2020 were audited by other accountants.
(2) Increase and decrease of merged subsidiaries: None.
Subsidiaries not included in the consolidated financial report: None.
Different adjustment and treatment methods of subsidiaries in accounting period: None.
Major restrictions: None.
Contents of securities issued by parent company held by subsidiary: Please refer to note 6(29).
Information of subsidiaries with significant non-controlling interests:

Name of Subsidiaries Shareholding ratio Southeast Gaoliang 49% Recycling Co., Ltd Other Total Name of Subsidiaries Shareholding ratio	December 31, 2021 Allocation to Non- controlling interests Non-controlling interests Profit or loss allocated to non-controlling interests $ 71,686 $ (6,438) 15,298 264 $ 86,984 $(6,174) December 31, 2020 Allocation to Non- controlling interests Non-controlling interests Profit or loss allocated to non-controlling interests

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Southeast Gaoliang 49% Recycling Co., Ltd Other Total	$ 43,825 $ (5,201) 15,085 (8) $ 58,910 $(5,209)

(1) The above listed subsidiaries' principal place of business and the company's registered national information.Please refer to Note 13
(2) Aggregate financial information is as follows.：

A. Balance Sheet：

A. Balance Sheet：
Item	Southeast Gaoliang Recycling Co., Ltd
	December 31,2021 $ 48,382 291,033 63,004 130,112 $ 146,299	December 31,2020 $ 12,363 234,787 22,807 134,905 $ 89,438
Current assets Non-current assets Current liabilities Non-current liabilities Equity

B. Statement of Comprehensive Income：

B. Statement of Comprehensive I	ncome：
Income Net profit (loss) for the period Other comprehensive income (Net after tax） Total comprehensive income in the current period Net profit (loss) attributable to Non- controlling interest Total comprehensive income attributable to Non-controlling interest Dividends paid to noncontrolling interests	Southeast Gaoliang	Recycling Co., Ltd
	2021	2020
	$ 42,191	$ -
	$ (13,139) -	$ (10,614) -
	$ (13,139)	$ (10,614)
	$ (6,438)	$ (5,201)
	$ (6,438)	$ (5,201)
	$ -	$ -

C. Statement of Cash Flow：

C. Statement of Cash Flow：
Cash inflow (outflow) from operations Cash flow from investment activities Cash flow from financing activities Increase (decrease) in cash and cash equivalents in the current period Opening balance of cash and cash equivalents Ending balance of cash and cash equivalents	Southeast Gaoliang	Recycling Co., Ltd
	2021	2020
	$ (25,197) (80,345) 106,617	$ 29,315 (70,013) 36,538
	$ 1,075 587	$ (4,160) 4,747
	$ 1,662	$ 587

(IV) Foreign Currency Conversion

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The items listed in the financial statements of each entity of the Group are measured in the currency of the main economic environment in which the entity operates (i.e. functional currency). The consolidated financial statements are presented in the company’s functional currency “New Taiwan dollars.”
When preparing the individual financial statements of each consolidated entity, transactions in currencies (foreign currencies) other than the functional currency of the entity are converted and recognized at the exchange rate on the trading day. At the end of the reporting period, monetary items in foreign currency are converted at the spot exchange rate on that day, and the exchange difference is recognized as profit or loss in the current period. Foreign currency non-monetary items measured at fair value are converted at the exchange rate on the day when the fair value is determined. The exchange difference generated is included in the profit or loss of the current year. If changes in fair value are recognized in other comprehensive income, the exchange difference generated is included in other comprehensive income. If foreign currency non-monetary items measured at historical cost are converted at the exchange rate on the transaction date, they will not be further converted.
For the purpose of preparing the consolidated financial statements, the assets and liabilities of foreign operating organizations are converted into New Taiwan dollars at the spot exchange rate at the end of the reporting period; the income and loss items are converted at the average exchange rate of the current period, and the resulted exchange differences are recognized as other comprehensive income which are accumulated under the equity of the foreign operating organization’s financial statements (and appropriately allocated to non-controlling equity).
(V) The standard for distinguishing current and non-current assets and liabilities
Manufacturing Department:
- (1) Assets meeting any of the following conditions shall be classified as current assets:
  - A. The asset is expected to be realized in the normal business cycle, or intended to be sold or consumed.
  - B. The assets are held mainly for trading purposes.
  - C. Expected to be realized within 12 months after the balance sheet date.
  - D. Cash or cash equivalents, except those to be used to swap or repay liabilities in more than 12 months after the balance sheet date or subject to other restrictions.
    - The Group classifies all assets that do not meet the conditions above as noncurrent assets.
- (2) Liabilities meeting any of the following conditions shall be classified as current liabilities:
  - A. The liabilities are expected to be settled in the normal business cycle.
  - B. Held mainly for trading purposes.
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C. The liabilities are required to be repaid within 12 months after the balance sheet date. (Even if the long-term refinancing or payment rescheduling agreement has been completed after the balance sheet date and before the issuance of the financial report, they are also regarded as current liabilities.)
D. The liabilities the period of repayment of which cannot be extended unconditionally to at least 12 months after the end of the reporting period. The fact that the terms of the liabilities allow repayment by issuing equity instruments at the option of the counterparty does not affect their classification. The Group classifies all liabilities that do not meet the conditions above as non-current.
Construction Department:

As the business cycle of building and selling is usually longer than one year, the assets and liabilities related to construction business are classified as current or noncurrent according to the business cycle.

(VI) Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank deposits and short-term and highly liquid investments (including time deposits with original maturity within three months) that can be converted into fixed amounts of cash at any time and with little risk of change in value.

(VII) Financial instruments

Financial assets and financial liabilities shall be recognized when the Group becomes a party to the contractual terms of the financial instrument.

When financial assets and financial liabilities are initially recognized, they are measured at fair value. At the time of original recognition, the transaction costs directly attributable to the acquisition or issuance of financial assets and financial liabilities (except those classified as financial assets and financial liabilities measured at fair value through income statement) shall be added to or subtracted from the fair value of the financial assets or financial liabilities. Transaction costs directly attributable to financial assets and financial liabilities measured at fair value through income statement are immediately recognized as profit or loss.

Financial assets
(1) Measurement category

Conventional transactions of financial assets are recognized by trading day accounting.

The types of financial assets held by the Group are financial assets measured at fair value through income statement, financial assets measured at amortized cost and equity instrument investment measured at fair value through other comprehensive income.

A. Financial assets measured at fair value through income statement
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Financial assets measured at fair value through income statement include financial assets that are compulsorily measured at fair value through income statement and those designated to be measured at fair value through income statement. Financial assets that are compulsorily measured at fair value through income statement include equity instrument investments that are not designated by the Group to be measured at fair value through other comprehensive income, and debt instrument investments that are not classified to be measured at amortized cost or measured at fair value through other comprehensive income.

When financial assets meet any of the following conditions, the Group designates them to be measured at fair value through income statement at the time of original recognition:

a. A hybrid (mixed) contract; or
b. Can eliminate or significantly reduce measurement or recognition inconsistencies; or
c. An investment managed and evaluated on a fair value basis in accordance with a written risk management or investment strategy.

Financial assets measured at fair value through income statement are measured at fair value; the dividends generated are recognized in other income, and gains or losses arising from interest and remeasurement are recognized in other gains and losses. For the determination of fair value, please refer to note 12.

B. Equity instrument investment measured at fair value through other comprehensive income

At the time of original recognition, the Group may make an irreversible choice to designate the equity instrument investment that is not held for trading and not recognized as contingent consideration by an M&A acquirer as measured at fair value through other comprehensive income.

Investment in equity instruments measured at fair value through other comprehensive income is measured at fair value. Subsequent changes in fair value are presented in other comprehensive income and accumulated under other equity. On disposal of investments, gains and losses accumulated under other equity are directly transferred to retained earnings and are not reclassified as gains or losses.

The dividend of the investment instrument measured at the fair value through other comprehensive income is recognized as income at the time the Group’s right to receive the payment is established, unless the dividend obviously represents the return of a part of the investment cost.

C. Financial assets measured at amortized cost

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If the Group’s investment-oriented financial assets meet the following two conditions at the same time, it is classified as financial assets measured at amortized cost:

(A) Held under a business model the purpose of which is to hold financial assets for receipt of contractual cash flows; and
(B) The terms of the contract generate cash flows on a specific date, which are fully for the repayment of the principal and interest payment of the outstanding principal amount.

After the initial recognition, financial assets measured at amortized cost are measured by the total book amount determined by effective interest method minus the amortized cost of any loss reduction, and any foreign currency exchange profit or loss is recognized as income.

Except in the following two conditions, interest income is calculated by multiplying the effective interest rate by the total book amount of the financial assets:

  - (A) For financial assets with credit impairment at the time of purchase or creation, the interest income is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial assets.

  - (B) For financial assets with no credit impairment at the time of purchase or creation, but subsequently have credit losses, the interest income is calculated by multiplying the effective interest rate by the amortized cost of the financial assets.

(2) Financial assets impairment
A. The impairment loss of the financial assets (including accounts receivable) assessed by the Group based on the expected credit impairment and measured by the amortized cost, debt instrument investment measured at fair value through other comprehensive income, lease payments receivable and contractual assets on each balance sheet date of the Group.
B. Accounts receivable and lease payments receivable are recognized as allowance for losses based on the expected credit loss during the period of existence. For other financial assets, first assess whether the credit risk has increased significantly since the original recognition. If there is no significant increase, the allowance for losses is recognized according to the 12-month expected credit loss. If there is a significant increase, the allowance for losses is recognized according to the expected credit loss during the period of existence.
C. Expected credit loss is the weighted average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit
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loss caused by possible default events of the financial instrument within 12 months after the reporting date, while the expected credit loss during the period of existence represents the expected credit loss caused by all the possible default events of the financial instrument during the expected period of existence.

D. The impairment loss of all financial assets is reduced in the face value by the allowance account. However, the allowance for losses of debt instrument investment measured at fair value through other comprehensive income is recognized in other comprehensive income without having the book amount reduced.
(3) Exclusion of financial assets

The Group will exclude financial assets which meet any of the following conditions:

A. The right of contract derived from cash flow of financial assets is no longer valid.
B. Transfer of contractual rights to receive cash flow from financial assets, and almost all risks and returns of the ownership of such financial assets are already transferred.
C. None of almost all risks and returns of the ownership of the financial assets are transferred nor retained, but the control over the financial assets is not retained.

When financial assets measured at amortized cost are excluded as a whole, the difference between their book amount and the consideration received is recognized in profit or loss. When debt instrument investments measured at fair value through other comprehensive income are excluded as a whole, the difference between their book amount and the sum of the consideration received plus any accumulated profit or loss recognized in other comprehensive income is recognized in income. When equity instrument investments measured at fair value through other comprehensive income are excluded as a whole, the accumulated profit or loss is directly transferred to retained earnings and not reclassified as profit or loss.

2. Equity instruments

The debt and equity instruments issued by the Group are classified as financial liabilities or equity according to the essence of the contract and the definitions of financial liabilities and equity instruments. An equity instrument refers to any contract that recognizes the residual equity of an enterprise after deducting all its liabilities from its assets. Equity instruments issued by the Group are recognized at the acquiring price minus the direct issue cost.

3. Financial liabilities

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(1) Follow up measurement

Financial liabilities that are not held for trading purposes and not designated to be measured at fair value through income statement are measured at amortized cost at the end of subsequent accounting periods.

(2) Exclusion of financial assets

The Group will exclude financial liabilities only when the obligations are discharged, cancelled or lapsed. When excluding financial liabilities, the difference between the book amount and the total consideration paid or payable (including any non-cash assets transferred or liabilities assumed) is recognized as profit or loss.

(VIII) Inventory

1. Manufacturing Department:

The inventory is measured based on the lower of cost and net realizable value; the perpetual inventory system is adopted, and the cost is determined by the weighted average method. The cost of finished products and work in process includes raw materials, direct labor, other direct costs and manufacturing costs related to production (apportioned according to normal capacity), but excluding borrowing costs. The item by item comparison method is adopted when comparing whether the cost or the net realized value is lower. The net realizable value refers to the balance after the estimated selling price in the normal operation process less the estimated cost to be further invested before the completion time and related change of sales cost.

Construction Department:

Inventory is measured by the lower of cost and net realization value. Cost includes the necessary expenditure incurred in making it available at the designated location and the designated status, plus the capitalization cost of borrowing.

Net realization value refers to the balance after the estimated selling price under normal operation less the estimated cost to be further invested before the estimated completion time and the estimated cost required to complete the sale. The determination method of net realizable value is as follows:

(1) Construction land: The net realizable value is calculated based on the market

price adopted by the management authorities less the cost to be further invested before the completion time and the sales cost, or based on the most recent market value (development analysis method or comparison method).

(2) Construction in progress: The net realizable value is calculated based on the estimated price (based on the market situation at that time) less the cost to be further invested before the completion time and the sales cost.
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- (3) Property for sale: The net realization value is the estimated selling price (estimated by the management according to the current market situation) less the estimated cost and sales cost incurred at the time of the sale of the property.
(IX) Investment by equity method – affiliated enterprises
Affiliated enterprises refer to all entities on which the Group has significant influence but no controlling rights; generally referring to shares with more than 20% of the voting rights directly or indirectly held. The Group adopts the equity method to deal with the investment in affiliated enterprises which is recognized at the cost when acquired.
The Group’s share of profit or loss after acquiring the affiliated enterprises is recognized as the current profit or loss, and the share of other comprehensive income after the acquisition is recognized as other comprehensive income. If the Group’s share of loss in any affiliated enterprise is equal to or exceeds its interest in the affiliated enterprise (including any other unsecured receivables), the Group does not recognize further losses unless the Group has any legal obligation or constructive obligation to, or has made any payment on behalf of the affiliated enterprise.
The unrealized profit or loss arising from transactions between the Group and affiliated enterprises has been eliminated according to the equity proportion of the affiliated enterprises; unless there is any evidence showing that the assets transferred through such transactions have been impaired, the unrealized losses will also be eliminated. The accounting policies of affiliated enterprises have been adjusted as necessary and are consistent with the policies adopted by the Group.
When the Group disposes of an affiliated enterprise, if it loses the significant influence on the affiliated enterprise, then the accounting treatment of all the amounts previously recognized as other comprehensive income of the affiliated enterprise will be the same as that of the affiliated enterprise directly disposing of the related assets or liabilities; that is, if the profit or loss which was previously recognized as other comprehensive income will be reclassified as profit or loss when disposing of the related assets or liabilities, then when there is a loss of significant influence on the affiliated enterprises, the profit or loss will be reclassified from equity to income. If the Group still has a significant influence on the affiliated enterprise, only the amount previously recognized in other comprehensive income shall be transferred out in proportion based on the above-mentioned method.
(X) Property, plant and equipment
Property, plant and equipment are recorded on the basis of acquisition cost, and the relevant interest during the period of acquisition and construction is capitalized.
Follow-up costs are included in the book amount of assets or recognized as a separate asset only when the future economic benefits related to the project are likely to flow
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into the company and the cost of the project can be measured reliably. The book amount of the replaced part shall be excluded. All other maintenance expenses are recognized as current income.

Land is not depreciated. Other property, plant and equipment are depreciated on a straight-line basis over their estimated durable lives. At the end of each financial year, the company reviews the residual value, durable life and depreciation method of each asset. If the expected value of the residual value and durable life is different from the previous estimate, or the expected consumption pattern of the future economic benefits of the asset has changed significantly, the provisions of International Accounting Standard No. 8 “Changes in accounting policies and accounting estimates and errors” on changes in accounting estimates shall be followed from the date of change. The durable life of each asset is as follows:

Buildings Main plant buildings 5–50 years Electromechanical power equipment 5–10 years Other equipment 15 years Machinery and equipment 2–16 years Transportation equipment 3–6 years Miscellaneous equipment 2–10 years

Property, plant and equipment are excluded at disposal or when there are no future economic benefits expected to be generated from their use or disposal. The amount of profit or loss arising from exclusion of property, plant and equipment is the difference between the net disposal price and the book amount of the asset, and is recognized in the current income.

(XI) Leasing

The Group assesses whether a contract is (or includes) a lease on the establishment date of the contract. Where a contract contains one leasing component and one or more additional leasing or non-leasing components, the Group allocates the consideration in the contract to the leasing component on the basis of the relative individual price of each leasing component, and the aggregate individual price of the non-leasing component. 1. The Group as the lessee

Except for leases of low-value assets and short-term leases which are recognized as expenses on a straight-line basis, the Group recognizes the right-of-use assets and lease liabilities on the lease start date for other leases.

Right-of-use assets

The right-of-use assets are initially measured at cost (including the original measured amount of lease liabilities, lease payments made before the lease start date minus lease incentives received, original direct cost and estimated cost of reinstating the underlying assets), and subsequently measured at cost minus accumulated

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depreciation and accumulated impairment loss, with the remeasurement of lease liabilities adjusted.

The right-of-use assets shall be depreciated on a straight-line basis from the beginning of the lease to the expiration of the durable life or the expiration of the lease term, whichever is earlier. However, if the ownership of the underlying assets will be acquired at the end of the lease term, or if the cost of the right-of-use assets reflects the exercise of the purchase option, then depreciation shall be accrued from the beginning of the lease to the expiration of the durable life of the underlying assets. Lease liabilities

Lease liabilities are originally measured at the present value of lease payments (including fixed payments, substantial fixed payments, and lease payments depending on index or rate changes). If the implied interest rate of the lease is easy to determine, the lease payment is discounted by the interest rate. If the interest rate is not easy to determine, the incremental borrowing rate of the lessee is used.

Subsequently, lease liabilities are measured on an amortized cost basis by effective interest method, and the interest expense is apportioned over the lease term. If there is any change in the lease term, the evaluation of the underlying asset purchase option, the amount expected to be paid under the residual value guarantee, or the index or rate used to determine the lease payment change in the future, the Group will measure the lease liabilities again and relatively adjusts the right-of-use assets. However, if the book amount of the right-of-use assets has been reduced to zero, the remaining remeasured amount is recognized in the income. Lease liabilities are presented as a single-line item in the consolidated balance sheet.

The Group as the lessor

When the Group subleases the right-of-use assets, the classification of the sublease is determined by the right-of-use assets (not the underlying assets). However, if the principal lease is a short-term lease for which the Group applies recognition exemption, the sublease is classified as an operating lease.

If a lease transfers almost all the risks and rewards attached to the ownership of the underlying asset, it is classified as a financial lease; otherwise, it is classified as an operating lease.

Under finance lease, lease payment includes fixed payments, substantial fixed payments, variable lease payments depending on index or rate change, guaranteed residual value, exercise price of purchase option that is reasonably believed to be exercised, and lease termination penalties that have been reflected in the lease term, less lease incentive that should be paid. The net lease investment is the sum of the present value of the lease payments receivable and the unguaranteed residual value, and expressed as financing lease payments receivable. The Group allocates the

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financing income to the lease term on a systematic and reasonable basis to reflect the fixed rate of return of the Group’s unexpired net lease investment in each period.

Under an operating lease, lease payments less lease incentives are recognized as lease income on a straight-line basis. The original direct cost arising from the acquisition of an operating lease is added to the book amount of the underlying asset and is recognized as an expense during the lease term on the same basis as the recognized lease income.

(XII) Investment property

Investment property refers to property held for the purpose of earning rent or capital appreciation or both (including property in the process of construction for these purposes). Investment property also includes the right-of-use assets that meet the definition of investment property.

Investment property is initially measured at cost (including transaction costs), and subsequently measured at cost less accumulated depreciation and impairment loss. The Group adopts straight-line basis for depreciation.

Investment property under construction is recognized at cost less accumulated impairment loss. The cost includes professional service fee and borrowing cost meeting capitalization conditions. Such assets are depreciated as soon as they are in the expected state of use.

The amount of profit or loss arising from excluded investment property is the difference between the net disposal price and the book amount of the asset, and is recognized in the current income.

(XIII) Intangible assets

Individually acquired intangible assets with limited life are presented at cost less accumulated amortization and accumulated impairment. The amortization amount is calculated and apportioned according to the following durable lives by straight-line method: 3 years for computer software design fee, and the economic benefit or contract term for patent rights. The estimated durable life and amortization method are reviewed at the end of the reporting period. The application of the impact from any change in the estimate is deferred.

Intangible assets are excluded at the time of disposal or when it is expected that future economic benefits cannot be generated by the use or disposal of them. The amount of profit or loss arising from intangible assets is due to the difference between the net disposal price and the book amount of the assets, and is recognized in the current income. (XIV) Impairment of non-financial assets

On the balance sheet date, the Group estimates the recoverable amount of the assets showing signs of impairment. When the recoverable amount is lower than the book amount, the impairment loss is recognized. Recoverable amount refers to the fair value of an asset less the cost of sale or its value of use, whichever is higher. When the

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impairment of assets recognized in the previous year does not exist any longer, it shall be reversed within the range of the amount of loss provided in the previous year.

(XV) Provision for liabilities

Provision for liabilities is recognized when there is a current legal or constructive obligation due to past events, and it is likely to require the outflow of resources with economic benefits to clear the obligation, and the amount of the obligation can be reliably estimated. The provision for liabilities is measured by the best estimated present value of the expenses required to pay off the obligation on the balance sheet date. For the discount rate, the pre-tax discount rate reflecting the current market assessment of the time value of money and the specific risk of liabilities is adopted. The amortization of the discount is recognized as interest expense. Future operating losses shall not be recognized as liabilities.

(XVI) Employee benefits

1. Short-term employee benefits

Short-term employee benefits are measured at the non-discounted amount expected to be paid, and are recognized as expenses when related services are provided.

2. Pension

Defined allocation plan

For the defined allocation plan, the amount of the pension to be allocated is recognized as the current pension cost on the accrual basis. Advance payments are recognized as assets to the extent that they are refundable in cash or reduce future payments.

Remuneration of employees, directors and supervisors

The remuneration of employees, directors and supervisors is recognized as expenses and liabilities when they are legal or constructive obligations and the amount can be reasonably estimated. If there is a difference between the actual allotment amount and the estimated amount, it shall be treated as a change of accounting estimate.

4. Resignation benefits

Resignation benefits refer to the benefits provided when the employee terminates his/her employment before the normal retirement date or when the employee decides to accept the company’s offer of benefits in exchange for termination of employment. The Group recognizes expenses when the offer of resignation benefits can no longer be revoked or when the related restructuring costs are recognized. Benefits that are not expected to be fully paid off 12 months after the end of the reporting period shall be discounted.

(XVII) Share capital and treasury shares
Share capital
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Ordinary shares are classified as equity. The classification of preferred shares refers to the essence of the contract agreement and the definition of financial liabilities and equity instruments. The specific rights attached to the preferred shares are assessed, and the shares are classified as liabilities when the basic characteristics of financial liabilities are shown, otherwise they are classified as equity. The incremental cost directly attributable to the issuance of new shares or stock options is included as a decrease in equity price.

2. Treasury shares

When the Group recovers issued shares, the consideration paid at the time of repurchase (including directly attributable costs) is recognized as “treasury shares” as a deduction of equity. If the disposal price of treasury shares is higher than the book amount, the difference is listed as capital reserve – treasury share transaction; if the disposal price is lower than the book amount, the difference is offset against the capital reserve generated by the same type of treasury share transactions, and the retained earnings will be debited if there is an insufficiency. The book amount of treasury shares is a weighted average and calculated separately according to the reason for the buyback.

At the time of cancellation of treasury shares, the capital reserve – share issue premium and share capital are debited in proportion to equity. If the book amount is higher than the sum of the face value and share issue premium, the difference will be offset against the capital reserve generated by the same type of treasury share transactions. If the book amount is lower than the sum of the face value and share issue premium, the capital reserve generated by the same type of treasury share transactions will be credited.

(XVIII) Income tax

Income tax expense includes current and deferred income tax. Income tax is recognized in income, except the income tax related to items under other comprehensive income or directly included under equity which is respectively included in other comprehensive income or directly included under equity.
The current income tax is calculated on the taxable income generated by the Group according to the tax rate that has been legislated or substantively legislated on the balance sheet date. The management regularly assesses the status of income tax returns in accordance with applicable income tax laws and regulations, and assesses income tax liabilities based on the tax expected to be paid to the tax authorities where applicable. The undistributed earnings calculated in accordance with the Income Tax Act of the Republic of China are subject to income tax, and the income tax expense is recognized according to the distribution of the actual earnings only after the shareholders’ meeting approves the earning distribution plan in the year following the year when the earnings are generated.
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Deferred income tax is recognized by balance sheet method according to the temporary difference between the assets and liabilities based on the tax basis and the book amount in the balance sheet. Deferred income tax liabilities arising from the originally recognized goodwill are not recognized. Deferred income tax is not recognized if it comes from the originally recognized assets or liabilities in the transaction (excluding business merger) which do not affect the accounting profit or tax income (tax loss) at the time of the transaction. If the Group can control the time point of reversal of the temporary difference arising from the investment in a subsidiary, and it is likely that the temporary difference will not be reversed in the foreseeable future, then it will not be recognized. The tax rate (and tax law) that has been legislated or substantially legislated on the balance sheet date and is expected to apply when the relevant deferred income tax assets are realized or when the deferred income tax liabilities are settled shall prevail.
Deferred income tax assets are recognized to the extent that temporary differences, unused tax losses and unused tax credits are likely to have future tax income available for use, and the unrecognized and recognized deferred income tax assets are reassessed at the end of each reporting period.
The current income tax assets and current income tax liabilities are offset only when there is legal execution power to offset the recognized amount of current income tax assets and liabilities, and there is the intention to pay off the net of assets and liabilities or realize the assets and pay off the liabilities at the same time; when there is legal execution power to offset the current income tax assets and current income tax liabilities, and the deferred income tax assets and liabilities are generated by the same taxable entity under the same tax authority, or generated by different taxable entities but each entity intends to pay off the net of assets and liabilities or realize the assets and pay off the liabilities at the same time, then the deferred income tax assets and liabilities can be offset.
Tax preference arising from the purchase of equipment or technology, research and development expenditure, personnel training expenditure and equity investment shall be accounted by income tax deduction.
(XIX) Revenue recognition
The Group’s revenue from customer contracts is recognized in the following steps:
Identify the customer contract;
Identify the performance obligations in the contract;
Determine the transaction price;
Apportion the transaction price to the performance obligations in the contract; and
Revenue is recognized when the performance obligations are met.
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If the time interval between the transfer of goods or services and the collection of consideration is less than one year, the transaction price of the major financial components of the contract shall not be adjusted.

1. Income from goods sold

The income from goods sold is from the sales of cement, limestone and cement processing products. Sales revenue It is recognized when control of the goods is transferred to the customer because the customer already has the right to price and use the product, and the company has the main responsibility for resale and bears the risk of obsolescence of the goods. The company recognizes at this time the income and accounts receivable, and has them expressed net of sales returns, quantity discounts and allowances.

For processing of self-delivered materials, the control of the ownership of the processed products is not transferred, so the income is not recognized when the materials are delivered.

2. Income from sale of property

Sale of property in the normal course of business is recognized when the property construction is completed and delivered to the buyer.

(XX) Borrowing costs

The borrowing cost directly attributable to the acquisition, construction or production of an asset that meets the requirements is a part of the cost of the asset until almost all the necessary activities for the asset to reach its intended state of use or sale are completed.

The investment income from temporary investment before the occurrence of eligible capital expenditure due to a specific loan, the investment income is deducted from the borrowing cost eligible for capitalization.

Other than the above, all borrowing costs are recognized as income in the period of occurrence.

V. Major Sources of Uncertainty in Significant Accounting Judgments, Estimates and Assumptions The Group includes the economic impact of COVID-19 into significant accounting estimates, and will continue to review the basic assumptions and estimates. If the amendment of an estimate affects only the current period, it is recognized in the current period of the amendment; if the amendment of an accounting estimate affects both the current and future periods, it is recognized in the current period of the amendment and the future period.

The important judgments, important accounting estimates and assumptions adopted by the Group in preparing the consolidated financial statements are as follows:

(I) Significant judgment adopted by the accounting policy

32 -

1. Business model judgment of financial assets classification

The Group assesses the business model of financial assets according to the level that reflects the common management of the financial asset group to achieve the specific business purpose. For this assessment, all relevant evidence should be considered, including the way asset performance is measured, the risks affecting performance, and the way managers’ compensation is determined. The Group continuously evaluates the appropriateness of its business model and judgment, monitors the financial assets measured at amortized cost and the debt instrument investment measured at fair value through other comprehensive income before the maturity date, and understands the reasons for the disposal, so as to evaluate whether the disposal is consistent with the objectives of the business model. If it is found that the business model has changed, the Group reclassifies the financial assets in accordance with the provisions of IFRS 9 and postpones the application from the date of reclassification.

2. Revenue recognition

In accordance with IFRS 15, the Group determines whether it has obtained or has not obtained the control of specific goods or services before transferring them to customers, and whether it will be the principal or agent in the transaction. If it is determined that it is the agent of the transaction, the net transaction amount will be recognized as income.

In case of any of the following circumstances, the Group shall be the principal:

(1) The Group obtains control of the goods or other assets from the counterparty before the goods or other assets are transferred to the customer; or
(2) The Group controls the right of the counterparty to provide services, so as to have the ability to lead the counterparty to provide services to customers on behalf of the Group; or
(3) The Group obtains the control of goods or services from the counterparty to combine with other goods or services, so as to provide specific goods or services to customers.

The indicators used to help determine whether the Group controls specific goods or services before transferring them to customers include (but are not limited to) the following:

(1) The Group is mainly responsible for fulfilling the commitment of providing specific goods or services.
(2) The Group assumes the inventory risk before and after the transfer of specific goods or services to customers.
(3) The Group has the discretion to fix the price.
Lease period
33 -

In determining the lease period, the Group considers all relevant facts and circumstances that give rise to economic incentives to exercise (or not to exercise) the option, including the expected changes in all facts and circumstances from the start date to the day when the option is exercised. The factors to be considered include the contract terms and conditions during the option period, the significant leasehold improvements made (or expected to be made) during the contract period, and the importance of the underlying assets to the operation of the Group. Reevaluate the lease period in case of major events or changes in circumstances within the control of the Group.

Judgment on whether the affiliated enterprise has substantial control.

The Group holds 40% of the shares of Penghu Cable TV Co., Ltd., and is its single largest shareholder. After considering the number and distribution of voting rights held by other shareholders, the other shares are not very widely distributed, and the Group is not yet able to dominate the relevant activities of Penghu Cable TV Co., Ltd. and therefore has no control over it. The management of the Group considers that it only has a significant impact on Penghu Cable TV Co., Ltd., so it is listed as an affiliated enterprise of the Group.

(II) Significant accounting estimates and assumptions
Estimated impairment of financial assets

The estimated impairment of accounts receivable, debt instrument investment and financial guarantee contracts is based on the Group’s assumption of default rate and expected loss rate. The Group considers historical experience, current market conditions and forward-looking information to make assumptions and select the input value of impairment assessment. If the actual cash flow in the future is less than expected, there may be a significant impairment loss.

Fair value measurement and evaluation process

When there is no market quotation for assets and liabilities measured by fair value in active markets, the Group will decide whether to outsource the valuation according to relevant laws and regulations or judgment, and determine the appropriate fair value evaluation technology. If the first-level input value cannot be obtained when estimating the fair value, the Group determines the input value by referring to the analysis of the financial status and operating results of the investee, the latest transaction price, the quoted price of the same equity instrument in the non-active market, the quoted price of similar instruments in the active market, and the evaluation multiplier of comparable companies. If the actual change of the future input value is different from the expectation, there may be a change in the fair value. The Group regularly updates the input values according to the market conditions, so as to monitor whether the fair value measurement is appropriate.

Impairment assessment of tangible and intangible assets
34 -

In the process of asset impairment assessment, the Group needs to rely on subjective judgment and determine the independent cash flow, asset life years, and future income and loss of a specific asset group according to the asset use mode and industrial characteristics. Any estimation change due to changes in economic conditions or company strategy may cause significant impairment in the future.

Investment impairment assessment using the equity method

When there is an indication of impairment that an investment by equity method may have been impaired and the book amount cannot be recovered, the Group immediately evaluates the impairment of the investment. The Group assesses the recoverable amount and analyzes the rationality of relevant assumptions based on the discounted value of the expected future cash flow of investee companies, or the discounted value of the expected cash dividend and the future cash flow generated by disposal of the investment.

The realizability of deferred income tax assets

Deferred income tax assets are recognized only when it is likely that there will be sufficient taxable income in the future to be used for deducting temporary differences. The evaluation of the realizability of deferred income tax assets must involve the management’s significant accounting judgment and estimation, including the expected growth of future sales revenue and profit margin, tax exemption period, available income tax deduction, tax planning and other assumptions. Any changes in the global economic environment, industrial environment and laws and regulations may cause a significant adjustment of deferred income tax assets.

Evaluation of inventory

As inventories must be valued at the lower of cost and net realizable value, the Group must use judgment and estimation to determine the net realizable value of the inventory on the balance sheet date. The Group assesses the amount of inventory due to normal wear and tear, obsolescence or non-existence of market sales value on the balance sheet date, and subtracts the inventory cost from the net realizable value.

Incremental loan interest rate of the lessee

When determining the lessee’s incremental loan interest rate for the discount of lease payment, the risk-free interest rate of the same currency in the relevant period is taken as the reference interest rate, and the estimated credit risk premium of the lessee and the lease specific adjustment (such as asset specific and secured factors) are taken into account.

VI. Explanation of Important Accounting Items
(I) Cash and cash equivalents
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Item	December 31, 2021	December 31, 2020
Cash Check deposit Current deposit Cash equivalents Short term bills with original maturity within three months Total	$ 413 2,992 91,159 324,940	$ 312 3,256 112,085 61,090
	$419,504	$176,743

The credit quality of the financial institutions that the Group deals with is good, and the Group deals with multiple financial institutions to diversify the credit risk, so the possibility of default is very low.
The Group has not pledged any cash or cash equivalents.
(II) Financial assets measured at fair value through income statement – current

Item	December 31, 2021	December 31, 2020
Non-derivative financial assets Listed stock Open-end funds Bonds Total	$ 180,450 34,165 34,070	$ 157,300 42,716 32,651
	$248,685	$232,667

The net (loss) income recognized by the Group in 2021 and 2020 was NT$18,033 thousand and NT$4,086 thousand, respectively.
The Group has not pledged financial assets measured at fair value through income statement.
Please refer to note 12 for details of relevant credit risk management and assessment methods.

(III) Net notes receivable

Net notes receivable
Item	December 31,2021	December 31,2020
Measured at amortized cost Total book amount Less: allowance for loss Net notes receivable	$ 199,262 (2,339)	$ 290,013 (3,480)
	$ 196,923	$ 286,533

The Group has not pledged any notes receivable.
Please refer to note 6(4) for details of disclosure of allowance for losses of notes receivable.
36 -

(IV) Net accounts receivable

Net accounts receivable
Item	December 31, 2021	December 31, 2020
Measured at amortized cost Total book amount Less: allowance for loss Net accounts receivable	$ 126,140 (15,983)	$ 108,673 (16,175)
	$110,157	$ 92,498

The Group’s overdue and unimpaired accounts receivable are in line with the credit standards set according to the industrial characteristics, business scale and profitability of the counterparties. The average credit period for sales by the Production Department is 2–3 months; the Construction Department and the Leasing Department handle the processing according to the collection period in the contract.
The Group adopts the simplified method of IFRS 9 to recognize the allowance for losses of accounts receivable according to the expected credit loss during the period of existence. The expected credit loss during the period of existence is calculated with the reserve matrix, which takes into account customers’ past default records, current financial situation and the industry’s economic trend. As the Group’s historical experience of credit loss shows that there is no significant difference in loss types among different customer groups, the reserve matrix does not further differentiate customer groups, and sets the expected credit loss rate based on the number of overdue days of accounts receivable.
According to the reserve matrix, the Group measures the allowance for losses of notes receivable and accounts receivable (including those of related parties and other receivables) as follows:

December 31, 2021	Expected credit impairment rate	Total book amount	Allowance for losses (expected credit impairment in the period of existence)	Cost after amortization
Not overdue 0–90 days overdue 91–180 days overdue 181–365 days overdue More than 365 days overdue Total	0%-2% 0%-5% 0%-25% 0%-50% 0%-100%	$ 347,406 - - - 15,052	$ (3,688) - - - (15,052)	$ 343,718 - - - -
		$ 362,458	$ (18,740)	$ 343,718

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December 31, 2020	Expected credit impairment rate	Total book amount	Allowance for losses (expected credit impairment Expected credit impairment rate	Cost after amortization
Not overdue 0–90 days overdue 91–180 days overdue 181–365 days overdue More than 365 days overdue Total	0%-2% 0%-5% 0%-25% 0%-50% 0%-100%	$ 426,000 - - - 16,697	$ (5,050) - - - (16,697)	$ 420,950 - - - -
		$442,697	$ (21,747)	$420,950

The statement of changes in allowance for losses of notes receivable and accounts receivable (including those of related parties and other receivables) is as follows:

Item	2021	2020
Opening balance Plus: provision for impairment loss Less: reversal of impairment loss Ending balance	$ 21,747 - (3,007)	$ 21,511 236 -
	$18,740	$21,747

Other credit enhancement held for the accounts receivable above: None.

If there is evidence that the counterparty is facing serious financial difficulties and the Group cannot reasonably expect the recoverable amount, the Group will directly write off the relevant receivables and will continue to pursue the recovery. The amount recovered due to the recourse is recognized in income. The Group’s accounts receivable for offsetting the contract amount in 2021 and 2020 were both $0.

Please refer to note 12 for details of relevant credit risk management and assessment methods.
The Group has not pledged any account receivable.

(V) Other receivables

Other receivables
Item	December 31, 2021	December 31, 2020
Lease payments receivable Interests receivable Other receivables Sub-total Less: allowance for loss Net	1,400 596 218	1,384 418 4,935
	$ 2,214 -	$ 6,737 (1,645)
	$2,214	$ 5,092

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1. The composition of lease payments receivable is as follows:

Undiscounted lease payments Year 1 Year 2 Year 3 Year 4 Total Less: financing income not earned Less: allowance for loss Lease payments receivable Unguaranteed residual value Less: financing income not earned Present value of unguaranteed residual value Net lease investment reported as finance lease payment receivables Lease payments receivable (listed as other receivables) Long-term lease payments receivable (listed as other non-current assets)	December 31, 2021	December 31, 2020
	$ 1,428 1,428 - -	$ 1,428 1,428 1,428 -
	$ 2,856 (41) -	$ 4,284 (85) -
	$ 2,815	$ 4,199
	$ - -	$ - -
	$ -	$ -
	$ 2,815	$ 4,199
	$ 1,400	$ 1,384
	$ 1,415	$ 2,815

The Group signed a financial leasing agreement in December 2018 to sublease the 8th floor of the Southeast Building to the Vocational Training Bureau of the Ministry of Labor, with an average lease term of 5 years and a fixed lease payment of NT$714,000 per half year. Since the period of sublease is all the remaining period of the corresponding principal lease, the Group classifies the lease as a financing lease.

(VI) Inventory and cost of goods sold

Inventory and cost of goods sold
Item Manufacturing Department: Raw fuel Materials Work in process Finished products Sub-total Construction Department: Construction land Property under construction Net – Construction Department Total	December 31, 2021 $ 24,773 63,453 29,393 29,861 $ 147,480 $ 539,187 154,407 $ 693,594 $ 841,074	December 31, 2020
		$ 10,496 62,455 23,588 59,343
		$ 155,882
		$ 466,150 262,278
		$ 728,428
		$ 884,310

39 -
The inventory related losses (gains) recognized as cost of goods sold in the current period are as follows:

Item	2021	2020
Cost of inventory sold Other operating costs Manufacturing cost not apportioned Inventory loss(profits) Provision for inventory depreciation and losses from obsolete and slow-moving inventories (appreciation benefits) Manufacturing Department Cost of property sold Total operating costs	$ 1,479,010 38,028 9,820 (6,797) (17,619)	$ 1,496,474 37,773 5,705 188 (16,526)
	$ 1,502,442 209,775	$ 1,523,614 -
	$1,712,217	$1,523,614

The net realizable value of inventories appreciated due to consumption of some inventories in 2021 and 2020, so the recognized falling price and sluggish loss of inventory (recovery benefit) were NT$(17,619) thousand and NT$(16,526) thousand, respectively.
The Group has not pledged any inventory.
The adjustment between the increase in inventory and the inventory in the cash flow statement in the current period is as follows:

Item	2021	2020
Inventory decrease (increase) Transfer in of property, plant and equipment Transfer out to property, plant and equipment Cash received (paid) from inventory decrease (increase)	$ 43,236 - (2,260)	$ (233,353) 420 (4,627)
	$ 40,976	$ (237,560)

(VII) Prepayments

Prepayments
Item	December 31, 2021	December 31, 2020
Prepayment for material purchase Prepaid insurance premium Tax allowance Other prepayments Total	$ 15,516 357 13,684 6,708	$ 45,210 315 15,924 6,691
	$ 36,265	$ 68,140

(VIII) Other financial assets – current

) Other financial assets – current
Item	December 31, 2021	December 31, 2020
Original maturity date more than 3 months away Time deposits: NT$ time deposits	$ 41,107	$ 46,007

40 -

Foreign currency time deposits Total Interest rate range	120,518	128,591
	$161,625	$174,598
	0.22%-0.81%	0.35%-1.06%

(IX) Incremental cost of contract acquisition – current

The Group expects to recover the commission paid to the agent company for the acquisition of the property sales contract or the bonus paid to the internal sales department for its own sales and construction, so it is recognized as an asset. It is amortized when the income from the sale of property is recognized, and a promotion expense of $0 is recognized in both 2021 and 2020.

(X) Financial assets measured at fair value through other comprehensive income – non-

current

current
Item	December 31, 2021	December 31, 2020
Non-liquid Equity instruments Shares of domestic listed and OTC companies Shares of domestic unlisted and non- OTC companies Sub-total Evaluation adjustment Total	$ 282,470 357,840	$ 263,160 343,844
	$ 640,310 619,166	$ 607,004 571,919
	$1,259,476	$1,178,923

The Group invests in the shares of the above-mentioned domestic unlisted and nonOTC companies for medium and long-term strategic purposes, and expects to make a profit through long-term investment. The management of the Group believes that if the short-term fair value fluctuation of such investment is included in income, it will be inconsistent with the long-term investment planning mentioned above, so it chooses to designate such investment as fair value through other comprehensive income.
In 2021 and 2020, the Group adjusted its investment position to diversify the risk, and sold some shares at fair value. The unrealized gains and losses of other related interests – financial assets measured at fair value through other comprehensive income were respectively NT$254 thousand and NT$14,252 thousand, which were transferred to retained earnings.
Please refer to note 12 for the relevant credit risk management and assessment method.
The Group has not pledged financial assets measured at fair value through other comprehensive income.
41 -

(XI) Investment by equity method

vestment by equity method
Investee companies	December 31, 2021	December 31, 2020
Significant affiliated enterprises: Taiji Ship Plant Co., Ltd. Penghu Cable TV Co., Ltd. Sub-total Insignificant individual affiliated enterprises Total	330,900 150,299	315,605 147,713
	$ 481,199	$ 463,318
	$ 130,427	$ 127,328
	$ 611,626	$ 590,646

The basic information of the Group’s major affiliated enterprises is as follows:

Company name	Shareholding ratio	Shareholding ratio
	December 31, 2021	December 31, 2020
Taiji Ship Plant Co., Ltd. Penghu Cable TV Co., Ltd.	31.56% 40.00%	31.56% 40.00%

Please refer to Appendix 7 of note 13 for details of the business nature, main business location and country of incorporation of the affiliated enterprises above.

The consolidated financial information of the Group’s major affiliated enterprises is as follows:

A. Balance Sheet

A. Balance Sheet
Current assets Non-current assets Current liabilities Non-current liabilities Equity Share of net assets of affiliated enterprises Unrealized gain or loss from transactions with affiliated enterprises Book value of affiliated enterprises	Taiji Ship Plant Co., Ltd.
	December 31, 2021	December 31, 2020
	$ 303,393 1,151,348 (380,002) (2,157)	$ 426,129 1,127,494 (534,344) -
	$1,072,582	$1,019,279
	$ 338,544 (7,644)	$ 321,720 (6,115)
	$ 330,900	$ 315,605

Current assets Non-current assets Current liabilities Non-current liabilities Equity Share of net assets of affiliated enterprises	Penghu Cable TV Co., Ltd.	Penghu Cable TV Co., Ltd.
	December 31, 2021	December 31, 2020
	$ 369,570 124,128 (82,679) (35,271)	$ 368,339 110,007 (82,799) (27,262)
	$ 375,748	$ 368,285
	$ 150,299	$ 147,713

42 -

Book value of affiliated enterprises $ 150,299 $ 147,713

B. Comprehensive Income Statement

Companyname	Taiji ShipPlant Co.,Ltd.	Taiji ShipPlant Co.,Ltd.
	2021	2020
Operating income Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period Dividends received from affiliated enterprises Companyname	$ 191,440	$ -
	$ 54,467 6,715	$ 8,746 7,837
	$ 61,182	$ 16,583
	$ 2,486	$ -
	Penghu Cable TV Co.,Ltd.
	2021	2020
Operating income Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period Dividends received from affiliated enterprises	$ 119,148	$ 123,389
	$ 22,042 6,821	$ 19,485 798
	$ 28,863	$ 20,283
	$ 7,200	$ 8,000

(1) The shares of individual insignificant affiliated enterprises are summarized as follows:

follows:
Share: Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period	2021	2020
	$ 2,672 425	$ 3,924 832
	$ 3,097	$ 4,756

(2) The investment by equity method and the Group’s share of income and other comprehensive income are calculated according to the financial statements audited by the independent auditor.
The Group did not pledge its investment by equity method as of December 31, 2021 and 2020.
43 -

(XII) Property, plant and equipment

perty, plant and equipment
Item	December 31, 2021	December 31, 2020 $ 153,748 395,161 2,646,621 25,036 50,050 48,145 $ 3,318,761 (3,041,614) (27,449) $249,698
Land Housing and construction Machine and equipment Transportation equipment Other equipment Equipment pending inspection and unfinished construction Total cost Less: accumulated depreciation Accumulated impairment Total	$ 720,588 425,506 1,029,011 30,036 41,054 30,936
	$ 2,277,131 (1,063,788) (12,204)
	$1,201,139

Cost	Land	Housing and construction	Machine and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - - 566,840	$ 395,161 439 - 34,494 (85,910) 81,322	$2,646,621 564 - - (1,905,232) 287,058	$ 25,036 2,500 - - - 2,500	$ 50,050 4,055 - 499 (14,490) 940	$ 48,145 916,621 2,260 2,570 - (938,660)	$3,318,761 924,179 2,260 37,563 (2,005,632) -
Balance on January 1, 2021 Acquisition Inventory transferred in Transfer of right-of- use assets – Disposal Reclassification Balance on December 31, 2021 Accumulated depreciation and impairment
	$ 720,588	$ 425,506	$1,029,011	$ 30,036	$ 41,054	$ 30,936	$2,277,131
	$ - - - -	$ 393,536 692 (85,488) (422)	$2,601,785 10,851 (1,890,448) (14,784)	$ 23,863 614 - -	$ 49,879 404 (14,451) (39)	$ - - - -	$3,069,063 12,561 (1,990,387) (15,245)
Balance on January 1, 2021 Depreciation expense Disposal Impairment reversal Balance on December 31, 2021
	$ -	$ 308,318	$ 707,404	$ 24,477	$ 35,793	$ -	$1,075,992

Cost	Land	Housing and construction	Machine and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - -	$ 400,141 - -	$2,642,031 2,996 -	$ 24,336 - 700	$ 50,050 - -	$ 24,827 30,342 3,927	$3,295,133 33,338 4,627
Balance on January 1, 2020 Acquisition Inventory transferred in

44 -

Transfer to inventory Disposal Transfer to right-of- use assets – Buildings Reclassification Balance on December 31, 2020 Accumulated depreciation and impairment	Land	Housing and construction	Machine and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	- - - -	- (4,980) - -	- (6,764) - 8,358	- - - -	- - - -	(420) - (2,173) (8,358)	(420) (11,744) (2,173) -
	$ 153,748	$ 395,161	$2,646,621	$ 25,036	$ 50,050	$ 48,145	$3,318,761
	$ - - - -	$ 398,392 124 (4,980) -	$2,597,730 10,819 (4,873) (1,891)	$ 23,171 692 - -	$ 49,747 132 - -	$ - - - -	$3,069,040 11,767 (9,853) (1,891)
Balance on January 1, 2020 Depreciation expense Disposal Impairment reversal Balance on December 31, 2020
	$ -	$ 393,536	$2,601,785	$ 23,863	$ 49,879	$ -	$3,069,063

The adjustment of property, plant and equipment acquired in the current period and from the cash flow statement is as follows:

Item	2021	2020
	$ 924,179 9,468	$ 33,338 (3,325)
		$ 30,013

Capitalization amount and interest rate range of borrowing costs of property, plant and equipment: None.
The Group’s reversal of accumulated impairment and accrued impairment loss in 2021 and 2020 were NT$(15,245) thousand and NT$(1,891) thousand, respectively. Due to the shutdown of the raw materials and clinker department in 2018, the relevant equipment was idle and unused; the recoverable amount of the equipment was expected to be less than the book amount, and a provision for impairment loss was made. However, it has already scrapped some of the related equipment in fiscal 2021 and 2020, so the accumulated impairment loss was reversed.The residual value from the disposal above belongs to the third-level fair value.
Information on guarantees provided with property, plant and equipment: None.
45 -

(XIII) Lease agreement

1. Right-of-use assets

Right-of-use assets
Item	December 31, 2021 $ 427,389 97,208 5,261 $ 529,858 (172,197) - $357,661	December 31, 2020
Land Buildings Transportation equipment Total cost Less: accumulated depreciation Accumulated impairment Net		$ 407,039 92,409 4,220
		$ 503,668 (114,497) -
		$389,171

Cost	Land	Buildings	Transportation equipment
Balance on January 1, 2021 Increase in current period Property, plant and equipment Transfer in Decrease in current period Balance on December 31, 2021 Accumulated depreciation and impairment	$ 407,039 39,479 - (19,129)	$ 92,409 42,362 (37,563) -	$ 4,220 1,041 - -
	$ 427,389	$ 97,208	$ 5,261
	$ 110,985 54,531 -	$ 2,692 1,658 -	$ 820 1,511 -
Balance on January 1, 2021 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2021 Cost
	$ 165,516	$ 4,350	$ 2,331
	Land	Buildings	Transportation equipment
Balance on January 1, 2020 Increase in current period Property, plant and equipment Transfer to Decrease in current period	$ 264,579 143,649 - (1,189)	$ 18,839 71,397 2,173 -	$ - 4,220 - -

46 -

Cost	Land	Buildings	Transportation equipment	Total
Balance on December 31, 2020 Accumulated depreciation and impairment	$ 407,039	$ 92,409	$ 4,220	$ 503,668
	$ 53,046 57,939 -	$ 1,346 1,346 -	$ - 820 -	$ 54,392 60,105 -
Balance on January 1, 2020 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2020
	$ 110,985	$ 2,692	$ 820	$ 114,497

A reconciliation of the additions to the statement of cash flows to the acquisition of right-of-use assets for the period is as follows：

Item	2021	2020
Increase in right-of-use assets Increase in lease liabilities Transfer to property, plant and equipment Increase/decrease in payables for purchase of right-of-use assets Cash paid for purchase of right-of-use assets	$ 82,882 (40,520) - 12,729	$ 219,266 (145,696) (2,173) (12,729)
	$ 55,091	$ 58,668

3. Lease liabilities

Lease liabilities
Item	December 31, 2021	December 31, 2020
	$ 52,946	$ 65,651
	$235,791	$265,358
		December 31, 2020
Land Buildings Transportation equipment	0.85%-2.03% 1.16%-2.03% 1.16%-2.03%	1.16%-2.03% 1.16%-2.03% 1.16%

For the maturity analysis of lease liabilities, please refer to note 12(2).

4. Important leasing activities and terms

The Group leases a number of land, buildings and transportation equipment for operation, plants and external roads. The lease term is 3–20 years. Some of the leases are attached with the right to renew the lease upon the expiration of the lease term, and the rent of some of the leases is based on the area of the leased land and is

47 -

calculated according to the section value and rate or according to the present value of the land announced in the current year. The Group has included in the lease liability the right to renew the lease upon the expiration of the lease term. In addition, according to the contract, the company shall not sublet the leased assets to others without the consent of the lessor. As of December 31, 2021 and 2020, there was no sign of impairment of the right-of-use assets, so no impairment assessment was conducted.

Due to the severe impact of COVID-19 on the market economy in 2020, the Group negotiated the land lease with the lessor, and the lessor agreed to unconditionally reduce a part of rent in 2020 and 2021 and postpone the payment of rent from January 1 to June 30, 2020 to December 31, 2020. In 2020, the Group recognized the influence number of the rent concession above as NT$6,245 thousand and NT$4,733 thousand in 2021 and 2020 which is recognized as profit or loss (posted under other income). 5. Sublease:

The Group sublets the 8th floor of the Southeast Building to the Vocational Training Bureau of the Ministry of Labor in the form of business lease; the relevant right-ofuse assets are excluded due to the sublease relationship, and the lease payment receivable is recognized at the same time. The income from the sublease of the rightof-use assets in 2021 and 2020 was NT$44 thousand and NT$60 thousand, respectively.

6. Other leasing information

(1) Please refer to note 6(14) for the Group’s agreement of leasing investment property by operating lease.
(2) The lease related expenses for the current period are as follows:

Item	2021	2020
Short-term lease expenses Low-value asset leasing expenses Changes not included in the measurement of lease liabilities Lease payment expenses Total cash outflow from leasing (note)	$117	$ 597
	$-	$48
	$-	$-
	$ (63,548)	$ (57,395)

(Note): It includes the principal payment of current lease liabilities.

In 2021 and 2020, the Group selected exemption recognition for eligible shortterm leases and low-value asset leases, and did not recognize related right-of-use assets and lease liabilities of such leases.

(XIV) Investment property

nvestment property
Item	December 31, 2021	December 31, 2020
Land Housing, construction and equipment Equipment pending inspection and unfinished construction Total cost Less: accumulated depreciation	$ 5,317,887 759,818 -	$ 5,316,453 754,283 5,535
	$ 6,077,705 (494,151)	$ 6,076,271 (489,909)

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Accumulated impairment Net Land Cost Balance on January 1, 2021 $ 5,316,453 Acquisition 1,434 Disposal - Balance on December 31, 2021 $ 5,317,887 Accumulated depreciation and impairment Balance on January 1, 2021 $ - Depreciation expense - Disposal - Balance on December 31, 2021 $ - Land Cost Balance on January 1, 2020 $ 5,316,453 Acquisition - Disposal - Balance on December 31, 2020 $ 5,316,453 Accumulated depreciation and impairment Balance on January 1, 2020 $ - Depreciation expense - Disposal -	Accumulated impairment Net Land Cost Balance on January 1, 2021 $ 5,316,453 Acquisition 1,434 Disposal - Balance on December 31, 2021 $ 5,317,887 Accumulated depreciation and impairment Balance on January 1, 2021 $ - Depreciation expense - Disposal - Balance on December 31, 2021 $ - Land Cost Balance on January 1, 2020 $ 5,316,453 Acquisition - Disposal - Balance on December 31, 2020 $ 5,316,453 Accumulated depreciation and impairment Balance on January 1, 2020 $ - Depreciation expense - Disposal -	(203,630) $ 5,379,924 Housing, construction and equipment Equipment pending inspection and unfinished construction $ 754,283 $ 5,535 - - 5,535 (5,535) $ 759,818 $ - $ 693,539 $ - 4,242 - - - $ 697,781 $ - Housing, construction and equipment Equipment pending inspection and unfinished construction $ 754,283 $ - - 5,535 - - $ 754,283 $ 5,535 $ 690,088 $ - 3,451 - - -	(203,630)	(203,630)	(203,630)
			$ 5,379,924		$ 5,382,732
					Total
	$ 5,316,453 1,434 -	$ 754,283 - 5,535		$ 5,535 - (5,535)	$ 6,076,271 1,434 -
Balance on January 1, 2021 Acquisition Disposal Balance on December 31, 2021 Accumulated depreciation and impairment
	$ 5,317,887	$ 759,818		$ -	$ 6,077,705
	$ - - -	$ 693,539 4,242 -		$ - - -	$ 693,539 4,242 -
Balance on January 1, 2021 Depreciation expense Disposal Balance on December 31, 2021 Cost
	$ -	$ 697,781		$ -	$ 697,781
	Land	Housing, construction and equipment		Equipment pending inspection and unfinished construction	Total
	$ 5,316,453 - - $ 5,316,453	$ 754,283 - - $ 754,283		$ - 5,535 - $ 5,535	$ 6,070,736 5,535 - $ 6,076,271
Balance on January 1, 2020 Acquisition Disposal Balance on December 31, 2020 Accumulated depreciation and impairment Balance on January 1, 2020

	$ - - -	$ 690,088 3,451 -		$ - - -	$ 690,088 3,451 -
Depreciation expense Disposal

49 -

Balance on December 31, 2020

$ -

$ 693,539 $ -

$ 693,539

Rental income and direct operating expenses of investment property:

Item	2021	2020
Rental income from investment property Direct operating expenses incurred from investment property generating rental income in the current period Direct operating expenses incurred from investment property not generating rental income in the current period	$ 59,102	$ 53,985
	$ 38,028	$ 37,773
	$ 376	$ 376

The total amount of lease payment to be received in the future for leasing investment property by operating lease is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 More than 5 years Total	Total significant lease payment	Total significant lease payment
	December 31, 2021	December 31, 2020
	$ 25,129 26,874 27,197 27,215 28,298 164,704	$ 24,690 25,129 26,636 26,905 26,921 189,848
	$299,417	$ 320,129

The fair value of investment property is based on the evaluation results by independent experts in recent years by comparative method; reference is also made to the real price inquiry service network of the Ministry of the Interior or the websites of real estate brokers to obtain the transaction prices in similar locations and of similar types in the near past; the current lease contract is also referred to, and the future cash flow is discounted to serve as the evaluation basis. All the above belong to the third-level fair value, and the fair value obtained from the evaluation is as follows:

Item December 31, 2021 December 31, 2020 Fair value $ 11,237,024 7,801,934

As of December 31, 2021 and 2020, some of the Group’s land has not been registered in the name of the company due to the restrictions of the law, but to ensure the interests, the Group has obtained the promise of the registrant to transfer the land unconditionally to the Group after the legal restrictions are lifted, or apply security measures on the land if it is already registered for mortgage rights.
50 -
For information on guarantees provided with property, please refer to note 8.
The Group has made a provision of NT$0 as the impairment loss (benefits from reversal) in both 2021 and 2020.
(XV) Intangible assets

ntangible assets	ntangible assets
Item		December 31, 2021		December 31, 2020
			$ 105 (105)	$ 105 (82)
			$-	$23
			Cost	Cost of computer software
Balance on January 1, 2021 Acquisition Excluded at expiration Balance on December 31, 2021 Accumulated depreciation	$ 105 - -		Balance on January 1, 2020 Acquisition Excluded at expiration Balance on December 31, 2020 Accumulated depreciation	$ 105 - -
	$ 105			$ 105
	Cost of computer software			Cost of computer software
Balance on January 1, 2021 Amortization expense Excluded at expiration Balance on December 31, 2021	$ 82 23 -		Balance on January 1, 2020 Amortization expense Excluded at expiration Balance on December 31, 2020	$ 47 35 -
	$ 105			$ 82

(XVI) Refundable deposits

Refundable deposits
Item	December 31, 2021	December 31, 2020
Security deposit of mining area Lease security deposit Security deposit of National Property Administration Membership deposit Other security deposits Total	$ 562 10,212 - 165 1,810	$ 562 8,464 263 765 64
	$12,749	$10,118

(XVII) Short-term borrowings

Short-term borrowings
Nature of borrowing	December 31, 2021
	Amount	Interest rate
Mortgage loan Credit loan Total	$ 770,000 470,000	0.78%-0.80% 0.78%
	$1,240,000

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Nature of borrowing	December 31, 2020	December 31, 2020
	Amount	Interest rate
Mortgage loan Credit loan Total	$ 155,000 80,000	0.85% 0.85%
	$235,000

For short-term borrowings, the company provides some investment property as the guarantee for borrowing. Please refer to note 8.

(XVIII) Short-term notes payable

) Short-term notes payable
Item	December 31, 2021	December 31, 2020
Short-term notes payable Less: Unamortized discount Net Rate range	$ 82,000 (31)	$ - -
	$ 81,969	$-
	0.85%-1.54%	-

(XIX) Contractual liabilities – current

Contractual liabilities – current
Item	December 31, 2021	December 31, 2020
Cement to be collected Prepayments Pre-collected property Total	$ 30,505 27 -	$ 73,555 27 16,843
	$30,532	$90,425

(XX) Other payables

ther payables
Item Salary and bonus payable Commodity tax payable Utilities payable Tax payable Remuneration payable to employees and directors – the company Remuneration payable to employees and directors – subsidiaries Equipment payable – property, plant and equipment Equipment payable – right-of-use assets Dividend payable – previous period Other Total	December 31, 2021	December 31, 2020 $ 15,499 18,372 9,164 2,998 667 1,227 10,444 12,729 3,983 14,542 $ 89,625
	$ 16,373 7,722 8,025 3,159 8,157 2,246 976 - 3,977 21,030
	$ 71,665

(XXI) Debt provision – current

Item December 31, 2021 December 31, 2020

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Employee benefits Total Item		$ 1,572 -	$ 1,553 -
		$1,572	$1,553
		2021
	Employee benefits	Decommissioning liabilities	Total
Balance on January 1 New liability reserve in the current period Liability reserve used in current use Balance on December 31	$ 1,553 1,572 (1,553)	$ - - -	$ 1,553 1,572 (1,553)
	$ 1,572	$ -	$ 1,572

Item		2020
	Employee benefits	Decommissioning liabilities	Total
Balance on January 1 New liability reserve in the current period Liability reserve used in current use Balance on December 31	$ 1,440 1,553 (1,440)	$ - - -	$ 1,440 1,553 (1,440)
	$ 1,553	$ -	$ 1,553

The provision for employee benefit liabilities is an estimate of employees' acquired short-term service leave entitlement.

(XXII) Pension

Since the end of 2004, the Group handles the measures for employees’ self-applied retirement and voluntary retirement in accordance with the provisions of the Labor Standards Act. On July 1, 2005, the Group established a defined retirement scheme in accordance with the “Labor Pension Act” which applies to employees of R.O.C. nationality. For employees who select the application of the labor pension system in the “Labor Pension Act,” the Group pays the labor pension to the employee’s personal account at the Labor Insurance Bureau at 6% of the salary each month. The payment of the employee pension is collected in a monthly or one-off manner according to the individual pension account type and the amount of accumulated income of the employee.
The pension costs recognized as expenses by the Group in accordance with the pension rules above in 2021 and 2020 are NT$3,216 thousand and NT$2,881 thousand. respectively.
53 -

(XXIII) Guarantee deposits received

uarantee deposits received
Item	December 31, 2021	December 31, 2020
Lease deposit Cement deposit Total	$ 20,476 3,481	$ 20,476 3,481
	$23,957	$23,957

For the transaction of related parties, please refer to note 7(3)(vi).

(XXIV) Ordinary share capital

Item	2021	2021	2020	2020
	Number of shares (thousand shares)	Amount	Number of shares (thousand shares)	Amount
January 1 Capital increase in cash Capital increase from earnings December 31	572,000 - -	$ 5,720,008 - -	572,000 - -	$ 5,720,008 - -
	572,000	$ 5,720,008	572,000	$ 5,720,008

As of December 31, 2021, the company’s rated capital is NT$8,000,000 thousand, divided into 800,000 thousand shares.

(XXV) Capital reserve

apital reserve
Item	December 31, 2021	December 31, 2020
Premium on shares issued Treasury share trading Recognized due to investment by equity method Total	$ 118,316 66,846 3,211	$ 118,316 66,740 3,211
	$188,373	$188,267

In accordance with the Company Act, the amount of shares issued in excess of the par value and the capital reserve from donations may be used to make up for losses, and when the company has no accumulated loss, it may distribute new shares or cash in proportion to the original shareholdings of the shareholders. In addition, in accordance with the relevant provisions of the Securities and Exchange Act, when the capital reserve above is appropriated as capital, the total amount shall not exceed 10% of the paid-in capital each year. Unless the earnings reserve is insufficient to fill the capital loss, the

54 -

company shall not supplement with the capital reserve. The capital reserve arising from investment by equity method shall not be used for any purpose.

(XXVI) Retained earnings and dividend policy

In accordance with the provisions of the company’s articles of association on earnings distribution, if there are earnings in the annual final accounts of the company, the company shall pay taxes first and make up for the previous losses. 10% of the earnings reserve shall then be appropriated as the legal reserve, until the legal reserve reaches the total capital of the company; after the special reserve is provided or reversed in accordance with the provisions of the competent authority’s requirement, the balance plus the accumulated undistributed earnings in the previous year and the adjustment of the undistributed earnings in the current year will be the earnings available for distribution; the board of directors shall prepare an earnings distribution scheme and submit it to the shareholders’ meeting for resolution and distribution of the dividend to shareholders.

For the dividend payment, the company shall take into account the characteristics of the business climate change, and consider the future capital needs and long-term financial planning of the life cycle of each product or service. Under the goal of maintaining stable dividends, in principle all dividend payments shall be in cash, but if the company has capital needs for capacity expansion, financial structure improvement, major investment plans, etc., then more than 50% may be stock dividend, and the rest be cash dividend.

The legal reserve shall not be used except for making up the company’s losses, or distributing new shares or cash in proportion to the original shareholdings of the shareholders. However, if new shares or cash is distributed, the amount is limited to the portion of the reserve exceeding 25% of the paid-in capital.
(1) When the company distributes earnings, it is required by law to set aside a special reserve for the debit balance of other equity items on the balance sheet date of the current year. When the debit balance of other equity items is reversed, the amount reversed can be included in earnings available for distribution.
(2) When IFRSs is adopted for the first time, according to the special reserve listed in the letter dated April 6, 2012 referenced Jin-Guan-Cheng-Fa No. 1010012865, if the company uses, disposes of or reclassifies related assets later, it may convert the proportion of the original special reserve into retained earnings available for distribution.
The company’s earnings distribution plan and dividend per share for 2019 and 2018 as determined by the company in June 2020 and June 2019 are as follows:
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	Earnings distribution plan	Earnings distribution plan		Dividend per share	Dividend per share	(NT$)
Item	2020	2019		2020	2019
Legal reserve	$ 3,632	$	3,313
Ordinary share dividend	57,200	57,200		0.1		0.1
Total	$ 60,832	$ 60,513
5. The board of	directors of the company proposed on March 15, 2022 the					following
earnings distribution plan for 2021:
		Earnings distribution			Dividend per share
			plan		(NT$)
Legal reserve			$	14,023
Cash dividend				114,400	0.2
Total			$	128,423

The board of directors of the company proposed on March 15, 2022 the following earnings distribution plan for 2021:

The earnings distribution plan for 2021 is pending the resolution of the general shareholders’ meeting to be held in June 2022

For the proposal by the company’s board of directors and the resolution of the shareholders’ meeting on earnings distribution, please go to the “Market Observation Post System” of the Taiwan Stock Exchange for inquiry.

(XXVII) Special reserve

Special reserve
Item	December 31, 2021	December 31, 2020
Preparation for plant construction Provision due to the initial application of International Accounting Standards Total	$ 500,000 310,918	$ 500,000 310,918
	$ 810,918	$ 810,918

The preparation for plant construction is the special reserve proposed by the company in 1994 by the resolution of the shareholders’ meeting on plant construction at home or abroad.
Due to the initial application of International Accounting Standards, the company transferred NT$341,766 thousand to retained earnings from unrealized revaluation value previously recognized in accordance with the Generally Accepted Accounting Principles of our country. In accordance with the order referenced Jin-Guan-ChengFa No. 1010012865, the company shall provide a special reserve of the same amount. However, because the adjusted retained earnings on the transfer date was only
56 -

NT$319,012 thousand, the special reserve amount proposed was NT$ 319,012 thousand.

If the special reserve listed above is adopted under IFRSs for the first time, and if the company uses, disposes of or reclassifies the relevant assets later, it may reverse the proportion of the special reserve originally provided into distributable retained earnings. As of December 31, 2020, NT$8,094 thousand was reversed to undistributed earnings from the proportion of the original special reserve due to the disposal of investment property.

(XXVIII) Other equity

Other equity
Item	Unrealized benefit (loss) of financial assets measured by fair value through other comprehensive income.
	2021	2020
Opening balance Unrealized valuation gain/loss of equity instrument investment measured at fair value through other comprehensive income Disposal of equity instruments measured at fair value through other comprehensive income Share of affiliated enterprises and joint ventures recognized by equity method – unrealized valuation gain/loss of equity instrument investment measured at fair value through other comprehensive income Disposal of equity instruments measured at fair value through other comprehensive income Ending balance	$ 500,520 50,042 (254) 988 -	$ 514,103 (18,938) (14,320) 19,607 68
	$551,296	$500,520

(XXIX) Treasury shares

The investment in the shares of the company by subsidiaries is regarded as treasury shares, and the changes are summarized as follows: December 31, 2021:

December 31, 2021:
Item	Number of shares at the beginning of the period	Increase (decrease) in the current period	Unit: 1000 shares Number of shares at the end of the period
The shares of the parent company held by subsidiaries transferred from long-term	2,113	-	2,113

57 -

investment to treasury shares

December 31, 2020:

December 31, 2020:
Item	Number of shares at the beginning of the period	Increase (decrease) in the current period	Unit: 1000 shares Number of shares at the end of the period
The shares of the parent company held by subsidiaries are transferred from long- term investment to treasury shares	2,113	-	2,113

As the company acquired the control over Southeast Paper Co., Ltd. at the end of December 2011, the book amount NT$24,509 thousand of its reinvestment in the parent company (financial assets measured by fair value through other comprehensive income – non-current) was transferred to treasury shares according to the shareholding ratio of 49.71%. The amount as of December 31, 2021 and 2020 was both NT$12,185 thousand. The market prices of the company’s shares held by Southeast Paper Co., Ltd. on December 31, 2021 and 2020 were NT$42,786 thousand and NT$37,820 thousand, respectively. The shares of the parent company held by subsidiaries are treated as treasury shares and still enjoy the right of dividend distribution.

(XXX) Non-controlling interests

on-controlling interests
Item	December 31, 2021	December 31, 2020
Opening balance Shares attributable to non-controlling interests: Net profit for the year Change of the year due to other comprehensive income Increase/decrease of non-controlling interests Ending balance ) Operating income Item	$ 58,910 (6,174) (10) 34,258	$ 46,809 (5,209) 118 17,192
	$86,984	$58,910
	2021	2020
Revenue from customer contracts Sales revenue Income from sale of property	$ 1,553,923 233,760	$ 1,537,001 -

(XXXI) Operating income

58 -

Total income from customer contracts Less: sales discount Net income from customer contracts Rental income Net operating income	$ 1,787,683 - $ 1,787,683 59,102 $1,846,785	$ 1,537,001 -
		$ 1,537,001 53,985
		$1,590,986

1. Description of customer contract

A. Sales revenue

The sales revenue of cement and furnace stone powder products of the Production Department is mainly sold to dealers at fixed prices as agreed in the contract.

2. Other operating income

The lease income from business leases is recognized as income on a straight-line basis during the lease period.

3. The breakdown of customer contract revenue is as follows:

The company’s revenue can be divided in detail into the following major product lines and geographical regions:

lines and geographical regions:
Major regional markets	2021	2020
	$1,787,683	$1,537,001
Taiwan Main product lines
	$ 1,301,477 200,855 9,400 42,191 233,760	$ 1,295,602 222,044 - 19,355 -
Cement Furnace stone powder and other Ready Mixed Concrete raw materials Land and housing Total Time point of revenue recognition
	$1,787,683	$1,537,001
	$ 1,787,683 -	$ 1,537,001 -
Fulfilling the performance obligation at a certain time point Gradually fulfilling the performance obligation over time Total
	$1,787,683	$1,537,001

4. Contract balance

The Group recognizes the receivables and contractual liabilities related to customer

contract income as follows:

contract income as follows:
Item	December 31, 2021	December 31, 2020
Receivables Contractual liabilities – current	$ 341,504	$415,858
	$ 30,532	$ 90,425

Significant changes in contractual assets and liabilities
59 -

The change in contractual assets and liabilities is mainly due to the difference between the time point when the performance obligation is met and the time point when the customer pays. There is no other significant change.

The amount of contractual liabilities at the beginning of the period and income recognized in the current period from performance obligations fulfilled in the previous period is as follows:

Amount recognized as income in the current period	2021	2020
From contract liabilities at the beginning of the period From performance obligations fulfilled in the previous period	$ 72,296	$ 97,861
	$ -	$ -

(XXXII) Employee benefits, depreciation, depletion and amortization

Nature		2021
	Belonging to operating costs	Belonging to operating expenses	Total
Employee benefits Salary expenses Labor and health insurance expenses Pension expenses Other employee benefits Depreciation expense Amortization expense Total	$ 49,385 3,290 2,037 6,548 44,997 -	$ 39,584 3,766 1,179 3,114 29,506 23	$ 88,969 7,056 3,216 9,662 74,503 23
	$106,257	$77,172	$183,429

Nature		2020
	Belonging to operating costs	Belonging to operating expenses	Total
Employee benefits Salary expenses Labor and health insurance expenses Pension expenses Other employee benefits Depreciation expense Amortization expense Total	$ 44,870 2,943 1,822 5,555 41,278 -	$ 31,167 3,242 1,059 2,866 34,045 35	$ 76,037 6,185 2,881 8,421 75,323 35
	$ 96,468	$ 72,414	$168,882

According to the articles of association of the company, if there is profit in the year, the company shall allocate the employees’ remuneration and directors’ remuneration with not less than 2% and not more than 3% of the pre-tax profit before deducting the employees’ remuneration and directors’ remuneration. However, if the company still
60 -

has an accumulated loss, it shall reserve the amount of compensation in advance. In both 2021 and 2020, employees’ remuneration was estimated and provided at not less than 2% of the pre-tax benefits, and directors’ remuneration was estimated and provided at no more than 3%. If there is still any change in the amount after the date of announcement of the annual financial report, it shall be handled according to the change of accounting estimate and adjusted and recorded in the next year.

On March 15, 2022 and March 18, 2021, the board meetings of the company respectively passed resolutions on the remuneration of employees and directors for 20201 and 2020, and the relevant amounts recognized in the financial report are as follows:

follows:
Item	2021		2020
	Employees’ remuneration	Directors’ remuneration	Employees’ remuneration	Directors’ remuneration
Amount to be distributed as resolved Amount recognized in annual financial report Difference amount	$ 3,263 3,263	$ 4,894 4,894	$ 267 267	$ 400 400
	$-	$-	$-	$-

The employees’ remuneration above is paid in cash.

For information on the remuneration of employees and directors as resolved by the board meeting of the company, please go to the “Market Observation Post System” of the Taiwan Stock Exchange for inquiry.

(XXXIII) Interest income

Interest income
Item	2021	2020
Interest income Bank deposit interest Interest income from lease payments receivable Other interest Total	$ 1,036 44 $ 2,725	$ 3,410 60 2,758
	$3,085	$6,228

(XXXIV) Other income

Other income
Item	2021	2020
Dividend income Income from sale of air pollution abatement Income from sale of scrap iron Income from rent concession Other Total	$ 51,560 35,512 419 6,245 14,768	$ 46,500 797 4,733 4,966
	$108,504	$ 56,996

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(XXXV) Other benefits and losses

Other benefits and losses
Item	2021	2020
Financial assets and liabilities measured at fair value through income statement Gain (loss) on disposal of financial assets measured at fair value through income statement Net foreign exchange gain (loss) Gain (loss) from disposal of property, plant and equipment Impairment loss of property, plant and equipment Other losses Profit from lease revision Expenses related to city land rezoning (note 1) Refund of land preparation and clearance cost of the base (note 2) Total	$ 19,335 (1,302) (3,730) - - (5,821) 232 - -	$ 3,837 249 (7,208 - - (3,218 7 - (25,714
	$ 8,714	$ (32,047

(Note) The refund of land preparation and clearance expenses of the base refers to the refund of the expenses of land preparation, clearance of debris and excavation of underground foundation for returning the land the Group leased for its base in Gaonan Section leased in 2021, as there is no longer the need to use the leased land. In addition to demolishing the above-ground objects, there are still wastes and waste soil from the demolition of buildings in the leased base, and the land shall be restored to its original condition as agreed. The land preparation, removal of debris and excavation of underground foundation started in September, 2020, and the total expenses are estimated to be NT$27,000 thousand (including tax).

(XXXVI) Financial cost

Financial cost
Item	2021	2020
Bank loan interest Interest on lease liabilities Other interests Sub-total Less: capitalization amount of qualified assets Financial cost	$ 6,226 4,716 160	$ 1,475 4,445 206
	$ 11,102 -	$ 6,126 -
	$11,102	$6,126

(XXXVII) Income tax

Income tax expenses
(1) The components of income tax expenses are as follows:
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Current income tax The income tax generated in the current period estimated higher or lower than in the previous year Land value added tax Additional tax on undistributed earnings Total amount of current income tax Deferred income tax Origin of temporary difference and total amount of deferred income tax reversed Income tax expenses (benefits)	2021	2020
	$ - (2,207) - -	$ - (2,153) - -
	$ (2,207)	$ (2,153)
	$ 17,524	$ (7,366)
	$ 17,524	$ (7,366)
	$15,317	$ (9,519)

(2) Income tax expenses (benefits) related to other comprehensive income: None.
The adjustment of accounting income and income tax expenses recognized under income for the current year is as follows:

income for the current year is as follows:
Item	2021		2020
Net profit before tax	$149,128		$	7,430
Tax amount of net profit before tax calculated at statutory tax rate	$	29,825	$	1,486
Tax influence number of adjustment items:
Influence number of items not included in
the calculation of taxable income
Investment loss (profit) recognized by equity method		(5,431)		(2,590)
Tax free disposal of land benefits		-		-
Depreciation tax difference		(4,223)		(1,755)
Income from suspension of securities transaction income tax		(30)		239
Unrealized inventory depreciation loss (appreciation benefit)		(3,524)		(3,306)
Realized liquidation loss		-	(11,641)
Other adjustments	(16,617)			17,567
Loss deduction to save income tax of
subsequent years		-		-
Additional tax on undistributed earnings		-		-
Net change in deferred income tax		17,524		(7,366)
Estimated higher or lower than in the previous year		(2,207)		(2,153)
Land value added tax		-		-
Income tax expense recognized in profit or loss	$	15,317	$	(9,519)

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The tax rate applicable to the Group in accordance with the Income Tax Act of the Republic of China is 20%, and the tax rate applicable to the undistributed earnings is 5%.

In July 2019, the president of the Republic of China promulgated an amendment to the Statute for Industrial Innovation, adding that if the amount of the undistributed earnings from 2018 onward is reinvested in specific assets or technologies to a certain amount, the amount of the investment may be included as a deduction item for calculating the undistributed earnings. In calculating the tax on undistributed earnings, the Group has deducted the amount of capital expenditures for reinvestment of undistributed earnings in the required years.

Deferred income tax assets or liabilities arising from temporary differences, loss deduction and investment deduction:

	2021
Opening balance	Recognized in profit (loss)	Ending balance
$ 827 40,726 5,490 1,866 9,298 10,224 28,984	$ (501) - (3,049) 504 (3,523) (216) (9,493)	$ 326 40,726 2,441 2,370 5,775 10,008 19,491
$ 97,415	$ (16,278)	$ 81,137
$ (260,570) (42,796)	$ - (1,246)	$ (260,570) (44,042)
$ (303,366)	$ (1,246)	$ (304,612)
$ (205,951)	$ (17,524)	$ (223,475)
	2020
Opening balance	Recognized in profit (loss)	Ending balance
$ 1,214 40,726	$ (387) -	$ 827 40,726

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5,868 12,760 12,604 9,010 6,112	(378) (10,894) (3,306) 1,214 22,872	5,490 1,866 9,298 10,224 28,984
$ 88,294	$ 9,121	$ 97,415
$ (260,570) (41,041)	$ - (1,755)	$ (260,570) (42,796)
$ (301,611)	$ (1,755)	$ (303,366)
$ (213,317)	$7,366	$ (205,951)

4. Items not recognized as deferred income tax assets:

Item	December 31, 2021	December 31, 2020
Temporary difference subtractable Loss deduction Total	$ 11,335 25,170	$ 11,335 25,170
	$ 36,505	$ 36,505

The company’s profit-making enterprise income tax is approved by the tax collection authority up to 2020

(XXXVIII) Other comprehensive income

	2021
Amount before tax	Income tax (expenses) benefits	Net after tax
	$ - - -	$ (5) 3,518 47,502
$ 51,015	$ -	$ 51,015

Item	2020
	Amount before tax Income tax (expenses) benefits Net after tax

Items not reclassified to profit or loss:

Share of affiliated enterprises and joint ventures by equity method

65 -

Remeasurement number of defined benefit plans $ (99) Unrealized evaluation profit or loss of equity instrument investment measured at fair value through other comprehensive income 3,386 Equity instruments measured at fair value through other comprehensive income (2,598) Unrealized valuation gain/loss of investment Recognized in other comprehensive income $ 689	Remeasurement number of defined benefit plans $ (99) Unrealized evaluation profit or loss of equity instrument investment measured at fair value through other comprehensive income 3,386 Equity instruments measured at fair value through other comprehensive income (2,598) Unrealized valuation gain/loss of investment Recognized in other comprehensive income $ 689	$ - - -	$ (99) 3,386 60,236
	$ 689	$ -	$ 689

(XXXVIIII) Earnings per share of ordinary shares

II) Earnings per share of ordinary shares
Item	2021	2020
		$ 22,158 569,887
	$ 0.25	$ 0.04
	$ 139,985 -	$ 22,158 -
	$ 139,985	$ 22,158
	$ 569,887 63	$ 569,887 30
	$ 569,950	$ 569,917
	$ 0.25	$ 0.04

(Note) If the company has the option to pay employees’ remuneration in stock or cash, when calculating the diluted earnings per share, it is assumed that the employee’s remuneration will be paid in the form of stock, and the weighted average number of outstanding shares will be included in the calculation of diluted earnings per share when the potential ordinary shares have a diluting effect. When calculating the diluted earnings per share before the resolution on the number of shares to be paid in the next year, the diluting effect of these potential ordinary shares shall be continuously considered.

VII. Related Party Transactions

(I) Parent company and ultimate controller:

The company is the ultimate controller of the company.

(II) Name and relationship of related party
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Name of related party

Southeast Industrial Construction Co., Ltd.

Nansha Wood Co., Ltd.

Taiji Ship Plant Co., Ltd.

Penghu Cable TV Co., Ltd.

Penghu Bay Co., Ltd.

CHC Resources Co., Ltd.

Baifu Investment Co., Ltd.

Chentai Cement Co., Ltd.

Chentai Resource Development Co., Ltd.

Dongshu Investment Co., Ltd.

Taiwan Concrete Co., Ltd.

Taiwan Concrete Resource Development Co.,
Ltd.

Chen Chao-Shu Foundation

Tiancheng Concrete Industry Co., Ltd.

Dun-Ling Zheng-Chen

Li-Fei Chen

Mei-Yu Huang

Chian-Hao Chen

Dahao Enterprise Management Co., Ltd.

Dongyue Investment Co., Ltd.

Relationship with the merged
company

Affiliated enterprise
Affiliated enterprise
Affiliated enterprise
Affiliated enterprise
Affiliated enterprise
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party

(III) Major transactions with related parties

1. Operating income:

Item	Category/name of related party	2021	2020
Sales revenue Lease income	Other related party Tiancheng Concrete industry Co., Ltd. Other Total Affiliated enterprise Other related party Total	$ 113,758 31,723	$ 112,165 38,746
		$145,481	$150,911
		$ 141 41	$ 170 34
		$182	$204

(1) Sales revenue:

The sales price of the Group to the above-listed companies is roughly the same as that to ordinary customers. The average collection period is about 2–3 months, and the two parties agree to extend the collection period to within another month.

(2) Rental income:

For the leases of the Group to the above-listed companies, the rental price is agreed in accordance with the contract, and the rent is charged on a monthly basis.

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2. Purchases:

Purchases:
Type of related party	2021	2020
Other related party Other	$ 556	$1,622

The purchase price to the Group from the above-listed companies is roughly the same as that from general suppliers, and the average payment period is about 3 months.

3. Contractual assets: None.

4. Contractual liabilities:

Contractual liabilities:
Category/name of related party	December 31, 2021	December 31, 2020
Other related party	$ 320	$1,464

5. Receivables from related parties (excluding loans to related parties)

Item	Category/name of related party	December 31, 2021	December 31, 2020
Accounts receivable Sub-total Less: allowance for loss Net Refundable deposits	Other related party Tiancheng Concrete industry Co., Ltd. Other Other related party	$ 34,842 -	$ 33,667 3,607
		$ 34,842 (418)	$ 37,274 (447)
		$ 34,424	$ 36,827
		$ 7,346	$ 6,000

The expected credit losses recognized (reversed) for the receivables above from related parties in 2021 and 2020 were NT$(29) thousand and NT$(224) thousand, respectively.

6. Accounts payable to related parties (excluding loans from related parties)

Item	Type of related party	December 31, 2021	December 31, 2020
Accounts payable Guarantee deposits received Other current liabilities	Other related party Other related party Affiliated enterprise Taiji Ship Plant Co., Ltd.	$ -	$ 325
		$ 60	$ 60

		$ 7,474	$ 13,630

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(1) The Group as of December 31, 2021 and 2020, the sales commissions to be paid to the advertising company on behalf of a related party, Taiwan Machinery Shipyard (Co., Ltd.), amounted to $1,524 thousand and $0 thousand, respectively, and were recorded under other current liabilities - provisional receipts.
(2) The Group as of December 31, 2021 and 2020, the amount of $5,950 thousand and $13,630 thousand, respectively, received from the sale of land on behalf of a related party, Taiwan Machinery Shipyard (Co., Ltd.), was recorded under other current liabilities - collection.

7. Prepayments:

7. Prepayments:
Category/name of related party	December 31, 2021 December 31, 2020
Affiliated enterprise
Other		$		2	$	2
8. Asset transactions: None.
9. Lease agreements:
(1) Leasehold assets
Account item/type of related party/name Subject matter lease	of	2021			2020
Acquisition of right-of-use
assets
Other related party
Chentai Cement Co., Ltd. Land in Gaonan other sections	and	$		39,479	$	-
Taiwan Concrete Co., Ltd. The land in Shande Section				22,018	217,219
Other				-		-
Total		$		61,497	$217,219
Account item/type of related party/name	December 31, 2021				December 31, 2020
Lease liabilities
Other related party
Chentai Cement Co., Ltd.		$	81,358		$	72,271
Dun-Ling Cheng-Chen			15,051			17,058
Taiwan Concrete Co., Ltd.		137,996			144,735
Other				2,816		4,913
Total		$237,221			$238,977
Account item/type of related party/name		2021			2020
Interest expense
Other related party		$		3,838	$	3,211

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(2) Expenses:

xpenses:
Account item/type of related party/name	2021 2020 $ 12 $ 12
Rental expenses Affiliated enterprise

The terms of the leases above are agreed in the contract, and the rent is paid monthly or every half a year.

Lease agreements: Please refer to note 7 (III) 1.
Loans to related parties: Please refer to the attached table 1 for the relevant explanation of the Group’s loans to related parties.
Borrowing from related parties: None.
Endorsements and guarantees: None.

14. Others

(1) Various income

arious income
Category/name of related party	2021	2020
Affiliated enterprise Other related party Total	$ 265 549	$ 180 603
	$ 814	$ 783

(2) Part of the land of the Group is registered in the names of related parties, and the details are as follows:

Type of related Major transactions party Other related party Mei-Yu Huang No. 0681, 0733, 0739, 0741, 0834-1, 0835, 0836, 0839, 0846, 1347, 1348, 1350-1353, 1355, 1359, 1365, 1367, and 13811382 of Wulin Section, Renwu District, and No. 112-114 and 180-182 of Luiyuan Section, Renwu District

Chian-Hao Chen No. 0674, 0676 and 0745 of Wulin Section, Renwu District

(3) Conclusion of important contracts:

A. The Group has signed leases with related parties to acquire right-of-use assets. Please refer to note 9 for details.
B. Please refer to note 9 for the contents of the joint construction and sub-sale contracts with related parties.
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(IV) Key management salary information

Key management salary information
Item	2021 $ 12,571 327 - - - $12,898	2020 $ 12,547 324 - - - $12,871
Salary and other short-term employee benefits Post-retirement benefits Other long-term employee benefits Termination benefits Share based payments Total

VIII. Pledging of Assets

The following assets have been provided as collateral for various loans and performance guarantees:

guarantees:
Item	December 31, 2021	December 31, 2020
Investment property	$2,824,470	$2,824,470

Please refer to note 6(16) for the time deposits provided for performance guarantee which are listed under refundable deposits.

IX. Significant Contingent Liabilities and Unrecognized Contractual Commitments
(I) As of December 31, 2021 and 2020, the issued but unused letters of credit by the Group: None.
(II) As of December 31, 2021 and 2020, the amount of the guarantee notes deposited by the Group for loan and performance guarantee, and the guarantee notes received for performance guarantee are as follows:

performance guarantee are as follows:
Item Guaranteed notes deposited (guaranteed notes payable) Guarantee notes received (guarantee notes receivable)	December 31, 2021 $ 895,452 80,154	December 31, 2020
		$ 895,452 66,287

(III) The Group has signed a joint construction and sub-sale contract with Taiji Ship Plant Co., Ltd., and the relevant contents are as follows:
A small piece of land of Taiji Ship Plant Co., Ltd. located at No. 10, Beishi Section, Pingtung, with a land area of 3,008.52 square meters, or about 910.08 square meters. It is willing to have 4 townhouses and 56 elevatored mansions built by the Group. Both parties agree that the houses will be sold respectively, and the proceeds will be collected respectively. The price of the house and the land will be decided by both parties; the price split for townhouses will be 50% for the house price and 50% for the
71 -

land price, and for elevatored mansions it is 57% for the house price and 43% for the land price. The ratio of house price to land price is determined by the appraisal report issued by a professional organization.

The land of Taiji Ship Plant Co., Ltd. located at No. 969, Dong’an Section, Dongshan District, Tainan with a land area of 4,819.86 square meters, or about 1,458 square meters. It is willing to have 41 townhouses built by the Group. Both parties agree that the houses will be sold respectively, and the proceeds will be collected respectively, of which 75% will be for the house price and 25% for the land price. The ratio of house price to land price is determined by the appraisal report issued by a professional organization.
(VI) On March 16, 2020, the board meeting of the Group acquired the right-of-use assets through leasing with the related party Taiwan Concrete Resource Development Co., Ltd. The important matters are described as follows:
Subject matter and purpose of lease
- (1) Subject matter: land and above-ground buildings in Shande Section, Renwu District, Kaohsiung.
- (2) Purpose: it is used to build a plant for the manufacturing and selling of CLSM.
Contract agreements
- (1) Lease term: from April 1, 2020 to March 31, 2040,
- (2) Rent:
  - A. Land: The rental area is 4,488 square meters, the monthly rent is NT$673 thousand (excluding tax), and the rent is increased by 3% every three years.
  - B. Buildings: The Group undertakes the construction cost of the leased property, totaling NT$64,457 thousand.
  - C. Construction costs: The construction and installation costs shall be borne by the Group, and the property shall be owned by the Group during the lease term. However, when the contract is terminated or expires, Taiwan Concrete Resource Development Co., Ltd. does not need to return the construction costs of the leased building paid by the Group.
Reference basis for price determination: the real estate appraisal report issued by Mega Real Estate Appraiser Firm.
(V) The Group On May 4, 2021, the Board of Directors resolved to purchase land and plant facilities from the Kaohsiung District Court in Taiwan, and the bid was awarded on May 5, 2021, and the transfer of immovable property rights was completed on June 25, 2021, with the following important matters:
Subject matter and area: 18,288 square meters of land, 14,892.42 square meters of above-ground buildings (including basement) and four sets of ancillary machinery and equipment at Lot 1081, Zhonglinzi Section, Xiaogang District, Kaohsiung City.
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Use: Space required for future expansion of the circular economy business and related offices.
Total transaction amount: Real estate (land and buildings) and movable property totaling $872,000,000.
Transaction decision method: Public auction by the court.
Reference for price determination: Reference to the real estate market in the neighboring areas and the lowest auction price by the court.

(VI) Large capital expenditures that have been signed but not yet incurred:

Item	December 31, 2021	December 31, 2020
Property, plant and equipment Right-of-use assets Total	$ 21,366 17,576	$ 7,491 33,996
	$38,942	$41,487

X. Losses from Major Disasters: None.

XI. Major Subsequent Events:

(I) The Group in January 2022, the Group acquired the cement roundhouse and ancillary facilities at Pier 45, Kaohsiung Port from the Kaohsiung Port Service Branch of Taiwan Port Corporation for operational purposes.The lease period is from January 28, 2022 to January 27, 2042, with an annual rent of $1,297 thousand for land and $20,017 thousand for facilities.The annual rent for the facilities is NT$20,017 thousand, and the annual operating fee is NT$35 per ton based on the actual operating volume from the commencement date.
(II) The parent company originally planned to build a furnace stone grinding plant using real estate and machinery and equipment, but due to the recent escalation in the cost of construction and equipment, the investment cost has become higher and higher, which is no longer economically viable.On March 15, 2022, the board of directors approved to discontinue the construction of the plant and put it up for sale.
(III) On March 15, 2022, the board of directors of the parent company resolved to increase the capital of its subsidiary, Southeast Asset De-velopment Co., Ltd, by $500,000 thousand in cash.

XII. Miscellaneous

(I) Capital risk management

The Group needs to maintain sufficient capital to support the expansion and upgrading of plant and equipment. Therefore, the Group’s capital management is to ensure that it has the necessary financial resources and operating plan to meet the needs of working capital and capital expenditure in the next 12 months.

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(II) Financial instruments

Financial risk of financial instruments

Financial risk management policy

The daily operation of the Group is subject to a number of financial risks, including the market risk (including the exchange rate risk, interest rate risk and price risk), credit risk and liquidity risk. In order to reduce relevant financial risks, the Group is committed to identifying, evaluating and avoiding market uncertainty, so as to reduce the potential adverse impact of market changes on the company’s financial performance.

The important financial activities of the Group are reviewed by the board meeting in accordance with relevant norms and the internal control system. During the implementation of the financial plan, the Group must comply with the relevant financial operation procedures related to the overall financial risk management and the division of rights and responsibilities.

Nature and degree of major financial risks

(1) Market risks

A. Exchange rate risk
(A) The Group is exposed to exchange rate risks arising from sales, procurement and borrowing transactions not denominated in the functional currency of the Group. The functional currency of the Group is New Taiwan dollars. The currencies of such transactions are mainly denominated in US dollar and RMB. In order to avoid the decrease of the value of foreign currency assets and the fluctuation of future cash flows due to exchange rate changes, the Group uses foreign currency deposits to avoid the exchange rate risk. The use of such foreign currency deposits can help the Group reduce, but still cannot completely exclude the impact of foreign currency exchange rate changes.
(B) Exchange rate risk exposure and sensitivity analysis

December 31, 2021

				December 31, 2021	December 31, 2021	December 31, 2021
Foreign currency (foreign currency: functional currency) Financial assets Monetary items US$: NT$ 6,530	Foreign currency	Exchange rate	Amount posted (NT$)	Sensitivity analysis
				Range of change	Impact on profit and loss	Impact of equity
		27.68	180,745	Appreciation by 1%	1,807	-

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December 31, 2020 Amount Sensitivity analysis posted Impact on Foreign[Exchange ] Range of Impact of (NT$) profit and currency rate change equity loss (foreign currency: functional currency) Financial assets Monetary items US$: NT$ 6,617 28.48 188,466[Appreciation ] 1,885 - by 1%

If the value of the NT$ amount increases relative to the currency above, with all other change factors remaining unchanged, the amount reflected in the said currency on December 31, 2021 and 2020 will have an equal but opposite impact.

(C) The aggregate amount of all exchange gains and losses (including realized and unrealized) recognized in 2021 and 2020 due to exchange rate fluctuation of monetary items of the Group are NT$(3,730) thousand and NT$(7,208) thousand, respectively.

B. Price risk

The Group is exposed to the price risk of equity instruments as a result of the investment in equity instruments held by the Group. The Group’s equity instruments investment in the consolidated balance sheet is classified as financial assets measured by fair value through income statement and financial assets measured at fair value through other comprehensive income.

The Group mainly invests in equity instruments of domestic listed and OTC and domestic unlisted and non-OTC markets, and the prices of such equity instruments are affected by the uncertainty in the future values of such investment objects.

If the equity price rises or falls by 1%, the after-tax income in 2021 and 2020 will increase or decrease by NT$2,487 thousand and NT$2,327 thousand, respectively due to the increase or decrease of the fair value of financial assets measured at fair value through income statement. Other after-tax comprehensive income in 2021 and 2020 will increase or decrease by NT$12,595 thousand and NT$11,789 thousand, respectively due to the rise or decrease of the fair value of financial assets measured at fair value through other comprehensive income.

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C. Interest rate risk

The book amounts of financial assets and financial liabilities of the Group subject to interest rate risk exposure on the reporting date are as follows:

Item	Book amount	Book amount
	December 31, 2021	December 31, 2020
Fair value interest rate risk: Financial assets Financial liabilities Net Cash flow interest rate risk: Financial assets Financial liabilities Net	$ 520,635 (1,610,706)	$ 268,339 (566,010)
	$ (1,090,071)	$ (297,671)
	$ 91,159 -	$ 112,085 -
	$ 91,159	$112,085

Sensitivity analysis of fair value interest rate risk

The Group has not classified any fixed interest rate financial assets and liabilities as financial assets measured at fair value through income statement and at fair value through other comprehensive income; neither has it designated derivative instruments (interest rate swap) as risk hedging instruments under the fair value risk hedging accounting mode. Therefore, the change of interest rate on the reporting date will not affect income and other comprehensive net income.

Sensitivity analysis of cash flow interest rate risk

The financial instruments of the Group with variable interest rates are assets (liabilities) with floating interest rates, so the changes in market interest rates will cause the effective interest rates to change accordingly, and the future cash flow will therefore fluctuate. Every 1% decrease (increase) of the market interest rate will cause the net profit of 2021 and 2020 to increase (decrease) by NT$912 thousand and NT$1,121 thousand, respectively.

(2) Credit risk

Credit risk refers to the risk of the counterparty violating the contractual obligations and causing financial losses to the Group. The Group’s credit risk mainly comes from receivables from operating activities, and bank deposits and other financial instruments generated from investment activities. The operation related credit risk and financial credit risk are managed separately.

Operational related credit risk

In order to maintain the quality of accounts receivable, the Group has established procedures for the management of credit risk related to operation. Risk assessment of individual customers involves consideration of factors that may affect the payment ability of customers, including the financial status of the customer, credit rating within the Group, historical transaction records and current economic conditions.

Financial credit risk

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The credit risk of bank deposits and other financial instruments is measured and monitored by the Finance Department of the Group. Since the trading counterparties and the performing counterparties of the Group are creditworthy banks, financial institutions and company organizations above investment grade, and government agencies, there are no major performance doubts, so there is no significant credit risk. In addition, the Group does not classify debt instrument investment as investment measured at amortized cost and investment measured at fair value through other comprehensive income.

A. Credit concentration risk

As of December 31, 2021 and 2020, the accounts receivable balance of the top ten customers respectively accounted for 78.15% and 83.09% of the Group’s accounts receivable balance, and there is a credit concentration risk; the credit concentration risk of the remaining accounts receivable is relatively insignificant.

B. Measurement of expected credit impairment loss
(a) Accounts receivable: A simplified method is adopted; please refer to note 6 (4).
(b) The judgment basis for whether credit risk increases significantly: None. (the Group does not classify debt instrument investment as investment measured at amortized cost and investment measured at fair value through other comprehensive income)
C. Holding collateral and other credit enhancements to avoid the credit risk of financial assets:

Information about the financial impact of the financial assets recognized in the consolidated balance sheet, the collateral held by the Group as guarantee, the general agreement on net settlement and other credit enhancements on the maximum amount of credit risk exposure is as follows:

December 31, 2021	Book amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount
		Collateral	General agreement on net settlement	Other credit enhancements	Total
	$ - 248,685 1,259,476	$ - - -	$ - - -	$ - - -	$ - - -

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December 31, 2020	Book amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount
		Collateral	General agreement on net settlement	Other credit enhancements	Total
	$ - 232,667 1,178,923	$ - - -	$ - - -	$ - - -	$ - - -

(3) Liquidity risk

A. Liquidity risk management

The Group’s goal of liquidity risk management is to maintain the operationrequired cash and cash equivalents, high liquidity securities and sufficient bank financing lines, so as to ensure the Group has sufficient financial flexibility.

B. Analysis of financial liability maturities

The following table summarizes the analysis of the Group’s financial liabilities in agreed repayment periods according to the maturity date and undiscounted amount due:

			December 31, 2021	December 31, 2021
Within 6 months	7–12 months $ - - - - 30,927 8,157 44 $ 39,128	1–2 years	2–5 years	More than 5 years	Contractual cash flow	Book amount
$1,240,000 82,000 1,696 194,523 28,840 63,508 6,534		$ - - - - 51,902 - 1,340	$ - - - - 78,128 - 3,354	$ - - - - 129,904 - 12,685	$ 1,240,000 82,000 1,696 194,523 319,701 71,665 23,957	$ 1,240,000 81,969 1,696 194,523 288,737 71,665 23,957
$1,617,101		$ 53,242	$ 81,482	$ 142,589	$ 1,933,542	$ 1,902,547

Further information on the lease liability maturity analysis is as follows:

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Lease liabilities	Less than 1 year	1–5 years	5–10 years	10–15 years	Total undiscounted lease payments
	$59,767	$130,030	$50,838	$79,066	$319,701

December 31, 2020

Non-derivative financial liabilities	Within 6 months	7–12 months	1–2 years	2–5 years	More than 5 years	Contractual cash flow Book amount $ 235,000 $ 235,000 1,798 1,798 223,854 223,854 365,927 331,009 89,625 89,625 23,957 23,957 $ 940,161 $ 905,243
Short-term loans notes payable Accounts payable Lease liabilities Other accounts payable Guarantee deposits received Total	$ 235,000 1,798 223,854 32,242 88,958 7,282	$ - - - 34,328 667 -	$ - - - 75,406 - 1,797	$ - - - 91,856 - 2,193	$ - - - 132,095 - 12,685
	$ 589,134	$ 34,995	$ 77,203	$ 94,049	$ 144,780

Further information on the lease liability maturity analysis is as follows:

Lease liabilities	Less than 1 year	1–5 years	5–10 years	10–15 years	Total undiscounted lease payments
	$66,570	$167,262	$50,838	$81,257	$365,927

The Group does not expect the cash flow time point of the maturity analysis to be significantly earlier or the actual amount to be significantly different. 2. Types of financial instruments

Types of financial instruments
Financial assets Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable (including related parties) Other receivables Other financial assets – current Refundable deposits Financial assets measured at fair value through income statement – current Financial assets measured at fair value through other comprehensive income – non-current Financial liabilities Financial liabilities measured at	December 31, 2021	December 31, 2020
	$ 419,504 341,504 2,214 161,625 12,749 248,685 1,259,476 1,240,000 81,969	$ 176,743 415,858 5,092 174,598 10,118 232,667 1,178,923 235,000
amortized cost Short-term loans Short-term notes payable

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Notes and accounts payable (including related parties)	Notes and accounts payable (including related parties)	196,219	225,652
Other accounts payable		71,665	89,625
Lease liabilities (including within one year)	those	288,737	331,009
Guarantee deposits received		23,957	23,957

(III) Fair value information:
For the fair value information of the Group’s financial assets and financial liabilities not measured at fair value, please refer to note 12(3)A. For information on the fair value of the Group’s investment property measured at cost, please refer to note 6(14).
Definitions of three level of fair value

Level 1:

The input value of this level refers to the open quotation of the same instrument in the active market. An active market refers to the market that meets all the following conditions: the commodity traded in the market has the same nature, willing buyers and sellers can be found in the market at any time, and the price information can be obtained by the public. The value of the company’s investment in beneficiary’s certificates with open market quotation belongs to this level. Level 2:

The observable price of the input value of this level, other than the open quotation in the active market, includes the observable input value obtained directly (e.g. price) or indirectly (e.g. derived from price) from the active market. Level 3:

The input value of this level refers to the input parameter measured at fair value, which is not based on the observable input value available in the market.

Financial instruments not measured at fair value:

The Group’s financial instruments that are not measured at fair value, such as cash and cash equivalents, notes and accounts receivable, other financial assets, refundable deposits, short-term loans, short-term notes payable, accounts payable, lease liabilities (including current and non-current) and the book value of guarantee deposits received, are reasonable approximations of fair value.

Information on different levels of fair value:

The Group’s financial instruments measured at fair value are measured at fair value on the basis of repeatability. The information of fair value level is as follows:

Item		December 31,2021	December 31,2021
	Level 1	Level 2	Level 3	Total
		$ - - -	$ - - -	$ 180,450 34,165 34,070

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Financial assets measured at fair value through other comprehensive income Stocks of domestic listed and OTC companies 903,535 Shares of domestic unlisted and non-OTC companies Total $ 1,152,220 Item Level 1 Assets: Repetitive fair value Financial assets measured at fair value through income statement Listed stock $ 157,300 Open-end funds 42,716 Bonds 32,651 Financial assets measured at fair value through other comprehensive income Stocks of domestic listed and OTC companies 863,503 Shares of domestic unlisted and non-OTC companies - Total $1,096,170	-	355,941	903,535 355,941
$ 1,152,220	-	$ 355,941	$ 1,508,161
	December 31,2020
Level 1	Level 2	Level 3	Total
	$ - - - - -	$ - - - - 315,420	$ 157,300 42,716 32,651 863,503 315,420
$1,096,170	$ -	$ 315,420	$ 1,411,590

Fair value evaluation techniques for instruments measured at fair value:
(1)If a financial instrument has an open quotation in the active market, the open quotation in the active market shall be the fair value. The market prices announced by the major exchange and the over-the-counter exchange for central government bonds which are judged to be popular bonds, are the basis of the fair values of listed
- (OTC) equity instruments and debt instruments quoted publicly in the active market.

If the public quotation of a financial instrument can be obtained timely and frequently from exchanges, brokers, underwriters, industry associations, pricing service institutions or the competent authority, and the price represents the actual and frequent fair market trading, then the financial instrument has an active-market public quotation. If the conditions above are not met, the market will be considered inactive. Generally speaking, a large bid-ask spread, a significant increase in the bid-ask spread, or a small trading volume are all indicators of an inactive market.

The fair value of the financial instruments held by the Group with active markets is listed as follows by class and attribute:

A. Stocks of listed companies: closing price.
B. Open-end fund: net value.
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(2) Except for financial instruments with active markets, fair values of financial instruments are obtained using valuation techniques or by reference to quoted prices from counterparties. The fair values obtained through valuation techniques may be calculated by reference to the current fair values of other financial instruments with substantially similar conditions and characteristics, the discounted cash flow method or other valuation techniques, including the use of models with market information available at the balance sheet date.

The fair value of the Group's shares in unlisted companies with no active market is estimated mainly by the market approach and the asset approach, which are determined with reference to valuation of similar companies, third-party quotes, net worth and operating conditions. The significant unobservable inputs used for fair value measurement are listed in the table below.

Item	Evaluation Techniques	Significant Unobservable Inputs	Rang 10.71%~16.74% 18.48%~32.28% 16.93%~32.27%	Relationship between input value and fair value
Financial assets measured at fair value through other comprehensive income-stock Financial assets measured at fair value through other comprehensive income-stock	Asset Approach Market Approach	1.Lack of control discount rate 2.Lack of control discount rate Lack of control discount rate		The higher the control discount, the lower the fair value estimate The higher the liquidity discount, the lower the fair value estimate The higher the liquidity discount, the lower the fair value estimate

6. Movement between level 1 and level 2: None.

Details of changes on level 3:

Item	Financial assets measured at fair value through other comprehensive income – unlisted and non-OTC stocks	Item	Financial assets measured at fair value through other comprehensive income – unlisted and non-OTC stocks
January 1, 2021 Acquired in the current period Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2021	$ 315,420 15,473 (1,478) - 26,526	January 1, 2020 Acquired in the current period Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2020	$ 324,319 2,000 (4,800) - (6,099)
	$ 355,941		$ 315,420

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The evaluation process of fair value classified in level 3:

The Finance Department is responsible for the independent verification of the fair value of financial instruments in the Group’s evaluation process of fair value classified in level 3 to make the evaluation results close to the market status by using independent source information, and conducts regular reviews to ensure that the evaluation results are reasonable.

(IV) Transfer of financial assets: None.
(V) Offset of financial assets and financial liabilities: None.

XIII. Notes of Disclosure

(I) Information of Major Transactions:
Loans to others: Schedule 1.
Endorsements and guarantees for others: Schedule 2.
Securities held at the end of the period: Schedule 3.
The accumulated trading amount of the same securities reaches NT$300 million or 20% of the paid-in capital: None.
The amount of property acquired reaches NT$300 million or 20% of the paid-in capital: Schedule 4.
The amount of property disposed of reaches NT$300 million or 20% of the paid-in capital: None.
The amount of goods purchased and sold with related parties reaches NT$100 million or 20% of the paid-in capital: Schedule 5.
The receivables from related parties reachNT$100 million or 20% of the paid-in capital: None.
Engagement in derivative transactions: None.
Business relationship and important transactions between parent and subsidiary companies: Schedule 6.
(II) Information of reinvestment businesses: Schedule 7.
(III) Mainland investment information: Not applicable.
(IV) Information of major shareholders: Schedule 8.
83 -

Schedule 1

Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021

Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2021
													Unit: NT$ thousand
No.	Name of company under loans to others	Loan recipient	Transaction item	~~W~~hethe~~r~~ it is a related party	Maximum balance of the current period	Ending balance	Actual drawdown amount	Interest rate range	Loan nature	Amount of business transactions	Reason for the short- term financing need	Provision for bad debts	Collateral		Loan limit for an individual object	Loan limit
													Name	Value
1	Southeast Cement Corporation	Southeast Asset Development Co., Ltd.	Other receivables – related parties	Yes	400,000	200,000	30,000	0.975%	2	-	Operating turnover	-	-	-	431,186 (Note 1)	862,373 (Note 2)

(Note 1) The total amount of loans to others shall not exceed 5% of the current net value.

(Note 2) The total amount of loans to others shall not exceed 10% of the current net value.

(Note 3) The method for filling in the nature of loans to others is as follows: fill in 1 if there are business transactions, and fill in 2 if there is a need for short-term financing.

(Note 4) The above transactions between parent and subsidiary companies have been offset.

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Schedule 2

Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021

Schedule 2	Schedule 2	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2021
		Unit: NT$ thousand
No.	Company name of endorsement and guarantee	Object of endorsement and guarantee		Limit of endorsements and guarantees for a single enterprise	Maximum endorsement and guarantee balance in the current period	Ending balance of endorsements and guarantees	Actual drawdown amount	Amount of endorsements and guarantees backed by assets	Ratio of cumulative endorsement and guarantee amount of to the net value in the latest financial statements	Maximum amount of endorsements and guarantees	Parent company’s endorsements and guarantees to subsidiary companies	Subsidiary’s endorsements and guarantees to parent company	Endorsements and guarantees for mainland entities
		Company name	Relationship (note 1)
1	Southeast investment Co., Ltd.	Southeast Cement Corporation	3	207,868 (Note 2)	704	704	-	-	0.10%	277,157 (note 3)	-	Y	-

(Note 1): There are the following seven kinds of relationship between the endorser/guarantor and the endorsee/guaranteed; simply mark the type:

A company with business relations.
A company which the company directly or indirectly holds more than 50% of its voting shares.
A company which directly or indirectly holds more than 50% of the voting shares of the company.
A company which the company directly or indirectly holds more than 90% of its voting shares.
A company of the same industry that provides a mutual guarantee with the company due to the purpose of project soliciting, or a coconstructor that provides a mutual guarantee with the company in accordance with the contract.
A company for which all the shareholders, due to a joint investment relationship, provide endorsements and guarantees according to their shareholding ratio.
Joint performance guarantee for a company of the same industry for its sales of pre-sale houses, the contract of which complies with the provisions of the Consumer Protection Act.

(Note 2): The limit is 30% of the net value in the subsidiary’s latest audited or reviewed financial statements.

(Note 3): The limit is 40% of the net value in the subsidiary’s latest audited or reviewed financial statements.

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Schedule 3

Southeast Cement Corporation and Subsidiaries Details of securities held at the end of the period December 31, 2021

Unit: 1000 shares; NT$ thousand

Holding company	Type and name of securities	Relationship with the securitiesissuer	Accounting subject	Number of shares	Book amount	Shareholding ratio	Fair value
Southeast Cement Corporation	Stock – Goldsun Co., Ltd.	None.	Financial assets measured at fair value through other comprehensive income	3,432	100,051	0.29	100,051
	Stock – CHC Resources Co., Ltd.	The company is a corporate director of this company.	Financial assets measured at fair value through other comprehensive income	13,084	593,350	5.26	593,350
	Stock – Chunghwa Telecom	None.	Financial assets measured at fair value through other comprehensive income	360	41,940	-	41,940
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through other comprehensive income	949	45,564	-	45,564
	Stock – Yuanta Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	547	13,840	-	13,840
	Stock – TXC Corporation	None.	Financial assets measured at fair value through other comprehensive income	80	8,440	-	8,440
	Stock – Nantex IndustryCo.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	1	30	-	30
	Stock – China Steel Corporation	None.	Financial assets measured at fair value through other comprehensive income	600	21,210	-	21,210
	Stock – Taiwan Hong Chuan Group	None.	Financial assets measured at fair value through other comprehensive income	202	14,459	-	14,459
	Stock – CSRC	None.	Financial assets measured at fair value through other comprehensive income	354	9,990	-	9,990
	Stock – Sincere Navigation Corporation	None.	Financial assets measured at fair value through other comprehensive income	190	5,534	-	5,534
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	462	35,260	-	35,260

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Stock – Yonyu Plastic	None.	Financial assets measured at fair value through other comprehensive income	52	1,817	0	1,817
Stock – China Carbon	None.	Financial assets measured at fair value through other comprehensive income	100	12,050	0	12,050
Stock – Kaohsiung MRT	None.	Financial assets measured at fair value through other comprehensive income	11,117	69,395	3.99	69,395
Stock – Huasheng Ventures	The company is a corporate supervisor of this company.	Financial assets measured at fair value through other comprehensive income	7	484	4.17	484
Stock – Yuhua Venture Capital	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	20	621	5.00	621
Stock – China National Products	None.	Financial assets measured at fair value through other comprehensive income	15	1,728	3.84	1,728
Stock – Global Alliance International	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	2,333	42,208	16.67	42,208
Stock – One Card Solution	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	3,828	20,795	3.36	20,795
	Total			1,038,766		1,038,766
Fund – Alliance Bernstein America	None.	Financial assets measured at fair value through income statement	15	5,061	-	5,061
Fund – JPMorgan Global	None.	Financial assets measured at fair value through income statement	21	5,277	-	5,277
Fund – Amundi	None.	Financial assets measured at fair value through income statement	50	14,022	-	14,022
Bond – Arabian Oil	None.	Financial assets measured at fair value through income statement	500	14,228	-	14,228
Bond – Delhi International Airport	None.	Financial assets measured at fair value through income statement	500	13,753	-	13,753
Bond – Pfizer	None.	Financial assets measured at fair value through income statement	200	6,089	-	6,089
	Total			58,430		58,430

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Southeast investment Co., Ltd.	Stock – Chentai Cement Co., Ltd.	Its chairman is the Chairman of the company.	Financial assets measured at fair value through other comprehensive income	2,383	137,807	13.86	137,807
	Stock – Taiwan Concrete	Its chairman is a second-tier relative of the Chairman of the company.	Financial assets measured at fair value through other comprehensive income	1	41,000	4.21	41,000
	Stock – Taiwan Implant Technology Co., Ltd.	None.	Financial assets measured at fair value through other comprehensive income	701	4,996	4.20	4,996
	Stock – Dushanlin Development	None.	Financial assets measured at fair value through other comprehensive income	3,840	36,907	-	36,907
		Total			220,710		220,710
	Fund – Cathay No. 2	None.	Financial assets measured at fair value through income statement	500	9,805	-	9,805
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through income statement	131	10,071	-	10,071
	Stock – Taiwan Chemical Fiber	None.	Financial assets measured at fair value through income statement	17	1,400	-	1,400
	Stock – ZTE Security	None.	Financial assets measured at fair value through income statement	292	30,401	-	30,401
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through income statement	2,710	130,094	-	130,094
	Stock – CHC Resources	None.	Financial assets measured at fair value through income statement	30	1,374	-	1,374
	Stock – Mega Financial Holdings	None.	Financial assets measured at fair value through income statement	200	7,110	-	7,110
		Total			190,255		190,255
Southeast Paper Co.,Ltd.	Stock – Southeast Cement	The company’s parent company.	Financial assets measured at fair value through other comprehensive income	2,113	42,786	0.37	42,786	Note

Note: The shares of the parent company held by the investee companies above have been transferred to treasury shares according to the respective shareholding ratio.

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Schedule 4

Southeast Cement Corporation and Subsidiaries

Acquisition of real estate amounting to at least NT$300 million or 20 percent of the paid-in capital

January 1 to December 31, 2021

							Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
The company of Acquisition of real estate	Property	Date of events	Transaction Amount	Payment status	partners to the transaction	Relationship	If the counterparty is a related party, the previous transfer of information				Price determination basis	Purpose of Acquisition and Usage	Other Agreements
							Holder	Relationship with the Issuer	Transfer Date	Amount
	Land of lot
Southeast Cement Co.,Ltd	1081, Zhonglinzi Section, Xiaogang District, Kaohsiung City and above-ground buildings and ancillary machinery and equipment.	5.5.2022	872,000	872,000	Kaohsiung District Court Foreclosure-Ruyu company	None	-	-	-	-	Reference to the real estate market in the neighboring areas and the lowest court auction price	To provide space for future expansion of circular economy business and related offices	None

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Schedule 5

Southeast Cement Corporation and Subsidiaries

The breakdown of purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital January 1 to December 31, 2021

			January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021	January 1 to December 31, 2021
			Unit: NT$ thousand
The company of purchases (sales)	partners to the transaction	Relationship	Transaction				The circumstances and reasons why the transaction conditions are different from those of ordinary transactions		A/R(A/P)、N/R(N/P)		~~R~~emark
			purchases (sales)	Amount	Percentage of purchases (sales) sales	Credit Period	Unit price	Credit Period	Balance	Percentage of total A/R (A/P), N/R (N/P)
Southeast Cement Co.,Ltd	Tiancheng Concrete Industry Co., Ltd	Other related party	Sales	110,976	7.02%	About2- 3months	-	Equivalent	A/R 34,842	10.66%

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Schedule 6

Southeast Cement Corporation and Subsidiaries

Business relationships and significant transactions between HEAD OFFICE and its subsidiaries

January 1 to December 31, 2021

If the amount of individual transactions does not reach $5 million or more, they will not be disclosed; in addition, the asset side and income side will be disclosed, and their relative transactions will not be disclosed.

Unit: NT$ thousand

				Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
No. (Note1)	Name of the trader	partners to the transaction	Relationship with the counter-party (Note 2)	Transaction
				Account	Amount	Transaction terms	Percentage of total consolidated revenue or total assets (Note 3)
0	Southeast Cement Co.,Ltd	Southeast Gaoliang Recycling Co., Ltd	1	Sales Revenue	9,935	About 2-3 months	0.54%

Note1: The business information between head office and subsidiaries is indicated in the number column, and the number is filled in as follows:

Head office fill in 0。
The subsidiaries are numbered by head off, not by serial number starting from the Arabic number 1.。

Note2: There are three types of relationships with traders, and it is sufficient to mark two types:

head office to subsidiary。
subsidiary to head office。

3. subsidiary to subsidiary。

Note3: The ratio of transaction amount to consolidated total revenue to total assets is calculated as the ending balance to consolidated total assets for balance sheet accounts and as the cumulative amount to consolidated total revenue for profit and loss accounts.

Note4: Transactions between head office and subsidiaries wereeliminated。

91 -

Schedule7

Southeast Cement Corporation and Subsidiaries Details of reinvestment businesses December 31, 2021

				Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021	Details of reinvestment businesses December 31, 2021
				Unit: 1000 shares; NT$ thousand
Name of investing company	Name of investee company	Location	Main business items	Original investment amount		Holding at the end of the period			Investee companies Profit or loss in the current period	Investment profit or loss recognized in the current period	Remarks
				End of current period	End of last year	Number of shares	Ratio	Book amount
Southeast Cement Corporation	Southeast Investment	Kaohsiung	Securities investment	297,870	297,870	499	99.29	672,848	42,357	42,055	(note)
	Southeast Industrial Construction Co., Ltd.	Kaohsiung	Construction industry	11,361	11,361	36	31.01	72,292	5,792	1,796
	Southeast Paper Co., Ltd.	Kaohsiung	Cement paper bags	4,971	4,971	5	49.71	22,537	(76)	(40)	(note)
	Nansha Wood Co., Ltd.	Kaohsiung	Wood products	8,540	8,540	1	27.56	11,472	973	268
	Southeast Asset	Kaohsiung	Construction industry	290,000	290,000	29,000	100.00	293,908	3,955	3,955	(note)
	Taiji Ship Plant Co., Ltd.	Kaohsiung	Engineering industry	328,492	328,492	25,611	31.01	324,999	49,538	15,364
	Southeast Gaoliang Recycling Co., Ltd.	Kaohsiung	Waste removal treatment	85,000	50,000	8,500	50.00	73,149	(13,139)	(6,570)	(note)
	Sub-total							1,471,205	89,400	56,828
	Less: parent company’s shares held by subsidiaries reclassified as treasury shares							(12,185)
	Total							1,459,020	89,400	56,828

92 -

Penghu Cable TV Co., Ltd.	Penghu County	Cable TV	51,093	51,093	8,000	40.00	150,299	22,042	8,817
Penghu Bay	Penghu County	Beach	60,347	60,347	1,663	38.68	16,573	63	24
Southeast Industrial Construction Co., Ltd.	Kaohsiung	Construction industry	29,381	29,381	12	10.92	30,090	5,792	584
Taiji Ship Plant Co., Ltd.	Kaohsiung	Engineering industry	5,826	5,826	454	0.55	5,901	49,538	300
Southeast Gaoliang Recycling Co., Ltd.	Kaohsiung	Waste removal treatment	1,700	1,000	170	1.00	1,463	(13,139)	(131)	(note)
Total							204,326	64,296	9,594

Note: The above transactions between parent and subsidiary companies have been offset.

93 -

Schedule 8

Southeast Cement Corporation and Subsidiaries Information of major shareholders December 31, 2021

	Information of major shareholders December 31, 2021
Name of major shareholder	Number of shares held	Shareholding ratio
Dongshu Investment Co., Ltd.	80,496,816	14.07%
Taiji Ship Plant Co., Ltd.	49,292,761	8.62%
Changching Co., Ltd.	40,070,010	7.01%
Consortium Legal Person Fukang Cultural and Educational Foundation	38,829,350	6.79%
Baifu Investment Co., Ltd.	35,008,148	6.12%
Consortium Legal Person Southeast Cultural Foundation	33,421,803	5.84%
Yue-Ling Chen	30,065,760	5.26%

Note: The information of major shareholders in this table is calculated by the Central Depository Company on the last business day of each quarter about shareholders holding more than 5% of the company’s ordinary shares and preferred shares (including treasury shares) that have been registered and delivered in a scripless manner. As for the share capital recorded in the company’s financial report and the number of shares actually registered and delivered by the company in a scripless manner, there may be differences due to different calculation basis.

94 -

XIV. Department Information

(I) General information:

For the purpose of management, the Group’s operational decision maker (the Chairman) divides the operating units into the following reporting departments according to different business types:

Production Department: mainly engaged in the production and marketing of cement and furnace stone powder.
Leasing Department: mainly engaged in the leasing business of real estate such as land and factory buildings.

3. Construction and Sale Department

(II) Measurement basis:

The Group’s operational decision maker monitors the operational results of each operating unit to make decisions on resource allocation and performance evaluation. The performance of a department is assessed on the basis of its operating profit and is measured in a manner consistent with the operating profit and loss in the consolidated financial statements. However, the management expenses, non-operating income and expenses in the consolidated financial statements are managed on a group basis and are not allocated to the operating departments.

(III) Departmental financial information:

2021:

2021:
Net income Revenue from external customers Inter departmental revenue Total net income Departmental interests General operating expenses of the company Non-operating income and expenditure Net profit before tax Income tax benefits (expenses) Net profit after tax Departmental assets Departmental liabilities	Production Department	Construction Department	Leasing Department, etc.	Adjustment and elimination	Total
	$ 1,553,923 10,130	$ 233,760 -	$ 59,102 15	$ - (10,145)	$ 1,846,785 -
	$ 1,564,053	$ 233,760	$ 59,117	$ (10,145)	$ 1,846,785 99,499 (87,445) 137,074
	$ 66,750	$ 11,675	$ 21,089	$ (15)

					$ 149,128 (15,317)
					$ 133,811
					$ 10,958,500
					$ 2,247,791

95 -

2020:

2020:
Net income Revenue from external customers Inter departmental revenue Total net income Departmental interests General operating expenses of the company Non-operating income and expenditure Net profit before tax Income tax benefits (expenses) Net profit after tax Departmental assets Departmental liabilities	Production Department	Construction Department $ - - $ - $ -	Leasing Department, etc.	Adjustment and elimination	Total
	$ 1,537,001 1,371		$ 53,985 15	$ - (1,386)	$ 1,590,986 -
	$ 1,538,372		$ 54,000	$ (1,386)	$ 1,590,986 52,299 (82,872) 38,003
	$ 36,087		$ 16,227	$ (15)

					$ 7,430 9,519
					$ 16,949
					$ 9,865,320
					$ 1,316,601

(IV) Product and service information by type:

The Group has classified operation departments on the basis of business type, so it does not disclose the product and service information by type separately.

1. Information by region:

(1) Revenue from external customers (classified on the basis of the customers’ country of residence):

of residence):
Country	2021	2020
Taiwan on-current assets: Country	$ 1,846,785 2021	$ 1,590,986 2020
Taiwan	$ 7,550,350	$ 6,612,270

(2) Non-current assets:

2. Important customer information:

Important customer information:
Customer	2021 Amount % of net sales $ 170,801 9.25% 2020 Amount % of net sales $ 182,963 11.50%
Customer A from Production Department Customer
		% of net sales 11.50%
Customer A from Production Department

96 -

AI assistant

SE CEMENT — Annual Report 2021

51741_rns_2021-11-12_51d8c8ea-27d3-4c7d-9ad8-6d89a33199ec.pdf

Southeast Cement Corporation Statement

Independent Auditor’s Report

To Southeast Cement Corporation

Audit

Opinion

Basis of Our Audit Opinion

Key Audit Items

Description of key audit items:

Corresponding audit procedures:

Other Matters

Responsibilities of the Management and Governance Unit for the Consolidated Financial Report

The Accountants’ Responsibility for Auditing the Consolidated Financial Report

Southeast Cement Corporation and Subsidiaries Consolidated Balance Sheet December 31, 2021 and 2020

(Continued)

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Comprehensive Income January 1 to December 31, 2021 and 2020

Unit: NT$ thousand

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Changes in Equity January 1 to December 31, 2021 and 2020

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow January 1 to December 31, 2021 and 2020

January 1 to December 31, 2021 and 2020

I. Company History

II. Date and Procedure of Adoption of the Financial Report

IV. Summary of Major Accounting Policies

(I) Compliance statement

(II) Basis of preparation

2. The subsidiaries included in the consolidated financial statements are as follows:

B. Statement of Comprehensive Income：

C. Statement of Cash Flow：

(VII) Financial instruments

2. Equity instruments

3. Financial liabilities

(1) Follow up measurement

(VIII) Inventory

1. Manufacturing Department:

(XI) Leasing

(XII) Investment property

(XIII) Intangible assets

(XV) Provision for liabilities

(XVI) Employee benefits

1. Short-term employee benefits

2. Pension

4. Resignation benefits

2. Treasury shares

1. Income from goods sold

2. Income from sale of property

1. Business model judgment of financial assets classification

2. Revenue recognition

(III) Net notes receivable

(IV) Net accounts receivable

(V) Other receivables

1. The composition of lease payments receivable is as follows:

(VI) Inventory and cost of goods sold

(VII) Prepayments

(VIII) Other financial assets – current

(IX) Incremental cost of contract acquisition – current

current

(XI) Investment by equity method

A. Balance Sheet

B. Comprehensive Income Statement

(XII) Property, plant and equipment

(XIII) Lease agreement

1. Right-of-use assets

3. Lease liabilities

4. Important leasing activities and terms

6. Other leasing information

(XIV) Investment property

(XVI) Refundable deposits

(XVII) Short-term borrowings

(XVIII) Short-term notes payable

(XIX) Contractual liabilities – current

(XX) Other payables

(XXI) Debt provision – current

(XXII) Pension

(XXIII) Guarantee deposits received

(XXIV) Ordinary share capital

(XXV) Capital reserve

(XXVII) Special reserve

(XXVIII) Other equity

SE CEMENT Annual Report 2021