SE CEMENT - Annual Report 2021 | FinancialReports.eu

[Stock code 1110]

Southeast Cement Corporation

Individual 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

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Independent Auditor’s Report

To Southeast Cement Corporation

Audit Opinion

We have audited the individual balance sheet of Southeast Cement Corporation as of December 31, 2021 and 2020, the individual comprehensive income statement, individual statement of changes in equity and individual cash flow statement from January 1 to December 31, 2020 and 2019 and the notes to the individual 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 individual financial report above was prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and are sufficient to properly express the individual financial status of Southeast Cement Corporation as of December 31, 2021 and 2020, and the individual financial performance and individual 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 individual financial report. We are subject to the code of independence of the accounting firm that we belong to, have maintained our independence from Southeast Cement Corporation 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 individual financial report of Southeast Cement Corporation for 2021 based on our professional judgment. These items have been reflected in the process of auditing the individual 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 individual financial report of Southeast Cement Corporation for 2021 are described as follows:

Sales Revenue Recognition

Please refer to Note 4(17) to the financial statements for the accounting policies related to revenue recognition; Note 5(1) to the financial statements for significant accounting judgments, estimates and assumptions related to revenue recognition; and Note 6(28) to the financial statements for revenue recognition.

Description of key audit items:

Since Southeast Cement is mainly engaged in the manufacture and sale of various cement-related products, which may be affected by raw material prices, market supply and demand, and the economic climate, and the revenue from cement sales has to be recognized when the customer actually collects the cement to satisfy the performance obligation, the revenue from cement sales is recognized as a critical audit in 2021.

Corresponding audit procedures:

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

Other Matters

The financial reports of some investee companies recognized by equity method in the individual financial reports of 2021 and 2020 have not been audited by us, but have been audited by other accountants. Therefore, in our opinion on the abovementioned individual financial report, the amounts listed in the financial report of these investee companies are based on the audit reports by other accountants. The total investment amount by equity method in these investee companies as of December 31, 2021 and 2020 was NT$419,115 thousand and NT$401,668 thousand, respectively, accounting for 3.95% and 4.20% of the total assets, respectively; in 2021 and 2020, the share of profit and loss of subsidiaries and affiliated enterprises and joint ventures by equity method was NT$17,388 thousand and NT$4,093 thousand, respectively, accounting for 11.22% and 32.31% of the net profit before tax, respectively; the share of other comprehensive income of affiliated enterprises and joint ventures recognized by equity method was NT$2,397 thousand and NT$3,046 thousand, respectively, accounting for 4.70% and 533.45% of the net other comprehensive income, respectively.

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

The management is responsible for the preparation of properly expressed individual financial report in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and responsible for maintaining the necessary internal control related to the preparation of individual financial report, so as to ensure that there is no material misrepresentation in individual financial report due to fraud or error.

In the preparation of the individual financial report, the management’s responsibilities include the assessment of the ability of Southeast Cement Corporation 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 Cement Corporation, 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 Individual Financial Report

The purpose of our audit of the individual financial report is to obtain reasonable assurance as to whether the individual 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 individual 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 individual financial report.

When auditing in accordance with Generally Accepted Auditing Standards, we use professional judgment and maintained professional suspicion. We also performed the following tasks:

I. Identifying and assessing the risks of material misrepresentation of the individual 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 Cement Corporation.
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 Cement Corporation 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 individual financial report to pay attention to the relevant disclosure in the individual 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 Cement Corporation to no longer have the ability to continue to operate.
V. We evaluated the overall presentation, structure and content of the individual financial report (including related notes), and whether the individual 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 Cement Corporation, in order to express opinions on the individual financial report. We are responsible for the guidance, supervision and implementation of the audit case, and for forming audit opinions on Southeast Cement Corporation.

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 individual financial report of Southeast Cement Corporation 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 Individual 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 1210 1220 130x 1410 1476 11xx 1517 1550 1600 1755 1760 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)) Other accounts receivable – related parties (note 7) Current income tax assets Inventory (note 6(6)) Prepayments (note 6(7)) Other financial assets – current (note 6(8)) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income – non-current (note 6(9)) Investment by equity method (note 6(10)) Property, plant and equipment (note 6(11)) Right-of-use assets (note 6(12)) Net investment property (note 6(13)) Deferred income tax assets Refundable deposits (note 6(14)) Other non-current assets – others (note 6(5)) Total non-current assets Total assets	$ 334,709 58,430 192,560 76,675 38,721 2,117 30,000 284 504,386 22,362 161,625	3 1 2 1 - - - - 5 - 2	$ 67,754 58,630 286,562 92,498 36,827 2,047 93,000 168 506,215 45,691 174,598	1 1 3 1 - - 1 - 5 - 2
		1,421,869	13	1,363,990	14
		1,038,766 1,459,020 1,121,926 147,589 5,336,055 77,812 9,209 1,415	10 14 11 1 50 1 - -	955,673 1,389,228 226,744 177,339 5,338,862 93,776 10,070 2,815	10 15 2 2 56 1 - -
		9,191,792	87	8,194,507	86
		$ 10,613,661	100	$ 9,558,497	100

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

(Continued)

Code	Liabilities and equity	December 31, 2021	December 31, 2021	December 31, 2020	December 31, 2020
		Amount	%	Amount	%
2100 2110 2130 2170 2200 2230 2250 2280 2300 21xx 2570 2580 2645 25xx 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3500 3xxx	Current liabilities Short term loans (note 6(15))	$ 1,240,000 39,991 30,532 160,671 58,260 - 1,572 47,214 896	12 - - 2 1 - - - -	$ 235,000 - 73,582 192,899 68,736 2,220 1,553 60,370 -	2 - 1 2 1 - - 1 -
	Short-term notes and bills payable
	(note 6(16) Contractual liabilities – current (note 6(17)) Accounts payable Other accounts payable (note 6(18)) Current income tax liabilities Provision for liabilities – current (note 6(19)) Lease liabilities – current (note 6(12)) Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities (note 6(34)) Lease liabilities – non-current (note 6(12)) Guarantee deposit received (note 6(21)) Total non-current liabilities Total liabilities Equity Share capital (note 6(22)) Ordinary share capital Capital reserve (note 6(23)) Retained earnings Legal reserve Special reserve (note 6(25)) Undistributed earnings (note 6(24)) Other equity (note 6(26)) Treasury shares (note 6(27)) Total equity Total liabilities and equity
		1,579,136	15	634,360	7
		281,164 105,679 23,957	3 1 -	279,918 130,453 23,957	3 1 -
		410,800	4	434,328	4
		1,989,936	19	1,068,688	11
		5,720,008 188,373 1,055,689 810,918 309,626 551,296 (12,185)	54 2 10 8 3 5 -	5,720,008 188,267 1,052,057 810,918 230,224 500,520 (12,185)	60 2 11 8 2 5 -
		8,623,725	81	8,489,809	89
		$ 10,613,661	100	$ 9,558,497	100

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

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

2021	% 100 (93) 7 (1) (5) - (5) 1 - 6 (1) (1) 4 9 10 (1) 9 3 - 3 12	Unit: NT$ thousand 2020	Unit: NT$ thousand 2020
Amount	%	Amount $ 1,592,259 (1,524,976) 67,283 (14,943) (66,709) (236) (81,888) (14,605) 5,459 46,876 (37,577) (4,203) 16,717 27,272 12,667 9,491 22,158 (18,938) 19,509 571 $ 22,729 $ 0.04 $ 0.04	%
$ 1,580,865 (1,475,177)	100 (93)		100 (96)
105,688 (14,538) (74,128) 3,007	7 (1) (5) -		4 (1) (4) -
(85,659)	(5)		(5)
20,029	1		(1)
4,254 96,118 (13,975) (8,264) 56,828	- 6 (1) (1) 4		- 3 (2) - 1
134,961	9		2
154,990 (15,005)	10 (1)		1 1
139,985	9		2
50,042 983	3 -		(1) 1
51,025	3		-
$ 191,010	12		2
$ 0.25
$ 0.25

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

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

Ordinary share capital	Capital reserve		Retained earnings		Other equity items	Unit:NT$ thousand Treasury stock Total equity	Unit:NT$ thousand Treasury stock Total equity
		Legal reserve	Special reserve	Undistributed earnings	Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensive income
$ 5,720,008 - - - -	$ 188,162 - - - -	$ 1,048,744 3,313 - - -	$ 810,918 - - - -	$ 254,425 (3,313) (57,200) (68) 22,158	$ 514,103 - - 68 -	$ (12,185) - - - -	$ 8,524,175 - (57,200) - 22,158
-	-	-	-	(98)	669	-	571
- -	- 105	- -	- -	22,060 -	669 -	- -	22,729 105
- 5,720,008 - - - -	- 188,267 - - - -	- 1,052,057 3,632 - - -	- 810,918 - - - -	14,320 230,224 (3,632) (57,200) 139,985 (5)	(14,320) 500,520 - - - 51,030	- (12,185) - - - -	- 8,489,809 - (57,200) 139,985 51,025
-	-	-	-	139,980	51,030	-	191,010
- -	106 -	- -	- -	- 254	- (254)	- -	106 -
$ 5,720,008	$ 188,373	$ 1,055,689	$ 810,918	$ 309,626	$ 551,296	$ (12,185)	$ 8,623,725

(please refer to the notes to individual financial statements)

Chairman: Min-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

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

Unit: NT$ thousand

Item 2021 Cash flow from operating activities Net profit (net loss) before tax of the current period $ 154,990 Adjustments Income, expense and loss items Depreciation expense 65,469 Expected credit impairment loss (profit) (3,007) Net loss (profit) of financial assets and liabilities measured at fair value through income statement 4,717 Interest expense 8,264 Interest income (4,254) Dividend income (39,644) Share of losses (profits) of affiliated enterprises and joint ventures recognized by equity method (56,828) Profit from lease revision (232) Total income, expense and loss items (25,515) 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 (4,517) Decrease (increase) in notes receivable 95,143 Decrease (increase) in accounts receivable 14,150 Decrease (increase) in other receivables 1,765 Decrease (increase) in inventory (431) Increase in prepayment 23,329 Decrease (increase) in other financial assets 12,973 Total net change in assets related to operating activities 142,412 Net change in liabilities related to operating activities Increase (decrease) in contractual liabilities (43,050) Increase (decrease) in accounts payable (32,228) Increase (decrease) in other payables (4,634) Increase (decrease) in provision for liabilities 19 Increase (decrease) in other current liabilities 896 Total net change in liabilities related to operating activities (78,997) Total net change in assets and liabilities related to operating activities 63,415 Total adjustments 37,900 Cash outflow from operations 192,890 Interest received 4,080 Dividends received 62,769 Interest paid (8,025) (continued)	2020
	$ 12,667 69,936 236 1,444 4,203 (5,459) (35,471) (16,717) (7) 18,165
	(16,019) (11,942) (5,295) 22,927 41,070 (9,982) 59,293
	80,052
	(25,130) 3,020 (2,773) 113 -
	(24,770)
	55,282
	73,447
	86,114 5,458 37,321 (4,171)

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(Continued)

Item Income tax refunded (paid) Net cash 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 investment by equity method Return of share capital from investee companies due to capital reduction by equity method Acquisition of property, plant and equipment Decrease in refundable deposit Increase in other receivables – related parties Decrease in Other receivables – related parties Acquisition of investment property Decrease in long-term lease payments receivable Cash inflow (outflow) from investment activities Cash flow from financing activities Increase in short-term loans Decrease in short-term bills payable Increase in guarantee deposit received Repayment of lease principal Cash dividend payment Net cash inflow (outflow) from financing activities 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 $ (131) 251,583 $ (39,164) 4,635 1,478 (35,000) - (910,140) 861 - 63,000 (1,434) 1,384 (914,380) 1,005,000 40,000 - (58,048) (57,200) 929,752 266,955 67,754 $ 334,709	2020
		$ (451)
		124,271
		(14,010) 15,519 10,583 (20,000) 2,486 (18,669) 1,664 (93,000) (5,535) 1,368
		(119,594)
		35,000 - 917 (53,287) (57,200)
		(74,570)
		(69,893) 137,647
		$ 67,754

(please refer to the notes to individual 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 individual financial report January 1 to December 31, 2020 and 2019

(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 the manufacture and sale of cement, kiln stone powder, cement processed products and premixed concrete.

This individual 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 individual 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, amendment Effective date of IASB and revision release Amendment to “Temporary exemption from the extension[ From 25 June, 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 IFRS 16 Amendment to "New Coronavirus Pneumonia-Related Rent Deduction after June 30 April 1, 2021 (note) Rent reductions related to novel coronavirus pneumonia after June 30

(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 January 1, 2022(note 2) reaching the intended state of use of IAS 16 Amendment to “Loss contract – cost of contract performance” January 1, 2022(note 3) of IAS 37 Amendment to “Introduction to conceptual architecture”of January 1, 2022(note 4) IFRS 3 2018–2020 annual improvement of IFRS January 1, 2022(note 5)

(Note 1) 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 to the 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.
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 production or supply of goods or services, leased to others, or used for management purposes.
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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 a 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 revision Amendment to “Sale or investment of contingent assets between the investor and its affiliated enterprises or joint ventures” IFRS 10 and IAS 28 Amendment to “Insurance contract” of IFRS 17 Amendment to IFR 17 Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - Comparative Information Amendment to “Liabilities classified as current or non-current” of IAS 1 Amendment to “Disclosure of accounting policies” of IAS 1 Amendments to IAS 8 "Definition of Accounting Estimates Amendment to IAS 12, "Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Transaction Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Transaction".

Effective date of IASB release (note 1) Undecided

January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

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 individual financial report are as follows. Unless otherwise stated, these policies apply consistently throughout all reporting periods.

(I) Compliance statement

This individual 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 individual 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.
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 company’s accounting policies, the management also needs to use
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their judgment. For items involving intensive judgment or complexity, or items involving major assumptions and estimates of the individual financial reports, please refer to note 5 for details.

When preparing the individual financial report, the company adopts the equity method to deal with the investment in subsidiaries, affiliated enterprises or joint ventures. In order to make the current year’s profit, other comprehensive income and equity of the individual financial report the same as the current year’s profit, other comprehensive income and equity belonging to the owners of the company in the individual financial report of the company, some differences in accounting treatment between the individual basis and the individual basis are the adjustment of “investment by equity method,” “share of profit of subsidiaries, affiliated enterprise and joint ventures by equity method” “share of other comprehensive incomes of subsidiaries, affiliated enterprises and joint ventures by equity method” and related equity items.
(III) Foreign Currency Conversion
Foreign currency transactions and balance
- (1) Foreign currency transactions are converted into functional currencies at the spot exchange rate on the transaction date or measurement date, and the translation differences arising from such transactions are recognized as current profit or loss.
- (2) The balance of foreign currency monetary assets and liabilities shall be evaluated and adjusted according to the spot exchange rate on the balance sheet date, and the conversion difference arising from the adjustment shall be recognized as current profit or loss.
- (3) 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 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.
(IV) 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 assets are 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. The assets are expected to be realized within 12 months after the end of the reporting period.
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D. The assets are cash or cash equivalents, except those used to exchange or settle liabilities or subject to other restrictions more than 12 months after the end of the reporting period.

The company classifies all assets that do not meet the conditions above as non-current 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. The liabilities are mainly for trading purposes.
- 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 company 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 non-current according to the business cycle.

(V) 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.

(VI) Financial instruments

Financial assets and financial liabilities shall be recognized when the company 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

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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 company 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

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 company 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 company 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

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 and interest generated are recognized as other income and interest income respectively, and gains or losses generated from remeasurement are recognized as 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 company 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.

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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 company’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

If the company’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) Impairment of financial assets
A. The impairment loss of the financial assets (including accounts receivable) assessed by the company based on the expected credit impairment and measured by the amortized cost, debt instrument investment measured at fair value through other comprehensive income, rents receivable and contractual assets on each balance sheet date of the company.
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B. Accounts receivable and rents 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 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 value reduced.
(3) Exclusion of financial assets

The company 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 value 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 value 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

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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 company 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 company are recognized at the acquiring price minus the direct issue cost.

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

(VII) 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.

2. 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

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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.
(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.

(VIII) Investment by equity method – subsidiaries and affiliated enterprises

Subsidiary refers to entities (including structured entities) controlled by the company. When the company is exposed to or entitled to variable remuneration from participation in the entities’ operation, and has the ability to influence such remuneration through its power over the entities, the company has control over such entities.
The unrealized profit or loss arising from transactions between the company and its subsidiaries has been eliminated. The subsidiary’s accounting policies have been adjusted as necessary to be consistent with those adopted by the company.
The company’s share of profit or losses from subsidiaries after their acquisition is recognized as current income, and its share of other comprehensive income after their acquisition is recognized as other comprehensive income. If the share of loss in the subsidiary recognized by the company is equal to or more than the equity in the subsidiary, the company will continue to recognize the loss according to the shareholding ratio.
Affiliated enterprises refer to all entities on which the company has significant influence but no controlling rights; generally referring to shares with more than 20% of the voting rights directly or indirectly held. The company adopts the equity method to deal with the investment in affiliated enterprises which is recognized at the cost when acquired.
The company’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 company’s share of loss in any affiliated enterprise is equal to or exceeds its interest in the
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affiliated enterprise (including any other unsecured receivables), the company does not recognize further losses unless the company 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 company 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 company.
When the company disposes of an affiliated enterprise, if it loses 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 company 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.
According to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” the income of the current period and other comprehensive income of the individual financial report shall be the same as the apportioned amounts of the income of the current period and other comprehensive income attributable to the owners of the parent company in the financial report prepared on the consolidated basis, and the owners’ equity in the individual financial report shall be the same as the equity attributable to the owners of the parent company in the financial report prepared on the consolidated basis.
(IX) 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 value of assets or recognized as a separate asset only when the future economic benefits related to the project are likely to flow into the company and the cost of the project can be measured reliably. The book value 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,
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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 20–50 years Electromechanical power 5–10 years equipment Other equipment 15 years Machinery and equipment 2–16 years Transportation equipment 3–6 years Miscellaneous equipment 3–10 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 value of the asset, and is recognized in the current income.

(X) Leasing

The company 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 company 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.

The company 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 company 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 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

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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.

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 company will measure the lease liabilities again and relatively adjusts the right-of-use assets. However, if the book value 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 individual balance sheet.

The company as the lessor

When the company 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 company 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 payment receivable and the unguaranteed residual value, and expressed as financing lease payments receivable. The company allocates the financing income to the lease term on a systematic and reasonable basis to reflect the fixed rate of return of the company’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 value of the underlying asset and is recognized as an expense during the lease term on the same basis as the recognized lease income.

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(XI) 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 company 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 value of the asset, and is recognized in the current income.

(XII) Impairment of non-financial assets

On the balance sheet date, the Company estimates the recoverable amount of the assets showing signs of impairment. When the recoverable amount is lower than the book value, 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 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.

(XIII) 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.

(XIV) 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

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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.

3. 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 Company 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.

(XV) Share capital and treasury shares

1. Share capital

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 stock

When the Company 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 value, the difference is listed as capital reserve – treasury share transaction; if the disposal price is lower than the book value, 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 value 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 value is

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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 value 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.

(XVI) 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 Company 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.
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 value 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 Company 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
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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.
(XVII) Revenue recognition

The company’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.

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.

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.

(XVIII) 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.

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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 Uncertainties in Significant Accounting Judgments, Estimates and Assumptions

The Company 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 Company in preparing the individual financial statements are as follows:

(I) Significant judgment adopted by the accounting policy
Business model judgment of financial assets classification

The company 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 company 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 company reclassifies the financial assets in accordance with the provisions of IFRS 9 and postpones the application from the date of reclassification.

Revenue recognition

In accordance with IFRS 15, the company 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 company shall be the principal:

(1) The company obtains control of the goods or other assets from the counterparty before the goods or other assets are transferred to the customer; or
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(2) The company 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 company; or
(3) The company 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 company controls specific goods or services before transferring them to customers include (but are not limited to) the following:

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

In determining the lease period, the company 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 company. Reevaluate the lease period in case of major events or changes in circumstances within the control of the company.

(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 company’s assumption of default rate and expected loss rate. The company 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.

2. Fair value measurement and evaluation process

When there is no market quotation for assets and liabilities measured by fair value in active markets, the company 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 company determines the input value by referring to the analysis of the financial status and operating results of the investee, the latest

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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 company 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

In the process of asset impairment assessment, the company 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 value cannot be recovered, the company immediately evaluates the impairment of the investment. The company 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 company must use judgment and estimation to determine the net realizable value of the inventory on the balance sheet date. The company 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

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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

ash and cash equivalents
Item	December 31, 2021	December 31, 2020
Cash Check deposit Current deposit Cash equivalents Total	$ 264 2,990 61,521 269,934	$ 202 3,255 64,297 -
	$ 334,709	$ 67,754

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

Item	December 31, 2021	December 31, 2020
Mandatory measurement at fair value through income statement Open-end funds Bonds Total	$ 24,360 34,070	$ 25,979 32,651
	$ 58,430	$ 58,630

The net (loss) income recognized by the company in 2021 and 2020 was NT$(4,717) thousand and NT$(1,444) thousand, respectively.
The company 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 value Less: allowance for loss Net notes receivable	$ 194,899 (2,339)	$ 290,042 (3,480)
	$ 192,560	$ 286,562

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Please refer to note 6(4) for details of disclosure of allowance for losses of notes receivable.
For related party transactions, please refer to note 7(3) 5.
(IV) Net accounts receivable

Net accounts receivable
Item	December 31, 2021	December 31, 2020
Measured at amortized cost Total book value Less: allowance for loss Net accounts receivable	$ 92,658 (15,983)	$ 108,673 (16,175)
	$ 76,675	$ 92,498

The company’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 sale 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 company 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 company’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 company 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 0%-2% 0%-5% 0%-25% 0%-50% 0%-100%	Total book value	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		$ 313,761 - - - 15,052	$ (3,688) - - - (15,052)	$ 310,073 - - - -
		$ 328,813	$ (18,740)	$ 310,073

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December 31, 2020	Expected credit impairment rate	Total book value	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%	$ 422,984 - - - 16,697	$ (5,050) - - - (16,697)	$ 417,934 - - - -
		$ 439,681	$ (21,747)	$ 417,934

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 company cannot reasonably expect the recoverable amount, the company 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 company’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 company has not pledged any account receivable.

(V) Other receivables

Other receivables
Item	December 31, 2021	December 31, 2020
Proceeds receivable from sale of shares Interests receivable Other receivables Sub-total Less: allowance for loss Net	$ 1,400 585 132	$ 1,384 411 1,897
	$ 2,117 -	$ 3,692 (1,645)
	$ 2,117	$ 2,047

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

Undiscounted lease payments Year 1 Year 2 Year 3 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 company 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 company 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 Net - Manufacturing Construction Department: Construction land Net - Construction Department Total	December 31, 2021	December 31, 2020
	$ 22,841 63,166 29,393 29,861	$ 10,496 62,455 23,588 59,343
	$ 145,261	$ 155,882
	$ 359,125	$ 350,333
	$ 359,125	$ 350,333
	$ 504,386	$ 506,215

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

period are as follows:
Item	2021	2020
Cost of inventory sold Other operating costs Manufacturing cost not apportioned Inventory loss(gain) Provision for inventory depreciation and losses from obsolete and slow-moving inventories (appreciation benefits) Total operating costs	$ 1,451,739 38,022 9,820 (6,785) (17,619)	$ 1,497,844 37,765 5,705 188 (16,526)
	$ 1,475,177	$ 1,524,976

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 company 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)	$ 1,829 (2,260) -	$ 45,277 (4,627) 420
	$ (431)	$ 41,070

(VII) Prepayments

) Prepayments
Item	December 31, 2021	December 31, 2020
Prepayment for material purchase Prepaid tenders Prepaid insurance premium Tax allowance Other prepayments Total	$ 15,492 5,500 284 350 736	$ 45,210 - 304 - 177
	$ 22,362	$45,691

The prepaid tenders are for the Company's proposed lease of cement roundhouse and ancillary equipment at Kaohsiung Port Terminal.

(VIII) Other financial assets – current

I) Other financial assets – current
Item	December 31, 2021	December 31, 2020
Original maturity date more than 3 months away Time deposits: NT$ time deposits Foreign currency time deposits Total Interest rate range	$ 41,107 120,518	$ 46,007 128,591
	$161,625	$174,598
	0.22%-0.81%	0.35%-1.06%

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

non-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	$ 282,470 186,023	$ 263,160 172,028
	$ 468,493 570,273	$ 435,188 520,485
	$ 1,038,766	$ 955,673

The company invests in the shares of the above-mentioned domestic unlisted and non-OTC companies for medium- and long-term strategic purposes, and expects to make a profit through long-term investment. The management of the company 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 company 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$14,320 thousand, which were transferred to retained earnings.
Please refer to note 12 for the relevant credit risk management and assessment method.
The company has not pledged financial assets measured at fair value through other comprehensive income.

(X) Investment by equity method

nvestment by equity method
Investee companies	December 31, 2021	December 31, 2020
Subsidiaries: Southeast Investment Co., Ltd. Southeast Asset Development Co., Ltd. Southeast Gaoliang Recycling Co., Ltd. Southeast Paper Co., Ltd. Sub-total	$ 672,848 293,908 73,149 22,537	$ 652,887 289,954 44,719 22,471
	$ 1,062,442	$ 1,010,031

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Investee companies	December 31, 2021	December 31, 2020
Less: the parent company’s shares held by subsidiaries reclassified as treasury shares Sub-total Significant affiliated enterprises: Taiji Ship Plant Co., Ltd. Insignificant individual affiliated enterprises Total	(12,185)	(12,185)
	$ 1,050,257	$ 997,846
	324,999 83,764	$ 309,997 81,385
	$ 1,459,020	$ 1,389,228

1. Subsidiaries

(1) For information about the company’s subsidiaries, please refer to note 4 (3) of the company’s consolidated financial report for 2021.
(2) The investment by equity method and the company’s share of profits and losses and other comprehensive income are calculated according to the financial statements audited by the independent auditor.
Affiliated enterprises:
(1) The basic information of the company’s major affiliated enterprises is as follows:

Company name	Shareholding ratio	Shareholding ratio
	December 31, 2021	December 31, 2020
Taiji Ship Plant Co., Ltd.	31.01%	31.01%

Please refer to Appendix 6 of note 13 for details of the business nature, main

business location and country of incorporation of the affiliated enterprises above.

(2) The consolidated financial information of the company’s major affiliated enterprises is as follows:

A. Balance Sheet

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
	$ 332,643 (7,644)	$ 316,112 (6,115)
	$ 324,999	$ 309,997

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B. Comprehensive Income Statement

Comprehensive Income Statement
Companyname	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	$ 191,440	$ -
	$ 54,467 6,715	$ 8,746 7,837
	$ 61,182	$ 16,583
	$ 2,443	$ -

(3) 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
	$ 2,064 314	$ 3,081 615
	$ 2,378	$ 3,696

(4) The investment by equity method and the company’s share of income and other comprehensive income are calculated according to the financial statements audited by the independent auditor.

The company did not pledge its investment by equity method as of December 31, 2021and 2020.

(XI) Property, plant and equipment

operty, plant and equipment
Item	December 31, 2021	December 31, 2020
Land Housing and construction Machinery and equipment Transportation equipment Other equipment Equipment pending inspection and unfinished construction Total cost Less: accumulated depreciation Accumulated impairment Total	$ 720,588 381,670 1,001,897 25,036 39,437 21,655	$ 153,748 388,959 2,646,621 25,036 50,050 25,191
	$ 2,190,283 (1,056,153) (12,204)	$ 3,289,605 (3,035,412) (27,449)
	$1,121,926	$226,744

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Cost	Land	Housing and construction	Machinery and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - 566,840	$ 388,959 - - (85,910) 78,621	$2,646,621 25 - (1,905,232) 260,483	$ 25,036 - - - -	$ 50,050 3,877 - (14,490) -	$ 25,191 900,148 2,260 - (905,944)	$3,289,605 904,050 2,260 (2,005,632) -
Balance on January 1, 2021 Acquisition Inventory transferred in Disposal Reclassification Balance on December 31, 2021 Accumulated depreciation and impairment
	$ 720,588	$ 381,670	$1,001,897	$ 25,036	$ 39,437	$ 21,655	$2,190,283
	$ - - - -	$ 387,336 179 (85,488) (422)	$2,601,783 10,279 (1,890,448) (14,784)	$ 23,863 322 - -	$ 49,879 348 (14,451) (39)	$ - - - -	$3,062,861 11,128 (1,990,387) (15,245)
Balance on January 1, 2021 Depreciation expense Disposal Impairment reversal Balance on December 31, 2021
	$ -	$ 301,605	$ 706,830	$ 24,185	$ 35,737	$ -	$1,068,357

Cost	Land	Housing and construction	Machinery and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - - -	$ 393,939 - - - (4,980) -	$2,642,031 2,996 - - (6,764) 8,358	$ 24,336 - 700 - - -	$ 50,050 - - - - -	$ 8,279 21,763 3,927 (420) - (8,358)	$3,272,383 24,759 4,627 (420) (11,744) -
Balance on January 1, 2020 Acquisition Inventory transferred in 轉至存貨 Disposal Reclassification Balance on December 31, 2020 Accumulated depreciation and impairment
	$ 153,748	$ 388,959	$2,646,621	$ 25,036	$ 50,050	$ 25,191	$3,289,605
	$ - - - -	$ 392,192 124 (4,980) -	$2,597,728 10,819 (4,873) (1,891)	$ 23,171 692 - -	$ 49,747 132 - -	$ - - - -	$3,062,838 11,767 (9,853) (1,891)
Balance on January 1, 2020 Depreciation expense Disposal Provision for impairment loss Balance on December 31, 2020
	$ -	$ 387,336	$2,601,783	$ 23,863	$ 49,879	$ -	$3,062,861

The adjustment of property, plant and equipment acquired in the current period and from the cash flow statement is as follows:
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Item	2021	2020
Increase of property, plant and equipment Increase or decrease of equipment purchase payable Cash paid for purchase of property, plant and equipment	$ 904,050 6,090	$ 24,759 (6,090)
	$ 910,140	$ 8,317

Capitalization amount and interest rate range of borrowing costs of property, plant and equipment: None.
The company’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 value, and a provision for impairment loss was made. However, some of the equipment was scrapped in 2020, and the accumulated impairment was reversed. In addition, because the expected recoverable amount of part of the production equipment was less than the book value in 2021 and 2020, and the book value of related equipment could not be recovered by using or selling. The residual value from the disposal above belongs to the third level of fair value.
Information on guarantees provided with property, plant and equipment: None.

(XII) Lease agreement

1. Right-of-use assets

1. Right-of-use assets	1. Right-of-use assets	1. Right-of-use assets	1. Right-of-use assets
Item December 31, 2021 December 31, 2020 Land $ 283,740 $ 263,390 Buildings 18,839 18,839 Transportation equipment 4,220 4,220 Total cost $ 306,799 $ 286,449 Less: accumulated depreciation (159,210) (109,110) accumulated Impairment Loss - - Net $147,589 $177,339 Cost Land Buildings Transportation equipment Total Balance on January 1, 2021 $ 263,390 $ 18,839 $ 4,220 $ 286,449 Increase in current period 39,479 - - 39,479 Decrease in current period (19,129) - - (19,129) Balance on December 31, 2021 $ 283,740 $ 18,839 $ 4,220 $ 306,799
Balance on January 1, 2021 Increase in current period Decrease in current period Balance on December 31, 2021	$ 263,390 39,479 (19,129)	$ 18,839 - -	$ 4,220 - -
	$ 283,740	$ 18,839	$ 4,220

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Accumulated depreciation and impairment	Accumulated depreciation and impairment	Accumulated depreciation and impairment	Accumulated depreciation and impairment
Balance on January 1, 2021 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2021 Cost
	$ 152,946	$ 4,038	$ 2,226
	Land	Buildings	Transportation equipment
Balance on January 1, 2020 Increase in current period Decrease in current period Balance on December 31, 2020 Accumulated depreciation and impairment	$ 264,579 - (1,189)	$ 18,839 - -	$ - 4,220 -
	$ 263,390	$ 18,839	$ 4,220
	$ 53,046 52,552 -	$ 1,346 1,346 -	$ - 820 -
Balance on January 1, 2020 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2020
	$ 105,598	$ 2,692	$ 820

2. Lease liabilities

Lease liabilities
Item	December 31, 2021	December 31, 2020
	$ 47,214	$ 60,370
	$ 105,679	$ 130,453
		December 31, 2020
Land Buildings Transportation equipment	0.85%-1.16% 1.16% 1.16%	1.16% 1.16% 1.16%

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

3. Important leasing activities and terms

44 -

The company leases a number of land, buildings and transportation equipment for operation, plants and external roads. The lease term is 3–14 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 calculated according to the section value and rate or according to the present value of the land announced in the current year. The company 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 2021 and 2020, the company negotiated the land lease with the lessor, and the lessor agreed to unconditionally reduce from January 1 to December 31, 2020 and postpone the payment of rent from January 1 to June 30, 2020 to December 31, 2020. In 2021 and 2020, the company recognized the influence number of the rent concession above as NT$6,245 and NT$4,733 thousand which is recognized as income (posted under other income).

4. Sublease:

The company 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-of-use 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 right-of-use assets in 2021 and 2020 was NT$44 thousand and NT$60 thousand, respectively.

5. Other leasing information

(1) Please refer to note 6(14) for the company’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)	$ 61	$ 540
	$-	$ 48
	$-	$-
	$ (58,109)	$ (53,875)

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

45 -

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

(XIII) Investment property

Cost	Item	Item	December 31, 2021	December 31, 2021	December 31, 2020
			$ 5,274,017 759,818 -		$ 5,272,583 754,283 5,535
			$ 6,033,835 (494,150) (203,630)		$ 6,032,401 (489,909) (203,630)
			$ 5,336,055		$ 5,338,862
				Equipment pending inspection and unfinished construction	Total
	$ 5,272,583 1,434 -	$ 754,283 - 5,535		$ 5,535 - (5,535)	$ 6,032,401 1,434 -
Balance on January 1, 2021 Acquisition Disposal Balance on December 31, 2021 Accumulated depreciation and impairment
	$ 5,274,017	$ 759,818		$ -	$ 6,033,835
	$ - -	$ 693,539 4,241		$ - -	$ 693,539 4,241
Balance on January 1, 2021 Depreciation expense Balance on December 31, 2021 Cost
	$ -	$ 697,780		$ -	$ 697,780
	Land	Housing, construction and equipment		Equipment pending inspection and unfinished construction	Total
	$ 5,272,583	$ 754,283		$ -	$ 6,026,866
Balance on January 1, 2020

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Acquisition Disposal Reclassification Balance on December 31, 2020 Accumulated depreciation and impairment	- - -	- - -	5,535 - -	5,535 - -
	$ 5,272,583	$ 754,283	$ 5,535	$ 6,032,401
	$ - - -	$ 690,088 3,451 -	$ - - -	$ 690,088 3,451 -

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	$ 59,003	$ 53,886
	$ 38,022	$ 37,765
	$ 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 of independent experts in recent years, and the comparative method is used; reference is also made to the real price inquiry service network of the Ministry of the Interior or the websites of
47 -

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	$ 11,170,624	$ 7,735,534

As of December 31, 2021 and 2020, some of the company’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 company has obtained the promise of the registrant to transfer the land unconditionally to the company after the legal restrictions are lifted, or apply security measures on the land if it is already registered for mortgage rights.
For information on guarantees provided with property, please refer to note 8.
The company has made a provision of NT$0 as the impairment loss (benefits from reversal) in both 2021 and 2020.

(XIV) 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 8,466 - 165 16	$ 562 8,464 263 765 16
	$ 9,209	$10,070

(XV) Short-term borrowings

hort-term borrowings
Nature of borrowing	December 31, 2021
	Amount	Interest rate
Mortgage loan Credit loan Total Nature of borrowing	$ 770,000 470,000
	$1,240,000
	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.

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(XVI) short-term notes and bills payable

short-term notes and bills payable
Item	December 31, 2021	December 31, 2020 $ - - $- -
Commercial paper payable Less: unamortized discount Net Interest rate range	$ 40,000 (9)
	$ 39,991
	0.85%

(XVII) Contractual liabilities

(XVII) Contractual liabilities
Item	December 31, 2021	December 31, 2020
Cement to be collected	$ 30,505	$ 73,555
Prepayments	27	27
Total	$ 30,532	$ 73,582
(XVIII) Other payables

) Other payables
Item	December 31, 2021	December 31, 2020
Salary and bonus payable	$ 13,124	$ 14,007
Commodity tax payable	7,722	18,372
Utilities payable	8,025	9,164
Tax payable	3,159	2,998
Dividend payable – previous period	3,977	3,983
Remuneration payable to employees and directors	8,157	667
Equipment payable	-	6,090
Other	14,096	13,455
Total	$ 58,260	$ 68,736

(XIX) Debt provision – current

(XIX) Debt provision – current	Debt provision – current	Debt provision – current
Item Employee benefits Item Employee benefits Balance on January 1,2021 $ 1,553 New liability reserve in the current period 1,572 Liability reserve used in current use (1,553) Balance on December 31,2021 $ 1,572	Item			December 31, 2021	December 31, 2020
				$ 1,572 Item	$ 1,553 Employee benefits $ 1,440 1,553 (1,440) $ 1,553
Balance on January 1,2021 New liability reserve in the current period Liability reserve used in current use Balance on December 31,2021		$ 1,553 1,572 (1,553)	Balance on January 1,2020 New liability reserve in the current period Liability reserve used in current use Balance on December 31,2020
		$ 1,572

The provision for employee welfare liabilities is the estimation of the right of employees to take short-term service leaves. .

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(XX) Pension

Since the end of 2004, the company 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 company 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 company 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 company in accordance with the pension rules above in 2021 and 2020 are NT$2,534 thousand and NT$2,499 thousand, respectively.

(XXI) Guarantee deposits received

Guarantee 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).

(XXII) Ordinary share capital

rdinary share capital
Item	2021		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.

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

(XXIV) 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
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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 2020 and 2019 as determined by the company in Aug 2021 and June 2020 are as follows:

Item	Earnings distribution plan	Earnings distribution plan	Dividend per share (NT$)	Dividend per share (NT$)
	2020	2019	2020	2019
Legal reserve Cash dividend of ordinary shares Total	$ 3,632 57,200	$ 3,313 57,200	0.1	0.1
	$ 60,832	$ 60,513

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

earnings distribution plan for 2021:
Legal reserve Cash dividend of ordinary shares Total	Earnings distribution plan	Dividend per share (NT$)
	$ 14,023 114,400	0.2
	$ 128,423

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 Taiwan stock exchange for inquiry.

(XXV) Special reserve

pecial reserve
Item	December 31, 2021	December 31, 20020
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

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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-Cheng-Fa 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 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, 2021, NT$8,094 thousand was reversed to undistributed earnings from the proportion of the original special reserve due to the disposal of investment property.

(XXVI) Other equity items

ther equity items
Item	Unrealized benefit (loss) of financial assets measured by fair value through other comprehensive income.
	110年度	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

(XXVII) Treasury shares

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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 investment to treasury shares December 31, 2020: Item	2,113	-	2,113
	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 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 value 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, 2021and 2020 were NT$42,786 thousand and NT$37,82 thousand, respectively. The shares of the parent company held by subsidiaries are treated as treasury shares and still enjoy the right of dividend distribution.

(XXVIII) Operating income

Operating income
Item	2021	2020
Revenue from customer contracts Sales revenue Less: sales discount Net income from customer contracts Rental income Net operating income	$ 1,521,862 -	$ 1,538,373 -
	$ 1,521,862 59,003	$ 1,538,373 53,886
	$ 1,580,865	$ 1,592,259

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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
	$ 1,521,862	$ 1,538,373
Taiwan Main product lines
	$ 1,311,607 200,855 9,400	$ 1,296,974 222,044 19,355
Cement Furnace stone powder and other raw materials Total Time point of revenue recognition
	$ 1,521,862	$ 1,538,373
	$ 1,521,862 -	$ 1,538,373 -
Fulfilling the performance obligation at a certain time point Gradually fulfilling the performance obligation over time Total
	$ 1,521,862	$ 1,538,373

4. Contract balance

The company recognizes the receivables and contractual liabilities related to customer contract income as follows:

customer contract income as follows:
Item	December 31, 2021	December 31, 2020
Receivables Contractual liabilities – current	$ 307,956	$ 415,887
	$ 30,532	$ 73,582

5. Significant changes in contractual assets and liabilities

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

(XXIX) Employee benefits, depreciation, depletion and amortization

Nature		2021
	Nature	Belonging to operating costs	Total
Employee benefits Salary expenses Labor and health insurance expenses Pension expenses Directors’ remuneration Other employee benefits Depreciation expense Total	$ 43,723 2,895 1,840 - 5,970 39,557	$ 20,856 2,803 694 8,404 2,710 25,912	$ 64,579 5,698 2,534 8,404 8,680 65,469
	$ 93,985	$ 61,379	$155,364

Nature		2020
	Nature	Belonging to operating costs	Total
Employee benefits Salary expenses Labor and health insurance expenses Pension expenses Directors’ remuneration Other employee benefits Depreciation expense Total	$ 42,512 2,943 1,822 - 5,439 41,278	$ 20,404 2,496 677 3,750 2,563 28,658	$ 62,916 5,439 2,499 3,750 8,002 69,936
	$ 93,994	$ 58,548	$152,542

Additional information on the number of employees and welfare expenses of the company in 2021 and 2020 is as follows:

Item	December 31, 2021	December 31, 2020
Number of employees Number of directors not concurrently serving as employees Average employee benefits Average employee salary cost Change of average employee salary cost adjustment	112	119
	7	7
	$ 776	$ 704
	$ 615	$ 565
	9.43%	-6.33%

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- Supervisors’ remuneration
The company’s compensation policies (for directors, managers and employees) are as follows:
(1) Directors’ compensation

According to the articles of association of the company, the compensation of the directors of the company shall be determined by the board meeting in accordance with the degree of their participation in the operation of the company, the value of their contribution, and the standards of the industry at home and abroad. The company’s articles of association also stipulate that not more than 3% of the annual profit shall be the directors’ remuneration.

(2) Managers’ compensation

The amount of compensation paid to the company’s managers is determined by their position, contribution, the company’s operating performance in the current year and the company’s future risks. The compensation is reviewed by the Compensation Committee and submitted to the board meeting for resolution.

(3) Employees’ compensation

The company is committed to providing employees with salaries and benefits above the average level of the industry. On the premise of giving consideration to external competition, internal fairness and legitimacy, the company provides a competitive compensation system, and adheres to the concept of profit sharing with employees to retain and motivate employees. The compensation of the company’s employees includes the monthly salary and the remuneration paid by the company according to the annual profit status. According to the company’s articles of association, not less than 2% of the annual profit shall be regarded as the employees’ remuneration.

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 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
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2021 and 2020, and the relevant amounts recognized in the financial report are as follows:

Item	2021	2021	2020	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.

(XXX) Interest income

terest income
Item	2021	2020
Bank deposit interest Lending interest Interest income from lease payments receivable Other interest Total	$ 862 846 44 2,502	$ 2,638 216 60 2,545
	$4,254	$ 5,459

(XXXI) Other income

) Other income
Item	2021	2020
Dividend income Revenue from the sale of air pollution abatement Income from sale of scrap iron Income from rent concession Other Total Other benefits and losses Item	$ 39,644 35,512 419 6,245 14,298	$ 35,471 - 797 4,733 5,875
	$ 96,118	$46,876
	2021 $ (3,405) (1,312) (3,730) (5,760) 232	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) Other losses Profit from lease revision		$ (1,457) 13 (7,208) (3,218) 7

(XXXII) Other benefits and losses

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Refund of land preparation and clearance - (25,714) cost of the base (note 2) Total $ (13,975) $ (37,577)

(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 company 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).

(XXXIII) 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	$ 6,191 1,913 160	$ 1,475 2,521 207
	$ 8,264 -	$ 4,203 -
	$ 8,264	$4,203

(XXXIV) Income tax

Income tax expenses
(1) The components of income tax expenses are as follows:

Current income tax The income tax generated in the current period estimated higher or lower than in the previous year 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
	$ - (2,205) -	$ - (2,157) -
	$ (2,205)	$ (2,157)
	$ 17,210	$ (7,334)
	$ 17,210	$ (7,334)
	$ 15,005	$ (9,491)

(2) Income tax expenses (benefits) related to other comprehensive income: None.

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The adjustment of accounting income and income tax expenses recognized under income for the current year is as follows:

Item	2021	2020
	$ 154,990	$ 12,667
		$ 2,533 (3,343) (1,755) (3,306) (11,641) (6,320) - 23,832 (7,334) (2,157)
	$ 15,005	$ (9,491)

The tax rate applicable to the company 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 Company has deducted the amount of capital expenditures actually made for the actual investment.

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

Deferred income tax assets Temporary difference Cement to be collected		2021
	Opening balance	Recognized in profit (loss)	Ending balance
	$ 827	$ (501)	$ 326

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2021

		2021
Impairment loss of investment property Property, plant and equipment impairment loss Investment income recognized by equity method Sluggish inventory and falling price loss Other Unused loss deduction Sub-total Deferred income tax liabilities Reserve for land value added tax Temporary difference Depreciation tax difference Sub-total Total Deferred income tax assets Temporary difference Cement to be collected Impairment loss of investment property Property, plant and equipment impairment loss Investment income recognized by equity method Sluggish inventory and falling price loss Other Unused loss deduction Sub-total Deferred income tax liabilities Reserve for land value added tax Temporary difference Depreciation tax difference Sub-total Total	Opening balance	Recognized in profit (loss)	Ending balance
	40,726 5,490 1,866 9,298 6,646 28,923	- (3,049) 504 (3,523) 99 (9,494)	40,726 2,441 2,370 5,775 6,745 19,429
	$ 93,776	$ (15,964)	$ 77,812
	$ (237,122) (42,796)	$ - (1,246)	$ (237,122) (44,042)
	$ (279,918)	$ (1,246)	$ (281,164)
	$ (186,142)	$ (17,210)	$ (203,352)
		2020
	Opening balance	Recognized in profit (loss)	Ending balance
	$ 1,214 40,726 5,868 12,760 12,604 5,432 6,083	$ (387) - (378) (10,894) (3,306) 1,214 22,840	$ 827 40,726 5,490 1,866 9,298 6,646 28,923
	$ 84,687	$ 9,089	$ 93,776
	$ (237,122) (41,041)	$ - (1,755)	$ (237,122) (42,796)
	$ (278,163)	$ (1,755)	$ (279,918)
	$ (193,476)	$ 7,334	$ (186,142)

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4. Items not recognized as deferred income tax assets:

Item	December 31, 2021	December 31, 2020
Temporary difference subtractable Loss deduction Total	$ 11,335 38,760	$ 11,335 24,129
	$ 50,095	$ 35,464

The company’s profit-making enterprise income tax is approved by the tax collection authority up to 2019.

(XXXV) Other comprehensive income

(XXXV) Other comprehensive income
Item		2021
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ (5) 988 50,042
	$ 51,025	$-	$ 51,025
		2020
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ (98) 19,607 (18,938)
	$ 571	$ -	$ 571

(XXXVI) Earnings per share of ordinary shares

Earnings per share of ordinary shares
Item	2021	2020
		$ 22,158 569,887

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Basic earnings per share (after tax) (NT$) B. Diluted earnings per share: Current net profit Impact of potential ordinary shares with a diluting effect Calculation of the current net profit of diluted earnings per share Weighted average number of outstanding shares in current period (1000 shares) Influence number of employees’ remuneration (note) Calculation of the weighted average of diluted earnings per share Number of shares outstanding (1000 shares) Diluted earnings per share (after tax) (NT$)	$ 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

Name and relationship of related party

Name of related party

Southeast Paper Co., Ltd.

Southeast Investment Co., Ltd.

Southeast Gaoliang Recycling Co., Ltd.

Southeast Asset Development Co., Ltd.

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.

Relationship with the company

Subsidiary
Subsidiary
Subsidiary
Subsidiary
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

63 -

Taiwan Concrete Co., Ltd. Taiwan Concrete Resource Development Co., Ltd. Chen Chao-Shu Foundation Tiancheng Concrete Industry Co., Ltd. Dahao Enterprise Co. , Ltd Dongyue Investment Co., Ltd. Dun-Ling Zheng-Chen Li-Fei Chen Mei-Yu Huang Chian-Hao Chen

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 Subsidiary Total Affiliated enterprise Other related party Subsidiary Total	$ 110,976 31,723 10,129	$ 112,165 38,746 1,371
		$ 152,828	$ 152,282
		$ 15 167 15	$ 44 160 15
		$ 197	$ 219

(1) Sales revenue:

The sales price of the company 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 company to the above-listed companies, the rental price is

agreed in accordance with the contract, and the rent is charged on a monthly basis.

2. Purchases:

Purchases:
Type of related party	2021	2020
Other related party Other Total	$ 528	$ 1,622
	$528	$1,622

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The purchase price to the company 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
Notes receivable Accounts receivable Sub-total Less: allowance for loss Net Refundable deposits	Subsidiary Total Subsidiary Other related party Tiancheng Concrete industry Co., Ltd. Other Other related party	$-	$ 29
		$-	$ 29
		$ 4,297 34,842 -	- 33,667 3,607
		$ 39,139 (418)	$ 37,274 (447)
		$ 38,721	$ 36,827
		$ 6,000	$ 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 deposit received	Other related party Other related party	$ -	$ 325
		$ 60	$ 60

7. Prepayments:

Prepayments:
Category/name of related party	December 31, 2021	December 31, 2020
Other related party Other	$ 2	$ 2

65 -

8. Asset transactions: None.

9. Lease agreements:

(1) Leasehold assets

(1) Leasehold assets	(1) Leasehold assets
Account item/type of related party/name		Subject matter of lease	2021	2020 $ - $- December 31, 2020 $ 72,271 17,058 9,462 $ 98,791 2020 $ 1,287 $ 12
			$ 39,479
			$ 39,479
			December 31, 2021
	Lease liabilities Other related party Chentai Cement Co., Ltd. Dun-Ling Zheng-Chen Other Total Account item/type of related party/name		$ 81,358 15,051 5,907
			$102,316
			2021
	Interest expense Other related party Rental expenses Other related party		$ 1,041
			$ 12

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:
(1) Other Non-operating Receivables

) Other Non-operating Receivables
Account item/type of related party/name	2021
	ending balance	maximum balance
Subsidiary Southeast Asset Development Co., Ltd.	$ 30,000	$ 170,000

2020

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Account item/type of related party/name	ending balance
		maximum balance
Subsidiary Southeast Asset Development Co., Ltd.	$ 93,000	$ 93,000

(2) Interest income

2)Interest income
Account item/type of related party/name	2021	2020
Subsidiary Southeast Asset Development Co., Ltd. Interest Rate Range	$ 846	$ 216
	0.975%~0.983%	0.975%

Borrowing from related parties: None.
Endorsements and guarantees: None.
Others
(1) Various income

arious income
Category/name of related party	2021	2020
Affiliated enterprise Other related party Subsidiary Total	$ 265 549 981	$ 180 603 1,518
	$ 1,795	$ 2,301

(2) The company’s participation in the cash capital increase of related parties and investment increase: 2021:

Category/name of related party	Investment increase	Investment increase	Shareholdingratio	Shareholdingratio
	Number of shares (thousand shares)	Amount	Before capital increase	After capital increase
Subsidiary Southeast Gaoliang Co., Ltd.	3,500	$ 35,000	50.00%	50.00%

2020:

Category/name of related party	Investment increase Shareholding ratio Number of shares (thousand shares) Amount Before capital increase After capital increase 2,000 $ 20,000 50.00% 50.00%	Investment increase Shareholding ratio Number of shares (thousand shares) Amount Before capital increase After capital increase 2,000 $ 20,000 50.00% 50.00%
		After capital increase
Subsidiary Southeast Gaoliang Co., Ltd.		50.00%

(3) Part of the land of the company is registered in the names of related parties, and the

details are as follows:

Type of related Major transactions party Other related parties

67 -

Mei-Yu Huang

Chian-Hao Chen

No. 0681, 0733, 0739, 0741, 0834-1, 0835, 0836, 0839, 0846, 1347, 1348, 1350-1353, 1355, 1359, 1365, 1367, and 1381-1382 of Wulin Section, Renwu District, and No. 112-114 and 180-182 of Luiyuan Section, Renwu District

No. 0674, 0676 and 0745 of Wulin Section, Renwu District

(4) Conclusion of important contracts: None.

(IV) Key management salary information

Key management salary information
Item	2021	2020 $ 11,836 324 - - - $12,160
Salary and other short-term employee benefits Post-retirement benefits Other long-term employee benefits Termination benefits Share based payments Total	$ 11,871 327 - - -
	$12,198

VIII. Pledged 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(14) 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 company: None.

(II) As of December 31, 2021 and 2020, the amount of the guarantee notes deposited by the company for loan and performance guarantee, and the guarantee notes received for performance guarantee are as follows:

erformance guarantee are as follows:
Item Guaranteed notes deposited (guaranteed notes payable) Guarantee notes received (guarantee notes receivable)	December 31, 2021 $ 895,452 45,113	December 31, 2020
		$ 895,452 40,297

(III) 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 real property rights was completed on June 25, 2021:

68 -
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.
Use: To provide space for future expansion of circular economy business and related offices.
Total transaction amount: Real estate (land and building) and movable property totaling $872,000 thousand.
Transaction decision method: court public auction.
Reference for price determination: Reference to the real estate market in the neighboring areas and the lowest court auction price.

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

Item	December 31, 2021	December 31, 2020
Real property, plant and equipment	$ -	$ 2,030

X. Losses from Major Disasters: None.

XI. Major Subsequent Events:

(I) For operational purposes, the Company acquired the cement roundhouse and ancillary facilities at the Port of Kaohsiung, No. 45, from Taiwan Port Services Corporation, Kaohsiung Port Branch in January 2022.
(II) The Company originally planned to build a furnace stone grinding plant to use the real estate and machinery and equipment, due to the recent soaring operating costs and equipment costs, resulting in higher and higher investment costs, which is no longer economically viable.
(III) On March 15, 2022, the Board of Directors of the Company resolved to increase the capital of its subsidiary, Southeast Assets Development (Co., Ltd.), by $500,000 thousand in cash.

XII. Miscellaneous

(I) Capital risk management

The company needs to maintain sufficient capital to support the expansion and upgrading of plant and equipment. Therefore, the company’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.

(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),

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credit risk and liquidity risk. In order to reduce relevant financial risks, the company 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 company are reviewed by the board meeting in accordance with relevant norms and the internal control system. During the implementation of the financial plan, the company 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 company is exposed to exchange rate risks arising from sales, procurement and borrowing transactions not denominated in the functional currency of the company. The functional currency of the company 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 company uses foreign currency deposits to avoid the exchange rate risk. The use of such foreign currency deposits can help the company reduce, but still cannot completely exclude the impact of foreign currency exchange rate changes.

(B) Exchange rate risk exposure and sensitivity analysis

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

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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 company are NT$(3,730) thousand and NT$(7,208) thousand, respectively.

B. Price risk

The company is exposed to the price risk of equity instruments as a result of the investment in equity instruments held by the company. The company’s equity instruments investment in the individual 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 company 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$584 thousand and NT$586 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$10,388 thousand and NT$9,557 thousand, respectively due to the rise or decrease of the fair value of financial assets measured at fair value through other comprehensive income.

C. Interest rate risk

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

follows:
Item	Book amount
	December 31, 2021	December 31, 2020
Fair value interest rate risk: Financial assets	$ 465,629	$ 300,249

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Financial liabilities Net Cash flow interest rate risk: Financial assets Financial liabilities Net	(1,432,884)	(425,823)
	$ (967,255)	$ (125,574)
	$ 61,521 -	$ 64,297 -
	$ 61,521	$ 64,297

Sensitivity analysis of fair value interest rate risk

The company 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 company 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$615 thousand and NT$643 thousand, respectively.

(2) Credit risk

Credit risk refers to the risk of the counterparty violating the contractual obligations and causing financial losses to the company. The company’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 company 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 company, historical transaction records and current economic conditions.

Financial credit risk

The credit risk of bank deposits and other financial instruments is measured and monitored by the Finance Department of the company. Since the trading counterparties and the performing counterparties of the company are creditworthy banks, financial institutions and company organizations above

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investment grade, and government agencies, there are no major performance doubts, so there is no significant credit risk. In addition, the company 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 81.18% and 83.09% of the company’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 company 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 individual balance sheet, the collateral held by the company 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
Financial instruments subject to the impairment provisions of IFRS9 and whose credit has been impaired Financial instruments not subject to the impairment provisions of IFRS9: Financial assets measured at fair value through income statement Financial assets measured at fair value through other comprehensive income Total December 31, 2020	$ - 58,430 1,038,766	$ - - -	$ - - -	$ - - -	$ - - -
	$ 1,097,196	$ -	$ -	$ -	$ -
	Book amount
		Collateral General agreement on net settlement Other credit enhancements Total

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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
$ - 58,630 955,673	$ - - -	$ - - -	$ - - -	$ - - -

(3) Liquidity risk

A. Liquidity risk management

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

B. Analysis of financial liability maturities

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

Non-derivative financial liabilities				December 31, 2021	December 31, 2021
	Within 6 months		1–2 years	2–5 years	More than 5 years	Contractual cash flow	Book amount
	$1,240,000 40,000 160,671 50,103 24,622 6,534		$ - - - - 43,305 1,340	$ - - - - 52,749 3,354	$ - - - - 8,761 12,685	$ 1,240,000 40,000 160,671 58,260 156,146 23,957	$ 1,240,000 39,991 160,671 58,260 152,893 23,957

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

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Further information on the lease Less than 1 liability 1–5 years 5–10 years 10–15 years year maturity analysis is as follows: Lease liabilities $ 51,331 $ 96,054 $ 7,301 $ 1,460 $ 156,146

			December 31, 2020	December 31, 2020
Within 6 months	7–12 months	1–2 years	2–5 years	More than 5 years	Contractual cash flow
$ 235,000 192,899 68,069 28,202 7,282	$ - - 667 30,289 -	$ - - - 59,088 1,797	$ - - - 66,727 2,193	$ - - - 10,951 12,685	$ 235,000 192,899 68,736 195,257 23,957

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

Lease liabilities	Further information on the lease liability maturity analysis is as follows:	Less than 1 year	1–5 years	5–10 years	10–15 years
	$58,491	$125,815	$7,301	$3,650	$195,257

The company 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
December 31, 2021 Financial assets Financial assets measured at amortized cost Cash and cash equivalents $ 334,709 Notes and accounts receivable (including related parties) 307,956 Other receivables (including related parties) 32,117 Other financial assets – current 161,625 Refundable deposits 9,209 Other non-current financial assets 1,415	December 31, 2021	December 31, 2020
		$ 67,754 415,887 95,047 174,598 10,070 2,815

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Financial assets measured at fair value through income statement – current	58,430	58,630
Financial assets measured at fair value through other comprehensive income – non-current	1,038,766	955,673
Financial liabilities
Financial liabilities measured at amortized cost
Short-term loans	1,240,000	235,000
short-term notes and bills payable	39,991
Notes and accounts payable (including related parties)	160,671	192,899
Other accounts payable	58,260	68,736
Lease liabilities (including those within one year)	152,893	190,823
Guarantee deposit received	23,957	23,957

(III) Fair value information:
For the fair value information of the company’s financial assets and financial liabilities not measured at fair value, please refer to note 12 (III)3. For information on the fair value of the company’s investment property measured at cost, please refer to note 6(13).
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 company’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, 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 company’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:

December 31, 2021

Item Level 1 Level 2 Level 3 Total

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Assets: Repetitive fair value Financial assets measured at fair value through income statement Open-end funds Bonds Financial assets measured at fair value through other comprehensive income Stocks of domestic listed and OTC companies Shares of domestic unlisted and non-OTC companies Total Item	$ 24,360 34,070 903,535 -	$ - - - -	$ - - - 135,231	$ 24,360 34,070 903,535 135,231
	$ 961,965	$ -	$ 135,231	$ 1,097,196

	Level 1	Level 2	Level 3	Total
Assets: Repetitive fair value Financial assets measured at fair value through income statement Open-end funds Bonds unrealized valuation gain/loss of equity instrument investment measured Financial assets Stocks of domestic listed and OTC companies Shares of domestic unlisted and non-OTC companies Total	$ 25,979 32,651 863,503 -	$ - - - -	$ - - - 92,170	$ 25,979 32,651 863,503 92,170
	$ 922,133	$ -	$ 92,170	$ 1,014,303

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

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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 company with active markets is listed as follows by class and attribute:

A. Stocks of listed companies: closing price.
B. Open-end fund: net value.
(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, 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 Company's unlisted stocks without an active market is estimated mainly by the market approach and the asset approach, and is determined by 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 Input Values	Zone	Relationship between input value and fair value
Measured at fair value through other comprehensive income.- Stock Measured at fair value through other comprehensive income- Stock	Asset-based approach Market approach	1.Lack of control over the discount rate 2. Lack of liquidity discount rate Lack of liquidity discount rate	13.34%~16.74% 23.42%~32.28% 16.93%~32.27%	The higher the control discount, the lower the fair. The lower the fair value estimate The higher the liquidity discount, the lower the fair. The lower the fair value estimate The higher the liquidity discount, the lower the fair The lower the fair value estimate

Movement between level 1 and level 2: None.
Details of changes on level 3:

	Financial assets		Financial assets
	measured at fair value		measured at fair value
Item	through other	Item	through other
	comprehensive income –		comprehensive income –
	unlisted and non-OTC		unlisted and non-OTC

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	stocks		stocks
January 1, 2021 Purchased during the 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	$ 92,170 15,473 (1,478) - 29,066	January 1, 2020 Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2020	$ 119,416 - (4,800) - (22,446)
	$135,231		$ 92,170

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 company’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.
(II) Information of reinvestment businesses: Schedule 6.

(III) Mainland investment information: Not applicable.

(IV) Information of major shareholders: Schedule 7.
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Schedule 1

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

Unit: NT$ thousand

															Unit: NT$	thousand
No.	Name of company under loans to others	Loan recipient	Transaction item	Whether 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.

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Schedule 2

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

Schedule 2	Schedule 2	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2021	Southeast Cement Corporation 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 co-constructor 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 Details of securities held at the end of the period December 31, 2021

Schedule 3	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2021	Southeast Cement Corporation 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 securities issuer	Accounting subject	Number of shares	Book amount	Shareholding ratio	Fair value	Remarks
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 Industry Co.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	1	30	-	30
	Stock－CSC	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 –PGIM	None.	Financial assets measured at fair value through income statement	50	14,022	-	14,022
Bond –The Boeing Company	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 TechnologyCo.,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

Acquisition of real estate amounting to at least NT$300 million or 20 percent of the paid-in capital From 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
Acquisition of Immovable Property of real estate Company	Name of Property	Day of occurrence	Amount of transaction	Payment Payment Scenario	Trading Partners	Relationships	If the counterparty is a related party, the previous transfer of information				Price determined by Reference	Purpose of Acquisition and Usage	Other Agreements
							owner	Relationship with the Issuer	Date of transfer	Amount
	Lot 1081,
Southeast Cement Corporation	Zhonglinzi Section, Hsiaogang District, Kaohsiung City, Taiwan, and the buildings and ancillary equipment thereon	110.5.5	872,000	872,000	Kaohsiung District Court Foreclosure-Ru Desire Enterprise Co.	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

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

			From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021	From January 1 to December 31, 2021
			Unit:NT$ thousand
Import (Sales) of companies	Trading Partners	Relationships	Transaction Status				The circumstances and reasons why the transaction conditions are different from those of ordinary transactions		Receivable (payable) bills, accounts		Note
			Import (Sales)	Amount	Percentage of incoming (sales)	Credit Grant Period	Unit Price	Credit Grant Period	Balance	Percentage of total notes and accounts receivable (payable)
Southeast Cement Corporation	Tiancheng Concrete Industry Co., Ltd.	Other related party	Sales	110,976	7.02%	About 2-3 months	-	Equivalent	Accounts receivable 34,842	10.66%

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Schedule 6

Southeast Cement Corporation Details of reinvestment businesses December 31, 2021

Unit: 1000 shares; NT$ thousand

Name of investing company	Name of investee company	Location	Major business items	Original investment amount	Original investment amount	Holding at the end of the period	Holding at the end of the period	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
				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
	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	7,457	5	49.71	22,537	(76)	(40)
	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
	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	85,000	50,000	8,500	50.00	73,149	(13,139)	(6,570)
	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

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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	1,700	1,000	170	1.00	1,463	(13,139)	(131)
Total							204,326	64,296	9,594

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Schedule 7

Southeast Cement Corporation Information of major shareholders December 31, 2021

Schedule 7	Southeast Cement Corporation 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.

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XIV. Department Information

The company has disclosed departmental information in the consolidated financial report, so it is no longer disclosed in the individual financial report.

Details of important accounting items

Details of important accountingitems
Item	Number/index
Details of assets, liabilities and equity
Details of cash and cash equivalents	68
Details of financial assets measured at fair value through income statement – current	69
Details of notes receivable	70
Details of accounts receivable	71
Details of other receivables	note 6(5)
Details of Inventory	72
Details of prepayments	note 6(7)
Details of other financial assets–current	73
Details of financial assets measured at fair value through other comprehensive income–non-current	74
Details of investment changes by equity method	75
Details of changes in property, plant and equipment	note 6(11)
Details of changes in accumulated depreciation of property, plant and equipment	note 6(11)
Details of changes in accumulated impairment of property, plant and equipment	note 6(11)
Details of changes in right-of-use assets	note 6(12)
Details of changes in accumulated depreciation of right-of-use assets	note 6(12)
Details of changes in accumulated impairment of right-of-use assets	note 6(12)
Details of changes in investment property	note 6(13)
Details of changes in accumulated depreciation of investment property	note 6(13)
Details of changes in accumulated impairment of investment property	note 6(13)
Details of deferred income tax assets	note 6(34)
Details of refundable deposits	note 6(14)
Details of short-term loans	76
Details of contractual liabilities–current	77
Details of accounts payable	78
Details of other accounts payable	note 6(18)
Details of provision for liabilities–current	note 6(19)
Details of lease liabilities	note 6(12)
Details of other current liabilities	79
Details of deferred income tax liabilities	note 6(34)
Details of guarantee deposit received	note 6(21)
Details profit and loss items
Details of operating income	80
Details of operating costs	81
Details of manufacturing expenses	82
Details of sales expenses	83
Details of management expenses	84
Details of financial costs	note 6(33)
Functional summary of employee benefits, depreciation, depletion and amortization expenses incurred in the current period	note 6(29)

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Southeast Cement Corporation Details of cash and cash equivalents December 31, 2021

Item	Abstract	Unit: NT$ and foreign currency thousand Amount Remarks $ 69 195 $ 264 $ 2,990 59,724 1,797 HKD 1；USD 65 $ 64,511 $ 269,934 $269,934 $334,709	Unit: NT$ and foreign currency thousand Amount Remarks $ 69 195 $ 264 $ 2,990 59,724 1,797 HKD 1；USD 65 $ 64,511 $ 269,934 $269,934 $334,709
Cash Subtotal of cash Bank deposits Subtotal of bank deposits Cash equivalents Sub-total Total	Cash on hand Working capital Check deposit Current deposit Foreign currency deposits Original maturity within three months Short-term notes with an original maturity of three months or less	$ 69 195	HKD 1；USD 65
		$ 264
		$ 2,990 59,724 1,797
		$ 64,511
		$ 269,934
		$269,934
		$334,709

December 31, 2021 US dollar foreign exchange rate: 1:27.68 HK dollar foreign exchange rate 1:3.549

Southeast Cement Corporation

Details of financial assets measured at fair value through income statement – current December 31, 2021

Name of financial instrument	Abstract	Number of shares or unit	Acquisition cost	Unit: 1000 shares: NT$ thousand Fair value Unit price Total amount Remarks 12.08 $ 5,061 9.06 5,277 10.1313 14,022 $ 24,360 0.9937 $ 13,753 1.0998 6,089 1.02807 14,228 $ 34,070 $ 58,430	Unit: 1000 shares: NT$ thousand Fair value Unit price Total amount Remarks 12.08 $ 5,061 9.06 5,277 10.1313 14,022 $ 24,360 0.9937 $ 13,753 1.0998 6,089 1.02807 14,228 $ 34,070 $ 58,430
				Unit price	Total amount
Alliance Bernstein America JPMorgan Global PGIM Sub-total Delhi International Airport Pfizer Boeing Company Sub-total Total	Open-end funds Open-end funds Open-end funds Bonds Bonds Bonds	15 21 50 500 200 500	$ 6,139 6,151 13,953	12.08 9.06 10.1313 0.9937 1.0998 1.02807	$ 5,061 5,277 14,022
			$ 26,243		$ 24,360
			$ 16,100 6,952 15,351		$ 13,753 6,089 14,228
			$ 38,403		$ 34,070
			$ 64,646		$ 58,430

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Southeast Cement Corporation Details of notes receivable December 31, 2021

Object Company A Company B Company C Company D Company E Other Total Less: allowance for loss Net	Abstract Payment notes Payment notes Payment notes Payment notes Payment notes (5% or less)	Unit: NT$ thousand Amount Remarks $ 42,137 33,719 31,422 17,969 16,001 53,651 $ 194,899 (2,339) $ 192,560	Unit: NT$ thousand Amount Remarks $ 42,137 33,719 31,422 17,969 16,001 53,651 $ 194,899 (2,339) $ 192,560

Southeast Cement Corporation Details of accounts receivable December 31, 2020

Object Company A Company B Company C Company D Company E Company G Other Total accounts receivable – general Less: allowance for losses Net receivables – general Southeast Gaoliang Recycling Co., Ltd Tiancheng Company Total accounts receivable – related parties Less: allowance for losses Net receivables – related parties Net accounts receivable	Abstract Payments for goods receivable Payments for goods receivable Payments for goods receivable Payments for goods receivable Payments for goods receivable Rental income receivable (5% or less) Payments for goods receivable Payments for goods receivable	Unit: NT$ thousand Amount Remarks $ 9,062 8,681 6,776 6,663 6,307 23,019 32,150 $ 92,658 (15,983) $ 76,675 $ 4,297 34,842 $ 39,139 (418) $ 38,721 $ 115,396	Unit: NT$ thousand Amount Remarks $ 9,062 8,681 6,776 6,663 6,307 23,019 32,150 $ 92,658 (15,983) $ 76,675 $ 4,297 34,842 $ 39,139 (418) $ 38,721 $ 115,396

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Southeast Cement Corporation Details of Inventory December 31, 2021

Unit: NT$ thousand

Item Manufacturing Department: Raw fuel Materials Work in process Finished products Total Less: allowance for depreciation and losses from obsolete and slow-moving inventories Total inventory – Manufacturing Department Construction Department: Construction land Total inventory – Construction Department Net	Abstract Limestone, clay, coal and heavy oil Packaging equipment and consumables Products in process Partially Prepared Products Construction land	Amount Cost Net realized value $ 37,000 $ 22,947 77,880 69,630 29,393 33,426 29,861 30,728 $ 174,134 $ 156,731 (28,873) - $ 145,261 $ 156,731 $ 359,125 $ 370,282 $ 359,125 $ 370,282 $ 504,386 $ 527,013	Remarks
		Cost $ 37,000 77,880 29,393 29,861 $ 174,134 (28,873) $ 145,261 $ 359,125 $ 359,125 $ 504,386

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Southeast Cement Corporation Details of other financial assets – current December 31, 2021

Item	Abstract	Amount	Unit: NT$ thousand Remarks
Bank of Kaohsiung Far East Commercial Bank Hua Nan Bank Total	Time deposits with original maturity of more than 3 months away Time deposits with original maturity of more than 3 months away Time deposits with original maturity of more than 3 months away Time deposits with original maturity of more than 3 months away	$ 1,107 110,660 40,000 9,858	USD 3,998 USD 356
		$ 161,625

On December 31, 2021, the foreign exchange rate of US dollar was 1:27.68

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Southeast Cement Corporation

Details of financial assets measured at fair value through other comprehensive income – non-current

From January 1 to December 31, 2020

Unit: 1000 shares; NT$ thousand

Name	Opening balance	Opening balance	Increase in current period	Increase in current period	Decrease in current period	Decrease in current period	Decrease in current period
	Number of shares	Amount	Number of shares	Amount	Number of shares	Amount	Number of shares
		$ 85,807 620,826 39,240 41,007 11,241 5,992 22 - 9,175 12,177 6,459 18,983 1,724 10,850 60,017 855 1,034 1,800 17,453 11,011		$ 14,244 - 2,700 4,557 2,599 2,448 8 22,780 815 2,282 3,456 16,277 93 1,200 9,378 - 1,065 - 24,755 15,473		$ - 27,476 - - - - - 1,570 - - 4,381 - - - - 371 1,478 72 - 5,689

Note: 1. The increase of NT$124,130 thousand in the current period is due to NT$39,134 thousand from additional purchase and NT$84,966 thousand from unrealized evaluation benefit.

The decrease of NT$41,037 thousand in the current period is due to NT$4,635 thousand from sales reversal, NT$34,924 thousand from the appraisal loss of unrealized financial assets, and NT$1,478 thousand of share capital return from investee companies due to capital reduction.
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Southeast Cement Corporation Details of investment changes by equity method From January 1 to December 31, 2021

Name	Opening balance	Opening balance	Increasei	ncurrent period	Decreasei	ncurrent period		Ending balanc	e	Market value o	Unit: 1000 shares; NT$ tho r net equity value Guarantee or pledge status Total price $ 687,961 None. 83,991 None. 73,149 None. 31,622 None. 11,472 None. 293,908 None. 397,614 None. $ 1,579,717 (12,185) $ 1,567,532	Unit: 1000 shares; NT$ tho r net equity value Guarantee or pledge status Total price $ 687,961 None. 83,991 None. 73,149 None. 31,622 None. 11,472 None. 293,908 None. 397,614 None. $ 1,579,717 (12,185) $ 1,567,532
	Number of shares	Amount	Number of shares	Amount	Number of shares	Amount	Number of shares	Shareholding ratio	Amount	Unit price	Total price
Southeast Investment Co., Ltd. Southeast Industrial Construction Co., Ltd. Southeast Gaoliang Recycling Co., Ltd. Company Southeast Paper Co., Ltd. Nansha Wood Co., Ltd. Southeast Asset Development Co., Ltd. Taiji Ship Plant Co., Ltd. Total Less: parent company held by subsidiaries Stock reclassified as treasury shares Net long-term investment	499 36 5,000 5 1 29,000 25,611	$ 652,887 70,182 44,719 22,471 11,203 289,954 309,997	- - 3,500 - - - -	$ 42,056 2,110 35,000 106 269 3,954 17,445	- - - 2 - - -	$ 22,095 - 6,570 40 - - 2,443	499 36 8,500 5 1 29,000 25,611	99.29 31.01 50.00 49.71 27.56 100.00 31.01	$ 672,848 72,292 73,149 22,537 11,472 293,908 324,999	1,378.68 2,333.08 8.61 6,324.40 11,472.00 10.13 15.53	$ 687,961 83,991 73,149 31,622 11,472 293,908 397,614	None. None. None. None. None. None. None.
		$ 1,401,413 (12,185)		$ 100,940 -		$ 31,148 -			$ 1,471,205 (12,185)		$ 1,579,717 (12,185)
		$ 1,389,228		$ 100,940		$ 31,148			$ 1,459,020		$ 1,567,532

[(1) Market value or net equity value: based on the 2021 financial statements audited and] certified by the independent auditor.

(2) The increase of NT$100,940 thousand in the current period is due to NT$63,437 thousand from recognition of investment gains by equity method, NT$106 thousand from capital

reserve transferred from cash dividends received by the subsidiaries from the parent company, NT$2,397 thousand of other comprehensive income, and $35,000 thousand from cash injection.

[(3) The decrease of NT$31,148 thousand in the current period is due to the recognition of NT$6,609 thousand of investment loss by equity method, dividends of NT$23,125 thousand] a, NT$5 thousand of adjustment according to shareholding ratio – reevaluated amount of defined welfare plan, and an accumulated earnings of NT$1,409 thousand.

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Southeast Cement Corporation Details of short-term loans December 31, 2021

Unit: NT$

					Unit: NT$
Creditors	Abstract	Ending balance	Term of contract	Financing limit	thousand Pledges or guarantees Remarks None None. Land Land Land Land
Hua Nan Bank Hua Nan Bank Bank of Taiwan Bank of Taiwan Bank of Taiwan Bank of Kaohsiung Total Interest rate range at the end of the period	Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan Mortgage loan	$ 160,000 310,000 100,000 90,000 310,000 270,000	1101215-1110114 1101230-1110127 1101105-1110127 1101112-1100127 1101216-1110316 1101230-1110103	Note1 Note1 Note2 Note2 Note2 270,000
		$1,240,000
		0.78%~0.80%

Note 1: Consolidated amount of500,000 thousand Note 2: Consolidated amount of 1,200,000 thousand

Southeast Cement Corporation Details of contractual liabilities – current December 31, 2021

Object	Abstract Cement to be collected Cement to be collected Cement to be collected Cement to be collected Total of those less than 5%	Unit: NT$ thousand Amount Remarks $ 13,113 3,611 3,057 2,126 8,625 $ 30,532	Unit: NT$ thousand Amount Remarks $ 13,113 3,611 3,057 2,126 8,625 $ 30,532
Company A Company B Company C Company D Other Total

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Southeast Cement Corporation Details of accounts payable December 31, 2021

Object Company A Company A Other Total	Abstract Payment for goods payable Payment for goods payable (5% or less)	Unit: NT$ thousand Amount Remarks $ 137,401 9,361 13,909 $ 160,671	Unit: NT$ thousand Amount Remarks $ 137,401 9,361 13,909 $ 160,671

Southeast Cement Corporation Details of other current liabilities December 31, 2021

Unit: NT$ thousand

			Unit: NT$ thousand
Item	Abstract	Amount	Remarks
Collections Temporary Receipt Total	Collection of taxes, etc. Receipts in suspense, etc.	$ 554 342
		$ 896

Southeast Cement Corporation Details of operating income 2021

	2021
Item Cement and furnace stone raw materials Less: sales returns and discounts Net sales Rental income Total	Quantity	Amount $ 1,512,462 9,400 - $ 1,521,862 59,003 $ 1,580,865	Unit: NT$ thousand Remarks
	714,506.14

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Southeast Cement Corporation Details of operating costs 2021

Southeast Cement Corporation Details of operating costs 2021
Item Inventory at the beginning of the period Add: current feeding Inventory overage Less: inventory at the end of the period Sale Consumption of raw materials Inventory at the beginning of the period Add: current feeding Less: inventory at the end of the period Expenses transferred from collection Property, plant and equipment transferred from expenses from collection Materials consumed Direct labor Manufacturing expenses Manufacturing cost Add: work in process at the beginning of the period Outsourced WIP Inventory overage Less: work in process at the end of the period Cost of finished products Add: finished products at the beginning of the period Outsourcing of finished goods Less: finished products at the end of the period Transfer fee Cost of selling finished products Cost adjustment items Other additions and subtractions – goods tax and packing charges Production and marketing cost Rental cost Cost of raw materials sold Inventory overage Manufacturing cost not apportioned Gains from recovery of inventory falling price Operating cost	Unit: NT$ thousand 2021
	$ 41,997 144,795 236 37,000 17,472
	$ 132,556
	$ 77,446 64,851 77,880 36,165 2,260
	$ 25,992 17,579 173,082
	$ 349,209 23,588 835,771 6,550 29,393
	$ 1,185,725 59,343 6,519 29,861 134
	$ 1,221,592 212,675
	$ 1,434,267 38,022 17,472 (6,785) 9,820 (17,619)
	$ 1,475,177

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Southeast Cement Corporation Details of manufacturing expenses From January 1 to December 31, 2021

Southeast Cement Corporation Details of manufacturing expenses From January 1 to December 31, 2021
Item Indirect labor Repair cost Utility cost Depreciation Pension Other expenses Manufacturing cost not apportioned Total	Unit: NT$ thousand 2021
	$ 24,658 12,506 84,196 35,443 1,084 25,015 (9,820)
	$ 173,082

Southeast Cement Corporation Details of sales expenses From January 1 to December 31, 2021

Southeast Cement Corporation Details of sales expenses From January 1 to December 31, 2021
Item Salary expenses Rental expenses Stationery Travel expenses Freight Insurance premium Entertainment expenses Donation Meals Pension Transportation expenses Other expenses Total	Unit: NT$ thousand 2021
	$ 2,171 48 120 31 8,636 8 863 41 108 115 62 2,335
	$ 14,538

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Southeast Cement Corporation Details of management expenses From January 1 to December 31, 2021

Southeast Cement Corporation Details of management expenses From January 1 to December 31, 2021
Item Salary expenses Rental expenses Stationery Travel expenses Postal and telecommunication charges Repair cost Advertising expenses Utility cost Insurance premium Entertainment expenses Donation Taxes Depreciation Meals Employee welfare Training fee Service fee Pension Sundry purchases Transportation expenses Books, newspapers and magazines Other expenses Total	Unit: NT$ thousand 2021
	$ 26,699 13 180 52 435 583 42 842 2,951 261 794 4,488 25,912 618 1,984 47 2,428 580 269 125 19 4,806
	$ 74,128

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AI assistant

SE CEMENT — Annual Report 2021

51741_rns_2021-11-12_01fa0f1f-e65d-47f3-b707-e211056e7135.pdf

Southeast Cement Corporation

Individual Financial Report and Independent Auditor’s Report

Independent Auditor’s Report

Audit Opinion

Basis of Our Audit Opinion

Key Audit Items

Sales Revenue Recognition

Corresponding audit procedures:

Other Matters

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

The Accountants’ Responsibility for Auditing the Individual Financial Report

Southeast Cement Corporation Individual Balance Sheet December 31, 2021 and 2020

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

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

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

(Continued)

I. Company History

IV. Summary of Major Accounting Policies

2. Equity instruments

(VII) Inventory

1. Manufacturing Department:

2. Construction Department:

(X) Leasing

(XI) Investment property

(XII) Impairment of non-financial assets

(XIV) Employee benefits

1. Short-term employee benefits

2. Pension

3. Remuneration of employees, directors and supervisors

4. Resignation benefits

(XV) Share capital and treasury shares

1. Share capital

2. Treasury stock

2. Income from sale of property

(XVIII) Borrowing costs

2. Fair value measurement and evaluation process

VI. Explanation of Important Accounting Items

(III) Net notes receivable

(V) Other receivables

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

(VI) Inventory and cost of goods sold

(VII) Prepayments

(X) Investment by equity method

1. Subsidiaries

A. Balance Sheet

B. Comprehensive Income Statement

(XI) Property, plant and equipment

(XII) Lease agreement

1. Right-of-use assets

2. Lease liabilities

3. Important leasing activities and terms

4. Sublease:

5. Other leasing information

(XIII) Investment property

(XIV) Refundable deposits

(XV) Short-term borrowings

(XVI) short-term notes and bills payable

(XVII) Contractual liabilities

(XIX) Debt provision – current

(XX) Pension

(XXI) Guarantee deposits received

(XXII) Ordinary share capital

(XXIII) Capital reserve

(XXIV) Retained earnings and dividend policy

(XXV) Special reserve

(XXVI) Other equity items

(XXVIII) Operating income

1. Description of customer contract

A. Sales revenue

2. Other operating income

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

4. Contract balance

5. Significant changes in contractual assets and liabilities

(XXIX) Employee benefits, depreciation, depletion and amortization

(XXX) Interest income

(XXXI) Other income

(XXXII) Other benefits and losses

SE CEMENT Annual Report 2021