SE CEMENT - Annual Report 2020 | FinancialReports.eu

Stock code: 1110

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Southeast Cement Corporation

General Shareholders’ Meeting of 2021 Meeting Handbook

Meeting time: June 25, 2021

Meeting venue: B1, No. 21 Wufu 3rd Road, Qianjin District, Kaohsiung

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|Meeting Procedure ···························································|1|
|Meeting Agenda ······································································· 2|
|Report Items ··································································|3|
|Recognition Items ····························································|6|
|Discussion Items ······································································ 8|
|Extraordinary motions ································································· 10|
|Annexes|
|(I) Business Report ····································································· 11|
|(II) Independent Auditor’s Report and Financial Statements ····················· 13|
|(III) Earnings Distribution Table ····················································· 26|
|(IV) Comparison Table of Amendments to “Rules of Procedure of|
|Shareholders’ Meeting” ························································|27|
|(V) Comparison Table of Amendments to the Articles of Association ·········· 31|
|Appendices|
|(I) Articles of Association ···························································· 33|
|(II) Rules of Procedure of Shareholders’ Meeting ························|41|
|(III) Shareholdings of Individual and All Directors as Recorded in|
|the Register of Shareholders ·········································|48|

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Southeast Cement Corporation

Procedure of the 2021 General Shareholders’ Meeting

I Call Meeting to Order
II Chairman’s Speech
III Report Items
IV Recognition Items
V Discussion Items
VI Extraordinary motions
VII Meeting Adjourned

Agenda of the 2021 General Shareholders’ Meeting, Southeast Cement Corporation

I. Time: 9:00 a.m. on June 25 (Friday), 2021
II. Venue: B1, No. 21 Wufu 3rd Road, Qianjin District, Kaohsiung
III. Call Meeting to order
IV. Chairman’s speech
V. Report items
(I) 2020 Business report
(II) Audit Committee’s report on the review of the 2020 final accounts

(III) Report on the distribution of employees’ and directors’ remuneration for 2020

VI. Recognition items
(I) Recognition of 2020 final accounts
(II) Recognition of 2020 earnings distribution proposal
VII. Discussion items
(I) Amendment to some articles of “Rules of Procedure of Shareholders’ Meeting”
VIII. Extraordinary motions
IX. Meeting Adjourned

Report Items

(I) 2020 Business report

Explanation:

I. Please refer to Annex I (page 11–12) for the business report.
II. Please refer to Annex II (page 13–26) for the Independent Auditor’s Report and financial statements.

(II) Audit Committee’s report on the review of the 2020 final accounts

Audit Committee’s Review Report

The board of directors has prepared the company’s business report, financial statements (including individual and consolidated financial statements) and earnings distribution proposal for the year of 2020. The financial statements have been audited by CPAs Shu-Man Tsai and Ching-Lin Li of Crowe (TW) CPAs, and an audit report has been issued accordingly.

The above-mentioned business report, financial statements and earnings distribution proposal have been reviewed by the Audit Committee, and no inconsistency was found. Therefore, this report is issued in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act; kindly review and approve.

2021 General Shareholders’ Meeting, Southeast Cement Corporation

Southeast Cement Corporation

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Convener of Audit Committee:

March 18, 2021

(III) Report on the distribution of employee’s and directors’ remuneration for 2020

According to the articles of association of the company, if there is profit in the annual settlement of the company, the company shall allocate not less than 2% as the employees’ remuneration, which shall be distributed in stock or cash by resolution of the board meeting; the company may allocate not more than 3% of the profit above as the directors’ remuneration by resolution of the board meeting. The pre-tax net profit before the deduction of the employees’ remuneration and directors’ remuneration in 2020 is NT$13,333,514. After calculation, the employees’ remuneration in 2020 is NT$266,671 and the directors’ remuneration is NT$400,005, which is to be paid in cash.

Recognition Items

(I)

Subject: The 2020 final accounts are submitted for recognition. (proposed by the board of directors)

Explanation:

I. The company’s final accounts (including business report and financial statements) for 2020 have been reviewed by the Audit Committee, submitted to the board meeting for approval, and audited by the independent auditor. A written audit report is issued in accordance with Article 228 of the Company Act, and submitted for approval.
II. Please refer to Annex I and Annex II (page 13-26) for the final accounts.

Resolution:

※ To help shareholders understand and download the complete contents of the financial report as needed, please enter our website (URL: http://www.southeastcement.com.tw)
for “Financial Report” under “Investor Zone.”

(II)

Subject: The 2020 earnings distribution proposal is submitted for recognition. (proposed by the board of directors)

Explanation:

I. The company’s 2020 earnings distribution table is detailed in Annex III (page 29).
II. It is proposed to distribute a total dividend of NT$57,200,079 (NT$0.1 per share in cash) to shareholders, and the undistributed earnings after the distribution will be NT$169,392,565.
III. It is proposed that the chairman be authorized to decide the ex-dividend date for the cash dividend after the resolution of the 2020 general shareholders’ meeting.
IV. The cash dividend is calculated up to NT$1 (rounded off below NT$1), and the total amount of dividends less than NT$1 is included in other income.

Resolution:

Discussion Items

(I)

Subject: The amendment to some articles of the “Rules of Procedure of Shareholders’ Meeting” is submitted for discussion. (proposed by the board of directors)

Explanation:

Handled in accordance with the announcements of the Taiwan Stock Exchange dated January 28, 2021 referenced Tai-Cheng-Chi-Li No. 1100001446 and dated June 3, 2020 referenced Tai-Cheng-Chi-Li No. 1090009468.
See Annex IV (page 28~31) for the comparison table of amendments to “Rules of Procedure of Shareholders’ Meeting”.

Resolution:

(II)

Subject: The amendment to some articles of the “Articles of Association” are submitted for discussion. (proposed by the board of directors)

Explanation:

1. The Articles of Association of the company are to be amended in response to the provisions of Article 162 of the Company Act which came into effect on November 1, 2018 and for the additional business items.
See Annex V (pages 32~33) for the Comparison Table of Amendments to the “Articles of Association.”

Resolution:

Extraordinary motions

Meeting Adjourned

Annex I

Southeast Cement Corporation Business Report for the Year of 2020

The domestic demand for cement was 12.08 million tons in 2020, an increase of 730,000 tons or 6.4% compared with 11.35 million tons in 2019. The import volume of cement and clinker was 2.48 million tons in 2020, an increase of 180,000 tons or 7.8% compared with 2.3 million tons in 2019. According to the statistics of the

Directorate-General of Budget, Accounting and Statistics, Executive Yuan, the total floor area approved and the construction licenses issued in 2020 increased by about 12% over the same period in 2019. With the active promotion of public construction, the budget of the overall public construction plan also increased by NT$81.8 billion, a growth of 21.3%. Driven by the overall civil and public construction, the market expansion and cement demand increased.

However, because of the low cost of cement clinker, the import volume of the imported cement grinding industry has increased significantly, which has severely eroded the domestic cement market and made the company’s business more severe. Therefore, in the face of the erosion of the import cement industry, only by continuing to do a good job in quality management, strengthening customer service and upholding a steady business strategy, can the company maintain the market position.

The sales volume of cement in 2020 decreased by 0.29% compared with that in 2019, and the operating income increased by 0.15% compared with that in 2019. The sales volume of furnace stone powder in 2020 increased by 6.77% compared with that in 2019, and the operating income increased by 10.38% compared with that in 2019. The operating performance of the company in 2020 is as follows:

1. Comparison of operating income, production and sales between 2020 and 2019:

	Weight unit: metric ton Unit: NT$thousand	Weight unit: metric ton Unit: NT$thousand	Weight unit: metric ton Unit: NT$thousand	Weight unit: metric ton Unit: NT$thousand
Item	Year	2020	2019	Increase (decrease)%
Production volume	Cement	550,857	565,756	-2.63%
	Furnace stone powder	182,147	171,229	6.38%
	Blast furnace cement	4,375	2,232	96.01%
Sales volume	Cement	553,462	555,085	-0.29%
	Furnace stone powder	181,014	169,543	6.77%
	Blast furnace cement	4,375	2,232	96.01%
Operating income	Cement	1,287,553	1,285,638	0.15%
	Furnace stone powder	222,044	201,159	10.38%
	Blast furnace cement	9,421	4,749	98.38%
	Other	19,355	27,628	-29.94%
	Leasing	53,886	53,668	0.41%
	Total	1,592,259	1,572,842	1.23%

2. Net profit and dividend

In the operating result of 2020, the net profit after tax for the current period is

NT$22,157,309, a decrease of 33.13% over the same period last year. The total cumulative distributable earnings are NT$230,223,794, and the legal reserve is NT$3,63,1150. The balance of NT$57,200,079 from the retained earnings of NT$169,392,565 is entirely distributed as cash dividend of ordinary shares, and NT$0.1 is planned to be distributed in cash for each share.

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

Annex II

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Independent Auditor’s Report

To Southeast Cement Corporation

Audit Opinion

We have audited the consolidated balance sheet of Southeast Cement Corporation and its subsidiaries (hereinafter Southeast Group) as of December 31, 2020 and 2019, the consolidated comprehensive income statement, consolidated statement of changes in equity and consolidated cash flow statement from January 1 to December 31, 2020 and 2019 and the notes to the consolidated financial report (including the summary of significant accounting policies).

In our opinion, based on our audit results and the audit reports of other accountants (please refer to Other Matters), the consolidated financial report above was prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, as well as the International Financial Reporting Standards, International Accounting Standards, and the interpretations and explanations of International Financial Reporting Standards approved and issued by the Financial Supervisory Commission, and are sufficient to properly express the consolidated financial status of Southeast Group as of December 31, 2020 and 2019, and the consolidated financial performance and consolidated cash flow from January 1 to December 31, 2020 and 2019.

Basis of Our Audit Opinion

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

Key Audit Items

Key audit items refer to the most important items in the audit of the consolidated financial report of Southeast Group for 2020 based on our professional judgment. These items have been reflected in the process of auditing the consolidated financial report as a whole and the process of forming the audit opinion. We do not express our opinion on these items separately.

The key audit items of the consolidated financial report of Southeast Group for 2020 are described as follows:

I. Impairment assessment of investment property

For accounting policies on the impairment assessment of investment property, please refer to note 4(14) of the consolidated financial report on impairment of non-financial assets; for the impairment assessment of tangible and intangible assets, please refer to note 5(2)C of the consolidated financial report; for the impairment assessment of investment property, please refer to note 6(14) of the consolidated financial report.

Description of key audit items:

As of December 31, 2020, Southeast Group held NT$5,382,732 thousand investment property, accounting for 55% of the total assets. Some of the leased above-ground objects are jointly held with others; therefore, when the lease term expires, if the joint holder has no intention to continue to lease, there will be the uncertainty of having to remove the above-ground objects after the lease term expires. Therefore, there may be significant risks in the impairment of assets. To assess the impairment loss of assets, it is necessary to predict and discount the future cash flow to estimate the recoverable amount. The accounting estimate depends on the subjective judgment of the management, which is highly uncertain. Corresponding audit procedures:

Our main audit procedures include assessing the management’s recognition of cash generating units subject to possible impairment and the internal and external signs of impairment according to the understanding of the company, considering whether all assets required for the annual impairment test have been fully included in the management’s assessment process, assessing the rationality of the assessment method and assumptions used by the management to estimate the recoverable amount, assessing whether the policy and other relevant information on impairment of long-term non-financial assets have been properly disclosed, asking the management and reviewing the audit evidence obtained from the audit procedures of subsequent events, identifying whether there are no events related to the impairment test in the future, referring to the company’s estimated recoverable amount according to the independent evaluation report issued by a third party and the actual prices of the relevant neighboring areas, and examining the rationality of the relevant assumptions.

Other Matters

For some subsidiaries included in the consolidated financial report above and investments by equity method, their financial reports have not been audited by us, but by other accountants. Therefore, in our opinion on the consolidated financial report above, the amounts listed in the financial reports of these companies are based on the audit reports of other accountants. The total assets of these subsidiaries as of December 31, 2020 and 2019 were NT$81,969 thousand and NT$705,786 thousand, respectively, accounting for 0.83% and 7.25% of the total

consolidated assets, respectively; the total liabilities were NT$23,456 thousand and NT$25,414 thousand, respectively, accounting for 1.78% and 2.17% of the total liabilities; the operating income in 2020 and 2019 was NT$114 thousand and NT$114 thousand, respectively, accounting for 0.01% and 0.01% of the consolidated operating income, respectively; the total comprehensive income was NT$816 thousand and NT$6,745 thousand, respectively, accounting for 4.63% and 6.90% of the total consolidated comprehensive income, respectively. In addition, as of December 31, 2020 and 2019, the amount of investment in these related enterprises by equity method was NT$442,933 thousand and NT$434,470 thousand, accounting for 4.49% and 4.46% of the total consolidated assets, respectively; the share of profit and loss of affiliated enterprises and joint ventures by equity method recognized in 2020 and 2019 was NT$5,158 thousand and NT$(7,764) thousand, respectively, accounting for 69.42% and (18.00%) of the consolidated net profit before tax, respectively; the share of other comprehensive income of affiliated enterprises and joint ventures recognized by equity method was NT$3,306 thousand and NT$4,296 thousand, respectively, accounting for 479.83% and 6.66% of the net other comprehensive income, respectively.

Southeast Cement Corporation has prepared the individual financial reports for 2020 and 2019, which have been audited by us with an unqualified opinion plus the paragraph of other matters on file for reference.

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

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

In the preparation of the consolidated financial report, the management’s responsibilities include the assessment of the ability of Southeast Group to continue to operate, the disclosure of relevant matters, and the adoption of the accounting basis for continuing operations, unless the management intends to liquidate or suspend the business of Southeast Group and its subsidiaries, or there is no practical plan other than liquidation or suspension of business.

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

The Accountants’ Responsibility for Auditing the Consolidated Financial Report

The purpose of our audit of the consolidated financial report is to obtain reasonable assurance as to whether the consolidated financial report as a whole contains any material untruthful expression resulting from fraud or error, and issue an audit report accordingly. Reasonable assurance means a high degree of assurance, but an audit conducted in accordance with Generally Accepted Auditing Standards cannot guarantee that significant misrepresentation in the consolidated financial report will be detected. Misrepresentation may be due to fraud or

error. An individual or aggregate amount that is misrepresented is considered significant if it can be reasonably expected to affect the economic decisions made by the users of the consolidated financial report.

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

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

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

We determined the key audit matters for the audit of the consolidated financial report of Southeast Group in 2020 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 18, 2021

Southeast Cement Corporation and Subsidiaries Consolidated Balance Sheet December 31, 2020 and 2019

Unit: NT$ thousand

Code	Asset	December 31,2020	December 31,2020	December 31, 2019	December 31, 2019
		Amount	%	Amount	%
1100 1110 1150 1170 1180 1200 1220 130x 1410 1476 1480 11xx 1517 1550 1600 1755 1760 1780 1840 1920 1990 15xx 1xxx	Current assets Cash and cash equivalents (note 6(1)) Financial assets measured at fair value through income statement – current (note 6(2)) Net notes receivable (note 6(3)) Net accounts receivable (note 6(4)) Accounts receivable – related parties net (note 7) Other receivables (note 6(5)) Current income tax assets Inventory (note 6(6)) Prepayments (note 6(7)) Other financial assets – current (note 6(8)) Incremental cost of contract acquisition – current (note 6(9)) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income – non-current (note 6(10)) Investment by equity method (note 6(11)) Property, plant and equipment (note 6(12)) Right-of-use assets (note 6(13)) Net amount of investment property (note 6(14)) Intangible assets (note 6(15)) Deferred income tax assets Refundable deposits (note 6(16)) Other non-current assets – others (note 6(5)) Total non-current assets Total assets	$ 176,743 232,667 286,533 92,498 36,827 5,092 529 884,310 68,140 174,598 5,842	2 2 3 1 - - - 9 1 2 -	$ 207,931 245,872 273,608 82,302 41,150 33,053 656 650,957 40,919 447,691 2,053	2 3 3 1 - - - 7 - 5 -
		1,963,779	20	2,026,192	21
		1,178,923 590,646 249,698 389,171 5,382,732 23 97,415 10,118 2,815	12 6 3 4 55 - 1 - -	1,191,681 582,407 226,093 229,026 5,380,648 58 88,294 11,750 4,199	12 6 2 2 55 - 1 - -
		7,901,541	80	7,714,156	79
		$ 9,865,320	100	$ 9,740,348	100

(Continued)

Code	Liabilities and equity	December 31,2020	December 31,2020	December 31, 2019	December 31, 2019
		Amount	%	Amount	%
2100 2130 2150 2170 2200 2230 2250 2280 2300 21xx 2570 2580 2645 25xx 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3500 31xx 36xx 3xxx	Current liabilities Short term loans (note 6(17)) Contractual liabilities – current (note 6(18)) notes payable Accounts payable Other accounts payable (note 6(19)) Current income tax liabilities Provision for liabilities – current (note 6(20)) Lease liabilities – current (note 6(13)) Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Lease liabilities – non-current (note 6(13)) Guarantee deposits received (note 6(22)) Total non-current liabilities Total liabilities Equity Equity attributable to owners of the parent company Share capital (note 6(23)) Ordinary share capital Capital reserve (note 6(24)) Retained earnings Legal reserve Special reserve (note 6(26)) Undistributed earnings (note 6(25)) Other equity (note 6(27)) Treasury shares (note 6(28)) Total equity attributable to owners of the parent company Non-controlling interests (note 6(29)) Total equity Total liabilities and equity	$ 235,000 90,425 1,798 223,854 89,625 2,220 1,553 65,651 13,794	2 1 - 2 1 - - 1 -	$ 200,000 107,734 4,783 199,813 84,746 5,111 1,440 58,028 -	2 1 - 2 1 - - 1 -
		723,920	7	661,655	7
		303,366 265,358 23,957	3 3 -	301,611 183,058 23,040	3 2 -
		592,681	6	507,709	5
		1,316,601	13	1,169,364	12
		5,720,008 188,267 1,052,057 810,918 230,224 500,520 (12,185)	58 2 11 8 2 5 -	5,720,008 188,162 1,048,744 810,918 254,425 514,103 (12,185)	59 2 11 8 3 5 -
		8,489,809 58,910	86 1	8,524,175 46,809	88 -
		8,548,719	87	8,570,984	88
		$ 9,865,320	100	$ 9,740,348	100

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

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

2020	% 100 (96) 4 (1) (5) - (6) (2) - 4 (2) - 1 2 - 1 1 - - - 1 1 - 1 1	2019
Amount	%	Amount	%
$ 1,590,986 (1,523,614)	100 (96)	$ 1,584,940 (1,502,651)	100 (95)
67,372 (15,073) (82,636) (236)	4 (1) (5) -	82,289 (16,140) (75,215) 557	5 (1) (5) -
(97,945)	(6)	(90,798)	(6)
(30,573)	(2)	(8,509)	(1)
6,228 56,996 (32,047) (6,126) 12,952	- 4 (2) - 1	11,474 49,699 (3,201) (4,941) (1,378)	1 3 - - -
38,003	2	51,653	3
7,430 9,519	- 1	43,144 (9,901)	3 (1)
16,949	1	33,243	2
(2,598) 3,287	- -	60,236 4,271	4 -
689	-	64,507	4
$ 17,638	1	$ 97,750	6
$ 22,158 (5,209)	1 -	$ 33,133 110	2 -
$ 16,949	1	$ 33,243	2
$	1	$	6

2020	% - 1	2019
Amount	%	Amount	% -
22,729 (5,091)	-	97,600 150
$ 17,638	1	$ 97,750	6
$ 0.04		$ 0.06
$ 0.04		$ 0.06

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

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Changes in Equity January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

									Unit: NT$ thousand
Balance on 1 January, 2019 Allocation and distribution of earnings: Provision of legal reserve Cash dividend of ordinary shares Net profit (loss) for 2019 Other comprehensive income of 2019 Total comprehensive income of 2019 Capital reserve adjustment for dividends paid to subsidiaries Increase/decrease of non-controlling interests Disposal of equity instruments measured at fair value through other comprehensive income Balance on December 31, 2019 Allocation and distribution of earnings: Provision of legal reserve Cash dividend of ordinary shares Net profit (loss) for 2020 Other comprehensive income of 2020 Total comprehensive income of 2020 Capital reserve adjustment for dividends paid to subsidiaries Increase/decrease of non-controlling interests Disposal of equity instruments measured at fair value through other comprehensive income Balance on December 31, 2020			Equity attributable to owners of the parent company						Non-controlling interests Total equity
	Ordinary share capital	Capital reserve	Retained earnings			Other equity items	Treasury shares	Total owner’s equity attributable to the parent company
			Legal reserve	Special reserve	Undistributed earnings	Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensive income
	$ 5,720,008 - - - -	$ 188,057 - - - -	$1,042,176 6,568 - - -	$ 810,918 - - - -	$ 283,737 (6,568) (57,200) 33,133 10	$ 450,959 - - - 64,457	$ (12,185) - - - -	$8,483,670 - (57,200) 33,133 64,467	$ 28,468 $8,512,138 - - - (57,200) 110 33,243 40 64,507
	-	-	-	-	33,143	64,457	-	97,600	150 97,750
	- - -	105 - -	- - -	- - -	- - 1,313	- - (1,313)	- - -	105 - -	- 105 18,191 18,191 - -
	5,720,008 - - - -	188,162 - - - -	1,048,744 3,313 - - -	810,918 - - - -	254,425 (3,313) (57,200) 22,158 (98)	514,103 - - - 669	(12,185) - - - -	8,524,175 - (57,200) 22,158 571	46,809 8,570,984 - - - (57,200) (5,209) 16,949 118 689
	-	-	-	-	22,060	669	-	22,729	(5,091) 17,638
	- - -	105 - -	- - -	- - -	- - 14,252	- - (14,252)	- - -	105 - -	- 105 17,192 17,192 - -
	$ 5,720,008	$ 188,267	$ 1,052,057	$ 810,918	$ 230,224	$ 500,520	$ (12,185)	$ 8,489,809	$ 58,910 $ 8,548,719

(please refer to the notes to the consolidated financial statements)

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

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow January 1 to December 31, 2020 and 2019

Item Cash flow from operating activities Net profit (net loss) before tax of the current period Adjustments Income, expense and loss items Depreciation expense Amortization expense Expected credit impairment loss (profit) Net loss (profit) of financial assets and liabilities measured at fair value through income statement Interest expense Interest income Dividend income Share of losses (profits) of affiliated enterprises and joint ventures recognized by equity method Loss (profit) from disposal and retirement of property, plant and equipment Impairment loss of non-financial assets Profit from lease revision Other items Total income, expense and loss items 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 Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in other receivables Decrease (increase) in inventory Decrease (increase) in prepayments Decrease (increase) in other financial assets Decrease (increase) in incremental cost of contract acquisition Total net change in assets related to operating activities Net change in liabilities related to operating activities Increase (decrease) in contractual liabilities Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in other accounts payable Increase (decrease) in provision for liabilities Increase (decrease) in other current liabilities Total net change in liabilities related to operating activities	2020 $ 7,430 75,323 35 236 (4,086) 6,126 (6,228) (46,500) (12,952) - - (7) 105 12,052 22,291 (11,955) (5,434) 21,263 (237,560) (27,221) 273,093 (3,789) 30,688 (17,309) (2,985) 24,041 (11,207) 113 13,794 6,447	Unit: NT$ thousand 2019
		$ 43,144 69,396 35 (557) (27,989) 4,941 (11,474) (45,617) 1,378 2,974 1,875 - 105
		(4,933)
		(79,888) (11,796) (1,943) 6,406 (92,018) 5,930 224,326 (2,053)
		48,964
		46,128 4,783 (22,397) 5,810 (3,155) -
		31,169

(Continued)

Item Total net changes in assets and liabilities related to operating activities Total adjustments Cash inflow (outflow) from operations Interest received Dividends received Interest paid Income tax refunded (paid) Net cash inflow (outflow) from operating activities Cash flow from investment activities Acquisition of financial assets measured at fair value through other comprehensive income Disposal of financial assets measured at fair value through other comprehensive income Return of share capital from capital reduction of financial assets measured at fair value through other comprehensive income Acquisition of property, plant and equipment Decrease in refundable deposits Acquisition of right-of-use assets Acquisition of investment property Decrease in long-term lease payments receivable Net cash inflow (outflow) from investment activities Cash flow from financing activities Increase in short-term loans Decrease in short-term bills payable Increase in guarantee deposits received Repayment of lease principal (Continued)	2020 $ 37,135 49,187 56,617 6,297 54,500 (6,094) (611) 110,709 (16,010) 15,587 10,583 (30,013) 1,632 (58,668) (5,535) 1,368 (81,056) 35,000 - 917 (56,750)	2019
		$ 80,133
		75,200
		118,344 11,441 54,363 (4,861) (1,515)
		177,772
		(46,288) 8,084 10,966 (17,746) 213 - (200,820) 1,353
		(244,238)
		180,000 (30,000) 117 (51,213)

Item Cash dividend payment Changes in non-controlling interests Net cash inflow (outflow) from financing activities Increase (decrease) in cash and cash equivalents in the current period Opening balance of cash and cash equivalents Ending balance of cash and cash equivalents	2020 (57,200) 17,192 (60,841) (31,188) 207,931 $ 176,743	2019
		(57,200) 18,191
		59,895
		(6,571) 214,502
		$ 207,931

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

Annex III

Southeast Cement Corporation 2020

Earnings Distribution Table

Unit: NT$

			Unit: NT$
Summary	Before 1997	After 1998	Total
Undistributed earnings at the beginning of the period	3,860,408	190,051,888	193,912,296
Net profit after tax of 2020	0	22,157,309	22,157,309
Disposal of equity instruments measured at fair value through other comprehensive income		14,319,968	14,319,968
Disposal of equity instruments measured at fair value through other comprehensive income–subsidiaries		(67,672)	(67,672)
Remeasurement of defined benefit plans included in retained earnings (note 2)	0	(98,107)	(98,107)
Earnings available for distribution	3,860,408	226,363,386	230,223,794
Allocation items
Provision of 10% legal reserve	0	(3,631,150)	(3,631,150)
Distribution of cash dividend (NT$0.1 per share, calculated to NT$1)	0	(57,200,079)	(57,200,079)
Undistributed earnings at the end of the period	3,860,408	165,532,157	169,392,565

Note 1: According to the regulations of the Ministry of Economic Affairs dated October 14, 2013 referenced

Jing-Shang No. 10202433490, the “current net profit after tax” is the basis of legal reserve allocation, and the retained earnings generated from the initial adoption of International Accounting Standards are directly transferred to the retained earnings account without going through the profit and loss account, so no legal reserve is required. Accordingly, if the legal reserve is allocated based on the current net profit after tax, then according to the provision above, for a company’s remeasurement of defined benefit plans (included in other comprehensive income), failure to recognize the shareholding ratio of the investee company, and cancellation of treasury shares and adjustment of the retained earnings, etc., which are generated due to the adoption of International Accounting Standards, the allocation of legal reserve is not required.
Note 2: The remeasured amount of the defined benefit plan of the subsidiary Southeast Investment is recognized according to the shareholding ratio.

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

Annex IV

Southeast Cement Corporation

Comparison Table of Amendments to the “Rules of Procedure of Shareholders’ Meetings”

Amendments		Original Article	Explanation
Article 2: The first and second items are omitted. The selection or dismissal of directors or independent directors, change of articles of association, capital reduction, application for suspension of public offering, removal of the non-competition restriction for directors, capital increase from earnings, capital increase from legal reserve, company dissolution, merger, division, or matters in paragraph 1, Article 185 of the Company Act,Articles 26-1 and 43-6 of the Securities Exchange Act, Articles 56-1 and 60-2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be listed in the reasons for convening the meeting, and shall not be proposed as extraordinary motions. The fourth item is omitted. Shareholders who hold more than one percent of the total number of	Article 2:	The first and second items are omitted. The selection or dismissal of directors or independent directors, change of articles of association, capital reduction, application for suspension of public offering, removal of the non-competition restriction for directors, capital increase from earnings, capital increase from legal reserve, company dissolution, merger, division, or matters in paragraph 1, Article 185 of the Company Act shall be listed in the reasons for convening the meeting, and shall not be proposed as extraordinary motions. The main content may be placed on the website designated by the securities authority or the company, and its URL shall be stated in the notice. The fourth item is omitted. Shareholders who hold more than one percent of the total number of shares	I. The announcement method is adjusted in accordance with the provisions. II. In order to avoid the misunderstand ing by listed companies that matters other than those in paragraph 1, article 185 of the Company Act may be proposed via extraordinary motions, it is proposed to incorporate the provisions of laws other than the Company Act that do not allow such matters to be proposed via extraordinary motions.

shares in issue may submit a proposal to the company’s general shareholders’ meeting. The proposal is limited to one item, and any proposal with more than one item shall not be included in the proposal. However, if the shareholders’ proposal is to urge the company to promote the public interest or fulfill its social responsibilities, then the board of directors may still include it in the proposal. In addition, the board of directors may not include the proposal if the shareholder’s proposal has one of the conditions in paragraph 4, Article 172-1 of the Company Act.Shareholders may submit proposals to urge the company to promote public interests or fulfill its social responsibilities. According to Article 172-1 of the Company Act, the number of such proposals shall be limited to one, and any proposals more than one shall not be included. Omitted below Article 8: The first paragraph is omitted. The chairman shall call the meeting to order at the specified meeting time,and publish the information on the	in issue may submit a proposal to the company’s general shareholders’ meeting. The proposal is limited to one item, and any proposal with more than one item shall not be included in the proposal. However, if the shareholders’ proposal is to urge the company to promote the public interest or fulfill its social responsibilities, then the board of directors may still include it in the proposal. In addition, the board of directors may not include the proposal if the shareholder’s proposal has one of the conditions in paragraph 4, Article 172-1 of the Company Act. Omitted below Article 8: The first paragraph is omitted. The chairman shall call the meeting to order at the specified meeting time. However, when the attending shareholders do	The amendment is made in line with item 5, Article 172 of the Company Act, and paragraph 5 of this article is amended in line with the letter referenced Jing-Shang No. 10700105410. Paragraph 2 is amended in order to improve corporate governance and protect the rights andinterests of

number of non-voting rights and the number of shares present . However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairman may announce a meeting postponement, provided that the number of such postponement is no more than two, and the total time no more than 1 hour. If the attending shareholders still do not represent one third of the total number of issued shares after two postponements, the chairman shall declare the meeting aborted. Omitted below Article 18: The election of directors (including independent shareholders) at a shareholders’ meeting shall be held in accordance with the company’s Measures for Election of Directors, and the voting results, including the name list of elected directors and independent directors and the respective voting rights won,as well as the name list of directors and independent directors not elected and the respective voting rights won ,shall be announced on-site immediately. The ballots for the election referred to in the	not represent a majority of the total number of issued shares, the chairman may announce a meeting postponement, provided that the number of such postponement is no more than two, and the total time no more than 1 hour. If the attending shareholders still do not represent one third of the total number of issued shares after two postponements, the chairman shall declare the meeting aborted. Omitted below Article 18: The election of directors (including independent shareholders) at a shareholders’ meeting shall be held in accordance with the company’s Measures for Election of Directors, and the voting results, including the name list of elected directors and independent directors and the respective voting rights won. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custodyforatleast one	shareholders. Paragraph 1 is amended in order to improve corporate governance and protect the rights and interests of shareholders.

preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder initiates a lawsuit in accordance with Article 189 of the Company Act, the recording shall be kept until the end of the lawsuit.	year. However, if a shareholder initiates a lawsuit in accordance with Article 189 of the Company Act, the recording shall be kept until the end of the lawsuit.

A n n e x V

Southeast Cement Corporation Comparison Table of Amendments to the “Articles of Association”

Amended article	Original Article	Explanation
Article 2: The businesses operated by our company are as follows: １ C901030 Cement ‧ manufacturing. ２ B202010 Non ‧ -metallic mining. ３ C901040 Ready ‧ -mixed concrete manufacturing. ４ C901050 Cement and concrete ‧ product manufacturing. ５ H701010 Housing and ‧ building development and rental. ６ H701040 ‧ Specific area development. ７ H701060 ‧ New towns, new community development. ８ H703100 ‧ Real estate leasing. ９ J101040 ‧ Waste treatment. １０ F111090 ‧ Building materials wholesale. １１ F211010 ‧ Building materials retail. １２ CD01010 ‧ Ship and parts manufacturing. １３ CD01020 ‧ Rail vehicles and parts manufacturing. １４ A201040 ‧ Forest recreation area management. １５ J701020 ‧ Amusement park. １６ ZZ99999 ‧ All business items that are not prohibited or restricted by law, except those that are subject to special approval. １７ C901990 M ‧ anufacturing of	Article 2: The businesses operated by our company are as follows: １ C901030 ‧ Cement manufacturing. ２ B202010 Non ‧ -metallic mining. ３ C901040 Ready ‧ -mixed concrete manufacturing. ４ C901050 Cement and concrete ‧ product manufacturing. ５ H701010 Housing and ‧ building development and rental. ６ H701040 ‧ Specific area development. ７ H701060 ‧ New towns, new community development. ８ H703100 ‧ Real estate leasing. ９ J101040 ‧ Waste treatment. １０ F111090 ‧ Building materials wholesale. １１ F211010 ‧ Building materials retail. １２ CD01010 ‧ Ship and parts manufacturing. １３ CD01020 ‧ Rail vehicles and parts manufacturing. １４ A201040 ‧ Forest recreation area management. １５ J701020 ‧ Amusement park. １６ ZZ99999 ‧ All business items that are not prohibited or restricted by law, except those that are subject to special approval.	Addition of business items.

	Amended article	Original Article	Explanation
	other non-metallic mineral products.
Article 6: The shares of the company are all registered, and are issued with the signatures or seals of directorsrepresenting the company ,numbered and legally certified. The company may also issue shares without printing physical share certificates.		Article 6: The shares of the company are all registered, and are issued with the signatures or seals ofmore than three directors, numbered and legally certified. The company may also issue shares without printing physical share certificates.	Amendment in accordance with Article 162 of the Company Act.
Article 41 The Articles of Association was established on November 17, 1956. The following is omitted. The sixty eighth revision was made on June 25, 2021 .		Article 41 The Articles of Association was established on November 17, 1956. The following is omitted.

Appendix I

Articles of Association, Southeast Cement Corporation

Revised on June 20, 2020.

Chapter I General Provisions

Article 1: The company is named Southeast Cement Corporation in accordance with the Company Act on its provisions concerning the naming of organization.
Article 2: The businesses operated by our company are as follows:
C901030 Cement manufacturing.
B202010 Non-metallic mining.
C901040 Ready-mixed concrete manufacturing.
C901050 Cement and concrete product manufacturing.
H701010 Housing and building development and rental.
H701040 Specific area development.
H701060 New towns, new community development.
H703100 Real estate leasing.
J101040 Waste treatment.
F111090 Building materials wholesale.
F211010 Building materials retail.
CD01010Ship and parts manufacturing.
CD01020 Rail vehicles and parts manufacturing.
A201040 Forest recreation area management.
J701020 Amusement park.
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 3: The company has its head office located in Kaohsiung and a plant at No. 1, Pingshan Lane, Nanzi District, Kaohsiung. If necessary, branches, business offices or plants may be established at home and abroad by resolution of the board meeting.
Article 4: The company’s announcement method is in compliance with Article 28 of the Company Act.

Chapter II Shares

Article 5: The capital of the company is rated at NT$8 billion, divided into 800 million shares, at NT$10 per share. The unissued shares shall be issued in different trenches according to the business needs of the company.
Article 6: The shares of the company are all registered, and are issued with the signatures or seals of more than three directors, numbered and legally certified. The company may also issue shares without printing physical share certificates.

Article 7: The shareholder or legal agent shall fill in a seal card and keep it at the company for reference. The seal on the seal card shall be used for any transaction document with the company for exercise of the rights of shares.
Article 8: The company shall, unless otherwise provided by other laws or regulations, handle stock affairs in accordance with the provisions of the “Regulations Governing the Administration of Shareholder Services of Public Companies” issued by the competent authority.
Article 9: The title transfer of the shares shall be suspended within 60 days before the general shareholders’ meeting, 30 days before the extraordinary shareholders’ meeting or five days before the ex-date of the company’s decision to distribute dividends, bonuses or other interests.

Chapter III Shareholders’ Meeting

Article 10: The shareholders’ meeting is divided into two types: the general shareholders’ meeting and the extraordinary shareholders’ meeting. The general shareholders’ meeting shall be convened once a year within six months after the end of each accounting year, and the extraordinary shareholders’ meeting shall be convened when necessary.
Article 11: The shareholders shall be notified of the date, place and the cause of the meeting 30 days before the convening of the general shareholders’ meeting and 15 days before the convening of the extraordinary shareholders’ meeting.
Article 12: If a shareholder is unable to attend the shareholders’ meeting for some reason, he may issue a power of attorney in the form printed by the company to specify the scope of authorization, and entrust an agent to attend. However, when a person, other than a trust enterprise or a stock agency approved by the securities authority, is at the same time entrusted by two or more shareholders, the voting rights of the proxy shall not exceed 3% of the total voting rights of all shares issued, otherwise the excessive voting rights shall not be counted. If the power of attorney above is repeated, the first one that is delivered shall prevail. However, this does not apply to those which declare to revoke the previous entrustment.
Article 13: The chairman shall preside over the shareholders’ meeting. When the chairman is on leave or unable to perform his duties for some reason, the vice chairman shall act as his proxy. When the vice chairman is also on leave or unable to perform his duties for some reason, the directors shall elect one among themselves as the deputy.
Article 14: The resolutions of a shareholders’ meeting shall, unless otherwise provided by the Company Act or the company’s articles of incorporation, be adopted by a majority vote of the shareholders or proxies present, who represent more than half of the total number of shares issued.
Article 15: For the shareholders of the company, each share has one voting right, and the voting right less than one shall not be counted.
Article 15-1: When the company convenes a shareholders’ meeting, electronic means

shall be listed as one of the channels for exercising voting rights, and the method of the exercise shall be stated in the notice of the shareholders’ meeting. Shareholders who exercise voting rights electronically are deemed to have attended the shareholders’ meeting in person. However, the exercise of voting rights for extraordinary motions and the amendments to the original motions of the shareholders’ meeting shall be deemed as abstention. The relevant exercise methods are handled in accordance with the Company Act and the regulations of the competent authority.

Article 16: The resolutions of the shareholders’ meeting of the company shall be recorded into minutes, and Article 183 of the Company Act shall be followed for the distribution and retention of the minutes.

Chapter IV Directors, Supervisors and Important Staff

Article 17: The company has seven to eleven directors, who are selected by the shareholders’ meeting among people with capacity for conduct. The total number of shares of the company’s registered shares held by all directors of the company shall be set in accordance with the standards promulgated by the competent authority.
When the shareholders’ meeting elects directors, each share has the same voting rights as the number of directors to be elected. The shareholder may elect one person with all his voting rights, or have the voting rights distributed among a number of persons. The candidates who win votes with more voting rights are elected as directors.
Among the number of directors to be elected for each term in accordance with the first paragraph, the number of independent directors shall not be less than three, and shall not be less than one-fifth of the number of directors to be elected. The independent directors’ professional qualifications, shareholdings and restrictions on part-time employment, determination of independence, methods of nomination and other matters to be followed shall be in accordance with the relevant provisions of the Securities and Exchange Act.
The candidate nomination system is adopted for the election of the company’s directors (including independent directors), and shareholders shall make the selection from the list of candidates. Directors and independent directors shall be nominated separately, and the election shall be conducted together, with the number of elected positions calculated separately.
Article 17-1: The company has established the Audit Committee in accordance with Article 14-4 of the Securities and Exchange Act. Except for the functions and powers in paragraph 4, Article 14-4 of the Securities and Exchange Act, the Audit Committee is responsible for the exercise of powers of the supervisor as in

the Company Act, the Securities and Exchange Act and other laws and regulations.

The Audit Committee’s exercise of powers, organizational procedures and other matters to be complied with shall be handled in accordance with the Securities and Exchange Act and other relevant laws or company regulations.
Article 18: The chairman of the board of directors shall be elected from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. The same method above shall be employed for the election of a vice chairman. The chairman of the board of directors shall externally represent the company and internally take care of the resolutions of board meetings and all other matters.
Article 19: For the convening of the board meeting, except for the first meeting of each term, which is convened by the director who wins the votes representing the most voting rights, the subsequent meetings are convened by the chairman of the board who shall also be the chairman. When the chairman is on leave or unable to perform his duties for some reason, the vice chairman shall act as his proxy. When the vice chairman is also on leave or unable to perform his duties for some reason, the directors shall elect one among themselves as the deputy.
Article 20: The term of the directors is three years, and those who are reelected may serve another term. If the term expires and an reelection is not possible, the directors’ executive duties shall be extended until the reelected directors take office.
Article 21: (deleted)
Article 22: The company’s reinvestment is not subject to the provisions of Article 13 of the Company Act that reinvestment shall not exceed 40% of the paid-in capital. Matters related to reinvestment shall be resolved by the board of directors.
Article 23: The company may provide external guarantees for business needs with the approval of the board of directors.
Article 24: The board meeting is convened once every quarter, and the reason for the convening shall be stated at the time of convening, and the directors shall be notified seven days beforehand. However, in case of an emergency, a meeting may be called at any time.
The notice of the convening in the preceding paragraph shall be made by e-mail or fax upon the directors’ approval. The directors shall attend the board meeting in person, and may entrust other directors to attend on their behalf if they are unable to attend in person for some reason.
Article 25: Unless otherwise stipulated in the Company Act, the resolution of the board meeting shall be attended by more than half of the directors, and the consent of more than half of the directors present shall be obtained.
Article 26: When the vacancy of directors reaches one-third, the board of directors shall convene a by-election at an extraordinary shareholders’ meeting within 60 days, and the term of office shall be limited to the time limit for the original appointment.
Article 27: (deleted)

Article 28: (deleted) Article 29: (deleted) Article 30: (deleted)

Article 31: The travel fees and remuneration of all directors shall be determined by the board meeting. Salaries for general employees shall be reported to the chairman for approval by the president according to the normal standards, and shall be paid regardless of the company’s profit or loss.
Article 32: The company has one president and several vice presidents. The appointment, dismissal and remuneration shall be handled in accordance with Article 29 of the Company Act.
Article 33: The president takes the orders of the chairman and the board of directors to handle all business of the company, and the vice presidents assist the president in handling the business he designates.
Article 34: Depending on the business needs, the board of directors may hire lawyers as legal advisers, accountants as accounting advisers, and people with knowledge of the industry as advisers to the company.
Article 34-1: The company may purchase liability insurance for the directors during their term of office for the compensation liabilities according to law during their execution of duties within the business scope.

Chapter V Accounting

Article 35: The company has set its fiscal year from January 1 to December 31 each year.

Article 36: The board of directors shall prepare the following lists for the company at the end of each fiscal year, and submit them to the general shareholders’ meeting for recognition.
1. Business report
2. Financial statements
3. Proposal for earnings distribution or loss recovery
Article 37: If the company makes a profit in its annual settlement, it shall allocate no less than 2% as employees’ remuneration, which shall be distributed in stock or cash based on the resolution of the board meeting. The company may, based on the abovementioned profit, allocate no more than 3% as directors’ remuneration based on the resolution of the board meeting. The distribution of employees’ remuneration and directors’ remuneration shall be reported at the shareholders’ meeting.
- However, when the company still has accumulated losses, it shall reserve the compensation amount in advance, and then allocate employee compensation and director compensation in proportion to the preceding paragraph.
Article 37-1: If the company makes a profit in the fiscal year, it shall first pay taxes and make up for previous losses, and then allocate 10% as the legal reserve until the legal reserve reaches the total capital of the company. After making the provisions and reversing the special reserve in accordance with the regulations

of the competent authority, the balance shall be combined with the accumulated undistributed earnings of the previous year and the undistributed earnings adjustment of the current year to be the earnings available for distribution. The board of directors shall draft an earnings distribution plan, and submits it to the shareholders’ meeting for a resolution on the distribution of shareholder dividends.

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, all dividend payments in cash shall be the principle, but if the company has capital needs such as capacity expansion, financial structure improvement, major investment plans, etc., then more than 50% may be stock dividend, and the rest be cash dividend.

Chapter VI Supplementary Provisions

Article 38: The company’s organizational rules and rules for handling matters are to be separately formulated.
Article 39: Any matters not covered in this Articles of Association shall be handled in accordance with the provisions of the Company Act.
Article 40: This Articles of Association will take effect after being approved by the shareholders’ meeting, and the same procedure applies when amended.
Article 41: This Articles of Association was established on November 17, 1956. The first revision was made on March 10, 1957. The second revision was made on December 30, 1957. The third revision was made on May 10, 1958. The fourth revision was made on October 20, 1958. The fifth revision was made on November 15, 1959. The sixth revision was made on March 2, 1961. The seventh revision was made on March 25, 1962. The eighth revision was made on March 26, 1963. The ninth revision was made on March 28, 1964. The tenth revision was made on March 31, 1965. The eleventh revision was made on March 24, 1966. The twelfth revision was made on March 29, 1967. The thirteenth revision was made on August 20, 1967. The fourteenth revision was made on March 20, 1968. The fifteenth revision was made on August 9, 1968. The sixteenth revision was made on December 31, 1969. The seventeenth revision was made on September 24, 1970. The eighteenth revision was made on August 2, 1971. The nineteenth revision was made on February 5, 1972.

The twentieth revision was made on November 22, 1973. The twenty-first revision was made on June 1, 1974. The twenty-second revision was made on December 15, 1974. The twenty-third revision was made on April 1, 1976. The twenty-fourth revision was made on January 25, 1977. The twenty-fifth revision was made on August 27, 1977. The twenty-sixth revision was made on April 28, 1979. The twenty-seventh revision was made on May 26, 1980. The twenty-eighth revision was made on May 23, 1981. The twenty-ninth revision was made on April 15, 1982. The thirtieth revision was made on May 10, 1982. The thirty-first revision was made on May 7, 1983. The thirty-second revision was made on March 22, 1985. The thirty-third revision was made on May 17, 1985. The thirty-fourth revision was made on June 29, 1985. The thirty-fifth revision was made on January 7, 1986. The thirty-sixth revision was made on April 26, 1986. The thirty-seventh revision was made on September 9, 1986. The thirty-eighth revision was made on April 25, 1987. The thirty-ninth revision was made on April 30, 1988. The fortieth revision was made on August 1, 1988. The forty-first revision was made on November 30, 1988. The forty-second revision was made on April 29, 1989. The forty-third revision was made on April 13, 1990. The forty-fourth revision was made on April 29, 1991. The forty-fifth revision was made on March 27, 1992. The forty-sixth revision was made on March 26, 1993. The forty-seventh revision was made on September 6, 1993. The forty-eighth revision was made on March 26, 1994. The forty-ninth revision was made on April 29, 1995. The fiftieth revision was made on April 27, 1996. The fifty-first revision was made on April 30, 1997. The fifty-second revision was made on May 28, 1999. The fifty-third revision was made on May 22, 2000. The fifty-fourth revision was made on May 18, 2001. The fifty-fifth revision was made on June 14, 2002. The fifty-sixth revision was made on June 10, 2005. The fifty-seventh revision was made on June 16, 2006. The fifty-eighth revision was made on June 15, 2007. The fifty-ninth revision was made on June 19, 2009. The sixtieth revision was made on June 29, 2011. The sixty-first revision was made on June 18, 2012. The sixty-second revision was made on June 24, 2013. The sixty-third revision was made on August 22, 2013.

The sixty-fourth revision was made on June 27, 2014. The sixty-fifth revision was made on June 17, 2016. The sixty-sixth revision was made on June 22, 2018. The sixty-seventh revision was made on June 20, 2020.

Southeast Cement Corporation

Chairman: Min-Duan Chen

Appendix II

Rules of Procedure for Shareholders’ Meeting, Southeast Cement Corporation

Passed in the general shareholders’ meeting dated June 20, 2020

Article 1: The shareholders’ meeting of the company shall be conducted in accordance with the rules of procedure except where otherwise provided in laws and regulations or the Articles of Association.
Article 2: The shareholders’ meeting of the company shall be convened by the board of directors unless otherwise provided by laws and regulations. The company shall, 30 days before the general shareholders’ meeting or 15 days before the extraordinary shareholders’ meeting, submit the notice of the shareholders’ meeting, the form for the power of attorney, and the contents and explanations of relevant motions for approval, matters for discussion, election or dismissal of directors and independent directors, etc. and make them into an electronic file and send it to the MOPS. 21 days before the general shareholders’ meeting or 15 days before the extraordinary shareholders’ meeting, the meeting handbook and supplementary materials of the meeting shall be prepared and sent to the MOPS. 15 days before the shareholders’ meeting, the handbook of the current shareholders’ meeting and supplementary materials of the meeting shall be prepared for the request by shareholders at any time, display them at the company and the professional stock agency appointed by the company, and distribute them on-site at the shareholders’ meeting. The notice and announcement shall specify the reason for convening the meeting. Election or dismissal of directors and independent directors, changes to articles of association, capital reduction, application for suspension of public offerings, directors’ competition approval, capital increase from earnings, capital increase from legal reserve, company dissolution, merger, division, or circumstances in paragraph 1, Article 185 of the Company Act shall be listed and explained in the reason for the convening, and shall not be proposed as an extraordinary motion; the main content may be placed on the website designated by the securities authority or the company, and its URL shall be stated in the notice.

If the reasons for convening the shareholders’ meeting have been stated for the full reelection of directors and the appointment date, then after the election at the shareholders’ meeting, the appointment date shall not be further changed by an extraordinary motion or other methods at the same meeting. Shareholders who hold more than one percent of the total number of shares in issue may submit a proposal to the company’s general shareholders’ meeting. The proposal is limited to one item, and any proposal with more than one item shall not be included in the proposal. However, if the shareholders’ proposal is to urge the company to promote the public interest or fulfill its social responsibilities, then the board of directors may still include it in the proposal. In addition, the board of directors may not include the proposal if the

shareholder’s proposal has one of the conditions in paragraph 4, Article 172-1 of the Company Act.

The company shall announce the acceptance of shareholders’ proposals via written or electronic means and the acceptance location and period before the share transfer suspension date for the general shareholders’ meeting; the acceptance period shall not be less than 10 days.

A proposal by a shareholder shall be limited to 300 characters, and anything exceeding 300 characters shall not be included in the proposal; the proposing shareholder shall attend the shareholders’ meeting in person or entrust another person to attend and participate in the discussion of the proposal.

The company shall notify the proposing shareholder of the result of the resolution before the notice day of the shareholders’ meeting, and list the proposals that conform to the provisions of this article in the meeting notice. For shareholder proposals that are not included, the board of directors shall explain the reasons for not being included in the shareholders’ meeting.

Article 3: The shareholders referred to in these rules mean the shareholders themselves and their proxies entrusted to attend.

At each shareholders’ meeting, the shareholder may issue a power of attorney issued by the company specifying the scope of authorization, and appoint a proxy to attend the meeting.

Each shareholder is limited to issuing one power of attorney and entrusting one person. The power of attorney shall be delivered to the company five days before the shareholders’ meeting. If the power of attorney is repeated, the first one that is delivered shall prevail. However, this does not apply to those which declare to revoke the previous entrustment.

After the power of attorney is delivered to the company, shareholders who wish to attend the shareholders’ meeting in person shall give the company a written notice of the cancellation of the entrustment at least two days before the shareholders’ meeting; if the cancellation is overdue, the voting rights of the entrusted proxy shall prevail. .

Article 4: The company shall specify in the meeting notice the time and location of the shareholder registration, and other matters that should be noted. The time for accepting the registration of shareholders in the preceding paragraph shall be handled at least 30 minutes before the start of the meeting; the registration location shall be clearly marked, and adequately qualified personnel shall be dispatched to handle the registration.

The shareholder himself or the proxy entrusted by the shareholder (hereinafter jointly referred to as the shareholder) shall present the attendance certificate, sign-in card or other attendance documents to attend the shareholders’ meeting. The company shall not arbitrarily add other certification documents to the documents required for the shareholders to attend. The solicitor of the power of attorney shall bring identification documents for verification.

Attending shareholders shall wear attendance certificates and hand in the sign-in card to sign in.

The company shall deliver the meeting handbook, annual report, attendance certificate, speech slips, voting ballots and other meeting materials to shareholders attending the shareholders’ meeting; if there is an election of directors (including independent directors), additional election ballots shall be

attached.

When the government or legal person is a shareholder, the number of representatives present at the shareholders’ meeting is not limited to one. When a legal person is entrusted to attend the shareholders’ meeting, only one representative may be appointed to attend.

Article 5: The shareholders’ meeting shall be held at the location of the company or at a place convenient for shareholders to attend and suitable for the shareholders’ meeting.

The meeting start time shall be between 9 am and 3 pm.

Article 6: If the shareholders’ meeting is convened by the board of directors, the chairman shall preside over the meeting. When the chairman is on leave or unable to perform his duties for some reason, the vice chairman shall act as his proxy. When the vice chairman is also on leave or unable to perform his duties for some reason, the directors shall elect one among themselves as the deputy. If the chairman of the preceding paragraph is deputized by a director, the director shall have served for more than six months and understands the company’s financial and business conditions. The same applies if the chairman is the representative of a corporate director.

For the shareholders’ meeting convened by the board of directors, the chairman of the board shall preside in person, and more than half of the directors of the board of directors, at least one independent director and at least one member of each functional committee shall attend; the attendance shall be recorded in the shareholders’ meeting minutes.

If the shareholders’ meeting is convened by a convener other than a member of the board of directors, the convener shall be the chairman. If there are two or more conveners, one of them shall be elected. The company may appoint its designated lawyers, accountants or related personnel to attend the shareholders’ meeting as non-voting delegates. Article 7: The entire process of the shareholders’ meeting shall be audio or video recorded. The recording above shall be kept for at least one year. However, if a shareholder initiates a lawsuit in accordance with Article 189 of the Company Act, the recording shall be kept until the end of the lawsuit. Article 8: The number of attending shares is calculated based on the number of shares represented by the sign-in cards from the attending shareholders or the shareholders’ proxies, plus the number of shares of shareholders exercising their voting rights in writing or electronically. The chairman shall call the meeting to order at the specified meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairman may announce a meeting postponement, provided that the number of such postponement is no more than two, and the total time no more than 1 hour. If the attending shareholders still do not represent one third of the total number of issued shares after two postponements, the chairman shall declare the meeting aborted. If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to paragraph 1, Article 175 of the Company Act, and all shareholders shall be notified of the tentative resolution and another shareholders’ meeting shall be

convened within one month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chairman may resubmit the tentative resolution for voting by the shareholders’ meeting pursuant to Article 174 of the Company Act.

Article 9: If a shareholders’ meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors, and the resolutions of related motions (including extraordinary motions and amendments to original motions) shall be made on a case-by-case basis by voting. The meeting shall proceed in the order set in the agenda, which may not be changed without a resolution of the shareholders’ meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene but is not a member of the board of directors.

The chairman may not declare the meeting adjourned prior to completion of the meeting agenda (including extraordinary motions) of the preceding two paragraphs except by a resolution of the shareholders’ meeting. If the chairman declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chairman in accordance with statutory procedures, and then continue the meeting based on the agreement of a majority of the votes represented by the attending shareholders. The chairman shall allow ample opportunities during the meeting for explanation and discussion of motions and of amendments or extraordinary motions put forward by the shareholders; when the chairman is of the opinion that a motion has been discussed sufficiently for a vote, the chairman may announce a cessation of the discussion and call for a vote, and arrange sufficient time for voting. After the adjournment of the meeting, shareholders shall not elect another chairman to continue the meeting at the original site or in another place. After the adjournment of the meeting, shareholders shall not elect another chairman to continue the meeting at the original site or in another place. Article 10: Before speaking, an attending shareholder shall fill out a speech slip, specifying his/her shareholder account number, account name and speech summary. The order in which shareholders speak will be set by the chairman. A shareholder in attendance who has submitted a speech slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speech slip, the spoken content shall prevail.

Article 11: For the same proposal, each shareholder shall not speak more than twice without the consent of the chairman, and each speech shall not exceed five minutes.

If the shareholder’s speech violates the rules above or exceeds the scope of the agenda item, the chairman may terminate the speech. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chairman and the shareholder that has the floor; the chairman shall stop any violation. When a legal person shareholder appoints two or more representatives to

attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same motion on the same proposal.
Article 12: After an attending shareholder has spoken, the chairman may respond in person or direct relevant personnel to respond.
Article 13: When the chairman is of the opinion that the motion and the amendment or extraordinary motion put forward by the shareholder has been discussed sufficiently for a vote, the chairman may announce the discussion closed and call for a vote.
Article 14: Vote scrutinizing and counting personnel for the voting on a motion, if required, shall be appointed by the chairman, provided that all the scrutinizing personnel shall be shareholders of the company.
Article 15: The voting at the shareholders’ meeting shall be based on the number of shares. The shares held by shareholders having no voting right shall not be counted in the total number of issued shares while adopting a resolution at a meeting of shareholders.
Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted.
Article 16: Except in the circumstances otherwise provided for in Paragraph 2, Article 179 of the Company Act, a shareholder shall have one voting power in respect of each share in his/her/its possession.
When the company convenes a shareholder meeting, it shall adopt electronic means and may adopt a written method for the exercise of voting rights. When the voting right is exercised in writing or electronically, the exercise method shall be stated in the meeting notice. Shareholders who exercise voting rights in writing or electronically are deemed to have attended the shareholders’ meeting in person. However, the exercise of voting rights for extraordinary motions and amendments to the original motions of the shareholders’ meeting shall be deemed as abstentions; therefore, the company shall avoid proposing extraordinary motions and amendments to the original motions. When the voting right is exercised in writing or electronically, the expression of intention shall be delivered to the company two days before the shareholders’ meeting. If the expression of intention is repeated, the first one that is delivered shall prevail. However, this does not apply to those which declare to revoke the previous expression of opinions.
After shareholders have exercised their voting rights in writing or electronically, if they wish to attend the shareholders’ meeting in person, they shall revoke their expression of intention to exercise the voting rights in the preceding paragraph two days before the shareholders’ meeting, otherwise the voting rights exercised in writing or electronically shall prevail for late revocation. If voting rights are exercised in writing or electronically and a proxy is entrusted to attend the shareholders’ meeting with a power of attorney, the voting rights exercised by the entrusted proxy shall prevail.
The voting of the motion shall be passed with the approval of a majority of the voting rights of the shareholders present, unless otherwise stipulated in the Company Act and the articles of association of the company. When voting, the

chairman or his designated person shall announce the total voting rights of the shareholders present, and then the shareholders shall vote on a case-by-case basis. On the day after the shareholders’ meeting, the results of shareholders’ approval, opposition and abstention shall be entered into the MOPS.

Article 17: When there is an amendment or an alternative to a motion, the chair shall present the amended or alternative motion together with the original motion and decide the order in which they will be put to the vote. When any one among them is passed, the other motions will then be deemed rejected and no further voting shall be required.
Article 18: The election of directors (including independent shareholders) at a shareholders’ meeting shall be held in accordance with the company’s “Measures for Election of Directors,” and the voting results, including the name list of elected directors and independent directors and the respective voting rights won, shall be announced on-site immediately. The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a shareholder initiates a lawsuit in accordance with Article 189 of the Company Act, the recording shall be kept until the end of the lawsuit.
Article 19: The resolutions of the shareholders’ meeting of the company shall be recorded into minutes and signed or stamped by the chairman, and distributed to the shareholders within 20 days after the meeting.
For the distribution of the minutes of the preceding paragraph, the company may enter the minutes into the MOPS for public announcement. The minutes shall record the year, month, day, venue, name of the chairman, resolution method, key points of the proceedings, and voting results (including statistical weights) of the meeting. When there is an election of directors, the number of voting rights won by each candidate shall be disclosed. During the existence of the company, the minutes shall be kept permanently.
Article 20: The number of shares represented by shareholders’ proxies shall be clearly disclosed in a statistical table prepared in the prescribed format on the day of the shareholders’ meeting.
Article 21: When a meeting is in progress, the chairman may announce a break based on time considerations. If a force majeure event occurs, the chairman may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.
Article 22: The chairman may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word “Proctor.”
At the venue of the shareholders’ meeting, if a shareholder attempts to speak through any device other than the equipment set up by the company, the chairman may prevent the shareholder from doing so.
When a shareholder violates the rules of procedure and defies the chairman’s correction, or obstructs the proceedings and refuses to heed calls to stop, the chairman may direct the proctors or security personnel to escort the shareholder out of the meeting venue.
Article 23: The rules and any amendments hereto shall be implemented after adoption by

the shareholders’ meeting. The same procedure applies to the revision. Passed in the shareholders’ meeting on April 29, 1991.

The first revision was made in the general shareholders’ meeting on May 19, 1998.

The second revision was made in the general shareholders’ meeting on June 14, 2002.

The third revision was made in the general shareholders’ meeting on June 16, 2006.

The fourth revision was made in the general shareholders’ meeting on June 29, 2011.

The fifth revision was made in the general shareholders’ meeting on June 18, 2012.

The sixth revision was made in the general shareholders’ meeting on June 18, 2015.

The seventh revision was made in the general shareholders’ meeting on June 23, 2017.

The eighth revision was made in the general shareholders’ meeting on June 20, 2020.

Appendix III

Shareholdings of individual and all directors recorded in the register of shareholders as of April 27, 2021

Statutory minimum shareholding of all directors is 22,880,032 (4%).

Base date: April 26, 2021

Position	Name	Number of shares recorded in the register of shareholders on the book-close date
Chairman	Dongshu Investment Co., Ltd.; representative: Min-Duan Chen	80,496,816
Vice Chairman	Consortium Legal Person Chen Chao-Shu Charity Foundation;representative: Guan-Hua Chen	24,885,291
Vice Chairman	Dongshu Investment Co., Ltd.; representative: Tian-Chi Chen	80,496,816
Vice Chairman	Consortium Legal Person Chen Chao-Shu Charity Foundation;representative: Chang-Chi Wu	24,885,291
Vice Chairman	Likai Investment Co., Ltd.; representative: Li-HsiangCheng	19,605,559
Vice Chairman	Changching Co., Ltd.; representative: Chao-HsiungYang	33,525,346
Vice Chairman	Consortium Legal Person Southeast Cultural Foundation;representative: Chian-Hao Chen	33,421,803
Independent Director	Wen-Zai Yang	0
Independent Director	Jin-Bao Yeh	0
Independent Director	Yu-Hsin Chuang	0

Note: 1. The paid-in capital of the company is NT$5,720,007,970 on April 26, 2021, and a total of 572,000,797 shares were issued.

All directors hold 191,934,815 shares, accounting for 33.55%.
Since the company has set up an Audit Committee, there is no statutory requirement for the number of shares to be held by supervisors.

AI assistant

SE CEMENT — Annual Report 2020

51741_rns_2021-09-14_be02262f-f066-4823-980d-c7cd8b9e6274.pdf

Southeast Cement Corporation

Table of Contents

Southeast Cement Corporation

Agenda of the 2021 General Shareholders’ Meeting, Southeast Cement Corporation

Report Items

(I) 2020 Business report

Audit Committee’s Review Report

(III) Report on the distribution of employee’s and directors’ remuneration for 2020

Recognition Items

(I)

(II)

Discussion Items

(I)

(II)

Extraordinary motions

Meeting Adjourned

Annex I

Southeast Cement Corporation Business Report for the Year of 2020

1. Comparison of operating income, production and sales between 2020 and 2019:

2. Net profit and dividend

Annex II

Independent Auditor’s Report

To Southeast Cement Corporation

Audit Opinion

Basis of Our Audit Opinion

Key Audit Items

Other Matters

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

The Accountants’ Responsibility for Auditing the Consolidated Financial Report

Southeast Cement Corporation and Subsidiaries Consolidated Balance Sheet December 31, 2020 and 2019

(Continued)

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Changes in Equity January 1 to December 31, 2020 and 2019

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow January 1 to December 31, 2020 and 2019

(Continued)

Annex III

Southeast Cement Corporation 2020

Earnings Distribution Table

Annex IV

Southeast Cement Corporation

Comparison Table of Amendments to the “Rules of Procedure of Shareholders’ Meetings”

A n n e x V

Southeast Cement Corporation Comparison Table of Amendments to the “Articles of Association”

Appendix I

Articles of Association, Southeast Cement Corporation

Chapter I General Provisions

Chapter II Shares

Chapter III Shareholders’ Meeting

Chapter IV Directors, Supervisors and Important Staff

Chapter V Accounting

Chapter VI Supplementary Provisions

Appendix II

Rules of Procedure for Shareholders’ Meeting, Southeast Cement Corporation

attached.

Appendix III

Shareholdings of individual and all directors recorded in the register of shareholders as of April 27, 2021

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SE CEMENT Annual Report 2020