SE CEMENT - Annual Report 2020 | FinancialReports.eu

Stock code 1110 0

URL of the annual report

URL of the Market Observation Post System: http://mops.twse.com.tw URL of the company: http://www.southeastcement.com.tw

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Southeast Cement Corporation

2020

Annual Report

Date of printing: April 30, 2021

I. Spokesperson

Name: Hsin-Han Huang

Title: Finance Manager

Tel: (07)2711121 ext. 227

Acting spokesperson Name: Jung-Tsung Tang Title: Business Manager

Tel: (07)2711121 ext. 216

E-mail: [email protected]

II. Company address

Head Office: 4th Floor, No. 21, Wufu 3rd Road, Qianjin District, Kaohsiung

Tel: (07)2711121 (representative number)

Kaohsiung 1st Plant: No. 1, Pingshan Lane, Gaonan Highway, Nanzi District, Kaohsiung

Tel: (07)3421333 (representative number)

Kaohsiung 2nd Plant: No. 3, Pingshan Lane, Gaonan Highway, Nanzi District, Kaohsiung

Tel: (07)3421333 (representative number)

Taipei Office: No. 51-3, Chang’an East Road, Taipei

Tel: (02)25612308, 25612309

III. Stock transfer agency
Name: Yuanta Securities

Address: 1st Floor, No. 210, Section 3, Chengde Road, Taipei

Tel: (02)25865859

URL: http://www.yuanta.com.tw

IV. Latest independent auditor

Firm name: Crowe (TW) CPAs

Accountant names: Shu-Man Tsai, Ching-Lin Li

Address: 27th Floor, No. 6, Siwei 3rd Road, Kaohsiung

Tel: (07)3312133

URL: http://www.crowe.com/tw

V. Name of the trading place where the overseas securities are listed for trading and the method of inquiring about the overseas securities information: None.

VI: Company website

www.southeastcement.com.tw

Page

ONE. Report to Shareholders .............................................................................................. 1 Two. Company Profile ........................................................................................................ 5 I. Date of establishment: December 28, 1956 ............................................................... 5 II. Company History .................................................................................................... 5 Three. Corporate Governance Report .................................................................................. 9 I. Company structure ................................................................................................... 9 II. Information of directors, supervisors, the president, vice presidents, function directors and heads of various departments and branches ........................................... 10 IV. Corporate governance operation status ................................................................ 19 V. Accountant Fee Information ................................................................................. 52 VI. Change of independent auditor ............................................................................ 54 VII. Whether the chairman, the president or manager in charge of financial or accounting affairs of the company has worked in the firm of the independent auditor or its affiliated enterprises in the past year ..................................................... 54 VIII. Changes in equity transfer and pledge by directors, managers and shareholders with shareholding more than 10% in the latest year and up to the date of publication of the annual report ...................................................................... 54 IX. Information on the relationship among the top 10 shareholders in terms of shareholding ratio ...................................................................................................... 56 X. Number of shares in the same reinvested business held by the company, its directors, managers and businesses directly or indirectly controlled by the company .................................................................................................................... 59 Four. Fundraising Situation ............................................................................................... 60 I. Capital and shares .................................................................................................. 60 II. Handling of corporate bonds, preferred shares and overseas depositary receipts .... 66 III. Handling of employee stock option certificates .................................................... 66 IV. Handling of new shares with restricted employee rights ....................................... 66 V. Handling of new shares issued for M&A or transfer of shares of other companies ................................................................................................................. 66 VI. Implementation of Fund Utilization Plan ............................................................. 67

Five. Operation Overview ................................................................................................. 68 I. Business Contents .................................................................................................. 68 II. Overview of the market and production and sales.................................................. 72 III. Employee profile in the last two years ................................................................. 78 IV. Environmental protection expenditure information .............................................. 78 V. Labor Relations .................................................................................................... 79 VI. Important Contracts ............................................................................................. 81 Six. Financial Overview .................................................................................................... 82 I. Condensed Balance Sheet and Comprehensive Income Statement of the Last Five Years ................................................................................................................. 82 II. Financial Analysis of the Last Five Years ............................................................. 86 III. Audit Committee Review Report of the Latest Annual Financial Report .............. 92 IV. The latest annual consolidated financial report, including the Independent Auditor’s Report, balance sheet, comprehensive income statement, statement of changes in equity, cash flow statement and notes or schedules ................................... 93 V. The company’s individual financial report audited and certified by the independent auditor in the most recent year ............................................................. 149 VI. Impact of financial difficulties on the financial situation of the company and its affiliated enterprises. ........................................................................................... 278 Seven. Review and Analysis of Financial Status and Financial Performance and Risk Management ................................................................................................................... 279 I. Comparative Analysis of Financial Status ............................................................ 279 II. Comparative analysis of financial performance ................................................... 280 III. Cash Flow Analysis ........................................................................................... 282 IV. Impact of major capital expenditures in the most recent year on the financial status ....................................................................................................................... 284 V. Reinvestment policy in the most recent year, the main reason for its profit or loss, improvement plan and investment plan for the next year.................................. 284 VI. Risk Management .............................................................................................. 284 VII. Other important matters.................................................................................... 286 Eight. Special Records .................................................................................................... 287 I. Relevant information of affiliated enterprises ....................................................... 287 II. Handling of private placement securities. ............................................................ 290

III. Status of holding or disposing of the company’s shares by subsidiaries in the most recent year and as of the date of publication of the annual report: .................... 290 IV. Other necessary supplementary explanations ..................................................... 291 V. Whether there is any event in the most recent year and as of the date of publication of the annual report with significant impact on shareholders’ rights and interests or the price of securities as specified in the second subparagraph of second paragraph under Article 36 of the Securities and Exchange Act ................... 291

ONE. Report to Shareholders

Dear shareholders,

According to statistics from the Taiwan Cement Industry Association, the domestic sales of domestic cement and clinker in 2020 was 9.6 million metric tons, an increase of 6% from 9.05 million metric tons in 2019. Sales of imported cement and clinker was 2.48 million metric tons, an increase of 8% from the 2.3 million metric tons in 2019. In 2020, the demand for cement increased due to the active implementation of the forward-looking construction plan and public construction, coupled with the return of Taiwanese businessmen, the construction of semiconductor plants in Southern Taiwan Science Park and the enthusiasm of construction projects in the southern housing market. According to the data from the Construction Department, Ministry of the Interior, the total floor area approved for construction licenses all over Taiwan increased by 12% compared with that in the same period of 2019, showing that the market is expanding. The company’s cement revenue increased by 0.54% compared with that in 2019, and the furnace stone powder revenue increased by 10.45% compared with that in 2019.

The second phase of the Southeast Gathering construction project of the company’s subsidiary Southeast Asset Co., Ltd. (Southeast Asset) is located on Beixing Street in the Beishi Section of Pingtung next to the State Taxation Bureau. This project plan includes 4 elevatored Singapore-style buildings with 56 units and 4 units of townhouses (three and a half floors), for a total of 60 units. In 2020, 55 units of Singapore-style buildings and 4 units of townhouses have been sold. It is expected that the units will be delivered in April 2021. In addition, for the third phase of the Rising Sun Dongsha construction project in Dongshan District, Tainan, 41 units of three half-shop half-residence buildings are planned. The construction started in May 2020 and is expected to be completed in October 2021.

The following are the consolidated business results of the company and its subsidiaries in 2020:

I. Business results of last year
(I) Production:  The cement production volume of 2020 was 550,857 metric tons, a decrease of 14,899 metric tons or 2.63% from 565,756 metric tons in 2019.
- The production volume of furnace stone powder of 2020 was 182,147 metric tons, an increase of 10,918 metric tons or 6.38% from 171,229 metric tons in 2019.
(II) Sales:  The sales volume of cement of 2020 was 557,837 metric tons, an increase of 520 metric tons or 0.09% from 557,317 metric tons in 2019.
The sales volume of furnace stone powder of 2020 was 181,014 metric tons, an increase of 11,471 metric tons or 6.77% from 169,543 metric tons in 2019.
The cement sales revenue of 2020 was NT$1,297 million, an increase of NT$7 million or 0.54% from NT$1,290 million in 2019.
The sales revenue of furnace stone powder of 2020 was NT$222 million, an increase of NT$21 million or 10.45% from NT$201 million in 2019.
The other operating income of 2020 was NT$73 million, a decrease of NT$8 million or 9.88% from NT$81 million in 2019.
The total operating income of 2020 was NT$1.592 billion, an increase of 20 million or 1.27% from NT$1.572 billion in 2019.
(III) Profit and loss: The after-tax net profit of 2020 was NT$22million (earnings per share NT$0.06), a decrease of NT$33 million (earnings per share NT$0.06) from NT$11 million in 2019.
(IV) Financial situation: The debt ratio increased from 12.01% in 2019 to 13.35% in 2020, and the current ratio decreased from 306.23% in 2019 to 271.27% in 2020.
(V) Consolidated operating results of the company and its subsidiaries in 2020: The consolidated operating revenue of the company and the subsidiaries in 2020 was NT$1.591 billion, an increase of NT$0.006 billion or 0.38% from that in 2019. The net profit after tax of the current period

belonging to the owners of the company is NT$0.022 billion, and the basic (after tax) earnings per share of the company is NT$0.04.

II. R&D Status

The Portland blast-furnace cement developed by the company can be packaged in bags, space bags and bulk packages. The bag is used for floor tiles and stone sticking which can effectively prevent the occurrence of white blooms and black spots. Space bags and bulk packages have lower heat of hydration and in the later stage higher compressive strength and durability, and can be used in geological improvement projects, dam projects, maritime projects, tunnels, sewers, bridges, river embankments, etc. It is estimated that Portland blast-furnace cement sales can significantly contribute to the company’s revenue.

III. Summary of This Year’s Business Plan

Looking forward to 2021, the Executive Yuan will allocate an overall public construction budget of NT$534 billion, an increase of NT$96.2 billion or 22% over that in 2020. Among the items, transportation construction has NT$196.4 billion, environmental resources have NT$69.8 billion, economic construction has NT$179.2 billion, agricultural construction has NT$29.5 billion, and educational facilities has NT$31.6 billion. Major constructions such as the construction of the intercontinental terminal oil tank, the Zuoying military port project, the relocation and new construction of the arsenal, the development of the Renwu Park, the renewal of the gas facilities of the Xingda Power Plant, the offshore wind power facilities, private construction projects, the construction of the Southern Taiwan Science Park, the construction of Shalun Green Energy Park and the return of Taiwanese businessmen are expected to increase the demand for cement steadily.

The company’s subsidiary Southeast Asset is planning the construction of townhouses with 16 units and an office building with 114 units including 13 floors above ground and 3 floors underground in the New Hougang West Section of Renwu District, Kaohsiung, and expects to obtain that construction permits in mid-March 2021. A townhouse of 27 units is planned in the Yannan Section of Yanchao District, Kaohsiung, and it is expected that the construction permit can be obtained and the contract released for construction before the end of March 2021.

Another subsidiary, Southeast Gaoliang Resources Recycling Co., Ltd., has postponed its formal operation until June 2021 due to the epidemic and power supply factors.

The issues of grass-roots labor shortage in recent years, the hidden concerns of future electricity price costs, and the stricter environmental protection regulations will be the major challenges the company faces. The company can only maintain the smooth operation of existing equipment, reduce operating costs and increase competitiveness, and uphold the business philosophy of seeking development in a steady manner to increase sales of new products, and also integrate and develop the downstream industries to seek the company’s best interests.

Dear shareholders, the company’s 2020 operating status and future business plans are reported as above. The company is in the process of transformation; please give us your support and guidance. Thank you!

Chairman Min-Tuan Chen April 30, 2021

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Two. Company Profile

I. Date of establishment: December 28, 1956

Listing date: October 22, 1994

II. Company History

December 1956	The company was established with a registered capital of NT$4
	million.
January 1958	Increased the capital to NT$6 million.
May 1958	Increased the capital to NT$8 million.
October 1958	Increased the capital to NT$10 million.
December 1958	Kiln No. 1 was completed (60 metric tons per day) and produc-
	tion started.
1959	Increased the capital to NT$15 million.
1960	Kiln No. 2 was completed (280 metric tons per day) and pro-
	duction started.
1961	Increased the capital to NT$20 million.
1965	Increased the capital to NT$22 million.
1966	Increased the capital to NT$44 million.
1966	Kiln No. 3 was completed (950 metric tons per day) and pro-
	duction started.
March 1967	Increased the capital to NT$60 million.
August 1967	Increased the capital to NT$75 million.
1968	Increased the capital to NT$93 million.
1969	Increased the capital to NT$110 million.
1970	Increased the capital to NT$125 million.
1971	Increased the capital to NT$133 million.
1973	Increased the capital to NT$171.57 million.
1974	Increased the capital to NT$200 million.
1974	Kiln No. 1 was dismantled due to low output and high cost.
December 1974	Handled asset revaluation.
1975	Increased the capital to NT$320 million.
1976	Increased the capital to NT$360 million.
1976	Kiln No. 4 was completed (with a daily output of 2,250 metric
	tons) and participated in production.
1977	Increased the capital to NT$410 million.
1979	Increased the capital to NT$500 million.

1979 The annual cement production and sales exceeded one million metric tons.
May 1979 Deputized the management of Chentai Cement. 1980 Increased the capital to NT$640 million. 1980 Handled the second asset revaluation. 1981 Increased the capital to NT$800 million. October 1981 The Southeast Building was completed, and the head office was moved to the building.
January 1982 The conversion of the coal-fired system of Kiln No. 3 was completed and operation started.
April 1982 Lease of equipment from the Kaohsiung Plant of Chentai Cement Company.
June 1983 The conversion of the coal-fired system of the Kiln No. 4 was completed and operation started.
October 1985 The automated quality inspection system of the quality control laboratory started operation.
November 1985 Increased the capital to NT$880 million. August 1986 Increased the capital to NT$1.056 billion. October 1986 The government granted the company the award of excellent manufacturer in pollution prevention and control.
August 1987 The capital increased to NT$1,098,240,000. September 1988 Increased the capital to NT$1,141,070,000. December 1988 The company’s Kaohsiung plant was granted the “Demonstration Plant” award by the Kaohsiung Environmental Protection Agency for its strict sampling and testing for three consecutive years and meeting the standards set by the Air Pollution Control Act.
January 1989 The company established the “Southeast Cement Relations Employee Self-improvement Association” to coordinate the handling of employee welfare matters.
August 1989 The capital increased to NT$1,232,350,000. July 1990 The improvement of the automation process of Kiln No. 4 officially started.
August 1990 Increased the capital to NT$1,734,480,000.
December 1990 The computerized improvement system for production automation and process monitoring of Kiln No. 4 was completed and

	operations began.
June 1991	The company imported clinker from Japan’s Osaka Cement
	Company for the first time.
September 1991	Increased the capital to NT$2 billion.
May 1992	The company established the “Internal Control and Internal
	Audit Committee” and formulated the “Internal Control Sys-
	tem” to comply with the requirements of the Securities and
	Exchange Commission of the Ministry of Finance, and com-
	pleted declaration and filing before October 31, (1992) to ena-
	ble the company to have a complete basis for listing to follow.
July 1992	Increased the capital to NT$2.4 billion.
April 1993	Directors and supervisors are reelected to achieve the goal of
	detached and independent operation of the directors and super-
	visors.
July 1993	Increased the capital to NT$2.76 billion.
September 1993	Passed the ISO-9002 international quality assurance system
	verification and was awarded a certificate. The company is the
	first manufacturer in the domestic industry to obtain this certi-
	fication.
December 1993	Increased the capital to NT$3.08 billion.
August 1994	Increased the capital to NT$3,126,200,000.
October 1994	The company’s stock was officially listed.
September 1996	Increased the capital to NT$3,438,820,000.
September 1997	Increased the capital to NT$4,954,643,000.
December 1997	Handled land reevaluation.
May 1998	Started trial burning of waste tires.
July 1998	Increased the capital to NT$5,450,107,300.
October 1998	Applied with the Securities and Futures Commission for the
	change of the 1997 cash capital increase plan and received the
	approval; the original investment in Heping Cement was sus-
	pended, and changed it to the repayment of corporate bonds and
	bank loans.
December 1998	Passed IS0-14001 official evaluation and registered with the
	Commodity Inspection Bureau.
December 1998	Repaid the company’s corporate bond of NT$1 billion.
January 1999	The founder Chiang-Chang Chen passed away, and the chair-

man position was taken over by Vice Chairman Min-Hsien Chen.

August 2000 The capital was increased to NT$5,586,359,980. December 2000 Invested NT$500 million in Kaohsiung MRT, and the company chairman served as the vice chairman of Kaohsiung MRT.
November 2001 Invested NT$213 million in Kaohsiung MRT, with a total investment of NT$713 million and a shareholding ratio of 7%.
December 2001 The Great World Department Store which the company invested in officially opened.
July 2003 Production and sales of the new product furnace stone powder. December 2003 Invested in Mauritius to set up Southeast International Co., Ltd. which is 100% held by the company, with an initial investment of US$2.82 million. Through this company, the company indirectly invested in the equity of Jiaxin Jingyang Cement Co., Ltd. in mainland China.
August 2004 The capital was increased to NT$5,865,677,970. September 2005 The chairman of the company resigned from the vice chairman position of Kaohsiung MRT.
November 2005 Implemented the first treasury share buyback. February 2006 Implemented the second treasury share buyback. April 2006 Cancelled the first batch of treasury shares bought back, and the capital was reduced to NT$5,833,147,970.
July 2006 Cancelled the second batch of treasury shares bought back, and the capital was reduced to NT$5,760,007,970.
September 2008 Implemented the third treasury share buyback. January 2009 Cancelled the third batch of treasury shares bought back, and the capital was reduced to NT$5,720,007,970.
September 2009 Chairman Mr. Min-Hsien Chen passed away. October 2009 The board meeting elected Vice Chairman Min-Tuan Chen as the chairman.
December 2004 The reinvested Great World Department Store ended its business.
November 2018 Southeast International Co., Ltd., the company’s subsidiary, was liquidated and returned stock capital to investors.

Three. Corporate Governance Report

I. Company structure

(I) Organization chart: (revised on July 21, 2017)

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

Shareholders’ Meeting 股東會
Compensation Committee 薪酬委員會董 Board Meeting 事會審計委員會 Audit Committee
董 Chairman 事長
副董事長 Vice Chairman
總 President 經理
法務室 Legal Office
副總經理 Vice President
Secretary
Office of the
Various committees 各委員會 Board
Audit
Office
Man- Quality
Finance Business Assur-
Kaohsiu agement North
ng Plant Depart-ment Depart-ment Depart-ment Office Depart-ance
ment
The organization Financial
Section Audit Inspec-Section tion chart of Kaohsiung formulated sepa-Plant is to be agement Section Man- counting Section Ac- Business Section istration Admin-Section Section IT Center Data Center Audit
rately
(II) Business functions:
Management Planning, implementation and supervision of personnel, general affairs,
Department procurement, information and asset management.
Business
Handling of product sales, promotion, after-sales service and other matters.
Department
Finance Budget control, accounting processing, funding, fund scheduling and in-
Department vestment management.
QC Depart- Audit of quality assurance operations and formulation and implementation
ment of quality policies.
Kaohsiung
Cement, furnace stone powder production, packaging and delivery
plants
Audit Office [Check and evaluate the rationality and appropriateness of various business ]
control.
秘董
書事
室會
稽
核
室高財業管北品
雄務務理辦保
廠部部部處部
稽審另織高理會營總資資稽
訂系雄料核
查核之統廠財計業務訊中中
課課表組課課課課課心心
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II. Information of directors, supervisors, the president, vice presidents, function directors and heads of various departments and branches

		(I)Directors:							April30,2021	April30,2021	April30,2021	April30,2021
Job title	Nation- ality	Legal shareholder name	Gender	Election (office assuming) date	Term of office	Date of being elected for the first time	Shareholding on election date		Current shareholding		Current sharehold- ing of spouse and minor children		Shareholding in the names of others		Major experience (education)	Concurrent posi- tions at other companies at the moment	Other business heads, directors or supervisors with spouse or second-tier relative relationship			Note
		Representative’s name					Number of shares	Share- holding ratio	Number of shares	Share- holding ratio	Number of shares	Share- holding ratio	Num- ber of shares	Shareh olding ratio			Job title	Name	Relationship
Chairman	Taiwan	Dongshu Investment Co.,Ltd.	Male	June 20, 2020	3 years	June 29, 2011	80,496,816	14.07	80,496,816	14.07	13,003	0.00	0	0.00	Southeast Cement Corporation Vice Chairman	Chairman of Southeast Asset Co.,Ltd.	Vice Chairm an	Kuan-Hu a Chen	Father and son	None
		Min-Tuan Chen							2,985,000	0.52
Vice Chairman	Taiwan	Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	Male	June 20, 2020	3 years	June 29, 2011	24,885,291	4.35	24,885,291	4.35	0	0.00	0	0.00	MBA, University of Southern California	Southeast Invest- ment Co., Ltd. Director	Chairm an	Min-Tua n Chen	Father and son	None
		Kuan-Hua Chen							6,484,910	1.13
Director	Taiwan	Dongshu Investment Co.,Ltd.	Male	June 20, 2020	3 years	June 29, 2011	80,496,816	14.07	80,496,816	14.07	316,246	0.06	0	0.00	Bachelor, Soochow University	Chairman of Penghu Cable TV Co.,Ltd.	None	None	None	None
		Tien-Chih Chen							1,085,883	0.19
Director	Taiwan	Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	Male	June 20, 2020	3 years	June 29, 2011	24,885,291	4.35	24,885,291	4.35	0	0.00	0	0.00	Chengchi University Bachelor, Statistics Department	Southeast Invest- ment Co., Ltd. Director	None	None	None	None
		Chang-Chih Wu							41,869	0.01
Director	Taiwan	Likai Investment Co, Ltd.	Male	June 20, 2020	3 years	June 29, 2011	19,605,559	3.43	19,605,559	3.43	0	0.00	0	0.00	Southeast Cement Corporation Supervisor	President, Meiya International Enterprise Co., Ltd.	None	None	None	None
		Li-Hsiang Cheng							1,800,000	0.31
Director	Taiwan	ChangchingCo.,Ltd.	Male	June 20, 2020	3 years	June 29, 2014	33,525,346	5.86	40,070,010	7.01	0	0.00	0	0.00	President, Taiji Ship Plant Co., Ltd.	Consultant, Changching Co., Ltd.	None	None	None	None
		Chao-Hsiung Yang							0	0.00
Director	Taiwan	Consortium Legal Person Southeast Cultural Foundation	Male	June 20, 2020	3 years	June 29, 2014	33,421,803	3.40	33,421,803	5.84	0	0.00	0	0.00	Master, Massachusetts Institute of Technology	Chairman, Consor- tium Legal Person Fukang Cultural and Educational Foundation	None	None	None	None
		Chien-Hao Chen							58,609	0.01
Inde- pendent Director	Taiwan	Wen-Tsai Yang	Male	June 20, 2020	3 years	June 23, 2017	0	0.00	0	0.00	0	0.00	0	0.00	Master of Financial Finance, Chaoyang University of Tech- nology	None	None	None	None	None
									0	0.00
Inde- pendent Director	Taiwan	Chin-Pao Yeh	Male	June 20, 2020	3 years	June 23, 2017	0	0.00	0	0.00	0	0.00	0	0.00	Bachelor of Education, Taiwan Normal Uni- versity	None	None	None	None	None
									0	0.00
Inde- pendent Director	Taiwan	Yu-Hsin Chuang	Female	June 20, 2020	3 years	June 23, 2017	0	0.00	0	0.00	0	0.00	0	0.00	Master of International Management, Thun- derbird School of Global Management (Master of Internation- al Management)	None	None	None	None	None
									0	0.00

- Major shareholders of corporate shareholders (shareholders with top ten shareholdings)

April 30, 2021

	April30,2021
Corporate shareholder name	Major shareholders of corporate shareholders
Dongshu Investment Co., Ltd.	Min-Tuan Chen (64.45%), Mei-Yu Huang (13.80%), Baifu Invest- ment Co., Ltd. (8.93%), Kuan-Hua Chen (8.09%), Yi-Ching Chen (2.56%), Yi-Wen Chen (2.16%), Dahao Management Consulting Co.,Ltd. (0.56%)
Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	None
Likai Investment Co, Ltd.	Tun-Ling Cheng Chen (64.34%), Rui-Chen Ma (3.25%), Li-Hsiang Cheng (6.73%), Chieh-Yi Cheng (9.98%), Modern Holdings Ltd. (6.07%), Ching-Feng Cheng (9.62%)
Changching Co., Ltd.	Si-Yng Chen (34.49%), Chun-Min Shao (17.05%), Niko Capital Co., Ltd. (38.75%)
Consortium Legal Person Southeast Cultural Foundation	None

Note: The information above is provided by all corporate shareholders, based on which the company makes the disclosure.

Major shareholders of corporate shareholders if such shareholders are corporates (share - holders with top ten shareholdings)

April 30, 2021

	April30,2021
Corporate name	Major shareholders of corporate shareholders
Baifu Investment Co., Ltd. (shares)	Min-Tuan Chen (48.48%), Kuan-Hua Chen (30.75%), Mei-Yu Huang (12.90%), Dongshu Investment Co., Ltd. (2.68%), Yipin Re- source Co., Ltd. (0.19%), Yi-Wen Chen (1.42%), Yi-Ching Chen (1.44%), Pin-Chen Chen (1.18%), Yi-Pei Yeh (0.77%), Pin-Hsue Chen(0.19%)
Consortium Legal Person Fukang Cultural and Edu- cational Foundation	None

Note: The information above is provided by all corporate shareholders, based on which the compa-

ny makes the disclosure.

Director Information

Condition Name	Whether having more than five years of work experience and the following professional qual- ifications.	Whether having more than five years of work experience and the following professional qual- ifications.	Whether having more than five years of work experience and the following professional qual- ifications.	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Compliance with independence requirements (note).	Number of concurrent independent director posi- tions of other public compa- nies.
	Lecturer or above of a public or private college or university in business, law, finance, accounting or a relevant discipline required for the company’s business.	Judge, prosecutor, lawyer, accountant or another type of professional or technical personnel who has passed the national examination required for the company’s business.	Work experience in business, law, finance, ac- counting or any other field required for the compa- ny’s business.	1	2	3	4	5	6	7	8	9	10	11	12
Dongshu Invest- ment Co., Ltd. Representative: Min-Tuan Chen			ˇ							ˇ		ˇ		ˇ	ˇ	0
Dongshu Invest- ment Co., Ltd. Representative: Tien-Chih Chen			ˇ			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ		ˇ	ˇ	0
Consortium Legal Person Chao-Shu Chen Public Wel- fare Charity Foundation Representative: Kuan-Hua Chen			ˇ							ˇ		ˇ		ˇ	ˇ	0
Consortium Legal Person Chao-Shu Chen Public Wel- fare Charity Foundation Representative: Chang-Chih Wu			ˇ			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ		ˇ	ˇ	0
Likai Investment Co., Ltd. Representative: Li-HsiangCheng			ˇ			ˇ	ˇ		ˇ	ˇ	ˇ	ˇ		ˇ	ˇ	0
Changching Co., Ltd. Representative: Chao-Hsiung Yang			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ		ˇ	ˇ	0
Consortium Legal Person Southeast Cultural Founda- tion Representative: Chien-Hao Chen			ˇ	ˇ		ˇ	ˇ		ˇ	ˇ	ˇ	ˇ		ˇ	ˇ	0
Independent di- rector: Wen-Tsai Yang			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	1
Independent di- rector: Chin-Pao Yeh			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	0
Independent di- rector: Yu-Hsin Chuang			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	0

Note : If the director or supervisor meets the following conditions in the two years before their election and during the term of office, please mark “  ” in the space below each condition code.
(1) The director or supervisor is not an employee of the Company or its affiliated enterprises.
(2) The director or supervisor is not a director or supervisor of the company or its affiliated enterprises (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(3) The director or supervisor, or his/her spouse or minor children or in another person’s name, does not hold more than 1% of the total issued shares of the company or is not a top ten shareholder.
(4) The director or supervisor is not a manager in (1) or the spouse, second-tier relative or third-tier relative of the persons listed in (2) or (3).
(5) The director or supervisor is not a director, supervisor or employee of a corporate shareholder which directly holds more than 5% of the total issued shares of the company or a top five shareholder, or is designated as a representative to serve as a director or supervisor of the company in accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(6) The director or supervisor is not a director, supervisor or employee of another company which has a seat on the board of directors, or more than half of its shares with voting rights are controlled by the same owner of this company (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(7) The director or supervisor is not a director, supervisor or employee of another company or institution who is the same person or spouse as the chairman, president or an equivalent position of the company (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(8) The director or supervisor is not a director, supervisor or manager of another company or institution which has financial or business dealings with the company, or is a shareholder holding more than 5% of the shares of the company (not applicable if the company or institution holds more than 20% but no more than 50% of the total issued shares of the company, with concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(9) The director or supervisor is not a professional, sole proprietor, partner, business owner or partner, or a director, supervisor, manager or the spouse of the above of a company or institution which provides audit services to the company or its affiliated enterprises, or the cumula-

tive remuneration amount of which in the past two years exceeds NT$500,000 for business, legal affairs, finance or accounting related services. However, this does not apply to the members of the Compensation Committee or Special Committee for Merger/Consolidation and Acquisition who perform their responsibilities in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.

(10) The director or supervisor has no spouse or second-tier relative relationship with other directors.
(11) There are no such circumstances as in Article 30 of the Company Act.
(12) The director or supervisor is not a government agency, a legal person or their representative as stipulated in Article 27 of the Company Act.

(II) Information of the president, vice presidents, function directors and heads of various departments and branches

April 30, 2020

Job title	Nationality	Name	Gender	Election (office taking) date	on el	ection date	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Shareholding in the names of others	Shareholding in the names of others	Major expe- rience (edu- cation)	Concurrent positions at other companies at the moment	Managers with a spouse or second-tier relative relationship	Managers with a spouse or second-tier relative relationship	Managers with a spouse or second-tier relative relationship
					Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Job title	Name	Relationship
President	Taiwan	Chang-Chih Wu	Male	July 100	41,869	0.01	0	0	0	0	Chengchi University Bachelor, Statistics Department	Southeast Investment Director	None	None	None
Management Department Senior manager	Taiwan	Chun-Chieh Lin	Male	February 2014	1,601	0	0	0	0	0	Bachelor, Civil Engi- neering Department, Cheng Shiu University	Southeast Asset Director	None	None	None
Finance Department Manager	Taiwan	Hsin-Han Huang	Male	January 2005	0	0	0	0	0	0	School of Business Management, Tunghai University	Southeast Gaoliang Supervisor	None	None	None
Business Department Manager	Taiwan	Jung-Tsung Tang	Male	July 2010	445	0	0	0	0	0	Tunghai University	Director, Tiancheng Concrete	None	None	None
Kaohsiung plants Plant man- ager	Taiwan	Yen-Hui Wu	Male	November 2013	1,718	0	0	0	0	0	Bachelor, Mining Department, Taipei College of Technology	Southeast Investment Director	None	None	None

(III) Remuneration of general directors and independent directors, the president and vice presidents:

1. Remuneration of general directors and independent directors:

Unit: NT$ thousand

Job title	Name		Directors’ rem	Directors’ rem	Directors’ rem	uneration	uneration	uneration		Ratio of the to C and D to n after	tal of A, B, et income tax	Receipt of rem	Receipt of rem	uneration as concu	uneration as concu	rrent employees	rrent employees	rrent employees	rrent employees	Ratio of t amount of D, E, F a net profit a	he total A, B, C, nd G to fter tax	Remuneration received from a non-subsidiary reinvested enterprise orparent company
		Remunera	tion (A)	Retirement pension (B)		Directors’ remu- neration (C) (note 1)		B exec	usiness ution fee (D)			Salary, bonus and special fee (E)		Retirement pension (F)( note 2)		Employees’ remuneration (G)
		All companies	in the financial report of the company	All companies	in the financial report of the company	All companies	in the financial report of the company	All companies	in the financial report of the company	All companies	All companies in the fi- nancial report of the company	All companies	in the financial report of the company	All companies	in the financial report of the company	All compa- nies		in the finan- cial report of the company		All companies	in the financial report of the company
																Cash amount	Stock amount	Cash amount	Stock amount
Chairman	Dongshu Investment Co., Ltd. Representative: Min-Tuan Chen	0	0	0	0	114	114	530	555	2.91%	3.02%	3,901	4,621	108	108	0	0	0	0	21.00%	24.36%	None
Director	Dongshu Investment Co., Ltd. Representative: Tien-Chih Chen
Vice Chairman	Consortium Legal Person Chao-Shu Chen Public Welfare Charity Founda- tion Representative: Kuan-Hua Chen	0	0	0	0	115	115	530	555	2.91%	3.02%	3,353	3,985	178	178	16	0	16	0	18.92%	21.88%	None
Director	Consortium Legal Person Chao-Shu Chen Public Welfare Charity Founda- tion Representative: Chang-Chih Wu
Director	Likai Investment Co, Ltd. Representative: Li-HsiangCheng	0	0	0	0	57	57	255	255	1.41%	1.41%	0	0	0	0	0	0	0	0	1.41%	1.41%	None
Director	Changching Co., Ltd. Representative: Chao-Hsiung Yang	0	0	0	0	57	57	265	265	1.45%	1.45%	0	0	0	0	0	0	0	0	1.45%	1.45%	None
Director	Consortium Legal Person South- east Cultural Foundation Representative: Chien-Hao Chen	0	0	0	0	57	57	260	260	1.43%	1.43%	0	0	0	0	0	0	0	0	2.06%	1.43%	None
Independent directors	Wen-Tsai Yang	0	0	0	0	0	0	505	505	2.88%	2.28%	0	0	0	0	0	0	0	0	2.88%	2.28%	None
Independent directors	Chin-Pao Yeh	0	0	0	0	0	0	505	505	2.88%	2.28%	0	0	0	0	0	0	0	0	2.88%	2.28%	None
Independent directors	Yu-Hsin Chuang	0	0	0	0	0	0	500	500	2.26%	2.26%	0	0	0	0	0	0	0	0	2.26%	2.26%	None

Note 1: The 2020 directors’ remuneration is a proposed number.

Note 2: The actual payment of the retirement pension in 2020 is NT$0; the expense allocations of retirement pension are NT$286 thousand and NT$286 thousand, respectively.

Remuneration Tier Table

	Remuneration Tier Table	Remuneration Tier Table	Remuneration Tier Table	Remuneration Tier Table
Tiers of remuneration of direc- tors of the company	Director name
	Total remuneration of the first four items (A + B +C+ D)		Total remuneration of the first seven items (A + B +C+ D + E + F +G)
	All companies	All companies in the financial re- port H	All companies	All companies in the financial re- port I
Below NT$1,000,000	Min-Tuan Chen Tien-Chih Chen Kuan-Hua Chen Chang-Chih Wu Li-Hsiang Cheng Chien-Hao Chen Chao-Hsiung Yang Wen-Tsai Yang Chin-Pao Yeh Yu-Hsin Chuang	Min-Tuan Chen Tien-Chih Chen Kuan-Hua Chen Chang-Chih Wu Li-Hsiang Cheng Chien-Hao Chen Chao-Hsiung Yang Wen-Tsai Yang Chin-Pao Yeh Yu-Hsin Chuang	Tien-Chih Chen Li-Hsiang Cheng Chien-Hao Chen Chao-Hsiung Yang Wen-Tsai Yang Chin-Pao Yeh Yu-Hsin Chuang	Tien-Chih Chen Li-Hsiang Cheng Chien-Hao Chen Chao-Hsiung Yang Wen-Tsai Yang Chin-Pao Yeh Yu-Hsin Chuang
NT$1,000,000 (inclu- sive)–NT$2,000,000			Chang-Chih Wu	Chang-Chih Wu
NT$2,000,000 (inclu- sive)–NT$3,500,000			Kuan-Hua Chen	Kuan-Hua Chen
NT$3,500,000 (inclu- sive)–NT$5,000,000			Min-Tuan Chen
NT$5,000,000 (inclu- sive)–NT$10,000,000				Min-Tuan Chen
NT$10,000,000 (inclu- sive)–NT$15,000,000
NT$15,000,000 (inclu- sive)–NT$30,000,000
NT$30,000,000 (inclu- sive)–NT$50,000,000
NT$50,000,000 (inclu- sive)–NT$100,000,000
More than NT$100,000,000
Total

2. Remuneration of the president and vice presidents:

								Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Job title	Name	Salary (A)		Retirement pension (B) (note 2)		Bonus and special sub- sidy (C)		Employees’ remuner- ation (D)				Ratio of the total of A, B, C and D to net income after tax (%)		Remuneration received from a non-subsidiary reinvested enter- prise or parent company
		This Company	in the financial report of the company	This Company	in the financial report of the company	This Company	in the financial re- port of the company	All compa- nies (note 1)		in the financial report of the company		This Company	in the financial re- port of the company
								Cash amount	Stock amount	Cash amount	Stock amount
President	Chang-Chih Wu	1,130	1,130	70	70	242	242	50	0	50	0	6.73%	6.73%	None

Note 1: The 2020 employees’ remuneration is a proposed number.

Note 2: The actual payment of the retirement pension and the expense allocation of retirement pension in 2020 are NT$0 and NT$70 thousand, respectively.

Remuneration Tier Table

Tiers of remuneration of the president and vice presidents of the company	Names of the president and vice presidents	Names of the president and vice presidents
	All companies	in the financial report of the company
BelowNT$1,000,000
NT$1,000,000 (inclusive)–NT$2,000,000	Chang-ChihWu	Chang-ChihWu
NT$2,000,000 (inclusive)–NT$3,500,000
NT$3,500,000 (inclusive)–NT$5,000,000
NT$5,000,000 (inclusive)–NT$10,000,000
NT$10,000,000 (inclusive)–NT$15,000,000
NT$15,000,000 (inclusive)–NT$30,000,000
NT$30,000,000 (inclusive)–NT$50,000,000
NT$50,000,000 (inclusive)–NT$100,000,000
Morethan NT$100,000,000
Total

3. Name of the manager assigning employees’ remuneration and dispatch situation:

					Unit: NT$thousand	Unit: NT$thousand
	Job title	Name	Stock amount	Cash amount (note)	Total	Ratio of the total amount to net in- come after tax (%)
relationship	President	Chang-Chih Wu	0	78	78	0.35%
	Financial Manager	Hsin-Han Huang

Note: The 2020 employees’ remuneration is a proposed number.

(IV) Analysis of the ratio of the total amount of remuneration paid to directors (including independent directors), the president and vice presidents of the company to the net profit after tax in the last two years by the company and all companies in the consolidated financial statements, and the relationship between the policy, standard and combination of remuneration, the procedures for determining remuneration and business performance and future risks:

Ratio of the total amount of remuneration paid to directors (including independent directors), the president and vice presidents of the company to the net

profit after tax in the last two years by the company:

Annual remunera- tion details Company name	Directors’ remuneration	Directors’ remuneration	Supervisors’ remuneration	Supervisors’ remuneration	Remuneration of the president and vice presidents	Remuneration of the president and vice presidents	Total of items	the three above
	2020	2019	2020	2019	2020	2019	2020	2019
All companies	51.03 %	39.54%	0%	0%	6.73%	3.77%	57.76%	43.31%
All companies in the consolidated report	57.35 %	45.87%	0%	0%	6.73%	3.77%	64.08%	49.64%

The ratio of the remuneration the company pays to directors (including independent directors), the president and vice presidents is higher than that of 2019, and the reason is the reduced net income after tax in 2019.
The company’s policy, standard and combination for remuneration payment is handled in accordance with the articles of association of the company:

The travel expenses and compensation of all directors (including independent directors) are assessed by the Compensation Committee and determined by the board meeting, and the general employee compensation is submitted by the president to the chairman for approval, regardless of the company’s profit or loss.

The company has a president, and their appointment, dismissal and compensation shall be handled in accordance with Article 29 of the Company Act.

When there is surplus in the final accounts of the company, the board meeting shall draw up a distribution resolution and submit it to the shareholders’ meeting for report; the remuneration of directors (including independent directors) shall account for 3% of the amount for distribution.

Relationship between remuneration and business performance and future risks:

Fixed salary and remuneration: None.

Directors’ remuneration and bonus from earnings distribution: There is a positive correlation.

Correlation with future risk: None.

IV. Corporate governance operation status

(I) Board meeting operation status:

In the most recent year (2020) the board meeting was held 5 (A) times, and the attendance of directors is as follows:

Job title	Name	Name	Actual number of attendance (as either a voting or nonvoting member)	Actual number of attendance (as either a voting or nonvoting member)	Number of delegated attendance	Actual rate of attend- ance (as either a voting or nonvoting member) (%) 【Ｂ/Ａ】	Actual rate of attend- ance (as either a voting or nonvoting member) (%) 【Ｂ/Ａ】
Chairman	Dongshu Investment Co., Ltd. Representative: Min-Tuan Chen		5		0	100
Vice Chairman	Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Representative: Kuan-Hua Chen		5		0	100
Director	Dongshu Investment Co., Ltd. Representative: Tien-Chih Chen		5		0	100
Director	Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Representative: Chang-Chih Wu		5		0	100
Director	Likai Investment Co., Ltd. Representative: Li-HsiangCheng		3		2	60
Director	Consortium Legal Person Southeast Cultural Foundation Representative: Chien-Hao Chen		4		1	80
Director	Changching Co., Ltd. Representative: Chao-HsiungYang		5		0	100
Inde- pendent directors	Wen-Tsai Yang		5		0	100
Inde- pendent directors	Chin-Pao Yeh		5		0	100
Inde- pendent directors	Yu-Hsin Chuang		4		0	80
Other matters to be recorded: I. If the operation of the meeting has any of the following circumstances, state the date, session number and proposal contents of the board meeting, all independent directors’ opinions, and the company’s handling of independent directors’ opinions: (I)Matters listed in Article 14-3 of the Securities and Exchange Act: None. Meeting date Session number Proposal contents All independent direc- tors’ opinions Handling of independent directors’ opinions March 17, 2020 13~~th~~ses- sion of 1. Revision of some arti- cles of the“Rules of Approved and passed by all independent directors. None
Meeting date	Session number	Proposal contents		All independent direc- tors’ opinions			Handling of independent directors’ opinions
March 17, 2020	13~~th~~ses- sion of	1. Revision of some arti- cles of the“Rules of		Approved and passed by all independent directors.			None

	the 31~~st~~ term	Procedures for Share- holders’ Meetings.” 2. Revision of some arti- cles of the “Ethical Corporate Manage- ment Best-Practice Principles.” 3. Revision of some arti- cles of the “Code of Practice in Corporate Governance.” 4. Revision of some arti- cles of the “Corporate Social Responsibility Best-Practice Princi- ples.” 5. Revision of some arti- cles of the “Rules of Procedures for Board Meetings.”
May 8, 2020	14~~th~~ses- sion of the 31st term	1. Proposal of revision of some articles of the “Articles of Associa- tion.”	Approved and passed by all independent directors.	None
August 11, 2020	2~~nd~~ses- sion of the 32nd term	1. Proposal of revision of some articles of the company’s “Rules of Procedures for Share- holders’ Meetings.” 2. Proposal of revision of some articles of the company’s “Rules of Procedures for Board Meetings.” 3. Proposal of revision of some articles of the company’s “Organiza- tional Rules of the Audit Committee.” 4. Proposal of revision of some articles of the company’s “Code of Ethical Conduct.” 5. Proposal of revision of some articles of the company’s “Financial Statement Preparation Process Management”	Approved and passed by all independent directors.	None
August 11, 2020	3~~rd~~ses- sion of the 32nd term	1. Revision of some arti- cles of the company’s “Accounting Profes- sional Judgment, Ac- counting Policy and Estimated Change	Approved and passed by all independent directors.	None

		Operation Proce- dures.” 2. Proposal of revision of some articles of the company’s “Rules on the Scope of Duties of Independent Direc- tors.” 3. Revision of some arti- cles of the company’s “Measures for Perfor- mance Self-evaluation of the Board of Direc- tors.” 4. Proposal of a NT$200 million loan to South- east Asset Develop- ment Co., Ltd. (here- inafter referred to as Southeast Asset), a 100% owned subsidi- ary of the company. 5. The company’s con- tinued lease of the Kaohsiung Plant of Chentai Cement Co., Ltd.	Operation Proce- dures.” 2. Proposal of revision of some articles of the company’s “Rules on the Scope of Duties of Independent Direc- tors.” 3. Revision of some arti- cles of the company’s “Measures for Perfor- mance Self-evaluation of the Board of Direc- tors.” 4. Proposal of a NT$200 million loan to South- east Asset Develop- ment Co., Ltd. (here- inafter referred to as Southeast Asset), a 100% owned subsidi- ary of the company. 5. The company’s con- tinued lease of the Kaohsiung Plant of Chentai Cement Co., Ltd.
Evaluation Cycle	Evaluation Period	Evaluation Scope	Evaluation Method	Evaluation Content
Once a year	January 1, 2020 ~ De- cember 31, 2020	Board of di- rectors	Self-evaluati on of board of directors	The measurement items of the performance evaluation of the board of directors cover the fol- lowing five aspects (45 indica- tors): degree of participation in the company’s operations, im- provement in the deci- sion-making quality of the board, composition and structure of the board of directors, elec- tion and continuing study of directors,andinternalcontrol.
Once a year	January 1, 2020~De-	Individual board mem-	Self-evaluati on of board	The measurement items of the performance evaluation of indi-

		cember 31,	bers	members	vidual directors cover the fol-
		2020			lowing six aspects (23 indica-
					tors): mastery of company goals
					and tasks, awareness of the di-
					rector’s responsibilities, degree
					of participation in the compa-
					ny’s operations, internal rela-
					tionship management and
					communication, professional
					and continuing study by the di-
					rector, and internal control.
	Once a year	January 1,	Functional	Self-evaluati	The measurement items of the
		2020 ~ De-	committees	on of board	performance evaluation of func-
		cember 31,		members	tional committees cover the
		2020			following five aspects (26 indi-
					cators): degree of participation
					in the company’s operations,
					awareness of the functional
					committee’s responsibilities,
					improvement in the deci-
					sion-making quality of the func-
					tional committee, composition
					of the functional committee and
					election of its members, and
					internal control.
IV. Strengthened goals of the board meeting (such as the establishment of an audit committee, en-
	hancing information transparency, etc.) and			the implementation status in the current period and
	the most recent year:
	(I) Formulation of the “Rules of Procedures for Board Meetings” to serve as the basis for the
	operation of the board meeting.
	(II) Regular	or irregular announcements of		financial business information in accordance with
	the law.
	(III) Establishing the Remuneration Committee to formulate and regularly review and evaluate
	the reasonableness of the remuneration policies, systems, standards and structures for di-
	rectors and managers, and submit the suggestion to the				board meeting for discussion.
	(IV) Establishing the Audit		Committee to be responsible for the assessment of the effectiveness
	of the internal control system and significant matters related to the regulations of the com-
	pany or	the competent authority, and submitting it to the board meeting for discussion.
	V. Assessment conclusion: assessment bythe company's board of directors is well.

(II) Status of the Audit Committee’s participation in the operation of the board

meeting:

Audit Committee’s operation status:

In the most recent year (2020) the Audit Committee meeting was held five (A)

times, and the attendance of independent directors is as follows:

Job title	Name	Actual number of attendance (as either a vot- ing or nonvoting member)	Number of delegated attendance	Actual rate of at- tendance (as either a voting or nonvoting member) (%) [B/A]	Note

Independent directors	Wen-Tsai Yang	Wen-Tsai Yang	5	0	0	100	100
Independent directors	Chin-Pao Yeh		5	0		100
Independent directors	Yu-Hsin Chuang		4	0		80
Other matters to be recorded: I. If the operation of the Audit Committee meeting has any of the following circumstances, state the date, session number and proposal contents of the Audit Committee meeting, the Audit Com- mittee’s resolutions, and the company’s handling of the Audit Committee’s opinions: (I)Matterslistedin Article14-5of the SecuritiesandExchangeAct. Meeting date Session number Proposal contents Resolution of the Audit Committee’s resolutions Handling of the Audit Committee’s opinions March 17, 2020 16th session of the 1stterm 1. The company’s 2019 internal control system statement. 2. The company’s 2019 remuner- ation for employees and di- rectors. 3. The company’s 2019 business report, individual financial report and consolidated finan- cial report. 4. The company’s 2019 earnings distribution. 5. Independence assessment of the independent auditor of the 2020 financial statement. 6. Revision of some articles of the “Rules of Procedures for Shareholders’ Meetings.” 7. Revision of some articles of the “Ethical Corporate Manage- ment Best-Practice Princi- ples.” 8. Revision of some articles of the “Code of Practice in Corpo- rate Governance.” 9. Revision of some articles of the “Corporate Social Responsi- bility Best-Practice Princi- ples” 10. Revision of some articles of the “Rules of Procedures for BoardMeetings.” Approved and passed by all Audit Committee mem- bers. None. May 8, 2020 17th session of the 1stterm 1. Draft amendment to the “Company Charter” section. All Auditors ap- proved. None August 11, 2020 1stses- sion of the 2nd term 1. Proposal of revision of some articles of the company’s “Rules of Procedures for Shareholders’ Meetings.” All Auditors ap- proved. None
Meeting date	Session number	Proposal contents			Resolution of the Audit Committee’s resolutions		Handling of the Audit Committee’s opinions
March 17, 2020	16th session of the 1stterm	1. The company’s 2019 internal control system statement. 2. The company’s 2019 remuner- ation for employees and di- rectors. 3. The company’s 2019 business report, individual financial report and consolidated finan- cial report. 4. The company’s 2019 earnings distribution. 5. Independence assessment of the independent auditor of the 2020 financial statement. 6. Revision of some articles of the “Rules of Procedures for Shareholders’ Meetings.” 7. Revision of some articles of the “Ethical Corporate Manage- ment Best-Practice Princi- ples.” 8. Revision of some articles of the “Code of Practice in Corpo- rate Governance.” 9. Revision of some articles of the “Corporate Social Responsi- bility Best-Practice Princi- ples” 10. Revision of some articles of the “Rules of Procedures for BoardMeetings.”			Approved and passed by all Audit Committee mem- bers.		None.
May 8, 2020	17th session of the 1stterm	1. Draft amendment to the “Company Charter” section.			All Auditors ap- proved.		None
August 11, 2020	1stses- sion of the 2nd term	1. Proposal of revision of some articles of the company’s “Rules of Procedures for Shareholders’ Meetings.”			All Auditors ap- proved.		None

			2. Proposal of revision of some articles of the company’s “Rules of Procedures for Board Meet- ings.” 3. Proposal of revision of some articles of the company’s “Or- ganizational Rules of the Audit Committee.” 4. Proposal of revision of some articles of the company’s “Code of Ethical Conduct.” 5. Proposal of revision of some articles of the company’s “Fi- nancial Statement Preparation ProcessManagement”
	November 10, 2020	2nd session of the 2nd term	1. Declaration of the company’s 2021 internal audit plan. 2. Revision of some articles of the company’s “Accounting Profes- sional Judgment, Accounting Policy and Estimated Change Operation Procedures.” 3. Proposal of revision of some articles of the company’s “Rules on the Scope of Duties of Inde- pendent Directors.” 4. Revision of some articles of the company’s “Measures for Per- formance Self-evaluation of the Board of Directors.” 5. Proposal of a NT$200 million loan to Southeast Asset Devel- opment Co., Ltd. (hereinafter re- ferred to as Southeast Asset), a 100% owned subsidiary of the company. 6. The company’s continued lease of the Kaohsiung Plant of Chentai Cement Co.,Ltd.	All Auditors ap- proved.	None

plan at the initial audit planning stage of each year, and will regularly report the results of the annual and semi-annual financial statement audit or review and other communication matters required by relevant laws and regulations. If there are special circumstances, he/she will report to the members of the Audit Committee in a timely manner; there were no such special circumstances in 2020. The members of the Audit Committee of the company communicated well with the independent auditor.

Supervisors’ participation in the operation of the board meeting: The company has established an Audit Committee to replace the supervisors after the reelection of the 2017 general shareholders’ meeting.

(III) Differences between the corporate governance operation and the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reasons:

Evaluation items	Operating status	Operating status	Operating status	Differences from the Corpo- rate Governance Best-Practice Principles for TWSE/TPEx Listed Compa- nies and the reasons:
	Yes	No	Summary description
I. Has the company been in compliance with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Com- panies” and disclosed the company’s own corporate governance Best-Practice principles?	Yes		The company has formulated the “Corporate Governance Best-Practice Principles,” which is based on the principles of: 1. Protecting the rights and interests of shareholders; 2. Strengthening the functions of the board of di- rectors; 3. Respecting the rights and interests of stakeholders; 4. Improving information transpar- ency. Rules of procedure, measures for electing directors, etc.	None
II. The company’s share- holding structure and shareholders’ equity (I) Has the company estab- lished internal operation procedures to deal with shareholders’ sugges- tions, doubts, disputes and lawsuits, and im- plemented them in ac- cordance with the pro- cedures? (II) Does the company have a list of major share- holders and ultimate controllers of major	Yes Yes		(I) If shareholders have sug- gestions or disputes related to stock affairs to reflect to the company, there are dedicated personnel and a stock affairs agency to han- dle shareholder sugges- tions, doubts, disputes and litigation matters. (II) The company keeps a list of major shareholders and their controllers in good time, and discloses it every	None None

shareholders who actu- ally control the compa- ny? (III) Has the company estab- lished and implemented risk control and firewall mechanisms with affili- ated enterprises? (IV) Does the company have internal regulations that prohibit insiders of the company from buying and selling securities using non-public infor- mation?	Yes Yes		month in accordance with regulations. (III) The company has estab- lished measures for loans to others, endorsement guar- antees or business dealings with affiliated enterprises to strictly control risks. The company has a full-time unit responsible for the management of reinvest- ment businesses. This unit regularly monitors the op- eration and financial status of reinvested companies, and is responsible for communication and coor- dination of related work. (IV) The company has regula- tions such as “Code of Eth- ical Conduct” and “Code of Ethical Conduct for Em- ployees,” which prohibit company insiders from us- ing undisclosed information not yet available on the market to buy and sell se- curities.	None None
III. Composition and respon- sibilities of the board of directors (I) Has the board of direc- tors formulated and im- plemented a diversifica- tion policy on the com- position of members? (II) In addition to the Com- pensation Committee and the Audit Commit- tee established in ac- cordance with the law, does the company vol- untarily establish other functional committees? (III) Has the company for- mulated performance evaluation measures and evaluation methods for the board of directors,	Yes Yes Yes		(I) There are 10 directors of the company, whose exper- tise covers finance, law, operation and marketing to provide professional rec- ommendations on company operations and implement them. (II) The company has estab- lished the Compensation Committee and the Audit Committee in accordance with the law. (III) The company has estab- lished performance evalua- tion measures and methods for the board of directors, conductsperformance	None None None

conducted annual and regular performance evaluations, reported the results of performance evaluations to the board meeting, and used them as a reference for the remuneration of indi- vidual directors and the nomination for term re- newal? (IV) Does the company reg- ularly assess the inde- pendence of the inde- pendent auditor?	Yes		evaluation regularly every year, and reports the results of performance evaluation to the board meeting. (IV) The company asked the in- dependent auditor to reply to the “Independence As- sessment Questionnaire for Independent Auditor” and provides the “Declaration of Transcendent Independ- ence,” and submitted the relevant assessment results to the board meeting on March 17, 2020 for discus- sion. The independent au- ditor’s independence as- sessment form is detailed in note 1 (page 26). In addi- tion, the rotation of inde- pendent auditors is also handled in accordance with relevant regulations.	None
IV. Is the listed or OTC company equipped with competent and an ap- propriate number of corporate governance personnel, and has it designated a corporate governance director to be responsible for cor- porate governance re- lated matters (including but not limited to providing information required by directors and supervisors to carry out business, assisting directors and supervisors to comply with laws and regulations, managing related matters of the board meeting and shareholders’ meeting in accordance with laws, takingminutes of the	Yes		According to the duties of each unit, the dedicated unit of the company is responsible for cor- porate governance-related mat- ters, including the secretary of- fice of the board of directors as the liaison window of directors (including independent directors) responsible for organizing the board meeting and taking the minutes of the board meeting in accordance with the law; the fi- nance department is responsible for providing the information required by the directors (in- cluding independent directors) to carry out business, organizing the shareholders’ meeting and taking the minutes of sharehold- ers’ meetings in accordance with the law.	None

board meeting and shareholders’ meeting, etc.)?
V. Has the company estab- lished a communication channel with stakehold- ers (including but not limited to shareholders, employees, customers and suppliers), set up a stakeholder area on the company’s website, and properly responded to major corporate social responsibility issues of concern to stakeholders?	Yes		The company and interested par- ties have established smooth communication channels: (I) Shareholders: 1. The sharehold- ers’ meeting is held in the second quarter of each year and each proposal is voted case by case, and investors can fully partici- pate in the voting process of each proposal. 2. The annual report and business report for the shareholder’ meeting are issued every year for investors to in- quire online or obtain paper data. 3. The revenue of the previous month is announced on the MOPS and company website every month. (II) Employees: employee training (every year), employee welfare committee, and occupational safety and health committee (every three months). (III) Communities and localities: Social welfare and donations to neighbors are pro- vided. (IV) Customers: 1. Cus- tomer feedback information is obtained through customer satis- faction surveys (annual), quality assurance, market surveys, regu- lar and irregular visits and cus- tomer interviews. 2. Strengthen- ing technical services, proac- tively marketing technologies, responding to customer needs in real time, and supplying products with stable quality. 3. Innovating and developing new products and new businesses to provide customers with better and more comprehensive services. In addi- tion, the corporate social respon- sibility zone (http://www.chc.com.tw/) is set up on the company’s website which helps the company under- stand the issues that stakeholders are concerned about and respond appropriately, and refer to feed- back from all walks of life for continuous improvement.	None

VI. Has the company ap- pointed a professional agency to handle the af- fairs of the shareholders’ meeting?	Yes		The Company has appointed the Stock Affairs Agency Depart- ment of Yuanta Securities Co., Ltd. to handle the relevant affairs of the shareholders’meeting.	None
VII. Information Disclosure (I) Has the company set up a website to disclose fi- nancial and corporate governance information? (II) Does the company adopt other ways of in- formation disclosure (such as setting up an English website, ap- pointing a dedicated person to be responsible for the collection and disclosure of the com- pany’s information, im- plementing the spokes- person system, and placing on the compa- ny’s website the process of the seminar for insti- tutional investors)? (III) Does the company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second and third quarter financial report and the opera- tion of each month ahead of the required time limit?	Yes Yes	No	(I) The company uses the company’s website and the MOPS of the TWSE to regularly disclose the company’s financial and significant information. (II) The company has a dedi- cated person responsible for the collection and dis- closure of additional in- formation, and has a spokesperson and an acting spokesperson. (III) The company announces and declares the annual fi- nancial report within three months after the end of the fiscal year, and announces and declares the first, se- cond, and third quarter fi- nancial reports and operat- ing conditions of each month before the pre- scribed deadline.	None None None
VIII. Whether the company has other important information to help understand the operation of corporate governance (including but not limited to employee rights and interests, employee care, investor relations, supplier relations, rights of interested parties, the status of directors’ and supervisors’ further education, the implementation of risk management policies and risk measurement standards, the implementation of customer policies, the company’s purchase of liability insurance policy for directors and supervisors)? (I) The company has formulated relevant personnel management measures, allocated la- bor pensions, handled employee group insurance and the care for retirees in accord- ance with the law to protect the rights and interests of employees. (II) The company has formulated employee pension measures, established an employee welfare committee, formulated employee mutual aid measures and provides employee benefits to take care of employees and their families. (III) The company has appointed Yuanta Securities, a professional stock agency company,

to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):	to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):	to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):	to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):	to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):	to be responsible for investor services, and provide honest disclosure of company in- formation in accordance with the law to protect the rights and interests of investors and fulfill the company’s responsibilities to shareholders. (IV) The company establishes contracts in a transparent manner and provides guarantees as needed to protect the rights of interested parties. (V) The status of further learning of directors (including independent directors):
Job title	Name	Time	Course Title	Hours	Total hours
~~C~~hairman	Min-Tuan Chen	September 3, 2020	2020 promotional seminar on preventing insider information dissemination and insider equity transactions	3	6
		November 16, 2020	2020 Promotion meeting for directors and supervisors on corporate governance and corporate integrity	3
Vice Chairman	Kuan-Hua Chen	September 3, 2020	2020 promotional seminar on preventing insider information dissemination and insider equity transactions	3	6
		November 16, 2020	2020 Promotion meeting for directors and supervisors on corporate governance and corporate integrity	3
Director	Tien-Chih Chen	September 3, 2020	2020 promotional seminar on preventing insider information dissemination and insider equity transactions	3	6
		December 29, 2020	The impact of COVID-19 on corporate governance and corporate countermeas- ures	3
~~D~~irector	Li-Hsiang Cheng	September 22, 2020	Summit forum of “Corporate Governance 3.0—Sustainable Development Blue- print”for listed companies	3	6
		October 23, 2020	2020 Promotion meeting for directors and supervisors on corporate governance and corporate integrity	3
~~D~~irector	Chien-Hao Chen	September 22, 2020	Summit forum of “Corporate Governance 3.0—Sustainable Development Blue- print”for listed companies	3	6
		September 23, 2020	2020 Promotion meeting for directors and supervisors on corporate governance and corporate integrity	3
Director	Chao-Hsiu ng Yang	November 13, 2020	Analysis of latest corporate governance policies and establishment of “corporate governance personnel” for compliance with the Audit Act	6	6
Director	Chang-Chi h Wu	August 3, 2020	Climate Change and TCFD	3	6
		September 3, 2020	2020 promotional seminar on preventing insider information dissemination and insider equity transactions	3
Independ- ~~e~~nt direc- tors	Wen-Tsai Yang	May 8, 2020	Industry 4.0 and how companies can lead innovation and transformation	3	6
		August 7, 2020	Principles and applications of artificial intelligence	3
Independ- ent direc-	Chin-Pao Yeh	January 16, 2020	Promotional meeting on intellectual property management obligations of the	2.5	6

tors Independ- ent direc- tors			board of directors of listed and OTC companies
		June 30, 2020	Practical operation and regulation of an- ti-money laundering and countering ter- rorism financing	3
		October 21, 2020	2020 promotional seminar on preventing insider information dissemination and insider equity transactions	3
	Yu-Hsin Chuang	September 8, 2020	How to prevent major financial fraud (cannibalizing company resources, insid- er trading, transfer of interests, etc.)	6
(VI) The company adopts a comprehensive risk management and control system, and has formulated related management procedures and regulations, so that the management can clearly identify, measure and effectively engage in controlling various risks, including maintaining sufficient working capital, conducting credit checks on customers, and con- ducting supplier evaluations. (VII) The company implements quality policies in accordance with ISO9001 standards, and has established service management procedures to handle customer complaints and satis- faction surveys, and tracks and improves them to achieve customer service goals. (VIII) The company has purchased liability insurance of US$3 million for directors, independ- ent directors and managers.
IX. Please explain the improvement of the corporate governance evaluation results according to the findings issued by the Corporate Governance Center of the Taiwan Stock Exchange for the latest year, and put forward the priorities and measures for those that have not been im- proved. (Those which are not included as evaluated companies do not need to fill in the fol- lowing. ) Unscored items in the 2020 “Corporate Governance Evaluation”: (I) English version of financial report, website, annual report and other related information: In line with government policy, English version of financial report, annual report, and shareholder meeting manual will be announced in 2021.

IX. Please explain the improvement of the corporate governance evaluation results according to the findings issued by the Corporate Governance Center of the Taiwan Stock Exchange for the latest year, and put forward the priorities and measures for those that have not been improved. (Those which are not included as evaluated companies do not need to fill in the following. )

Unscored items in the 2020 “Corporate Governance Evaluation”:

(I) English version of financial report, website, annual report and other related information: In line with government policy, English version of financial report, annual report, and shareholder meeting manual will be announced in 2021.

Note 1: The company’s board meeting has assessed the independent auditor’s independence on March 17, 2020. The assessment items are detailed in the following table:

following table:
Evaluation items	Evaluation result	Whether the independence requirement is met.
1. Whether the accountant has a direct or indirect significant fi- nancial relationship with the company.	No	Yes
2. Whether the accountant has a commercial relationship with the company that affects his/her independence.	No	Yes
3. Whether the accountant and the audit team members currently serve or have served in the last two years as directors or manag- ers of the company, or hold or have held positions that have a significant impact on the audit work.	No	Yes
4. Whether the accountant provides the company with non-audit services that may directly affect the audit work.	No	Yes

5. Whether the accountant has brokered the stocks or other securi- tiesissued bythe company.	No	Yes
6. Whether the accountant has acted as the defender of the com- pany or coordinated conflicts with other third parties on behalf of the company.	No	Yes
7. Whether the accountant has direct blood relatives, direct in-laws or second-tier relatives with the directors or managers of the company.	No	Yes
8. Whether the accountant has received gratitudes or gifts of great value from the company.	No	Yes

(IV) Composition, responsibilities and operation status of the Compensation Committee:
The Compensation Committee is responsible for assisting the board of directors in implementing and evaluating the compensation system for directors and managers of the company.
Information about the members of the Compensation Committee:

Identity type (note 1)	Condi- tion Name	Whether having more than five years of work experi- ence and the following pro- fessionalqualifications.	Whether having more than five years of work experi- ence and the following pro- fessionalqualifications.	Whether having more than five years of work experi- ence and the following pro- fessionalqualifications.	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Compliance with independence requirements (note 2)	Number of members concurrently serving as members of the compen- sation com- mittee of other public offering companies
		Lecturer or above of a public or private college or uni- versity in business, law, finance, accounting or a relevant discipline required for the company’s business.	Judge, prosecutor, lawyer, accountant or another type of professional or technical personnel who has passed the national examination required for the company’s busi-	Having work experience necessary for business, legal affairs, finance, accounting or businesses of the company	1	2	3	4	5	6	7	8	9	10
Independent directors	Wen-Tsai Yang			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	1
Independent directors	Chin-Pao Yeh			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	0
Independent directors	Yu-Hsin Chuang			ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	ˇ	0

Note 1: The identity type is director, independent director or other.
Note 2: If each member meets the relevant conditions two years before the election and during the tenure, please mark “  ” in the space below each condition code.
(1) The director or supervisor is not an employee of the Company or its affiliated enterprises.
(2) The director or supervisor is not a director or supervisor of the company or its affiliated enterprises (except for concurrent independent directors of the company and its parent company, subsidiaries, or

subsidiaries of the same parent company in accordance with this Act or local laws and regulations).

(3) The director or supervisor, or his/her spouse or minor children or in another person’s name, does not hold more than 1% of the total issued shares of the company or is not a top ten shareholder.
(4) Not a manager in (1) or the spouse, second-tier relative or third-tier relative of the persons listed in (2) or (3).
(5) The director or supervisor is not a director, supervisor or employee of a corporate shareholder which directly holds more than 5% of the total issued shares of the company or a top five shareholder, or is designated as a representative to serve as a director or supervisor of the company in accordance with paragraph 1 or 2 of Article 27 of the Company Act (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(6) The director or supervisor is not a director, supervisor or employee of another company which has a seat on the board of directors, or more than half of its shares with voting rights are controlled by the same owner of this company (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(7) The director or supervisor is not a director, supervisor or employee of another company or institution who is the same person or spouse as the chairman, president or an equivalent position of the company (except for concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(8) The director or supervisor is not a director, supervisor or manager of another company or institution which has financial or business dealings with the company, or is a shareholder holding more than 5% of the shares of the company (not applicable if the company or institution holds more than 20% but no more than 50% of the total issued shares of the company, with concurrent independent directors of the company and its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with this Act or local laws and regulations).
(9) Not a professional, sole proprietor, partner, business owner or partner, or a director, supervisor, manager or the spouse of the above of a company or institution which provides audit services to the company or its affiliated enterprises, or the cumulative remuneration amount of which in the past two years exceeds NT$500,000 for business, legal affairs, finance or accounting related services. However, this does not apply to the members of the Compensation Committee or Special Committee for Merger/Consolidation and Acquisition who perform their responsibilities in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(10) Having no such circumstances as in Article 30 of the Company Act.
Operation status of the Compensation Committee:
(1) There are three members on the Compensation Committee of the company.
(2) Term of office of the current members: From August11, 2020 to June 19, 2023; the

Compensation Committee held its committee meeting for three (A) times in the most

recent year, and the qualifications and attendance of the members are as follows:

Job title	Name	Actual at- tendance (B)	Actual attendance rate (%) (B/A)	Note
Convener	Wen-Tsai Yang	3	100%	None
Member	Chin-Pao Yeh	3	100%	None
Member	Yu-HsinChuang	3	100%	None

Other matters to be recorded:	Other matters to be recorded:
Compensation Committee	Proposal con- tent and fol- low-up han- dling	Resolution result	The company’s han- dling of the opinions of the Compensation Committee
The 3rdterm 8th session January 7, 2020	Review of the 2019 year-end bonus and per- formance bo- nus for the company’s managers and above.	(1) On the 2019 year-end bonus and performance bonus for managers and above, after review, the operating perfor- mance of the year has not reached the ex- pected target, so the performance bonus will not be paid. As for the announced payment measures of the year-end bonus and performance bo- nus, they are reasona- ble after review.	It has been approved by the 13th board meeting of the 31stterm, and implemented in ac- cordance with the reso- lution. In addition, it has been declared to the competent authority before the prescribed deadline.
The 4thterm 1st session August 11, 2020	Election of the convener of the 4thCompensa- tion Committee meeting.	The member Wen-Tsai Yang was elected as the con- vener of the 4thCom- pensation Committee meeting.
The 4thterm 2nd session November 10, 2020	Revise the company’s “Organizational Rules of the Compensation Committee”; please discuss.	The chairman con- sulted the attending members; the pro- posal was passed as it was without objec- tion, and sent to the board meeting for review.	Passed in the 3rdboard meeting of the 32nd term, and implemented in accordance with the resolution.

I If the board meeting does not adopt or amends the proposal of the Compensation Committee, state the date, session number, proposal contents, the resolution of the board meeting, and the company’s handling of the Compensation Committee’s proposal (if the compensation approved by the board meeting is superior to the committee’s proposed one, state the difference and the reason): None.

II If the members have objections to or reservations on the resolutions of the Compensation Committee meeting, and if relevant records or written statements are available, state the date, session number, proposal contents of the committee meeting, opinions of all the members and the handling of the members’ opinions: None.

(V) Performance of social responsibility:

Evaluation items			Operating status	Difference from the Corporate Social Respon- sibility Best-Practice Principles for TWSE/GTSM Listed Compa- nies and the reasons.
	Yes	No	Summary description
I. Does the company conduct risk assessment on environmental, social and corporate govern- ance issues related to the com- pany’s operation in accordance with the principle of materiali- ty, and formulate relevant risk management policies or strate- gies?	Yes		The chairman of the company personally presides over the op- eration meeting every month, and jointly plans the operation policy with the management team, conducts risk assessment on social, environmental and corporate governance issues re- lated to the company’s opera- tion, and formulates relevant risk management policies or strategies, so as to perform cor- porate social responsibility well.	None
II. Has the company set up a full-time (part-time) unit to promote corporate social re- sponsibility, which is man- aged by the senior manage- ment under the authorization of the board of directors, and reports to the board of direc- tors on the handling status?		No	(I) The company has not yet established the unit, but its work is distributed among various departments.	None
III. Environmental Issues (I) Has the company established an appropriate environmental management system accord- ing to its industrial charac- teristics? (II) Is the company committed to improving the efficiency of resource utilization and using recycled materials with low impact on the environment?	Yes Yes		(I) The company’s environ- mental management system is sound, and has obtained the international certifica- tion standards of ISO 9001 and ISO 14001. (II) The company uses calcium carbonate sludge, waste lime and other recycled materials as replacement raw materi- als for limestone, and the use of blast furnace slime as replacementof iron hasat-	None None

Evaluation items			Operating status	Difference from the Corporate Social Respon- sibility Best-Practice Principles for TWSE/GTSM Listed Compa- nies and the reasons.
	Yes	No	Summary description
(III) Does the company assess the potential risks and opportu- nities of climate change for the enterprise now and in the future, and take measures to deal with climate related is- sues? (IV) Does the company prepare statistics of greenhouse gas emissions, water consump- tion and total weight of waste in the past two years, and formulate policies for energy conservation and carbon reduction, green- house gas reduction, water consumption reduction or other waste management?	Yes Yes		tained CO2 reduction pur- poses. (III) The company has been conducting greenhouse gas examinations with cement industry peers since 2013, it purchases low sulfur content coal to reduce SOx emis- sions, and replaces urea with ammonia water to improve the NOx removal rate. (IV) 1. Greenhouse gas: 25,238 T in 2019; 25,912 T in 2020. Greenhouse gas has been significantly reduced by more than 90% after the operation suspension of the MO1 cement plant in 2016, and no inspection and dec- laration are required since 2019. 2. Water consumption: 26,755 degrees in 2019; 42,037 de- grees in 2020. The company implements water saving and cooling water recycling. 3. Waste: 63,900 kg in 2019; 49,820 T in 2020. In 2019, due to the dismantling of plants and machinery equip- ment which were no longer used to reduce land rental expenditure, the waste vol- ume in 2019 was therefore morethan in the currentyear.	None None

Evaluation items			Operating status	Difference from the Corporate Social Respon- sibility Best-Practice Principles for TWSE/GTSM Listed Compa- nies and the reasons.
	Yes	No	Summary description

IV. Social Issues (I) Has the company formulat- ed relevant management policies and procedures in accordance with relevant laws and regulations and International Human Rights Conventions? (II) Has the company estab- lished and implemented reasonable employee wel- fare measures (including compensation, vacation and other benefits), and properly reflected the operating per- formance or results in em- ployee compensation?	Yes Yes		(I) The company has in place an employee manual in accordance with relevant laws and regulations to serve as the basis for em- ployee management and rights. (II) 1. The company has established the Employee Welfare Com- mittee to handle various wel- fare business, such as the year-end dinner, birthday vouchers, Labor Day gift and gift vouchers for three major festivals, and the performance is good. 2. The company has established the Employee Self-Improvement Associa- tion to provide direct welfare to employees, such as wed- ding and funeral funds for employees and their immedi- ate family members, emer- gency relief funds, hospitali- zation consolation funds, in- terest-free loans, accommoda- tion supply, employee group insurance, free health exami- nation, group employee travel subsidies, retiree care, etc., to free the employees from wor- ries about their families. 3. The company has established the Employee Training Com- mittee to conduct labor edu-	None None

Evaluation items			Operating status	Difference from the Corporate Social Respon- sibility Best-Practice Principles for TWSE/GTSM Listed Compa- nies and the reasons.
	Yes	No	Summary description
(III) Does the company provide a safe and healthy working environment for its em- ployees and conduct regular safety and health education for them? (IV) Has the company estab- lished an effective career development training pro- gram for its employees? (V) Does the company follow relevant laws and regula- tions and international standards for customer health and safety, customer privacy, marketing and la- beling of products and ser- vices, and formulate rele- vant policies and grievance procedures to protect the rights and interests of con- sumers? (VI) Does the company have a supplier management policy that requires suppliers to follow relevant specifica- tions and their implementa- tion in environmental pro- tection, occupational safety and health or labor human rights issues?	Yes Yes Yes Yes		cation, instill new knowledge and cultivate business ethics, so as to improve technical standards and professional ethics. (III) In order to enhance em- ployees’ awareness of safety and health, the company regularly carries out relevant environmental safety and health training, and conducts regular health examinations for employ- ees every year. (IV) The company holds train- ing every year and irregu- larly sends employees to participate in external training. (V) The company complies with relevant product marks. (VI) All the company’s con- tracts with raw material suppliers and transporta- tion companies contain the clause that “Party B’s op- erations shall comply with the provisions of laws and regulations,”as well as ex-	None None None None

Evaluation items	Operating status	Operating status	Operating status	Difference from the Corporate Social Respon- sibility Best-Practice Principles for TWSE/GTSM Listed Compa- nies and the reasons.
	Yes	No	Summary description
			planations and require- ments of environmental and safety measures and the corresponding penal- ties.
V. Does the company prepare the corporate social responsi- bility report and other reports that disclose the company’s non-financial information in accordance with the interna- tional reporting standards or guidelines? Is the aforesaid report confirmed or guaran- teed by a third-party verification unit?	Yes		(I) The company has been preparing the social re- sponsibility report every year since 2017, and set up the “Corporate Social Re- sponsibility” area on the official website (http://www. South east generation.com.tw); the social responsibility report is also disclosed on the MOPS.	None
VI. If the company has its own corporate social responsibility Best-Practice principles in ac- cordance with the “Corporate Social Responsibility Best-Practice Principles for TWSE/GTSM Listed Companies,” please state the implementation status and the differ- ences: None.
VII. Other important information that helps to understand the operation of corporate social re- sponsibility: Mr. Chiang-Chang Chen, founder of the company, often said: “Entrepreneurs have social responsibilities.” The Southeast Cement Group set up the “Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation” in 1987 and “Consortium Legal Person Chiang-Chang Chen Culture and Education Foundation” in 2000 to carry out emergency relief, poverty relief, emergency medical treatment, disaster relief, educational and cultural awards and other charity activities, and actively give back to society to fulfill our corporate social responsibility. In recent years, the company has sponsored the medi- cal team of Kaohsiung Veterans’ Hospital to go to Penghu for free medical treatment, the Kaohsiung Blood Donation Center for blood donation activities, medical promotion and medical care, activities of public welfare organizations and school, artistic and cultural events as well as numerous other related public welfare activities. Especially in the most serious petrochemical gas explosion accident occurred in Kaohsiung City in the early morning of August 1, 2014 which caused extremely serious casualties, the company, as a member of local enterprises in Kaohsiung and sharing the same mood, donated NT$10 million totheKaohsiungmunicipalgovernment tomakea modestcontribution.

(VI) Performance of ethical corporate management:

Evaluation items			Operating status	Differences from the Ethical Corpo- rate Management Best-Practice Prin- ciples for TWSE/GTSM Listed Companies and the reasons:
	Yes	No	Summary description
I. Establishment of ethical corpo- rate management policies and plans (I) Does the company have an ethical corporate manage- ment policy approved by the board of directors, and clearly state the ethical cor- porate management policy and practice in the internal regulations and external documents, as well as the commitment of the board of directors and senior man- agement to actively imple- ment the corporate manage- ment policy?	Yes		(I) 1. The company has provisions on prevention of dishonesty in its rules and regulations such as the “Ethical Corpo- rate Management Best-Practice Principles,” “Code of Ethical Conduct,” “Code of Ethical Conduct for Employees” and “Measures for Handling Employee Ac- cusations.” 2. The improvement status is continuously tracked after the improvement proposal by the audit team is submit- ted and approved. The time- ly completion of improve- ment of each audit item is reported to the board meet- ing and independent direc- tors for review; this is an important mechanism of the board of directors to super- vise the implementation of the Ethical Corporate Man- agement Best-Practice Prin- ciples.	None

(II) Has the company established an evaluation mechanism for the risk of unethical behav- ior, regularly analyzed and evaluated the business activi- ties with high unethical be- havior risk within the busi- ness scope, and formulated a plan to prevent unethical be- havior accordingly which at least covers the preventive measures for the behaviors in paragraph 2, Article 7 of the “Ethical Corporate Manage- ment Best-Practice Principles for TWSE/GTSM Listed Companies”? (III) Does the company stipulate the operating procedures, behavior guidelines, and dis- ciplinary and grievance sys- tems in its unethical behavior prevention plan and imple- ment them, and regularly re- view and revise the plan?	Yes Yes		(II) The company has in place the “Code of Ethical Con- duct,” “Code of Ethical Conduct for Employees,” “Measures for Handling Employee Accusations,” etc. The audit room regu- larly checks the situation. (III) The company has in place the “Ethical Corporate Man- agement Best-Practice Prin- ciples” and “Measures for Handling Employee Accu- sations.” The company for- mulates integrity-based business policies based on the business philosophy of honesty, transparency and being responsible, and es- tablishes good corporate	None None

II. Implementation of ethical cor- porate management (I) Does the company assess the ethical corporate man- agement records of its counterparties and specify the ethical corporate man- agement terms in the con- tracts it enters into with them?	Yes		governance and risk control mechanisms to create a sus- tainable development envi- ronment for business. (I) In the trading and procure- ment process, the company confirms the authenticity of the transaction on the web- site of the Department of Commerce, Ministry of Economic Affairs, and checks the manufacturer’s transaction record through various channels (such as credit investigation) to con- firm the business integrity of the trading counterparty. The company reports the current situation of custom- ers and suppliers in business and operation management meetings. If it is found that the trading counterparty is involved in unethical be- havior, the company will immediately and strictly control the credit transac- tion, understand the current exposure of the company, and carefully evaluate whether to terminate the transaction with customers.	None

(II) Has the company set up a dedicated unit under the board of directors to promote ethical corporate manage- ment, and regularly (at least once a year) report to the board of directors its ethical corporate management poli- cy and plan to prevent un- ethical behavior as well as its supervision of the imple- mentation?	Yes		(II) For the sound ethical corpo- rate management, the units of the company are responsible for the following matters, and the auditors supervise and regularly report them to the board meeting: 1. Management Department: (1) Define the internal or- ganization, structure and responsibilities, and es- tablish a mutual supervi- sion and balance mecha- nism for business activi- ties within the scope of business with a high risk of unethical behavior. (2) Promote and coordinate ethical corporate man- agement policies. 2. President’s Office: (1) Assist in incorporating ethical behavior and mor- al value into the compa- ny’s operation principles.	None
(III) Does the company have a conflict of interest prevention policy to provide appropriate channels for explanation and implement it?	Yes		(2) Compliance with laws and regulations to set up ethical corporate man- agement operation pro- cedures and behavioral guidelines. (3) Formulating and main- taining relevant internal regulations of the com- pany, such as Code of Ethical Conduct and Code of Ethical Conduct for Employees. (III) The company has formulated the “Ethical Corporate Man- agement Best-Practice Prin- ciples,” “Code of Ethical Conduct for Employees” and “Measures for Handling Em- ployee Accusations” and pol- icies to prevent conflict of interest, and provides appro- priate channels for employ- ees’ statement of pipelines, and strictly implements them	None

			as well.
(IV) Has the company established an effective accounting system and internal control system for the implementation of ethical corpo- rate management, and has the in- ternal audit unit, according to the assessment results of the risk of unethical behavior, drawn up rel- evant audit plans to check the sta- tus of unethical behavior preven- tion accordingly, or entrusted an independent auditor to carry out the audit?	Yes		In addition, the Rules of Procedure of Board Meetings of the company clearly stipulates that the directors or other le- gal representatives shall state the important contents of their personal interests at the current board meeting, and shall not participate in the discussion and voting. They shall withdraw from the dis- cussion and voting, and not exercise their voting rights on behalf of other directors. (IV) The company has a rigorous accounting system and an in- dependent professional audit unit, which regularly per- forms internal audit work in accordance with the annual audit plan. The final accounts are audited by the independ- ent auditor to ensure fairness of each final account.	None
(V) Does the company regularly conduct internal and external ethical corporate manage- ment? III. Operation of the company’s accusation system (I) Does the company have a specific accusation and reward system, establish a convenient accusation channel, and assign appro- priate personnel to the ac-	Yes Yes		(V) The company conducts em- ployee training every year, and irregularly sends em- ployees to participate in ex- ternal training, including the curriculum of ethical corpo- rate management. (I) The company has an accusa- tion and reward system in the “Measures for Handling Employee Accusations” and established convenient accu- sation channels, and assigns	None None

cused person? (II) Has the company estab- lished the standard operat- ing procedures for investi- gation of accused matters, follow-up measures after investigation and the rele- vant confidentiality mech- anism?	Yes		appropriate acceptance per- sonnel for the subject of ac- cusation. (II) Article 4 of the Company’s “Measures for Handling Employee Accusations” stipulates that employees may deliver complaints via confidential letter or from a designated email box to the complaint acceptance unit. The complaint acceptance unit shall, after completing the case .... centrally keep the information via confidential documents.	None
(III) Does the company take measures to protect the accuser from improper treatment due to the accu- sation?	Yes		(III) Article 5 of the Company’s “Measures for Handling Employee Accusations” stipulates that the handling personnel of the complaint acceptance unit and related parties shall investigate and report the accusation cases in a fair and impartial spirit, and shall not retaliate against the accuser. In addition, they shall bear the responsibility of confi- dentiality. If there is a viola- tion, the case shall be sent to the personnel evaluation committee and handled in accordance with the com- pany’s relevant work rules.	None
IV. Enhancement of information disclosure (I) Does the company disclose the content and promotion effect of its ethical corporate man- agement best-practice princi- ples on its website and the MOPS?	Yes		(I) The information of the com- pany’s ethical corporate man- agement is disclosed in the “Corporate Governance” sec- tion under “Investors’ Area” of the company’s website www.southeastcement.com.tw as well as on the MOPS, in- cluding the “Code of Ethical Conduct” and “Ethical Corpo- rate Management Best-Practice Principles” un- der“Corporate Governance”;	None

in order to improve the management of the company’s ethical corporate management, all internal units are responsible for related issues, and the auditors are responsible for the supervision of the implementation, and regularly report the results to the board meeting.

V. If the company has its own ethical corporate management best-practice principles in accordance with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, please state the differences between its operation and the principles.
VI. Other important information helpful to understand the company’s ethical corporate management operation:
(I) The company clearly declares the ethical corporate management concept in the external documents such as the company profile, annual report and corporate social responsibility report.
(II) The company irregularly reviews, amends or formulates its regulations concerning ethical corporate management to meet the actual operation needs.
(VII) The company’s establishment of the corporate governance code and related regulations and the query method:
The company has established the Corporate Governance Code.
Related regulations:
- (1) Rules of Procedures for Shareholders’ Meetings. (2) Rules of Procedures for Board Meetings. (3) Measures for Election of Directors. (4) Rules of Independent Directors’ Scope of Duties. (5) Organizational Rules of the Compensation Committee. (6) Code of Ethical Conduct. (7) Code of Ethical Conduct for Employees. (8) Organizational Rules of the Audit Committee. (9) Ethical Corporate Management Best-Practice Principles (10) Corporate Social Responsibility Best-Practice Principles. (11) Corporate Governance Code. (12) Operation Procedures for Processing of Significant Internal Information and Prevention of Insider Trading.
Query method:
- (1) MOPS:
  - The “Rules and Regulations for Formulation of Corporate Governance” under “Corporate Governance Area” is available for download.
- (2) The company’s website (http://www.southeast.com.tw/rule.html):
  - The “Corporate Governance Regulations” of “Corporate Governance” under “Investor Relations” is available for download.
(8) Other important information that may enhance the understanding of corporate governance operations:

Managers’ participation in the further learning of corporate governance:

Job title	Name	Time	Course Title	Hours
Finance Manager	Hsin-Ha n Huang	June 18, 2020	Analysis of the competent authority’s requirement on the establishment of corporate governance supervi- sor/personnel	3

Finance Manager	Hsin-Ha n Huang	June 23, 2020	Enhancing the ability to prepare finan- cial reports: Internal control, internal audit andinformation technology	3
Finance Manager	Hsin-Ha n Huang	July 16, 2020	National Cheng Kung University: Continuous learning class for account- ing supervisors	6
Head of Audit Office	Guan-H sun Wang	July 31, 2020	Policy analysis of enterprises’ en- hancement of the ability to prepare financial reports and discussion of key internal audit and internal con- trol practices	6
Head of Audit Office	Guan-H sun Wang	October 23, 2020	How to detect the signs and exam- ples of hidden fraud	6

(IX) Internal control system implementation status:

Southeast Cement Corporation Statement of Internal Control System

Date: March 18, 2021

Based on the results of self-assessment of the company’s internal control system in 2020, the company hereby states the following:

The company acknowledges that it is the responsibility of the board of directors and the managers of the company to establish, implement and maintain the internal control system, which has already been established by the company. Its purpose is to provide reasonable assurance in achieving the objectives of operation effectiveness and efficiency (including profitability, performance and asset safety), in order to assure reliability, timeliness and transparency of reports, and compliance with relevant norms and regulations.
The internal control system has its inherent limitations. No matter how well designed, an effective internal control system can only provide reasonable assurance for the achievement of the above three objectives. Moreover, due to the change of environment and situation, the effectiveness of internal control system may change accordingly. However, the company’s internal control system has a self-monitoring mechanism. Once a shortcoming is identified, the company will immediately take corrective action.
The company judges the effectiveness of the design and implementation of the internal control system in accordance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the Regulations). The judgment items of the internal control system adopted in the “Regulations” are the process of management control, and the internal control system is divided into the following five components: 1. control environment, 2. risk assessment, 3. control operation, 4. information and communication, and 5. supervision operation. Each component includes several items. Please refer to the “Regulations” for these items.
The company has adopted the aforesaid internal control system judgment items to assess the effectiveness of the design and implementation of the internal control system.
Based on the assessment results, it is believed that the company’s internal control system (including the supervision and management of subsidiaries) as of December 31, 2020 (note 2), including the understanding of the operation effectiveness and the extent to which the efficiency objectives have been achieved, the reliability, timeliness, transparency of the report, and the design and implementation of the internal control system on the compliance with relevant norms, laws and regulations are effective and can reasonably assure the achievement of the objectives above.

This Statement will be the main content of the company’s annual report and prospectus, and will be made public. If the abovementioned contents are false or concealing, the legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act shall be involved.
This Statement has been approved by the board of directors’ meeting of the company on March 18, 2021. Of the seven directors present, there was no objection, and the rest agreed with the contents of this Statement.

Southeast Cement Corporation

Director: Min-Tuan Chen signature President: Chang-Chih Wu signature

(X) During the most recent year and up to the date of printing of the annual report, the punishment of the company and its insiders in accordance with the law, the company’s punishment on its insiders for violating the provisions of the internal control system, and the major deficiencies and improvement: None.
(XI) Important resolutions of shareholders’ meetings and board meetings in the most recent year and up to the date of printing of the annual report:
Review of the implementation of the resolutions of the general shareholders’ meeting in 2020:

Year of the meeting	Meet time	Important resolutions	Implementation and review
2020 gen- eral share- holders’ meeting	June 20, 2020	1. Passed the 2019 final accounts. 2. Passed the 2019 earnings dis- tribution. 3. Passed the revision of some ar- ticles of the “Rules of Proce- dures for Shareholders’ Meet- ings.” 4. Passed the revision of some ar- ticles of the “Articles of Asso- ciation.” 5. Reelection of directors. 6. Passed the lifting of non-competition for new direc- tors.	1. The 2019 earnings distribution has been fully imple- mented. 2. August 2, 2020 has been set as the ex-dividend date, and August 14, 2020 as the cash dividend distribu- tion date.

Important resolutions of board meetings in 2020 and as of April 30, 2021:

Term	Meet time	Important resolutions
2020	March 17, 2020	1. The company’s 2019 statement of internal control system. 2. The company’s 2019 remuneration of employees and directors. 3. The company’s 2019 business report, individual fi- nancial report and consolidated financial report. 4. The company’s 2019 earnings distribution plan. 5. Independence assessment of the independent auditor of the 2020 financial statement. 6. Revision of some articles of the “Rules of Procedures for Shareholders’ Meetings.” 7. Revision of some articles of the “Ethical Corporate Management Best-Practice Principles.” 8. Revision of some articles of the “Code of Practice in Corporate Governance.” 9. Revision of some articles of the “Corporate Social Responsibility Best-Practice Principles.” 10.Revision of some articles of the “Rules of Procedures for Board Meetings.” 11.Reelection of the company’s directors (including in- dependent directors) of the 32ndterm. 12.Lifting of non-competition for new directors. 13.Formulation of 2020 general shareholders’ meeting related issues. 14.Shareholders’ proposals for 2020 general sharehold- ers’ meeting and acceptance of director candidate nomination. 15.Proposals of the Compensation Committee
	May 8, 2020	1. Formulation of revision of some articles of the “Arti- cles of Association.” 2. Continuation of endorsement guarantee for the com- pany by Southeast Investment Co., Ltd., the compa- ny’s subsidiary. 3. Proposal to apply for a renewal of loan limit of NT$150 million from Mega Bank. 4. Correction of the agenda of the 2020 general share- holders’ meeting. 5. Review of the candidates of directors (including in- dependentdirectors) of the 32ndterm.
	June 20, 2020	Election of the chairman and deputy chairman of the company.

Term	Meet time	Important resolutions
	August 11, 2020	1. Proposal of revision of some articles of the compa- ny’s “Rules of Procedures for Shareholders’ Meet- ings.” 2. Proposal of revision of some articles of the compa- ny’s “Rules of Procedures for Board Meetings.” 3. Proposal of revision of some articles of the compa- ny’s “Organizational Rules of the Audit Committee.” 4. Proposal of revision of some articles of the compa- ny’s “Code of Ethical Conduct.” 5. Proposal of revision of some articles of the compa- ny’s “Financial Statement Preparation Process Man- agement” 6. Hiring of members of the 4thterm Compensation Committee the Company. 7. Application for loan limits with financial institutions.
	November 10, 2020	1. Declaration form of the company’s 2021 internal au- dit plan. 2. Revision of some articles of the company’s “Ac- counting Professional Judgment, Accounting Policy and Estimated Change Operation Procedures.” 3. Proposal of revision of some articles of the compa- ny’s “Rules on the Scope of Duties of Independent Directors.” 4. Revision of some articles of the company’s “Measures for Performance Self-evaluation of the Board of Directors.” 5. Proposal of a NT$200 million loan to Southeast As- set Development Co., Ltd. (hereinafter referred to as Southeast Asset), a 100% owned subsidiary of the company. 6. The company’s continued lease of the Kaohsiung Plant of Chentai Cement Co., Ltd. 7. Proposal to apply for a loan limit of NT$200 million from Mega Bank. 8. 2021 production and sales budget. 9. Proposals of the Compensation Committee. 10. Proposal to appoint Hsin-Han Huang to serve as the company’s head of corporate governance.

Term	Meet time	Important resolutions
Before April 30, 2021	March 18, 2021	1. The company's internal control system statement for 2020. 2. The company's remuneration for employees and di- rectors for 2020. 3. The company's business report, individual financial report and consolidated financial report for 2020. 4. The company's earnings distribution plan for 2020. 5. Independence evaluation of the independent auditor for 2021. 6. Amendment to some articles of the "Rules of Proce- dure of Shareholders' Meeting". 7. Amendments to some articles of the "Procedures for Changes in Professional Accounting Judgment, Ac- counting Policies and Estimates". 8. Amendment to some articles of the “Standard Oper- ating Procedures for Handling Directors' Requests”. 9. Formulation of matters related to the 2021 general shareholders’ meeting. 10. Issues related to the acceptance of shareholders' pro- posals at the 2021 general shareholders’ meeting. Proposals bythe CompensationCommittee.

(XII) If the directors have different opinions on the important resolutions passed by the board meeting in the most recent year and up to the date of publication of the annual report and there are records or written statements, the main contents: None.
(XIII) The resignation and dismissal of the company’s chairman, president, accounting supervisor, financial supervisor, internal audit supervisor and R&D supervisor in the most recent year and up to the date of publication of the annual report: None.

V. Accountant Fee Information:

Name of ac- countingfirm	Name of independent auditor	Name of independent auditor	Audit period	Note
Crowe (TW) CPAs	Shu-Man Tsai	Ching-Lin Li	January 1, 2020–December 31, 2020

			Unit: NT$thousand	Unit: NT$thousand
Fee item Amount tier		Audit fee	Non-audit fee(note)	Total
1	Below NT$2,000 thousand	v	v	v
2	NT$2,000 thousand (inclu- sive)–NT$4,000 thousand
3	NT$4,000 thousand (inclu- sive)–NT$6,000 thousand
4	NT$6,000 thousand (inclu- sive)–NT$8,000 thousand
5	NT$8,000 thousand (inclu- sive)–NT$10,000 thousand
6	NT$10,000 thousand (inclusive) or more

								Unit: NT$thousand	Unit: NT$thousand
Name of accounting firm	Name of inde- pendent auditor	Audit fee	Non-audit fee (note)					Audit period	Note
			System design	Industrial and commer- cial registration	Human resources	Other(note)	Subtotal
	Shu-Man Tsai	1,580		6		195	201	January 1, 2020 December 31,2020
	Ching-Li n Li

(Note): Including NT$120 thousand for IFRS9 counseling and consulting service fee, NT$60 thousand for certification of transfer price settlement declarations, NT$15 thousand for the non-supervisor employee salary checklist.

The non-audit fee paid to the independent auditor, the firm to which the independent auditor belongs and its affiliated enterprises account for more than a quarter of the audit fee: None.
The accounting firm is changed and the audit fee paid in the year of change is less than that in the year before the change: None.
The audit fee is reduced by more than 10% compared with the previous year: None.

VI. Change of independent auditor: None.

VII. Whether the chairman, the president or manager in charge of financial or accounting affairs of the company has worked in the firm of the independent auditor or its affiliated enterprises in the past year: None.

VIII. Changes in equity transfer and pledge by directors, managers and shareholders with shareholding more than 10% in the latest year and up to the date of publication of the annual report:

Job title	Name	2020	2020	The current year as of April 30	The current year as of April 30
		Increase (de- crease) of shares held	Increase (de- crease) of sharespledged	Increase (de- crease) of shares held	Increase (de- crease) of sharespledged
Chairman	Dongshu Investment Co.,Ltd.	0	0	0	0
	Representative: Min-Tuan Chen	0	0	0	0
Vice Chairman	Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	0	0	0	0
	Representative: Kuan-Hua Chen	0	0	0	0
Director	Dongshu Investment Co.,Ltd.	0	0	0	0
	Representative: Tien-Chih Chen	0	0	0	0
Director	Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	0	0	0	0
	Representative: Chang-Chih Wu	0	0	0	0
Director	Likai Investment Co,Ltd.	0	0	(3,000)	0
	Representative: Li-HsiangCheng	1,800,000	0	0	0
Director	Consortium Legal Person Southeast Cultural Foundation	0	0	0	0
	Representative: Chien-Hao Chen	0	0	0	0
Director	ChangchingCo.,Ltd.	6,544,664	0	0	0
	Representative: Chao-HsiungYang	0	0	0	0
Independe nt directors	Wen-Tsai Yang	0	0	0	0
Independe nt directors	Chin-Pao Yeh	0	0	0	0
Independe nt directors	Yu-Hsin Chuang	0	0	0	0
Financial Manager	Hsin-Han Huang	0	0	0	0

Equity transfer information

Name	Reason for eq- uity transfer	Transac- tion date	Transaction counterparty	Relationship between the transaction counterparty and the com- pany, the di- rectors, the su- pervisors, the managers and shareholders with a share- holding ratio of more than 10%	Num- ber of shares	Trading price
None	None	None	None	None	None	None

Equity pledge information

Name	Reason for the change of pledge	Change date	Transaction counterparty	Relationship between the transaction counterparty and the company, the di- rectors, the supervisors, the managers and share- holders with a sharehold- ing ratio of more than 10%	Number of shares	Share- holding ratio	Pledge ratio	Pledged (redeemed) amount
None	None	None	None	None	None	None	None	None

IX. Information on the relationship among the top 10 shareholders in terms of shareholding ratio

Name	The shareholder on election date	The shareholder on election date	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Total sharehold- ing in other people’s names	Total sharehold- ing in other people’s names	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)
	Number of shares	Share- holding ratio	Number of shares	Shareh olding ratio	Numb er of shares	Shareh olding ratio	Name	Relationship
Dongshu Investment Co., Ltd.	80,496,816	14.07	-	-	-	-	Taiji Ship Plant Co., Ltd. Baifu Investment Co., Ltd. (shares) Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Chentai Cement Co., Ltd. Yue-Ling Chen	The chairman is the same person as the chairman of Dongshu Investment. The chairman is the same person as the chairman of Dongshu Investment. The chairman is the same person as the chairman of Dongshu Investment. The chairman is the same person as the chairman of Dongshu Investment. A second-tier relative of the chairman of Dongshu Invest- ment.
Representative: Min-Tuan Chen	2,985,000	0.52	13,003	-	-	-
Taiji Ship Plant Co., Ltd.	49,292,761	8.62	-	-	-	-	Dongshu Investment Co., Ltd. Baifu Investment Co., Ltd. (shares) Yue-Ling Chen Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Chentai Cement Co., Ltd.	The chairman is the same person as the chairman of Taiji Ship Plant Co., Ltd. The chairman is the same person as the chairman of Taiji Ship Plant Co., Ltd. A second-tier relative of the chairman of Taiji Ship Plant Co., Ltd. The chairman is the same person as the chairman of Taiji Ship Plant Co., Ltd. The chairman is the same person as the chairman of Taiji ShipPlant Co.,Ltd.
Representative: Min-Tuan Chen	2,985,000	0.52	13,003	-	-	-
Changching Co., Ltd.	40,070,010	7.01	-	-	-	-	Consortium Legal Person Fukang Cultural and Educational Foundation Consortium Legal Person Southeast Cul- tural Foundation	The chairman is a director of Changching Corporation. The chairman is a director of Changching Corporation.
Representative: Chao-Hsiung Yang	0	0.00	-	-	-	-
Consortium Legal Person Fukang Cultural and Educational Founda-	38,829,350	6.79	-	-	-	-	Consortium Legal Person Southeast Cul- tural Foundation	The chairman is a second-tier relative of the chairman of Consortium Legal Person FukangCultural and Educational

Name	The shareholder on election date	The shareholder on election date	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Total sharehold- ing in other people’s names	Total sharehold- ing in other people’s names	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)
	Number of shares	Share- holding ratio	Number of shares	Shareh olding ratio	Numb er of shares	Shareh olding ratio	Name	Relationship
tion								Foundation.
Representative: Chien-Hao Chen	58,609	0.01	-	-	-	-
Baifu Investment Co., Ltd. (shares)	35,008,148	6.12	-	-	-	-	Dongshu Investment Co., Ltd. Taiji Ship Plant Co., Ltd. Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Chentai Cement Co., Ltd. Yue-Ling Chen	The chairman is the same person as the chairman of Baifu Investment Co., Ltd. The chairman is the same person as the chairman of Baifu Investment Co., Ltd. The chairman is the same person as the chairman of Baifu Investment Co., Ltd. The chairman is the same person as the chairman of Baifu Investment Co., Ltd. The chairman is a second-tier relative of the chairman of Baifu Investment Co.,Ltd.
Representative: Min-Tuan Chen	2,985,000	0.52	13,003	-	-	-
Consortium Legal Person Southeast Cultural Foundation	33,421,803	5.84	-	-	-	-	Consortium Legal Person Fukang Cultural and Educational Foundation	The chairman is a second-tier relative of the chairman of Consortium Legal Person Southeast Cultural Foundation.
Representative: Si-Ying Chen	58,891	0.01	-	-	-	-
Yue-Ling Chen	30,065,760	5.26	-	-	-	-	Baifu Investment Co., Ltd. (shares) Dongshu Investment Co., Ltd. Taiji Ship Plant Co., Ltd. Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foundation Chentai Cement Co.,Ltd.	The chairman and Yue-Ling Chen are second-tier relatives. The chairman and Yue-Ling Chen are second-tier relatives. The chairman and Yue-Ling Chen are second-tier relatives. The chairman and Yue-Ling Chen are second-tier relatives. The chairman and Yue-Ling Chen are second-tier relatives.
Yingchen Co., Ltd.	26,421,219	4.62	-	-	-	-	Consortium Legal Person Fukang Cultural and Educational Foundation	The chairman is the corporate-director representative of Yingchen Co., Ltd.
Representative: Chao-Hsiung Yang	0	0.00	-	-	-	-
Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	24,885,291	4.35	-	-	-	-	Baifu Investment Co., Ltd. (shares) Dongshu Investment Co., Ltd. Taiji ShipPlant Co.,Ltd.	The chairman is the same person as the chairman of Consortium Legal Person Chao-Shu Chen Pub- lic Welfare CharityFoundation.

Name	The shareholder on election date	The shareholder on election date	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Total sharehold- ing in other people’s names	Total sharehold- ing in other people’s names	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)	If the top 10 shareholders have relationships of interested parties or spouse or are first or second tier relatives with each other, their names and relationships. (note)
	Number of shares	Share- holding ratio	Number of shares	Shareh olding ratio	Numb er of shares	Shareh olding ratio	Name	Relationship
Representative: Min-Tuan Chen	2,985,000	0.52	13,003	-	-	-	Chentai Cement Co., Ltd. Yue-Ling Chen	The chairman is the same person as the chairman of Consortium Legal Person Chao-Shu Chen Pub- lic Welfare Charity Foundation. The chairman is the same person as the chairman of Consortium Legal Person Chao-Shu Chen Pub- lic Welfare Charity Foundation. The chairman is the same person as the chairman of Consortium Legal Person Chao-Shu Chen Pub- lic Welfare Charity Foundation. The chairman is a second-tier relative of the chairman of Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation.
Chentai Cement Co., Ltd.	24,005,929	4.20	-	-	-	-	Baifu Investment Co., Ltd. (shares) Dongshu Investment Co., Ltd. Taiji Ship Plant Co., Ltd. Consortium Legal Person Chao-Shu Chen Public Welfare Charity Foun- dation Yue-Ling Chen	The chairman is the same person as the chairman of Chentai Cement Co., Ltd. The chairman is the same person as the chairman of Chentai Cement Co., Ltd. The chairman is the same person as the chairman of Chentai Cement Co., Ltd. The chairman is the same person as the chairman of Chentai Cement Co., Ltd. A second-tier relative of the chairman of Chentai Cement Co.,Ltd.
Representative: Min-Tuan Chen	2,985,000	0.52	13,003	-	-	-

Note: The shareholders listed include legal persons and natural persons, and the relationships shall be disclosed in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

X. Number of shares in the same reinvested business held by the company, its directors, managers and businesses directly or indirectly controlled by the compa-

ny

ny
	As of December 31,2020 Unit: share;%
Reinvestment (note 1)	Investment of the company		Investment of di- rectors, managers and directly or indi- rectly controlled businesses		Total investment
	Number of shares	Share- holding Propor- tion	Number of shares	Share- holding Propor- tion	Number of shares	Shareh olding Pro- portion
Southeast Industrial Construction Co.,Ltd.	35,706	31.01	38,235	33.21	73,941	64.22
Southeast Paper Co., Ltd.	4,971	49.71	159	1.59	5,130	51.30
Nanxia Wood Co., Ltd.	887	27.56	0	0	887	27.56
Southeast Investment Co., Ltd.	498,780	99.29	1,787	0.36	500,567	99.65
Southeast Gaoliang Recycling Co., Ltd.	6,000,000	50.00	120,000	1.00	6,120,000	51.00
Jiahuan Dongni Co., Ltd. (note 2)	0	0	0	0.00	0	0
Southeast Asset Development Co., Ltd.	29,000,000	100.00	0	0.00	29,000,000	100.00
Taiji Ship Plant Co., Ltd.	25,611,169	31.01	1,928,044	2.33	27,539,213	33.34

Note 1: The company’s investment by equity method.

Four. Fundraising Situation

I. Capital and shares

(I) Source of share capital:

						Unit:NT$; share	Unit:NT$; share	Unit:NT$; share
Date	Issue price	Approved share capital		Paid-in capital		Note
		Number of shares	Amount	Number of shares	Amount	Source of share capital	Property other than cash as share capital	Other
September 1996	10	343,882,000	3,438,820,000	343,882,000	3,438,820,000	Capital increase from earnings (note 1)	None	None
September 1997	10	800,000,000	8,000,000,000	495,464,300	4,954,643,000	Capital increase from earnings & cash capital increase (note 2)	None	None
July 1998	10	800,000,000	8,000,000,000	545,010,730	5,450,107,300	Capital increase from capital reserve (note 3)	None	None
August 2000	10	800,000,000	8,000,000,000	558,635,998	5,586,359,980	Capital increase from earnings (note 4)	None	None
August 2004	10	800,000,000	8,000,000,000	586,567,797	5,865,677,970	Capital increase from earnings (note 5)	None	None
April 2006	10	800,000,000	8,000,000,000	583,314,797	5,833,147,970	Cancelled shares bought back (Note 6)	None	None
June 2006	10	800,000,000	8,000,000,000	576,000,797	5,760,007,970	Cancelled shares bought back (note 7)	None	None
December 2008	10	800,000,000	8,000,000,000	572,000,797	5,720,007,970	Cancelled shares bought back (note 8)	None	None

Note 1: June 13, 1996 (85) Tai-Cai-Zheng (I) No. 36904
Note 2: June 3, 1997 (86) Tai-Cai-Zheng (I) No. 41372
Note 3: June 20, 1998 (87) Tai-Cai-Zheng (I) No. 53956
Note 4: June 27, 2000 (89) Tai-Cai-Zheng (I) No. 55307
Note 5: July 7, 2004 Cheng-Chi-Yi No. 0930129934
Note 6: January 25, 2006 Jin-Guan-San No. 0950103221
Note 7: April 18, 2006 Jin-Guan-Zheng-San No. 0950113669
Note 8: November 28, 2008 Jin-Guan-Zheng -San No. 0970064920

Share type	Approved share capital	Approved share capital		Note
	Outstanding shares (already listed)	Unissued shares	Total
Registered ordinary shares	572,000,797	227,999,203	800,000,000

(II) Shareholder structure:

April 30, 2021

Shareholder structure Quantity	Government agencies	Financial institutions	Other legal persons	Individuals	Foreign in- stitutions and individuals	Total
Number	1	1	42	7,502	41	7,587
shareholding	10,500	23,000	449,344,835	79,442,496	43,179,966	572,000,797
shareholding ratio	0.00	0.00	78.56	13.90	7.54	100

Note: No mainland China shareholding.

(III) Diversified holding of ordinary shares:

NT$10 per share

April 30, 2021

Shareholding tiers	Shareholder number	shareholding	sharehold- ingratio
1 to 999	4,221	649,721	0.11
1,000 to 5,000	2,648	4,797,504	0.84
5,001 to 10,000	301	2,423,190	0.42
10,001 to 15,000	93	1,138,448	0.20
15,001 to 20,000	62	1,143,829	0.20
20,001 to 30,000	63	1,637,556	0.29
30,001 to 50,000	39	1,600,035	0.28
50,001 to 100,000	50	3,363,425	0.59
100,001 to 200,000	30	4,322,850	0.76
200,001 to 400,000	24	6,628,808	1.16
400,001 to 600,000	8	3,990,979	0.70
600,001 to 800,000	5	3,574,700	0.62
800,001 to 1,000,000	5	4,511,307	0.79
1,000,001 to 999,999,999	38	532,218,445	93.04
Total	7,205	572,000,797	100.00

(IV) List of major shareholders:

			April 30, 2021	April 30, 2021
Major shareholder name	Shareholdings	shareholding	shareholding ratio
Dongshu Investment Co.,Ltd.		80,496,816	14.07%

(IV) List of major shareholders:	(IV) List of major shareholders:	(IV) List of major shareholders:
April 30, 2021 Shareholdings Major shareholder name shareholding shareholding ratio Dongshu Investment Co.,Ltd. 80,496,816 14.07%
Shareholdings Major shareholder name	shareholding	shareholding ratio
Dongshu Investment Co.,Ltd.	80,496,816	14.07%
TaijiShipPlantCo.,Ltd.	49,292,761	8.62%
Changching Co.,Ltd.	40,070,010	7.01%
Consortium Legal Person Fukang Cultural andEducational Foundation	38,829,350	6.79%
Baifu Investment Co.,Ltd.(shares)	35,008,148	6.12%
Consortium Legal Person Southeast Cultural Foundation	33,421,803	5.84%
Yue-Ling Chen	30,065,760	5.26%
YingchenCo.,Ltd.	26,421,219	4.62%
Consortium Legal Person Chao-Shu Chen Public Welfare CharityFoundation	24,885,291	4.35%
ChengtaiCementCo.,Ltd.	24,005,929	4.20%

(V) Market price, net value, earnings and dividend information in the last two years:

Item	Year	Year	2019	2020	Current year as of March31,2021
Market price per share	Highest		17.85	18.40	17.50
	Lowest		15.10	13.05	13.05
	Average		16.57	16.51	16.65
Net val- ue per share	Before distribution		14.90	14.84	Note3
	After distribution		14.80	14.74	-
Earnings per share	Weighted average share number		569,887,932	569,887,932	569,887,932
	Earningsper share		0.06	0.04	Note3
Divina- tion per share	Cash dividend		0.1	0.1	-
	Free share allotment	Shares allotted from earnings	0	-	-
		Shares allotted from capital reserve	0	-	-
	Accumulate unpaid dividend		0	0	-
Invest- ment return analysis	Price-earnings ratio		276.17	412.75	-
	Capital-gain ratio		165.7	165.1	-
	Cash dividend yield		0.01	0.01	-

Note: 1. It is proposed to allocate a dividend of NT$0.1, but it has not yet been ap-

proved by the shareholders’ meeting.

The weighted average share number is after deduction of the number shares of the parent company held by subsidiaries.
The financial information for the current year as of March 31, 2021 has not been reviewed by the independent auditor as of the date of publication of the annual report.
(VI) Corporate dividend policy and execution status:
The company’s dividend policy:

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 submit it to the shareholders’ meeting for a resolution on the distribution of shareholder dividends.

The company’s dividends shall be distributed in accordance with the proportion specified in the preceding paragraph, taking into account the characteristics of business climate changes, the demand for future funds and long-term financial planning in the life cycle of various products or services, while maintaining a stable dividend. The dividend principle is to distribute all shareholders’ dividends in cash. However, if the company needs funds for capacity expansion, improvement of financial structure and major investment plans, then more than 50% shall be stock dividends and the rest cash dividends.

Proposed dividend distribution at the shareholders’ meeting:
(1) At the beginning of 2020, the retained earnings was NT$ 193,912,296 , and after the addition of the net profit after tax of NT$ 22,157,309 in 2020, disposal of equity instruments measured at fair value through other comprehensive income of NT$ 14,319,968 , and remeasurement of defined benefit plans of NT$ (67,672) included in retained earnings, the total distributable earnings after adjustment is NT$ (98,107) . A legal reserve of NT$ 230,223,794 is allocated, and NT$ (3,631,150) of earnings is retained and not distributed. The remaining balance of NT$57,200,079 is proposed to be fully distributed with a cash dividend of NT$0.1 per share for ordinary shares.
(2) It was approved in the 5th board meeting of the 32st term of the company on March 18, 2021, and submitted to the (2021) general shareholders’ meeting for ratification.

(7) Impact of the free share allotment on the company’s business performance, earnings per share and shareholders’ investment return:

gs per share and shareholders’ investment return:	gs per share and shareholders’ investment return:	gs per share and shareholders’ investment return:
Year Item			2020 (estimated)
Beginning collection capital			5,720,007,970
Stock and cash divi- dends of the year	Cash dividendper share		0.1
	Number of shares allotted from capital in- crease from earnings		－
	Number of shares allotted from capital in- crease from capital reserve		－
Business performance change	Operatingincome		－
	Increase (decrease) ratio of operating income from the sameperiod lastyear		－
	Netprofit after tax		-
	Increase (decrease) ratio of net profit after tax from the sameperiod lastyear		-
	Earningsper share		-
	Increase (decrease) ratio of earnings per share from the sameperiod lastyear		-
	Annual average investment return rate (in- verse of annual averageprice-earnings ratio)		-
Proposed earnings per share and price-earnin gs ratio	If the capital in- crease from earn- ings is all distribut- ed as cash dividend	Proposed earnings per share	-
		Proposed average annual investment return rate	-
	If no capital in- crease from capital reserve is handled	Proposed earnings per share	-
		Proposed average annual investment return rate	-
	If no capital in- crease from capital reserve is handled and the capital in- crease from earn- ings is all distribut- ed as cash dividend	Proposed earnings per share	-
		Proposed average annual investment return rate	-

The company shall explain the basic hypothesis of the estimated or proposed data.
Proposed earnings per share if the capital increase from earnings is all distributed as cash dividend

= [net profit after tax - estimated interest expenses payable on cash dividends * × (1 - tax rate)]/[total number of shares issued at the end of the year - number of shares from earnings allotment**]

Estimated interest expense of cash dividend * = amount of capital increase from earnings × one-year general lending rate

Number of shares from earnings allotment **: refers to the number of shares increased due to the previous year’s allotment of capital increase from earnings
Annual average price-earnings ratio = annual average market price per share/earnings per share of annual financial report

(VIII) Employees’ and directors’ remuneration:

If the company has a profit in the annual settlement, it 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 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 remuneration amount in advance, and then allocate employee remuneration and director remuneration in proportion to the preceding paragraph.
The basis for estimating the remuneration of employees and directors in the current period, the basis for calculating the employees’ remuneration distributed by shares, and the accounting treatment in case of any difference between the actual amount of distribution and the estimated amount: The remuneration of employees and directors of the company in 2020 is estimated according to the provisions of the articles of association. If there is any difference between the remuneration and the actual allotment, it will be regarded as the change of accounting estimation and included in the profit of 2021.
The proposed distribution of employees’ remuneration by the board meeting: The earnings in 2020 shall be distributed in accordance with the provisions of the articles of association of the company.
(1) NT$266,671 was allotted as employees’ remuneration and NT$400,005 as directors’ remuneration. There is no difference between the above proposed allotment amount, employees’ remuneration and directors’ remuneration and the estimated amounts in 2020. However, if there is any difference between the actual allotment amount determined by the subsequent shareholders’ meeting and the amount determined by the board meeting, it shall be regarded as a change in accounting estimate and included in the profit of 2021.

(2) The amount of employees’ remuneration distributed by shares and its proportion to the total amount of after-tax net profit of the individual or respective financial report and the total employees’ remuneration in the current period: Not applicable.
(3) Estimated earnings per share after the proposed allotment of employees’ and directors’ remuneration: NT$0.06.
Actual allotment of employees’ and directors’ remuneration in the previous year:

Unit: NT$

		Unit: NT$
Allotment item Allotment	Employees’ re- muneration	Directors’ remuner- ation
Proposed allotment by the boardmeeting	914,632	1,371,947
Actual allotment	914,632	1,371,947

(IX) The company’s buyback of its shares as of the publication date of the annual report: None.

II. Handling of corporate bonds, preferred shares and overseas depositary receipts:

III. Handling of employee stock option certificates:

(I) The company’s outstanding employee stock option certificates shall be disclosed as of the date of publication of the annual report and the impact on shareholders’ equity: None.
(II) The names and acquisition and subscription status of the managers and the top ten employees who have obtained the employee stock option certificates as of the date of publication of the annual report: None.

IV. Handling of new shares with restricted employee rights:

(I) For the new shares with restricted employee rights for which the acquisition conditions have not been fully met, the handling status as of the date of publication of the annual report and the impact on shareholders’ equity shall be disclosed: None.
(II) The names and acquisition status of the managers and the top ten employees who have obtained the new shares with restricted employee rights as if the date of publication of the annual report: None.

V. Handling of new shares issued for M&A or transfer of shares of other companies:

(I) Mergers and acquisitions or transfer of shares of other companies for issuing new shares that have been completed in the most recent year and as of the date of publication of the annual report: None.

(II) For mergers and acquisitions or transfer of shares of other companies for issuing new shares that have been approved by the board meeting, and mergers and acquisitions or transfer of shares of other companies for issuing new shares that are in process in the most recent year and as of the date of publication of the annual report, disclose the execution status and the impact on shareholders’ equity: None.

VI. Implementation of Fund Utilization Plan:

(I) Plan content:

The previous issuance or private placement of securities that has not been completed, or has been completed in the last three years but the planned benefits have not yet appeared: None.

(II) Implementation status: Not applicable.

Five. Operation Overview

I. Business Contents

(I) Business Scope:
Main business contents:
(1) C901030 Cement manufacturing
(2) B202010 Non-metallic mining
(3) C901040 Ready mixed concrete manufacturing
(4) C901050 Cement and concrete product manufacturing
(5) H701010 Development, lease and sale of residential and office buildings
(6) H701040 Specific area development
(7) H701060 new town, new community development
(8) H703100 Real estate leasing
(9) J102040 Waste treatment
(10) F1120200 Building materials wholesale
(11) F2202110 Building materials retail
(12) CD01010 Ship and parts manufacturing
(13) CD01020 Rail vehicles and parts manufacturing
(14) A201040 Forest amusement area operation
(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.

2. Business proportion in 2020:

Item	Individual	Individual	Consolidated	Consolidated
	Amount (NT$ thousand)	Percent- age(%)	Amount (NT$ thousand)	Percent- age(%)
-Cement	1,296,974	81.45	1,295,602	81.43
Furnace stone powder	222,044	13.95	222,044	13.96
Other	19,355	1.22	19,355	1.22
Lease	53,886	3.38	53,985	3.39
Sale of buildings and land	-	-	-	-
Total	1,592,259	100.00	1,590,986	100.00

Products (services) planned for development: None.

(II) Industry Overview:

Current industry status and development:
(1) Cement industry
- In 2020 the domestic cement market demand is 12,080,000 metric tons, an increase of 730,000 metric tons from 11,350,000 metric tons in 2019, a growth of 6.4%. The volume of imported cement and clinker is 2,480,000 metric tons, an increase of 180,000 metric tons from 2,300,000 metric tons in 2019, a growth of 7.8%. According to the statistics of the General Accounting Office, Executive Yuan, the floor area of buildings approved with the construction licenses issued in 2020 increased by about 12% compared with that in the same period of 2019. With the active promotion of public work 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 expanded and cement demand increased.

However, the imported grinders still have low cost, and the import volume is significantly growing. It has seriously eroded the domestic cement market to make the company’s operation more serious.

(2)Construction industry

At the end of 2020, the Central Bank suddenly launched policies to curb speculation in real estate, such as “illegal red order trading,” “credit control measures of the Central Bank,” “banking control by the FSC,” “real price registration 2.0,” “new LTV risk weight system” and “integrated taxation for houses and land.” However, the serious shortage of workers and soaring land prices continue to push up the cost and price of real estate.

At present, due to the low interest rate, surplus capital is looking for ways out, resulting in new highs in the housing and the stock market. In addition, as the technology industry transfers orders due to COVID-19, many industry zones are committed to the expansion of factories and paying cash for workers, and the real estate industry faces an unprecedented lack of workers; the soaring land price further deepens the risk of a bubble in the industry.

Relationship among upstream, midstream and downstream industries:
(1) Cement industry

==> picture [391 x 266] intentionally omitted <==

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

Raw material Finished product
Clinker
Clinker
Premixed concrete
industry
Non-meta Cement product
Plaster
industry
llic ing
industry Cement
industry Construction dustry
Steel smelting Water
Public construction
industry quenched
f
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(A) Relationship between finished products and downstream industries:
Premixed concrete industry, cement products, construction and public works are the downstream industries of the cement industry; cement is used in the civil construction industry, public works and national defense construction, and deeply affects the prosperity of the domestic cement industry.
(B) Various product development trends and competition situation:
- Supply and demand: Due to transportation and cost consideration, cement is mainly transported and sold at the place of production. Because of the coming gap when the term of the western ore expires, in addition to purchasing raw materials, the manufacturers in the west have to rely on the cement from the east or imported cement to fill the gap; however, limited by the ports and the storage and transportation capacity, there is still difficulty in the balance of production and sales.
- Alternative: Due to cost consideration, the premixed concrete industry increases additives such as blast furnace stone powder and flying gray to replace cement, and this has formed a long-term inevitable trend.

Competitive situation: Based on product characteristics, the company’s sales are mainly in the southern region, and the quality products and good after-sales service provided in the long term have won customer trust and affirmation.
(2) Construction industry

The fact that “Southeast Cement” has been in existence for more than 60 years since its establishment on December 28, 1956, and that it is a well-known brand among listed companies are the most powerful marketing tool of Southeast Asset; all the construction cases of Southeast Asset are in cooperation with the parent company, the bag cement of Southeast Cement is used, and only the factories using the cement of Southeast Cement are appointed for the premixed concrete, in order to effectively integrate the supply with its own materials.

(III) Overview of technology and R&D:

Unit: NT$ thousand

		Unit: NT$ thousand
Year	2020	As of April 30,2021
Amount	15	5

(IV) Long- and short-term business development plans:
Long-term plan
(1) Cement industry

The company still bases its operation on cement and furnace stone powder as the major products, and continuously purchases cement clinker and uses existing equipment for production and sales; in response to market demand, the company is developing the new product – blast furnace cement – which is used for geological improvement projects and floor tiles of construction companies to increase the company’s revenue. The water quenched furnace stone is still purchased from China Steel and ground into furnace stone powder the southern part of the ground.

(2) Construction industry

Continue to purchase the land in the southern with development value, accurately calculate the land development efficiency per ping , plan high-turnover objects, and enhance quality to raise the price. At present, the construction of townhouses with 16 units and an office building with 114 units including 13 floors above ground and 3 floors underground in the New Hougang West Section of Renwu District, Kaohsiung are being planned, and construction permits are expected to

be obtained in mid-March 2021. Products are being planned in the Pingtung-Dalian Section; the product plan is expected to be completed in August 2021 and the construction permit will be applied for.

Short-term plan
(1) Cement industry

Strive to acquire construction business opportunities, expand new product sales markets, improve quality standards, and strengthen customer service to ensure market status and competitive advantage.

(2) Construction industry

Accelerate the turnover of already developed cases and the progress of new cases, in order to improve the company’s investment efficiency and active and capital turnover rate. The property right transfer and delivery of houses in the Pingtung-Beishi Section is expected to start in April; the construction in the Tainan – Dong’an Section has started in June 2020, and an advertising company is commissioned for pre-sale.

II. Overview of the market and production and sales

(I) Market analysis:

(1) Cement industry

The total amount of the major public construction projects with an awarded price of more than NT$1 billion each in the southern region in 2020 was NT$85.1 billion, an increase of NT$26.7 billion from NT$58.4 billion in 2019, a growth rate of 45.7%. According to the data from the Construction Department, the total construction area of buildings is 32.4 million m[2] in the Taiwan and Minnan area, an increase of 4.56 billion m[2] from 27.84 billion m[2] in 2019, a growth rate of 16%. Looking forward to 2021, the cement demand of public work construction and civilian construction will grow steadily.

Comparison of production and sales in Taiwan from January to December 2020 and the same period last year

parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year	parison of production and sales in Taiwan from January to December 2020 and the same period last year
Unit: thousand metric tons
Domestic production				Imports			Domestic consumption
	Cement production	Cement for do- mestic supply (A)	Cement for ex- port	Cement	Clinker	Total (B)	(A + B)
January–December 2020	11,786	9,596	2,266	442	2,041	2,483	12,079
January–December 2019	11,267	9,054	2,321	381	1,914	2,295	11,349
Increase(decrease)	519	542	-55	61	127	188	730
Growth rate(%)	4.61%	5.99%	-2.37%	16.01%	6.64%	8.19%	6.43%

(2) Construction industry

The total sales amount of the Pingtun-Beishi Section is adjusted upward to NT$420 million; the total sales amount of the Tainan-Dong’an section is temporarily scheduled at NT$370 million.

At present, the southern market still has a rigid demand, and the demand is mainly for self-housing and then for employment. With the government’s continuous promotion of major construction projects—the southern extension of the high-speed railway line, the underground railway and the expansion of the Science Park—coupled with global currency devaluation and lower interest rates, the southern housing price is expected to continue to rise.

Favorable and unfavorable factors affecting the future development of the company:

1. Favorable factors:

(1) Cement industry

As the forward-looking construction plan and public works continue, major construction projects such as the oil tank relocation project for intercontinental piers, planned military port project in Zuoying Weihai, plant construction at Nanke Science Park, Tainan underground railway, Shalun Green Energy Park construction, Kaohsiung armory relocation project, Pingtung Veterans’ General Hospital, Kaohsiung Renwu Science Park, Pingtung parking lot project, etc., lead to an increase in the number of major projects in the south, and will help cement sales together with the growth of civil construction cases and expansion of construction area.

(2) Construction industry

  - Due to the continuous development of the forward-looking construction plan and previous construction projects in the southern region, not only is a large number of employment opportunities created, but the local development is also accelerated; these are conducive to the future development of the construction industry.

  - Under the effect of large-scale land hunting by major builders, the land price in the southern region is rising and reaching new highs. Although there are different opinions, some consumers worry that the house price will continue to rise which will speed up the phenomenon of house buying.

  - Suburban areas with convenient transportation systems are more suitable for leisure and retirement housing, and belong to the minority commodity market area; areas with job opportunities are more diversified, and the first-time buyers, investors and house changers can accept this area, which belongs to the mass commodity market area.

  - Long-term low interest rates will help real estate sales.

Unfavorable factors:
(1) Cement industry

Due to the lack of labor force in construction projects, delayed project progress, weak consumption power due to COVID-19, increasingly stringent environmental protection laws and regulations, increased cost of related facilities improvement, hidden worries about electricity price rise, etc., the company’s operation will face more difficulties.

(2) Construction industry
- Taiwan’s population growth is decreasing, and the demand for housing will be relatively less.
- The lack of labor in the construction industry has seriously affected the progress of construction projects.
- The gradual decrease of residential land available for construction, the rising cost of land, and the high ratio of house price to income all have an impact on the construction industry, especially on first-time buyers.
- Increasingly stringent environmental regulations and changes in energy policies have led to the rise of electricity prices, which has further troubled the operation of the construction industry.
- All kinds of unfavorable factors are affecting the market, resulting in weak consumption power and indirectly affecting purchase intention.
- In such an environment, it will also be difficult for the construction industry to control the cost of construction projects, and the purchase behavior of customers will also be affected.
Countermeasures for unfavorable factors
(1) Cement industry

Continuously improve the existing production equipment, strengthen equipment maintenance, seek low-cost sources of raw materials to reduce production costs, stabilize existing customers and develop new products for the market, make the sales strategy flexible, and deepen customer service to increase sales to seek the maximum benefit of the company.

  - (2) Construction industry: reduce cost and increase income

     - Carefully select reputable manufacturers, whether they are engineering construction manufacturers or material manufacturers, so as to avoid excessive differences in construction costs. Strict requirements should be made on the signing of construction and material contracts and investigation of manufacturers.

     - Formulate strict construction procedures and efficient construction management to make the construction process orderly. Strictly implement and indirectly reduce construction costs.

     - Reserve appropriate amount of land. Suburban land with a convenient transportation system is the future trend, and integrated land with old and dangerous buildings in urban areas are also suitable. The land around Qiaotou Science Park can be appropriately reserved.

     - If the pre-sale mode is adopted for future sales cases, when the sales volume reaches 35%, think carefully about the strategy for the next stage.

     - The planning of the case should be in line with the needs of the region. In this way, the sales price can be increased and the profit can be increased. The future after-sales service is a long-term task of the company, which needs to be strengthened.

(II) Applications of major products and production process:
1. Major products: 1. Application of Portland I cement: public works and building construction.
2. Application of Portland II cement: public works and building construction.
3. Furnace stone powder: public works and building construction.
Production process:

Cement is made by grinding clinker and gypsum, as follows:

A. Cement grinding: Grinding clinker and gypsum to standard fineness (337–380 by gas permeability) to become cement products. After the cement is made, the strength of the cement still needs to be tested. At present, the 28-day strength standard of Portland I cement is 380kg/cm[2] . In addition, in the grinding process, appropriate additives such as silica, aluminum or fur-

nace stone powder can be added according to the needs of customers to produce fly ash cement, blast furnace cement and silica cement.

B. Packing: The shipment of cement can be divided into two categories: bulk and bag. The bulk cement is directly unloaded to the bulk truck by the loading port according to the number on the weighbridge, and the bag cement is loaded and shipped from the cement warehouse after weighing by the packing machine and by bag. There are wet, semi-wet and dry methods for raw material grinding of cement. The wet method consumes a lot of heat to evaporate water; the production efficiency is the lowest, and has never been used in Taiwan. The semi-wet and Lepol process are now being gradually replaced by the suspension-preheating dry method which has a high thermal efficiency.

(III) Main original fuel supply status:

Raw material name	Supply
Clinker	Purchased domestically
Plaster	Purchased domestically
Water quenched furnace stone	Purchased domestically

(IV) Main customers of purchase (sales) in the last two years:
List of sales customers accounting for more than 10% of the total sales in the last two years:

		2019	2019	2019	2020	2020	2020	2020
Item	Name	Amount (NT$ thou- sand)	Percentage of the total net sales amount [%]	Relationship with the issuer	Name	Amount (NT$ thou- sand)	Percentage of the total net sales amount [%]	Relationship with the issuer
1	Goldsun Co.,Ltd.	262,485	16.56	None	Goldsun Co.,Ltd.	182,963	16.56	None
2	Honghsin Building Materials Co.,Ltd.	150,759	9.51	None	Lianghsun Corporation Co., Ltd.	170,598	9.51	None
	Other	1,171,696	73.93	None	Other	1,237,425	77.78	None
	Net sales amount	1,584,940	100.00		Net sales amount	1,590,986	100.00

Note: The consolidated report information is used.

List of manufacturers accounting for more than 10% of the total purchase amount in the last two years:

		2019	2019	2019		2020	2020	2020
Item	Name	Amount (NT$ thou- sand)	Percentage of the total net pur- chase amount [%]	Relationship with the issuer	Name	Amount (NT$ thousand)	Percentage of the total net pur- chase amount [%]	Relationship with the issuer
1	Taiwan Cement	919,126	77.05	None	Taiwan Cement	885,654	77.83	None
2
	Other	273,729	22.95	None	Other	252,288	22.17	None
	Net pur- chase amount	1,192,855	100.00		Net pur- chase amount	1,137,942	100.00

Note 1: The consolidated report information is used.

(V) Major product output value in the last two years:

Unit: metric tons/NT$ thousand

Year Output value Major product (ordepartment)	2019	2019	2019	2020	2020	2020
	Capacity	Yield	Output value	Capacity	Yield	Output value
Cement	871,000	565,756	1,039,359	871,000	550,857	1,023,944
Furnace stone powder	232,000	171,229	183,693	232,000	182,147	195,929
Total	1,103,000	736,985	1,223,052	1,103,000	733,004	1,219,873

(VI) Major product sales volume in the last two years:

Unit: metric tons/NT$ thousand

2019	2019	2019	2019	2020	2020	2020	2020
Domestic sales		Export		Domestic sales		Export
Volume	Value	Volume	Value	Volume	Value	Volume	Value
557,317	1,290,387	0	0	557,837	1,296,97	4 0	0
169,543	201,159	0	0	181,014	222,04	4 0	0
726,860	1,491,546	0	0	727,380	1,519,01	8 0	0

III. Employee profile in the last two years

(I) The company

I) The company	I) The company
Year		2019	2020	Current year as of April 30, 2021
Number of employees		112	108	107
Average age		53.4	54.2	53.3
Averageyear of service		10.17	10.94	10.29
Academic distribution ratio (%)	PhD	0	0	0
	Master	3	3	3
	College and university	43	43	45
	High school	46	46	44
	Below high school	8	8	8

(II) All companies in the financial report

Year	Year	2019	2020	Current year as of April 30, 2020
Number of employees		119	119	116
Average age		52.8	53.8	53.12
Averageyear of service		9.7	10.16	9.68
Education Distribution Ratio (%)	PhD	0	0	0
	Master	3	3	3
	College and university	44	45	48
	High school	45	44	41
	Below high school	8	8	8

IV. Environmental protection expenditure information

(I) Loss due to environment contamination in the last two years and up to the date of publication of the annual report:

Item Pollution status (type, degree) Compensation object or disposal unit Compensation amount or disposal situation Other losses	2019 Air pollution Environmental Protection Bureau NT$36,000 None	2020 Waste disposal Environmental Protection Bureau NT$24,000 None	2021 as of April30
			None None None None

(II) Countermeasures:

In order to strengthen the inspection and maintenance of production equipment, the environmental protection number should be added in addition to the original equipment number in the equipment inspection and maintenance record, so as to implement the inspection and maintenance work and facilitate the subsequent inspection.
For the emergency measures in case of equipment malfunction, the “Emergency Measures to Prevent Pollution Exceeding Emission Standards or Limits” has been amended, and personnel training has been strengthened to implement the emergency measures for exceptions.
(III) The company’s key environmental protection work in the future:
Continue the soil and water conservation and landscape maintenance in the original mining area.
Strengthen the cleaning of transportation routes and environmental greening in the plant area.
Strengthen the maintenance of production equipment, and ensure the normal operation of air pollution control equipment to avoid pollution.
Strengthen the professional training and management of staff, reduce human negligence, and strengthen the ability to respond to abnormal situations.

V. Labor Relations

(I) Employee Welfare System:
Major employee benefits and implementation status:
(1) Based on the Labor Standards Act and related regulations, the company formulated its “Work Rules” which was approved by the competent authority.
(2) The Employee Welfare Committee is established to handle various welfare business, such as the year-end dinner, birthday gift, Labor Day gift, three Festival gift certificate, etc., with excellent performance.
(3) The Employee Self-improvement Association is established to provide direct benefits for employees, such as wedding and funeral funds for employees and their immediate family members, emergency relief funds, hospitalization consolation funds, interest-free loans, accommodation supply, employee group insurance, free health examination, group employee travel subsidies, retiree care, etc., to free the employees from worries about their families.
(4) The Employee Training Committee is established to handle staff training, instill new knowledge, and cultivate enterprise ethics to enhance technical level and professional ethics.
Employee retirement system and implementation status: The company has established its Labor Retirement Measures according to law to stabilize employees’ life after retirement, and the seniority of em-

ployees before July 1, 2005 has been settled in accordance with Article 11 of the Labor Pension Act. Since July 1, 2005, the company has established its retirement measures for the allocation according to the Labor Retirement Regulations, and the company allocates 6% of the employee salary every month to the employee’s personal pension account; if there is any voluntary pension allocation, the amount shall be withheld from the employees’ monthly salary at the voluntary allocation rate to the personal pension account at the Labor Insurance Bureau.

The provisions of the Labor Pension Act applicable to the company are as follows:

(1) Voluntary retirement:
Employees with one of the following conditions may apply for retirement:
[1] Having worked for more than 15 years or over 55 years of age.
[2] Having worked for more than 20 years.
[3] Having worked for more than 10 years or over 60 years of age.
(2) Forced retirement:

If the employee has one of the following conditions, the company may not force his/her retirement:

Over 65 years of age.
Mentally or physically disabled and unable to perform the duty required.

Regarding the age requirement in the first paragraph above, the company may apply with the central competent authority for approval and adjustment if the employee’s work is of a dangerous or physically demanding nature. However, the age shall be no less than 55.

  - Labor–management agreement: None.

(II) Loss due to labor disputes in the last three years and as of the date of publication of the annual report:
Loss due to labor disputes in the last three years and as of the date of publication of the annual report: None.
Current and future countermeasures: None.
Estimated amount of current and future occurrence: None

VI. Important Contracts

Contract nature	Party	Contract Contractperiod	Main content	Restriction clauses
Lease con- tract	Chengtai Cement Co., Ltd.	January 1, 2021 – December 31, 2025	Renting the land of this company’s Kaohsiung plant and its production equipment.	None
Lease con- tract	Taiwan’s China Petroleum Company	January 1, 2017 – December 31, 2021	Renting the land of the oil plant segment,	only for cement manufacturing andprocessing.
Lease con- tract	Southern-region Office of the National Property Administration	February 1, 2019 – December 31, 2027	Renting the land of the Gaonan segment.	None
Lease con- tract	Taiwan Railways Administration, Ministry of Transportation and Communications	October 21, 2019 – October 20, 2022	Renting the land of the Gaonan and the Shande segment.	None
Lease con- tract	Taiwan Concrete Co., Ltd.	January 1, 2021 – December 31, 2021	Renting the land of the Gaonan segment.	Restricted to the piling of raw materials.
Lease con- tract	Boyuan Construction Co., Ltd.	February 15, 2016 – February14,2032	Renting the land and building of the Wannei segment.	None

Six. Financial Overview

I. Condensed Balance Sheet and Comprehensive Income Statement of the Last Five Years

(I) Condensed consolidated balance sheet:

					Unit:NT$thousand	Unit:NT$thousand
Year Item		2016 (note 1)	2017 (note 1)	2018 (note 1)	2019 (note 1)	2020 (note 1)
Current assets		1,998,413	2,117,646	2,029,986	2,026,192	1,963,779
Property, plant and equipment		250,890	228,265	216,383	226,093	249,698
Intangible assets		0	0	0	58	23
Other assets		6,958,943	7,019,380	7,001,382	7,488,005	7,651,820
Total assets		9,208,246	9,365,291	9,247,751	9,740,348	9,865,320
Current liabilities	Before distribution	251,953	460,946	412,748	661,655	723,920
	After distribution	251,953	460,946	412,748	661,655	723,920
Non-current liabilities		315,443	324,536	322,865	507,709	592,681
Total liabilities	Before distribution	567,396	785,482	735,613	1,169,364	1,316,601
	After distribution	567,396	785,482	735,613	1,169,364	1,316,601
Owner’s equity attributable to the owner of the parent company		8,507,604	8,540,158	8,483,670	8,524,175	8,489,809
Share capital		5,720,008	5,720,008	5,720,008	5,720,008	5,720,008
Capital increase		185,044	187,952	188,057	188,162	188,267
Retain earnings	Before distribution	2,007,235	2,009,757	2,136,831	2,114,087	2,093,199
	After distribution	2,007,235	2,009,757	2,136,831	2,114,087	2,093,199
Other interests		607,502	634,626	450,959	514,103	500,520
Treasury stock		(12,185)	(12,185)	(12,185)	(12,185)	(12,185)
Non-controlling interest		133,246	39,651	28,468	46,809	58,910
Rights and interests Total	Before distribution	8,640,850	8,579,809	8,512,138	8,570,984	8,548,719
	After distribution	8,640,850	8,579,809	8,512,138	8,570,984	8,548,719

Note 1: Audited and certified by the independent auditor.

(II) Condensed individual balance sheet:

) Condensed individual	) Condensed individual	balance sheet:	balance sheet:	balance sheet:	balance sheet:	balance sheet:
		Unit:NT$thousand
Year Item		2016 (note 1)	2017 (note 1)	2018 (note 1)	2019 (note 1)	2020 (note 1)
Current assets		1,271,374	1,516,988	1,468,195	1,427,080	1,363,990
Property, plant and equipment		250,890	228,265	216,383	209,545	226,744
Intangible assets		0	0	0	0	0
Other assets		7,515,205	7,533,101	7,494,015	7,990,360	7,967,763
Total assets		9,037,469	9,278,354	9,178,593	9,626,985	9,558,497
Current liabilities	Before distribution	237,870	437,108	395,506	618,549	634,360
	After distribution	237,870	437,108	395,506	618,549	634,360
Non-current liabilities		291,995	301,088	299,417	484,261	434,328
Total liabilities	Before distribution	529,865	738,196	694,923	1,102,810	1,068,688
	After distribution	529,865	738,196	694,923	1,102,810	1,068,688
Share capital		5,720,008	5,720,008	5,720,008	5,720,008	5,720,008
Capital increase		185,044	187,952	188,057	188,162	188,267
Retain earnings	Before distribution	2,007,235	2,009,757	2,136,831	2,114,087	2,093,199
	After distribution	2,007,235	2,009,757	2,136,831	2,114,087	2,093,199
Other interests		607,502	634,626	450,959	514,103	500,520
Treasury stock		(12,185)	(12,185)	(12,185)	(12,185)	(12,185)
Rights and interests Total	Before distribution	8,507,604	8,540,158	8,483,670	8,524,175	8,489,809
	After distribution	8,507,604	8,540,158	8,483,670	8,524,175	8,489,809

Note 1: The individual financial statements audited and certified by the independent auditor.

(III) Condensed consolidated income statement:

				Unit:NT$thousand	Unit:NT$thousand
Year Item	2016 (note 1)	2017 (note 1)	2018 (note 1)	2019 (note 1)	2020 (note 1)
Operating income	1,478,515	1,716,725	1,676,187	1,584,940	1,590,986
Operating gross profit	10,271	(43,205)	144,454	82,289	67,372
Business profit	(75,303)	(137,175)	40,497	(8,509)	(30,573)
Operating income and expenditure	292,639	201,190	30,744	51,653	38,003
Net profit before tax	217,336	64,015	71,241	43,144	7,430
Net profit of contin- uingly operated units	207,603	58,307	65,589	33,243	16,949
Loss of closed units	0	0	0	0	0
Net profit (loss) of the current period	207,603	58,307	65,589	33,243	16,949
Other comprehen- sive profit in the current period (net after tax)	(91,853)	26,773	(9,357)	64,507	689
Total comprehensive profit of the current period	115,750	85,080	56,232	97,750	17,638
Net profit attributa- ble to the owner of the parent company	108,418	61,404	65,680	33,133	22,158
Net profit attributa- ble to non-controlling in- terests	99,185	(3,097)	(91)	110	(5,209)
Total comprehensive profit attributable to the owner of the parent company	16,564	88,184	56,187	97,600	22,729
Total comprehensive profit attributable to non-controlling in- terests	99,186	(3,104)	45	150	(5,091)
Earnings per share	0.19	0.11	0.12	0.06	0.04

Note 1: Audited and certified by the independent auditor.

(IV) Condensed individual comprehensive income statement:

	Unit:NT$thousand	Unit:NT$thousand	Unit:NT$thousand	Unit:NT$thousand	Unit:NT$thousand
Year Item	2016 (note 1)	2017 (note 1)	2018 (note 1)	2019 (note 1)	2020 (note 1)
Operating income	1,478,295	1,455,094	1,562,161	1,572,842	1,592,259
Operating gross profit	10,062	(94,031)	111,631	78,157	67,283
Business profit	(68,257)	(161,738)	20,545	(4,870)	(14,605)
Operating income and expenditure	180,997	225,564	46,814	48,315	27,272
Net profit before tax	112,740	63,826	67,359	43,445	12,667
Net profit of contin- uingly operated units	108,418	61,404	65,680	33,133	22,158
Loss of closed units	0	0	0	0	0
Net profit (loss) of the currentperiod	108,418	61,404	65,680	33,133	22,158
Other comprehen- sive profit in the current period (net after tax)	(91,854)	26,780	(9,493)	64,467	571
Total comprehen- sive profit of the currentperiod	16,564	88,184	56,187	97,600	22,729
Net profit attributa- ble to the owner of the parentcompany	108,418	61,404	65,680	33,133	22,158
Net profit attributa- ble to non-controlling in- terests	0	0	0	0	0
Total comprehen- sive profit attributa- ble to the owner of theparent company	16,564	88,184	56,187	97,600	22,729
Total comprehen- sive profit attributa- ble to non-controlling in- terests	0	0	0	0	0
Earnings per share	0.19	0.11	0.12	0.06	0.04

Note 1: The individual financial statements audited and certified by the independent auditor.

(V) Independent auditors in the last five years:

Year	Accounting firm	Name of independent auditor	Audit opinion
2016	Crowe (TW) CPAs	Ling-Wen Huang,Ren-Yao Hsieh	Revised unqualified opinion
2017	Crowe (TW) CPAs	Shu-Man Tsai,Ren-Yao Hsieh	Unqualified opinion plus other matter
2018	Crowe (TW) CPAs	Shu-Man Tsai,Ching-Lin Li	Unqualified opinion plus other matter
2019	Crowe (TW) CPAs	Shu-Man Tsai,Ching-Lin Li	Unqualified opinion plus other matter
2020	Crowe (TW) CPAs	Shu-Man Tsai,Ching-Lin Li	Unqualified opinion plus other matter

II. Financial Analysis of the Last Five Years

(1) Analysis of consolidated financial statements:

Item	Year	2016 (note1)	2017 (note1)	2018 (note1)	2019 (note1)	2020 (note1)
Financial structure (%)	Debt to asset ratio	6.16	8.39	7.95	12.01	13.35
	Ratio of long term funds to property, plant and equipment	3,444.08	3,758.71	3,933.83	3,790.91	3,423.62
Solvency (%)	Current ratio	793.17	459.41	491.82	306.23	271.27
	Quick ratio	379.09	198.35	181.77	133.59	114.7
	Times interest earned	81,195.52	25,912.50	6,776.76	973.18	221.29
Business capability	Turnover rate of receivables(times)	4.08	5.43	4.66	4.06	3.91
	Average cash in days	89.46	67.21	78.32	89.90	93.35
	Turnover rate of accountspayable(times)	9.93	9.87	7.11	7.04	7.08
	Inventory turnover rate (times)	2.57	3.54	3.16	2.48	1.98
	Average sales days	142.02	103.10	115.5	147.17	184.34
	Turnover rate of property, plant and equipment (times)	5.89	7.52	7.54	7.16	6.69
	Total asset turnover rate (times)	0.16	0.18	0.18	0.17	0.16

Profitability	Return on assets(%)	2.24	0.63	0.71	0.39	0.22
	Return on equity (%)	2.40	0.68	0.77	0.39	0.20
	Ratio of net profit before tax topaid-in capital(%)	3.80	1.12	1.25	0.75	0.13
	Netprofit rate(%)	14.04	3.40	3.91	2.10	1.07
	Earningsper share(NT$)	0.19	0.11	0.12	0.06	0.04
Cash flow	Cash flow ratio(%)	0	0	3.86	26.87	15.29
	Cash flow adequacy ratio(%)	75.70	55.94	30.71	32.81	23.59
	Cash reinvestment ratio (%)	-5.37	-3.04	-0.62	1.87	0.84
Leverage	Operatingleverage	0.02	0.51	3.05	-7.77	-1.71
	Financial leverage	1.00	1.00	1.03	0.63	0.83
Reasons for changes in various financial ratios in the last two years: 1. The increase in the ratio of liabilities to assets and the decrease in current ratio and quick ratio were mainly due to the decrease of current assets caused by the investment in property, plant and equipment and right-of-use assets in 2020. 2. The decrease in times interest earned was mainly due to the increase of interest expense in 2020. 3. The decrease in inventory turnover rate was mainly due to the increase of inventory in 2020. 4. The increase in average sales days was mainly due to the decrease of inventory turnover rate in 2020. 5.The decrease in return on assets and return on equity was mainly due to the decrease of profit and loss after tax. 6. The decrease in the ratio of net profit before tax to paid-in capital was mainly due to the decrease of profit and loss before tax. 7. Reduction of net profit rate: Same as in 5. 8. Decrease in cash flow ratio and cash reinvestment ratio: Mainly due to the decrease of net cash inflow from operating activities. 9. Decrease in cash flow adequacy ratio: Mainly due to the decrease of net cash flow from operating activities in 2020.

Note 1: Audited and certified by the independent auditor.
Financial structure
(1) Ratio of liabilities to assets = total liabilities/total assets
(2) Ratio of long-term funds to property, plant and equipment = (total equity + non-current liabilities)/net real property, plant and equipment
Solvency
(1) Current ratio = current assets/current liabilities
(2) Quick ratio = current assets - inventory - prepayments/current liabilities
(3) Times interest earned = net profit before income tax and interest expense/interest expense in the current period
Business capability
(1) Turnover rate of receivables (including accounts receivable and notes receivable due to business): net sales/average receivables of each period (including accounts receivable and notes receivable due to business)
(2) Average cash in days = 365/turnover of receivables
(3) Inventory turnover = cost of goods sold/average inventory amount

(4) Turnover rate of payables (including accounts payable and notes payable due to business) = cost of goods sold/average payables of each period (including accounts payable and notes payable due to business)
(5) Average sales days = 365/inventory turnover
(6) Turnover rate of property, plant and equipment = net sales/average net amount of property, plant and equipment
(7) Total asset turnover = net sales/average total assets
Profitability
(1) Return on assets = [profit after tax + interest expense × (1 - tax rate)]/average total assets
(2) Return on equity = profit after tax/average net equity
(3) Net profit ratio = profit after tax/net sales
(4) Earnings per share = (profit attributable to the owners of the parent company - dividends on preferred shares)/weighted average number of shares (note 1)
Cash flow
(1) Cash flow ratio = net cash flow from operating activities/current liabilities
(2) Net cash flow adequacy ratio = net cash flow from operating activities in the last five years/(capital expenditure + inventory increase + cash dividend) in the last five years
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividend)/(gross amount of property, plant and equipment + long-term investment + other non-current assets + working capital) (note 2)
Leverage:
(1) Operating leverage = (net operating income - variable operating costs and expenses)/operating income (note 3)
(2) Financial leverage = operating income/(operating income - interest expense)
Note 1: When measuring earnings per share in the formula above, special attention shall be paid to the following matters:
1. The weighted average number of ordinary shares shall prevail, instead of the number of issued shares at the end of the year.
2. Where there is a cash capital increase or treasury stock buyback, the weighted average number of shares shall be calculated with the circulation period taken into consideration.
3. Where there is a capital increase from earnings or from capital reserve, the earnings per share in the previous year and six months shall be adjusted retroactively according to the proportion of the capital increase, without any consideration of the issuance period of such capital increase.
4. If the preferred shares are non-transferrable cumulative shares, the dividend of the current period (whether paid or not) shall be reduced from, or the net loss after tax shall be added to the net profit after tax. If the preferred shares are non-cumulative, in the case of a net profit after tax, the dividend of the preferred shares shall be deducted from the net profit after tax; if it is a loss, then it is unnecessary to make any adjustment.
Note 2: Special attention shall be paid to the following matters in the cash flow analysis:
1. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
2. Capital expenditure refers to the cash outflow from capital investment every year.
3. The increase in inventory shall only be included when the ending balance is larger than the opening balance. If the inventory decreases at the end of the year, it shall be counted as zero.
4. Cash dividends include cash dividends of ordinary shares and preferred shares.
5. Gross amount of property, plant and equipment refers to the total amount of property, plant and equipment before the deduction of accumulated depreciation.
Note 3: The issuer shall classify the operating costs and operating expenses into fixed and variable according to their nature. If there is any estimation or subjective judgment, attention shall be paid to its rationality to maintain consistency.

(II) Analysis of individual financial statements:

Item	Year	2016 (note1)	2017 (note1)	2018 (note1)	2019 (note1)	2020 (note1)
Financial structure (%)	Debt to asset ratio	5.86	7.96	7.57	11.46	11.18
	Ratio of long term funds to property, plant and equipment	3,390.97	3,741.33	3,920.67	4,067.97	3744.23
Solvency (%)	Current ratio	534.48	347.05	371.22	230.71	215.02
	Quick ratio	309.16	151.47	126.16	90.78	100.47
	Times interest earned	44,838.10	26,151.43	6,424.79	981.77	401.38
Business capability	Turnover rate of receivables(times)	4.08	4.73	4.45	4.03	3.92
	Average cash in days	89.46	77.16	82.02	90.57	93.11
	Turnover rate of accounts payable (times)	22.91	9.11	6.89	7.25	7.97
	Inventory turnover rate(times)	3.58	4.36	3.35	2.72	2.88
	Average sales days	101.95	83.71	108.95	134.19	126.73
	Turnover rate of property, plant and equipment(times)	5.89	6.37	7.22	7.51	7.02
	Total asset turnover rate(times)	0.16	0.16	0.17	0.16	0.17
Profitability	Return on assets(%)	1.19	0.67	0.72	0.40	0.27
	Return on equity (%)	1.27	0.72	0.77	0.39	0.26
	Ratio of net profit before tax to paid-in capital(%)	1.97	1.12	1.18	0.76	0.22
	Netprofit rate(%)	7.33	4.22	4.20	2.11	1.39
	Earnings per share (NT$)	0.19	0.11	0.12	0.06	0.04
Cash flow	Cash flow ratio (%)	0	0	2.85	35.25	19.59
	Cash flow adequacy ratio(%)	132.64	103.52	84.96	85.80	79.07
	Cash reinvestment ratio(%)	-1.62	-0.80	-0.69	2.50	1.05

Leverage	Operatingleverage	0.02	0.67	4.73	-12.80	-3.58
	Financial leverage	1.00	1.00	1.05	0.50	0.78
Reasons for changes in various financial ratios in the last two years: 1. Decrease in cash flow ratio: Mainly due to the decrease of net cash flow from operating activities caused by the decrease in profit before tax and decrease of cement to be withdrawn. 2. Decrease in cash flow adequacy ratio: Mainly due to the decrease of net cash flow of operating activities in 2020. 3. Decrease of cash reinvestment ratio: The same reason for the decrease in cash flow ratio.

Note 1: Audited and certified by the independent auditor.
Financial structure
(1) Ratio of liabilities to assets = total liabilities/total assets
(2) Ratio of long-term funds property, plant and equipment = (total equity + non-current liabilities)/net property, plant and equipment
Solvency
(1) Current ratio = current assets/current liabilities
(2) Quick ratio = current assets - inventory - prepayments/current liabilities
(3) Times interest earned = net profit before income tax and interest expense/interest expense in the current period
Business capability
(1) Turnover rate of receivables (including accounts receivable and notes receivable due to business): net sales/average receivables of each period (including accounts receivable and notes receivable due to business)
(2) Average cash in days = 365/turnover of receivables
(3) Inventory turnover = cost of goods sold/average inventory amount
(4) Turnover rate of payables (including accounts payable and notes payable due to business) = cost of goods sold/average payables of each period (including accounts payable and notes payable due to business)
(5) Average sales days = 365/inventory turnover
(6) Turnover rate of property, plant and equipment = net sales/average net property, plant and equipment
(7) Total asset turnover = net sales/average total assets
Profitability
(1) Return on assets = [profit after tax + interest expense × (1 - tax rate)]/average total assets
(2) Return on equity = profit after tax/total average equity
(3) Net profit ratio = profit after tax/net sales
(4) Earnings per share = (profit attributable to the owners of the parent company - dividends on preferred shares)/weighted average number of shares (note 1)
Cash flow
(1) Cash flow ratio = net cash flow from operating activities/current liabilities
(2) Net cash flow adequacy ratio = net cash flow from operating activities in the last five years/(capital expenditure + inventory increase + cash dividend) in the last five years
(3) Cash reinvestment ratio = (net cash flow of operating activities - cash dividend)/gross amount of property, plant and equipment + long-term investment + other non-current assets + working capital) (note 2)
Leverage:
(1) Operating leverage = (net operating income - variable operating costs and expenses)/operating income (note 3)
(2) Financial leverage = operating income/(operating income - interest expense)
Note 1: When measuring earnings per share in the formula above, special attention shall be paid to the following matters:
The weighted average number of ordinary shares shall prevail, instead of the number of issued shares at the end of the year.
Where there is a cash capital increase or treasury stock buyback, the weighted average number of shares shall be calculated with the circulation period taken into consideration.

3.Where there is a capital increase from earnings or from capital reserve, the earnings per share in the previous year and six months shall be adjusted retroactively according to the proportion of the capital increase, without any consideration of the issuance period of such capital increase.
If the preferred shares are non-transferrable cumulative shares, the dividend of the current period (whether paid or not) shall be reduced from, or the net loss after tax shall be added to the net profit after tax. If the preferred shares are non-cumulative, in the case of a net profit after tax, the dividend of the preferred shares shall be deducted from the net profit after tax; if it is a loss, then it is unnecessary to make any adjustment.
Note 2: Special attention shall be paid to the following matters in the cash flow analysis:
Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
Capital expenditure refers to the cash outflow from capital investment every year.
The increase in inventory shall only be included when the ending balance is larger than the opening balance. If the inventory decreases at the end of the year, it shall be counted as zero.
Cash dividends include cash dividends of ordinary shares and preferred shares.
Gross amount of property, plant and equipment refers to the total amount of property, plant and equipment before the deduction of accumulated depreciation.
Note 3: The issuer shall classify the operating costs and operating expenses into fixed and variable according to their nature. If there is any estimation or subjective judgment, attention shall be paid to its rationality to maintain consistency.
Note 4: If the company’s shares are without a face value or the face value per share is not NT$10, the paid-in capital ratio calculation shall be replaced with the ratio of equity attributable to the owner of the parent company in the balance sheet.

III. Audit Committee Review Report of the Latest Annual Financial Report

Audit Committee Review Report

The board of directors has prepared the 2020 business report, financial statements (including individual and consolidated financial statements) and earnings distribution proposal of the company; the audit of financial statements was commissioned to and completed by accountants Shu-Man Tsai and Ching-Lin Li of Crowe (TW) CPAs, and an audit report was issued accordingly.

The abovementioned business report, financial statements and earnings distribution proposal have been examined and approved by the Audit Committee, and there was no discrepancy found. The Review Report is therefore issued in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act; please review and verify.

The2021 general shareholders’ meeting of Southeast Cement Corporation

Southeast Cement Corporation

Convener of the Audit Committee:

March 18, 2021

==> picture [111 x 55] intentionally omitted <==

IV. The latest annual consolidated financial report, including the Independent Auditor’s Report, balance sheet, comprehensive income statement, statement of changes in equity, cash flow statement and notes or schedules:

Southeast Cement Corporation Statement

In the year of 2020 (from January 1 to December 31, 2020), the companies that should be included in the preparation of the consolidated financial statements of affiliated enterprises in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” and the companies that should be included in the preparation of consolidated financial statements of parent and subsidiary companies in accordance with the International Financial Reporting Standards No. 10 are the same, and the relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has been disclosed in the consolidated financial statements of the parent and subsidiary companies previously mentioned, so the consolidated financial statements of affiliated enterprises will not be prepared separately.

We hereby declare the above.

Company name: Southeast Cement Corporation Responsible person: Min-Tuan Chen

March 18, 2021

－－ 93

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.

－－ 94

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.

－－ 95

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.

－－ 96

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

－－ 97

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)

－－ 98

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

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

Unit: NT$ thousand

2020	% 100 (96) 4 (1) (5) - (6) (2) - 4 (2) - 1 2 - 1 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
$ 22,729 (5,091)	1 -	$ 97,600 150	6 -
$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-Tuan Chen Manager: Chang-Chi Wu Head of accounting: Hsin-Han Huang

－－ 100

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

		Equityattributable to ow	Equityattributable to ow	ners of theparent company	ners of theparent company		NT$ thousand Total equity
Ordinary share capital $ 5,720,008 - - - - - - - - 5,720,008 - - - - - - - - $5,720,008	Capital reserve $ 188,057 - - - - - 105 - - 188,162 - - - - - 105 - - $188,267	Retained earnings		Undistributed earnings $ 283,737 (6,568) (57,200) 33,133 10 33,143 - - 1,313 254,425 (3,313) (57,200) 22,158 (98) 22,060 - - 14,252 $230,224	Other equityitems	Treasury shares $ (12,185) - - - - - - - - (12,185) - - - - - - - - $ (12,185)
		Legal reserve $ 1,042,176 6,568 - - - - - - - 1,048,744 3,313 - - - - - - - $1,052,057	Special reserve $ 810,918 - - - - - - - - 810,918 - - - - - - - - $810,918		Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensive income
					$ 450,959 - - - 64,457		$ 8,512,138 - (57,200) 33,243 64,507
					64,457		97,750
					- - (1,313)		105 18,191 -
					514,103 - - - 669		8,570,984 - (57,200) 16,949 689
					669		17,638
					- - (14,252)		105 17,192 -
					$500,520		$8,548,719

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

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

Huang

－－ 101

Southeast Cement Corporation and Subsidiaries Consolidated Statement of Cash Flow 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
Item 2020 Cash flow from operating activities Net profit (net loss) before tax of the current period $ 7,430 Adjustments Income, expense and loss items Depreciation expense 75,323 Amortization expense 35 Expected credit impairment loss (profit) 236 Net loss (profit) of financial assets and liabilities measured at fair value through income statement (4,086) Interest expense 6,126 Interest income (6,228) Dividend income (46,500) Share of losses (profits) of affiliated enterprises and joint ventures recognized by equity method (12,952) Loss (profit) from disposal and retirement of property, plant and equipment - Impairment loss of non-financial assets - Profit from lease revision (7) Other items 105 Total income, expense and loss items 12,052 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 22,291 Decrease (increase) in notes receivable (11,955) Decrease (increase) in accounts receivable (5,434) Decrease (increase) in other receivables 21,263 Decrease (increase) in inventory (237,560) Decrease (increase) in prepayments (27,221) Decrease (increase) in other financial assets 273,093 Decrease (increase) in incremental cost of contract acquisition (3,789) Total net change in assets related to operating activities 30,688 Net change in liabilities related to operating activities Increase (decrease) in contractual liabilities (17,309) Increase (decrease) in notes payable (2,985) Increase (decrease) in accounts payable 24,041 Increase (decrease) in other accounts payable (11,207) Increase (decrease) in provision for liabilities 113 Increase (decrease) in other current liabilities 13,794 Total net change in liabilities related to operating activities 6,447 (Continued)	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

102

(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 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 $ 37,135 49,187 56,617 6,297 54,500 (6,094) (611) 110,709 (16,010) 15,587 10,583 (30,013) 1,632 (58,668) (5,535) 1,368 (81,056) 35,000 - 917 (56,750) (57,200) 17,192 (60,841) (31,188) 207,931 $ 176,743	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) (57,200) 18,191
		59,895
		(6,571) 214,502
		$ 207,931

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

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

103 -

Southeast Cement Corporation and Subsidiaries Notes to consolidated 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 manufacturing, mining and sales of cement, limestone, cement processed products and premixed concrete. For the main business activities of the company and its subsidiaries (hereinafter referred to as the Group), please refer to note 4(3)B. The Company is the ultimate parent company of the Group.

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

II. Date and Procedure of Adoption of the Financial Report

This consolidated financial report is issued after the approval of the board meeting on March 18, 2021.

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 2020 which are approved by the FSC.

Standards and interpretations of the new release, Effective date of IASB amendment and revision release Amendment to “Definition of business” in IFRS 3 January 1, 2020 Amendment to “Definition of significance” in IAS 1 and January 1, 2020 IAS 8 Amendment to “Reform of interest rate indicators” in IFRS January 1, 2020 9, IAS 39 and IFRS 7 Amendment to “Rent concession related to COVID-19” in June 1, 2020 (note) IFRS 16

(Note) The FSC allows enterprises to apply them in advance on January 1, 2020.

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

(II) Impact of not adopting the newly released and revised international financial reporting standards approved by 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 and Effective date of IASB

104

revision

release

Amendment to “Temporary exemption from the extension of[25 June, 2020 (effective ] IFRS 9” of IFRS 4 from the date of issue) Amendment to “Interest rate indicator reform – phase II” of IFRS January 1, 2021 (note) 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

(Note) This amendment shall apply during the annual reporting period beginning from January 1, 2021.

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

(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:

Standards and interpretations of the new release, amendment and revision

Effective date of IASB release (note 1)

Amendment to “Sale or investment of contingent assets between the Undecided investor and its affiliated enterprises or joint ventures” of IFRS 10 and IAS 28

Amendment to “Insurance contract” of IFRS 17 January 1, 2023 Amendment to IFR 17 January 1, 2023 Amendment to “Liabilities classified as current or non-current” of IAS 1 January 1, 2023 Amendment to “Property, plant and equipment: the price of reaching the January 1, 2022 (note 2) intended state of use of IAS 16

Amendment to “Loss contract – cost of contract performance” of IAS 37 January 1, 2022 (note 3) Amendment to “Introduction to conceptual architecture” of IFRS 3 January 1, 2022 (note 4) 2018–2020 annual improvement of IFRS January 1, 2022 (note 5) Amendment to “Disclosure of accounting policies” of IAS 1 January 1, 2023 Amendment to “Definition of accounting estimates” of IAS 8 January 1, 2023

(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 (January1, 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

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January 1, 2022; the amendment to IFRS 1 applies retroactively in the annual reporting period beginning after January 1, 2022.

Amendment to “Liabilities classified as current or non-current” of IAS 1.

When the amendment is used to determine whether the liabilities are classified as non-current, assessment shall be made on whether the Group has the right at the end of the reporting period to defer the liquidation period to at least 12 months after the reporting period. If the Group has the right at the end of the reporting period, the liabilities are classified as non-current, regardless of whether the Group expects to exercise the right or not. If the Group is subject to certain conditions to have the right to defer the liquidation of liabilities, the Group must comply with such conditions at the end of the reporting period, even if the lender tests on a later date whether the Group complies with such conditions. For the purpose of liability classification, the aforesaid liquidation refers to the elimination of liabilities by transferring cash or other economic resources or equity instruments of the Group to the counterparty. However, if the terms of liabilities may be settled by transferring the equity instruments of the Group according to the choice of the counterparty, and if the right of choice is recognized as equity separately in accordance with IAS 32 “Financial instruments: expression,” it does not affect the classification of liabilities.

Amended “Property, plant and equipment: price before 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.

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 Group 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 Group 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

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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.

Amendment to “Disclosure of accounting policies” of IAS 1

This amendment improves the disclosure of accounting policies to provide more useful information to major users of financial statements.

Amendment to “Definition of accounting estimates” of IAS 8
This amendment defines accounting estimate as the monetary amounts limited by measurement uncertainty in financial statements, and provides further interpretation and examples to help enterprises distinguish changes in accounting policies from changes in accounting estimates.

As of the date of issuance of the consolidated financial report, the Group continues to assess the impact of the standards above and interpretations on the financial status and financial performance of the Group; the relevant impact will be disclosed when the assessment is completed.

IV. Summary of Major Accounting Policies

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

(I) Compliance statement

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

(II) Basis of preparation
Except for the following important items, the consolidated financial report is prepared at historical cost:
- (1) Financial assets and liabilities (including derivatives) measured at fair value through income statement.
- (2) Financial assets and liabilities measured at fair value through other comprehensive income.
- (3) Liabilities for cash settled share-based payment agreements measured at fair value.
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

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

(III) Basis of consolidation
Principles for preparation of the consolidated financial report:
- (1) All subsidiaries of the Group are included in the consolidated financial report. A subsidiary refers to an entity (including a structured entity) controlled by the Group. When the Group is exposed to or entitled to variable remuneration from participation in the entity and has the ability to influence such remuneration through its power over the entity, the Group controls the entity. The subsidiary is included in the consolidated financial report from the date when the Group gains control over it, and the merger is terminated from the date when the Group loses the control.
- (2) The transactions, balances and unrealized gains and losses between companies within the Group have been eliminated. The accounting policies of the subsidiaries have been adjusted as necessary to be consistent with those adopted by the Group.
- (3) Profit and other comprehensive income components belong to the owners of the parent company and non-controlling interests; the total amount of comprehensive income also belongs to the owners of the parent company and non-controlling interests, even if it results in a loss balance of non-controlling interests.
- (4) If a change in the shareholding of a subsidiary does not result in loss of control (a transaction with a party with non-controlling interest), it is treated as an equity transaction, that is, a transaction with the owner. The difference between the adjusted amount of non-controlling interests and the fair value of the consideration paid or received is directly recognized under equity.
(5) When the Group loses control over the subsidiary, the remaining investment in the subsidiary is remeasured at fair value and is regarded as the fair value of the originally recognized financial assets or the cost of the originally recognized investment in the affiliated enterprise or joint venture. The difference between the fair value and the book amount is recognized as the profit/loss of the current period. For all amounts previously recognized in other comprehensive income and related to the subsidiary, the accounting treatment is the same as if the Group directly disposes of the relevant assets or liabilities; that is, if the profit/loss previously recognized in other comprehensive income is reclassified as profit/loss when disposing of the relevant assets or liabilities, when the control over the subsidiary is lost, the profit/loss will be reclassified as profit/loss from equity.
1. The subsidiaries included in the consolidated financial statements are as follows:

Investment company/subsidiary A. Southeast Cement Corporation Southeast investment Co., Ltd. Southeast Paper Co., Ltd. Southeast Asset Development	Main business items Reinvestment business Property leasing business (note) Development, rental and sale of	Shareholdingor capital contribution ratio	Shareholdingor capital contribution ratio
		December 31,2020 99.29% 49.71% 100.00%	December 31,2019
			99.29% 49.71% 100.00%

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Co., Ltd.	residential and office buildings
Southeast Gaoliang Recycling Co., Ltd.	Waste removal	50.00%	50.00%
		(see (2) for details)	(see (2) for details)
B. Southeast Investment Co., Ltd.
Southeast Gaoliang Recycling Co., Ltd.	Waste removal	1.00%	1.00%
		(see (2) for details)	(see (2) for details)

(Note) The parent company gained control over Southeast Paper Co., Ltd. due to the appointment of its assigned person as the president of Southeast Paper Co., Ltd.

(1) Some of the subsidiaries listed in the consolidated financial statements of 2020 and 2019 were audited by other accountants.
(2) Increase and decrease of merged subsidiaries:

The Group invested in the establishment of Southeast Gaoliang Recycling Co., Ltd. in March 2019 and has control over it; it was included in the preparation of consolidated financial statements for the first time in 2019.

Subsidiaries not included in the consolidated financial report: None.
Different adjustment and treatment methods of subsidiaries in accounting period: None.
Major restrictions: None.
Contents of securities issued by parent company held by subsidiary: Please refer to note 6(28).
Information of subsidiaries with significant non-controlling interests: None.
(IV) Foreign Currency Conversion
The items listed in the financial statements of each entity of the Group are measured in the currency of the main economic environment in which the entity operates (i.e. functional currency). The consolidated financial statements are presented in the company’s functional currency “New Taiwan dollars.”
When preparing the individual financial statements of each consolidated entity, transactions in currencies (foreign currencies) other than the functional currency of the entity are converted and recognized at the exchange rate on the trading day. At the end of the reporting period, monetary items in foreign currency are converted at the spot exchange rate on that day, and the exchange difference is recognized as profit or loss in the current period. Foreign currency non-monetary items measured at fair value are converted at the exchange rate on the day when the fair value is determined. The exchange difference generated is included in the profit or loss of the current year. If changes in fair value are recognized in other comprehensive income, the exchange difference generated is included in other comprehensive income. If foreign currency non-monetary items measured at historical cost are converted at the exchange rate on the transaction date, they will not be further converted.
For the purpose of preparing the consolidated financial statements, the assets and liabilities of foreign operating organizations are converted into New Taiwan dollars at

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the spot exchange rate at the end of the reporting period; the income and loss items are converted at the average exchange rate of the current period, and the resulted exchange differences are recognized as other comprehensive income which are accumulated under the equity of the foreign operating organization’s financial statements (and appropriately allocated to non-controlling equity).

(V) The standard for distinguishing current and non-current assets and liabilities
Manufacturing Department:
- (1) Assets meeting any of the following conditions shall be classified as current assets:
  - A. The asset is expected to be realized in the normal business cycle, or intended to be sold or consumed.
  - B. The assets are held mainly for trading purposes.
  - C. Expected to be realized within 12 months after the balance sheet date.
  - D. Cash or cash equivalents, except those to be used to swap or repay liabilities in more than 12 months after the balance sheet date or subject to other restrictions.

The Group classifies all assets that do not meet the conditions above as 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. Held 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 Group classifies all liabilities that do not meet the conditions above as non-current.

Construction Department:

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

(VI) Cash and cash equivalents

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

(VII) Financial instruments

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

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

Financial assets
(1) Measurement category

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

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

A. Financial assets measured at fair value through income statement

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

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

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

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

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

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

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

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

C. Financial assets measured at amortized cost

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

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

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

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

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

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

(2) Financial assets impairment
A. The impairment loss of the financial assets (including accounts receivable) assessed by the Group based on the expected credit impairment and measured by the amortized cost, debt instrument investment measured at fair value

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through other comprehensive income, lease payments receivable and contractual assets on each balance sheet date of the Group.

B. Accounts receivable and lease payments receivable are recognized as allowance for losses based on the expected credit loss during the period of existence. For other financial assets, first assess whether the credit risk has increased significantly since the original recognition. If there is no significant increase, the allowance for losses is recognized according to the 12-month expected credit loss. If there is a significant increase, the allowance for losses is recognized according to the expected credit loss during the period of existence.
C. Expected credit loss is the weighted average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss caused by possible default events of the financial instrument within 12 months after the reporting date, while the expected credit loss during the period of existence represents the expected credit loss caused by all the possible default events of the financial instrument during the expected period of existence.
D. The impairment loss of all financial assets is reduced in the face value by the allowance account. However, the allowance for losses of debt instrument investment measured at fair value through other comprehensive income is recognized in other comprehensive income without having the book amount reduced.
(3) Exclusion of financial assets

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

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

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

Equity instruments

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

3. Financial liabilities

(1) Follow up measurement

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

(2) Exclusion of financial assets

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

(VIII) Inventory

Manufacturing Department:

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

Construction Department:

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

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

(1) Construction land: The net realizable value is calculated based on the market price adopted by the management authorities less the cost to be further invested before the completion time and the sales cost, or based on the most recent market value (development analysis method or comparison method).

(2) Construction in progress: The net realizable value is calculated based on the estimated price (based on the market situation at that

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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.

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

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

Buildings Main plant buildings 20–50 years Electromechanical power equipment 5–10 years Other equipment 15 years Machinery and equipment 2–16 years Transportation equipment 3–6 years Miscellaneous equipment 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 amount of the asset, and is recognized in the current income.

(XI) Leasing

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

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

Right-of-use assets

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

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

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Lease liabilities

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

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

The Group as the lessor

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

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

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

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

(XII) Investment property

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

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

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

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

(XIII) Intangible assets

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

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

(XIV) Impairment of non-financial assets

On the balance sheet date, the Group estimates the recoverable amount of the assets showing signs of impairment. When the recoverable amount is lower than the book amount, the impairment loss is recognized. Recoverable amount refers to the fair value of an asset less the cost of sale or its value of use, whichever is higher. When the impairment of assets recognized in the previous year does not exist any longer, it shall be reversed within the range of the amount of loss provided in the previous year.

(XV) Provision for liabilities

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

(XVI) Employee benefits

1. Short-term employee benefits

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

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2. Pension

Defined allocation plan

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

Remuneration of employees, directors and supervisors

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

4. Resignation benefits

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

(XVII) Share capital and treasury shares

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.

Treasury shares

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

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

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issue premium, the capital reserve generated by the same type of treasury share transactions will be credited.

(XVIII) Income tax

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

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Tax preference arising from the purchase of equipment or technology, research and development expenditure, personnel training expenditure and equity investment shall be accounted by income tax deduction.
(XIX) Revenue recognition

The Group’s revenue from customer contracts is recognized in the following steps:

Identify the customer contract;
Identify the performance obligations in the contract;
Determine the transaction price;
Apportion the transaction price to the performance obligations in the contract; and
Revenue is recognized when the performance obligations are met.
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.

Income from sale of property

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

(XX) Borrowing costs

The borrowing cost directly attributable to the acquisition, construction or production of an asset that meets the requirements is a part of the cost of the asset until almost all the necessary activities for the asset to reach its intended state of use or sale are completed. The investment income from temporary investment before the occurrence of eligible capital expenditure due to a specific loan, the investment income is deducted from the borrowing cost eligible for capitalization.

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

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

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

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

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

Revenue recognition

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

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

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

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

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

In determining the lease period, the Group considers all relevant facts and circumstances that give rise to economic incentives to exercise (or not to exercise) the option, including the expected changes in all facts and circumstances from the start

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date to the day when the option is exercised. The factors to be considered include the contract terms and conditions during the option period, the significant leasehold improvements made (or expected to be made) during the contract period, and the importance of the underlying assets to the operation of the Group. Reevaluate the lease period in case of major events or changes in circumstances within the control of the Group.

Judgment on whether the affiliated enterprise has substantial control.

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

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

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

Fair value measurement and evaluation process

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

Impairment assessment of tangible and intangible assets

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

Investment impairment assessment using the equity method

When there is an indication of impairment that an investment by equity method may have been impaired and the book amount cannot be recovered, the Group

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immediately evaluates the impairment of the investment. The Group assesses the recoverable amount and analyzes the rationality of relevant assumptions based on the discounted value of the expected future cash flow of investee companies, or the discounted value of the expected cash dividend and the future cash flow generated by disposal of the investment.

The realizability of deferred income tax assets

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

Evaluation of inventory

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

Incremental loan interest rate of the lessee

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

VI. Explanation of Important Accounting Items

(I) Cash and cash equivalents

anation of Important Accounting Items ash and cash equivalents
Item	December31,2020	December31,2019
Cash Check deposit Current deposit Cash equivalents Short term bills with original maturity within three months Total	$ 312 3,256 112,085 61,090	$ 246 3,122 163,513 41,050
	$176,743	$207,931

The credit quality of the financial institutions that the Group deals with is good, and the Group deals with multiple financial institutions to diversify the credit risk, so the possibility of default is very low.
The Group has not pledged any cash or cash equivalents.

(II) Financial assets measured at fair value through income statement – current Item December 31, 2020 December 31, 2019

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Non-derivative financial assets Listed stock Open-end funds Bonds Total	$ 157,300 42,716 32,651	$ 153,046 60,747 32,079
	$232,667	$245,872

The net (loss) income recognized by the Group in 2020 and 2019 was NT$4,086 thousand and NT$27,989 thousand, respectively.
The Group has not pledged financial assets measured at fair value through income statement.
Please refer to note 12 for details of relevant credit risk management and assessment methods.

(III) Net notes receivable

Net notes receivable
Item	December 31,2020	December 31,2019
Measured at amortized cost Total book amount Less: allowance for loss Net notes receivable	$ 290,013 (3,480)	$ 278,058 (4,450)
	$ 286,533	$ 273,608

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

(IV) Net accounts receivable

Net accounts receivable
Item	December 31,2020	December 31,2019
Measured at amortized cost Total book amount Less: allowance for loss Net accounts receivable	$ 108,673 (16,175)	$ 98,692 (16,390)
	$92,498	$82,302

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

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According to the reserve matrix, the Group measures the allowance for losses of notes receivable and accounts receivable (including those of related parties and other receivables) as follows:

December 31, 2020	Expected credit impairment rate	Total book amount	Allowance for losses (expected credit impairment in the period of existence)	Cost after amortization
Not overdue 0–90 days overdue 91–180 days overdue 181–365 days overdue More than 365 days overdue Total December 31, 2019	0%-2% 0%-5% 0%-25% 0%-50% 0%-100% Expected credit impairment rate	$ 426,000 - - - 16,697	$ (5,050) - - - (16,697)	$ 420,950 - - - -
		$442,697	$ (21,747)	$420,950
		Total book amount	Allowance for losses (expected credit impairment Expected credit impairment rate	Cost after amortization
Not overdue 0–90 days overdue 91–180 days overdue 181–365 days overdue More than 365 days overdue Total	0%-2% 0%-5% 0%-25% 0%-50% 0%-100%	$ 436,572 - - - 15,052	$ (6,459) - - - (15,052)	$ 430,113 - - - -
		$451,624	$ (21,511)	$430,113

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	2020	2019
Opening balance Plus: provision for impairment loss Less: reversal of impairment loss Ending balance	$ 21,511 236 -	$ 22,068 - (557)
	$21,747	$21,511

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

If there is evidence that the counterparty is facing serious financial difficulties and the Group cannot reasonably expect the recoverable amount, the Group will directly write off the relevant receivables and will continue to pursue the recovery. The amount recovered due to the recourse is recognized in income. The Group’s accounts receivable for offsetting the contract amount in 2020 and 2019 were both $0.

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

Other receivables
Item Proceeds receivable from sale of shares Lease payments receivable Receivables of share capital returned from liquidation Interests receivable Other receivables Sub-total Less: allowance for loss Net	December31,2020	December31,2019
	$ - 1,384 - 418 4,935	$ 5,000 1,368 23,060 487 3,138
	$ 6,737 (1,645)	$ 33,053 -
	$5,092	$33,053

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

Undiscounted lease payments Year 1 Year 2 Year 3 Year 4 Total Less: financing income not earned Less: allowance for loss Lease payments receivable Unguaranteed residual value Less: financing income not earned Present value of unguaranteed residual value Net lease investment reported as finance lease payment receivables Lease payments receivable (listed as other receivables) Long-term lease payments receivable (listed as other non-current assets)	December 31,2020	December 31,2019
	$ 1,428 1,428 1,428 -	$ 1,428 1,428 1,428 1,428
	$ 4,284 (85) -	$ 5,712 (145) -
	$4,199	$ 5,567
	$ - -	$ - -
	$ -	$ -
	$ 4,199	$ 5,567
	$ 1,384	$ 1,368
	$ 2,815	$ 4,199

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

The receivables of share capital returned from liquidation is the Group’s investment in Jiahuan Dongni, which was originally evaluated by equity method because of the Group’s significant influence on it. However, the Group has no significant influence on it since the liquidation procedure started in the fourth quarter of 2019, and the NT$23,060 thousand investment by equity method is transferred to returned share

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capital receivable; in addition, the company has appointed a liquidator at the extraordinary shareholders’ meeting in April 2020, returned NT$22,695 thousand of investment money in 2020, recognized NT$365 thousand of liquidation loss, and completed the liquidation in December 2020.

(VI) Inventory and cost of goods sold

Inventory and cost of goods sold
Item	December31,2020	December31,2019
Manufacturing Department: Raw fuel Materials Work in process Finished products Sub-total Less: allowance for depreciation and losses from obsolete and slow-moving inventories Net – Manufacturing Department Construction Department: Construction land Property for sale Property under construction Net – Construction Department Total	$ 41,997 77,446 23,588 59,343	$ 104,739 73,314 17,446 68,678
	$ 202,374 (46,492)	$ 264,177 (63,018)
	$155,882	$201,159
	$ 466,150 - 262,278	$ 350,333 - 99,465
	$728,428	$449,798
	$884,310	$650,957

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

period are as follows:
Item	2020	2019
Cost of inventory sold Other operating costs Manufacturing cost not apportioned Inventory loss Provision for inventory depreciation and losses from obsolete and slow-moving inventories (appreciation benefits) Manufacturing Department Cost of property sold Total operating costs	$ 1,496,474 37,773 5,705 188 (16,526)	$ 1,474,447 22,247 9,398 - (11,572)
	$ 1,523,614 -	$ 1,494,520 8,131
	$1,523,614	$1,502,651

The net realizable value of inventories appreciated due to consumption of some inventories in 2020 and 2019, so the recognized falling price and sluggish loss of inventory (recovery benefit) were NT$(16,526) thousand and NT$(11,572) thousand, respectively.
The Group has not pledged any inventory.
The adjustment between the increase in inventory and the inventory in the cash flow statement in the current period is as follows:

2020

2019

Item

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Inventory decrease (increase) Transfer in of property, plant and equipment Transfer out to property, plant and equipment Cash received (paid) from inventory decrease (increase)	$ (233,353) 420 (4,627)	$ (90,771) - (1,247)
	$ (237,560)	$ (92,018)

(VII) Prepayments

) Prepayments
Item	December 31,2020 $ 45,210 315 15,924 6,691 $68,140	December 31,2019
Prepayment for material purchase Prepaid insurance premium Tax allowance Other prepayments Total		$ 31,953 406 6,906 1,654
		$40,919

(VIII) Other financial assets – current Item Original maturity date more than 3 months away Time deposits: NT$ time deposits Foreign currency time deposits Total Interest rate range	December31,2020	December31,2019
Original maturity date more than 3 months away Time deposits: NT$ time deposits Foreign currency time deposits Total Interest rate range	$ 46,007 128,591	$ 299,000 148,691
	$174,598	$447,691
	0.35%-1.06%	0.82%-2.60%

(IX) Incremental cost of contract acquisition – current

The Group expects to recover the commission paid to the agent company for the acquisition of the property sales contract or the bonus paid to the internal sales department for its own sales and construction, so it is recognized as an asset. It is amortized when the income from the sale of property is recognized, and a promotion expense of $0 is recognized in both 2020 and 2019.

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

non-current
Item	December 31,2020	December 31,2019
Non-liquid Equity instruments Shares of domestic listed and OTC companies Shares of domestic unlisted and non-OTC companies Sub-total Evaluation adjustment Total	$ 263,160 343,844	$ 256,268 346,644
	$ 607,004 571,919	$ 602,912 588,769
	$1,178,923	$1,191,681

The Group invests in the shares of the above-mentioned domestic unlisted and non-OTC companies for medium and long-term strategic purposes, and expects to

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make a profit through long-term investment. The management of the Group believes that if the short-term fair value fluctuation of such investment is included in income, it will be inconsistent with the long-term investment planning mentioned above, so it chooses to designate such investment as fair value through other comprehensive income.

In 2020 and 2019, the Group adjusted its investment position to diversify the risk, and sold some shares at fair value. The unrealized gains and losses of other related interests – financial assets measured at fair value through other comprehensive income were respectively NT$14,252 thousand and NT$1,313 thousand, which were transferred to retained earnings.
Please refer to note 12 for the relevant credit risk management and assessment method.
The Group has not pledged financial assets measured at fair value through other comprehensive income.

(XI) Investment by equity method

vestment by equity method
Investee companies	December 31,2020	December 31,2019
Significant affiliated enterprises: Taiji Ship Plant Co., Ltd. Penghu Cable TV Co., Ltd. Sub-total Insignificant individual affiliated enterprises Total	315,605 147,713	311,897 147,937
	$463,318	$459,834
	$ 127,328	$ 122,573
	$590,646	$582,407

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

Companyname	Shareholdingratio	Shareholdingratio
	December31,2020	December31,2019
Taiji Ship Plant Co., Ltd. Penghu Cable TV Co., Ltd.	31.56% 40.00%	31.56% 40.00%

Please refer to Appendix 4 of note 13 for details of the business nature, main business location and country of incorporation of the affiliated enterprises above.

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

follows: A. Balance Sheet
Current assets Non-current assets Current liabilities Non-current liabilities Equity Share of net assets of affiliated enterprises Unrealized gain or loss from transactions with affiliated	TaijiShipPlantCo.,Ltd.
	December 31,2020	December 31,2019
	$ 426,129 1,127,494 (534,344) -	$ 197,793 1,112,565 (307,663) -
	$1,019,279	$1,002,695
	$ 321,720 (6,115)	$ 316,483 (4,586)

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enterprises Book value of affiliated enterprises Current assets Non-current assets Current liabilities Non-current liabilities Equity Share of net assets of affiliated enterprises Book value of affiliated enterprises
	$315,605	$311,897
	Penghu CableTV Co.,Ltd.
	December 31,2020	December 31,2019
	$ 368,339 110,007 (82,799) (27,262)	$ 355,317 129,860 (85,361) (29,974)
	$368,285	$369,842
	$ 147,713	$ 147,937
	$147,713	$147,937

B. Comprehensive Income Statement

Companyname	Taiji ShipPlant Co., Ltd.	Taiji ShipPlant Co., Ltd.
	2020	2019
Operating income Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period Dividends received from affiliated enterprises Companyname	$ -	$ -
	$ 8,746 7,837	$ (4,936) (33,348)
	$ 16,583	$ (38,284)
	$ -	$ 746
	Penghu Cable TV Co.,Ltd.
	2020	2019
Operating income Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period Dividends received from affiliated enterprises	$ 123,389	$ 130,503
	$ 19,485 798	$ 20,251 875
	$ 20,283	$ 21,126
	$ 8,000	$ 8,000

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

follows:
Share: Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period	2020	2019 $ (6,233) 41 $ (6,192)
	$ 3,924 832
	$ 4,756

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(2) The investment by equity method and the Group’s share of income and other comprehensive income are calculated according to the financial statements audited by the independent auditor.
The Group did not pledge its investment by equity method as of December 31, 2020 and 2019.

(XII) Property, plant and equipment

roperty, plant and equipment
Item	December31,2020	December31,2019
Land Housing and construction Machine and equipment Transportation equipment Other equipment Equipment pending inspection and unfinished construction Total cost Less: accumulated depreciation Accumulated impairment Total	$ 153,748 395,161 2,646,621 25,036 50,050 48,145	$ 153,748 400,141 2,642,031 24,336 50,050 24,827
	$ 3,318,761 (3,041,614) (27,449)	$ 3,295,133 (3,039,700) (29,340)
	$249,698	$226,093

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Cost	Land	Housing and construction	Machine and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - - - -	$ 400,141 - - - (4,980) - -	$2,642,031 2,996 - - (6,764) - 8,358	$ 24,336 - 700 - - - -	$ 50,050 - - - - - -	$ 24,827 30,342 3,927 (420) - (2,173) (8,358)	$3,295,133 33,338 4,627 (420) (11,744) (2,173) -
Balance on January 1, 2020 Acquisition Inventory transferred in Transfer to inventory Disposal Transfer to right-of-use assets – Buildings Reclassification Balance on December 31, 2020 Accumulated depreciation and impairment
	$ 153,748	$ 395,161	$2,646,621	$ 25,036	$ 50,050	$ 48,145	$3,318,761
	$ - - - -	$ 398,392 124 (4,980) -	$2,597,730 10,819 (4,873) (1,891)	$ 23,171 692 - -	$ 49,747 132 - -	$ - - - -	$3,069,040 11,767 (9,853) (1,891)
Balance on January 1, 2020 Depreciation expense Disposal Impairment reversal Balance on December 31, 2020
	$ -	$ 393,536	$2,601,785	$ 23,863	$ 49,879	$ -	$3,069,063

Cost	Land	Housing and construction	Machine and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - -	$ 405,150 - - (5,009) -	$2,655,687 2,443 - (14,113) (1,986)	$ 23,508 - 358 - 470	$ 50,050 - - - -	$ - 22,422 889 - 1,516	$3,288,143 24,865 1,247 (19,122) -
Balance on January 1, 2019 Acquisition Inventory transferred in Disposal Reclassification Balance on December 31, 2019 Accumulated depreciation and impairment
	$ 153,748	$ 400,141	$2,642,031	$ 24,336	$ 50,050	$ 24,827	$3,295,133
	$ - - - - -	$ 399,677 750 (2,035) - -	$2,599,921 10,047 (14,113) - 1,875	$ 22,589 582 - - -	$ 49,573 174 - - -	$ - - - - -	$3,071,760 11,553 (16,148) - 1,875
Balance on January 1, 2019 Depreciation expense Disposal Reclassification Provision for impairment loss Balance on December 31, 2019
	$ -	$ 398,392	$2,597,730	$ 23,171	$ 49,747	$ -	$3,069,040

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

Item	2020	2019
	$ 33,338 (3,325)	$ 24,865 (7,119)
		$ 17,746

Capitalization amount and interest rate range of borrowing costs of property, plant and equipment: None.
The Group’s reversal of accumulated impairment and accrued impairment loss in 2020 and 2019 were NT$(1,891) thousand and NT$1,875 thousand, respectively. Due to the shutdown of the raw materials and clinker department in 2018, the relevant equipment was idle and unused; the recoverable amount of the equipment was expected to be less than the book amount, and a provision for impairment loss was made. However, 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 amount in 2019, and the book amount of related equipment could not be recovered by using or selling, an impairment loss of NT$1,875 thousand was therefore recognized. The residual value from the disposal above belongs to the third-level fair value.
Information on guarantees provided with property, plant and equipment: None.

(XIII) Lease agreement

Right-of-use assets

(XIII) Lease agreement 1. Right-of-use assets	(XIII) Lease agreement 1. Right-of-use assets	(XIII) Lease agreement 1. Right-of-use assets	(XIII) Lease agreement 1. Right-of-use assets
Item December 31,2020 December 31,2019 Land $ 407,039 $ 264,579 Buildings 92,409 18,839 Transportation equipment 4,220 - Total cost $ 503,668 $ 283,418 Less: accumulated depreciation (114,497) (54,392) Accumulated impairment - - Net $389,171 $229,026 Cost Land Buildings Transportation equipment Total Balance on January 1, 2020 $ 264,579 $ 18,839 $ - $ 283,418 Increase in current period 143,649 71,397 4,220 219,266 Property, plant and equipment - 2,173 - 2,173 Transfer in Decrease in current period (1,189) - - (1,189) Balance on December $407,039 $92,409 $4,220 $503,668
Balance on January 1, 2020 Increase in current period Property, plant and equipment Transfer in Decrease in current period Balance on December	$ 264,579 143,649 - (1,189)	$ 18,839 71,397 2,173 -	$ - 4,220 - -
	$407,039	$92,409	$4,220

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31, 2020 Accumulated depreciation and impairment
	$ 53,046 57,939 -	$ 1,346 1,346 -	$ - 820 -
Balance on January 1, 2020 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2020 Cost
	$ 110,985	$ 2,692	$ 820
	Land	Buildings	Transportation equipment
Balance on January 1, 2019 IFRS 16 adjustment applied for the first time Increase in current period Decrease in current period Balance on December 31, 2019 Accumulated depreciation and impairment	$ - 264,382 197 -	$ - 18,839 - -	$ - - - -
	$ 264,579	$ 18,839	$ -
	$ - 53,046 -	$ - 1,346 -	$ - - -
Balance on January 1, 2019 Depreciation expense Provision for (reversal of) impairment loss Balance on December 31, 2019
	$ 53,046	$ 1,346	$ -

2. Lease liabilities

Lease liabilities
Item	December31,2020	December31,2019
	$65,651	$58,028
	$265,358	$183,058
		December 31,2019
Land Buildings Transportation equipment	1.16%-2.03% 1.16%-2.03% 1.16%	1.16% 1.16% 1.16%

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

135

3. Important leasing activities and terms

The Group leases a number of land, buildings and transportation equipment for operation, plants and external roads. The lease term is 3–14 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 Group has included in the lease liability the right to renew the lease upon the expiration of the lease term. In addition, according to the contract, the company shall not sublet the leased assets to others without the consent of the lessor. As of December 31, 2020 and 2019, there was no sign of impairment of the right-of-use assets, so no impairment assessment was conducted.

Due to the severe impact of COVID-19 on the market economy in 2020, the Group negotiated the land lease with the lessor, and the lessor agreed to unconditionally reduce the rent by 20% 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 2020, the Group recognized the influence number of the rent concession above as NT$4,733 thousand which is recognized as income (posted under other income).

4. Sublease:

The Group sublets the 8th floor of the Southeast Building to the Vocational Training Bureau of the Ministry of Labor in the form of business lease; the relevant right-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 2020 and 2019 was NT$60 thousand and NT$75 thousand, respectively.

5. Other leasing information

(1) Please refer to note 6(14) for the Group’s agreement of leasing investment property by operating lease.

(2) The lease related expenses for the current period are as follows:

Item	2020	2019
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)	$597	$1,550
	$48	$77
	$-	$-
	$ (57,395)	$ (52,822)

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

In 2020 and 2019, the Group 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.

136

(XIV) Investment property

Cost	Item	Item	December 31,2020	December 31,2020	December 31,2019
			$ 5,316,453 754,283 5,535		$ 5,316,453 754,283 -
			$ 6,076,271 (489,909) (203,630)		$ 6,070,736 (486,458) (203,630)
			$5,382,732		$5,380,648
				Equipment pending inspection and unfinished construction	Total
	$ 5,316,453 - -	$ 754,283 - -		$ - 5,535 -	$ 6,070,736 5,535 -
Balance on January 1, 2020 Acquisition Disposal Balance on December 31, 2020 Accumulated depreciation and impairment
	$ 5,316,453	$ 754,283		$ 5,535	$ 6,076,271
	$ - - -	$ 690,088 3,451 -		$ - - -	$ 690,088 3,451 -
Balance on January 1, 2020 Depreciation expense Disposal Balance on December 31, 2020 Cost
	$ -	$ 693,539		$ -	$ 693,539
	Land	Housing, construction and equipment		Equipment pending inspection and unfinished construction	Total
	$ 4,824,222 - - 492,231	$ 755,621 - (1,338) -		$ 291,411 200,820 - (492,231)	$ 5,871,254 200,820 (1,338) -
Balance on January 1, 2019 Acquisition Disposal Reclassification Balance on December 31,
	$ 5,316,453	$ 754,283		$ -	$ 6,070,736

137

2019

2019
Accumulated depreciation and impairment	$ - - -	$ 687,975 3,451 (1,338)	$ - - -	$ 687,975 3,451 (1,338)
Balance on January 1, 2019 Depreciation expense Disposal Balance on December 31, 2019
	$ -	$ 690,088	$ -	$ 690,088

Rental income and direct operating expenses of investment property:

Item	2020	2019 $ 53,767 $ 22,247 $ 330
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	$ 53,985
	$ 37,773
	$ 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 leasepayment	Total significant leasepayment
	December31,2020 $ 24,690 25,129 26,636 26,905 26,921 189,848 $320,129	December31,2019
		$ 22,411 22,500 22,500 23,531 23,625 178,148
		$292,715

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

Item December 31, 2020 December 31, 2019 Fair value $ 9,223,868 $ 7,826,614

138

As of December 31, 2020 and 2019, some of the Group’s land has not been registered in the name of the company due to the restrictions of the law, but to ensure the interests, the Group has obtained the promise of the registrant to transfer the land unconditionally to the Group after the legal restrictions are lifted, or apply security measures on the land if it is already registered for mortgage rights.
For information on guarantees provided with property, please refer to note 8.
The Group has made a provision of NT$0 as the impairment loss (benefits from reversal) in both 2020 and 2019.

(XV) Intangible assets

ntangible assets	ntangible assets
Item		December31,2020		December31,2019
			$ 105 (82)	$ 105 (47)
			$23	$58
			Cost	Cost of computer software
Balance on January 1, 2020 Acquisition Excluded at expiration Balance on December 31, 2020 Accumulated depreciation	$ 105 - -		Balance on January 1, 2019 Acquisition Excluded at expiration Balance on December 31, 2019 Accumulated depreciation	$ 105 - -
	$ 105			$ 105
	Cost of computer software			Cost of computer software
Balance on January 1, 2020 Amortization expense Excluded at expiration Balance on December 31, 2020	$ 47 35 -		Balance on January 1, 2019 Amortization expense Excluded at expiration Balance on December 31, 2019	$ 12 35 -
	$ 82			$ 47

(XVI) Refundable deposits

Refundable deposits
Item	December 31,2020	December 31,2019
Security deposit of mining area Lease security deposit Security deposit of National Property Administration Membership deposit Other security deposits Total	$ 562 8,464 263 765 64	$ 562 6,764 2,827 765 832
	$10,118	$11,750

(XVII) Short-term borrowings

December 31, 2020

139

Nature of borrowing	Amount	Amount
Mortgage loan Credit loan Total Nature ofborrowing	$ 155,000 80,000
	$235,000
	Amount	Interest rate 0.90% 0.90%
Mortgage loan Credit loan Total	$ 80,000 120,000
	$200,000

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

(XVIII) Contractual liabilities – current

(XVIII) Contractual liabilities – current	) Contractual liabilities – current
Item Cement to be collected Prepayments Pre-collected property Total (XIX) Other payables	Item	December31,2020	December31,2019 $ 98,685 27 9,022 $107,734
		$ 73,555 27 16,843
		$90,425

(XIX) Other payables	Other payables	Other payables
Item December31,2020 December31,2019 Salary and bonus payable $ 15,499 $ 14,893 Commodity tax payable 18,372 16,329 Utilities payable 9,164 9,309 Tax payable 2,998 2,582 Remuneration payable to employees and directors – the company 667 2,286 Remuneration payable to employees and directors – subsidiaries 1,227 1,904 Equipment payable – property, plant and equipment 10,444 7,119 Equipment payable – right-of-use assets 12,729 - Dividend payable – previous period 3,983 3,985 Other 14,542 26,339 Total $89,625 $84,746 (XX) Debt provision – current Item December 31,2020 December 31,2019 Employee benefits $ 1,553 $ 1,440 Decommissioning liabilities - - Total $1,553 $1,440 2020 Item Employee benefits Decommissioning liabilities Total Balance on January 1 $ 1,440 $ - $ 1,440	Item		December31,2020 $ 15,499 18,372 9,164 2,998 667 1,227 10,444 12,729 3,983 14,542 $89,625 December 31,2020		December31,2019 $ 14,893 16,329 9,309 2,582 2,286 1,904 7,119 - 3,985 26,339 $84,746 December 31,2019 $ 1,440 - $1,440



				$ 1,553 -		$ 1,440 -
				$1,553		$1,440
				2020
		Employee benefits		Decommissioning liabilities		Total
	Balance on January 1	$ 1,440		$ -		$ 1,440

140

New liability reserve in the current period Liability reserve used in current use Balance on December 31 Item	1,553 (1,440)	- -	1,553 (1,440)
	$ 1,553	$ -	$ 1,553
		2019
	Employee benefits	Decommissioning liabilities	Total
Balance on January 1 New liability reserve in the current period Liability reserve used in current use Balance on December 31	$ 1,570 1,440 (1,570)	$ 3,025 - (3,025)	$ 4,595 1,440 (4,595)
	$ 1,440	$ -	$ 1,440

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

In addition to its own mining area, the Group has leased all the equipment and auxiliary equipment of the production system of Chentai Cement Company since 1982, and also leased its limestone mining right in the material area. According to the requirements of the Construction Bureau of Kaohsiung Municipal Government (renamed Economic Development Bureau later and then assigned under the Water Conservancy Bureau after the county and city merger), the competent authority of the target enterprise, the Group has the land restoration obligations of 13.7601 hectares of the old mining area of the Group and of the Banping Mountain of Chentai Cement Company after the mining activity is stopped. Since August 1997, the Group has started the land restoration and greening work in the areas above, and has completed the restoration of all projects. However, only local correction is made due to the actual construction in line with terrain and geological conditions. Upon the resolution of the review committee, the Group shall revise the plan according to the current completion status, and then the acceptance will be conducted accordingly. The Group has submitted the revised plan to the review committee in April 2012, and in order to smooth the follow-up review work and meet the current laws and regulations, the Group again submitted the review-version plan and the first design change to the review-version plan respectively in May 2017 and January 2018, in order to facilitate the continued review of the Water Conservancy Bureau. In December 2018, the Group obtained the construction permit for soil and water conservation issued by the Water Conservancy Bureau, and started the work in February 2019. The construction was completed in April 2019, and the completion certificate of soil and water conservation issued by the Kaohsiung Municipal Government was obtained on November 19, 2019. The Group has fulfilled its obligations of restoring the land to its original state required by the competent authority of the target enterprise, the land administration authority and the land ownership authority.

141

(XXI) Pension

Since the end of 2004, the Group handles the measures for employees’ self-applied retirement and voluntary retirement in accordance with the provisions of the Labor Standards Act. On July 1, 2005, the Group established a defined retirement scheme in accordance with the “Labor Pension Act” which applies to employees of R.O.C. nationality. For employees who select the application of the labor pension system in the “Labor Pension Act,” the Group pays the labor pension to the employee’s personal account at the Labor Insurance Bureau at 6% of the salary each month. The payment of the employee pension is collected in a monthly or one-off manner according to the individual pension account type and the amount of accumulated income of the employee.
The pension costs recognized as expenses by the Group in accordance with the pension rules above in 2020 and 2019 are NT$2,881 thousand and NT$2,688 thousand. respectively.

(XXII) Guarantee deposits received

uarantee deposits received
Item	December 31,2020	December 31,2019
Lease deposit Cement deposit Total	$ 20,476 3,481	$ 19,559 3,481
	$23,957	$23,040

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

(XXIII) Ordinary share capital

Item	2020	2020	2019	2019
	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, 2020, the company’s rated capital is NT$8,000,000 thousand, divided into 800,000 thousand shares.

(XXIV) Capital reserve

apital reserve
Item	December31,2020	December31,2019
Premium on shares issued Treasury share trading Recognized due to investment by equity method Total	$ 118,316 66,740 3,211	$ 118,316 66,635 3,211
	$188,267	$188,162

142

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.

(XXV) Retained earnings and dividend policy

In accordance with the provisions of the company’s articles of association on earnings distribution, if there are earnings in the annual final accounts of the company, the company shall pay taxes first and make up for the previous losses. 10% of the earnings reserve shall then be appropriated as the legal reserve, until the legal reserve reaches the total capital of the company; after the special reserve is provided or reversed in accordance with the provisions of the competent authority’s requirement, the balance plus the accumulated undistributed earnings in the previous year and the adjustment of the undistributed earnings in the current year will be the earnings available for distribution; the board of directors shall prepare an earnings distribution scheme and submit it to the shareholders’ meeting for resolution and distribution of the dividend to shareholders.
For the dividend payment, the company shall take into account the characteristics of the business climate change, and consider the future capital needs and long-term financial planning of the life cycle of each product or service. Under the goal of maintaining stable dividends, in principle all dividend payments shall be in cash, but if the company has capital needs for capacity expansion, financial structure improvement, major investment plans, etc., then more than 50% may be stock dividend, and the rest be cash dividend.
The legal reserve shall not be used except for making up the company’s losses, or distributing new shares or cash in proportion to the original shareholdings of the shareholders. However, if new shares or cash is distributed, the amount is limited to the portion of the reserve exceeding 25% of the paid-in capital.
(1) When the company distributes earnings, it is required by law to set aside a special reserve for the debit balance of other equity items on the balance sheet date of the current year. When the debit balance of other equity items is reversed, the amount reversed can be included in earnings available for distribution.
(2) When IFRSs is adopted for the first time, according to the special reserve listed in the letter dated April 6, 2012 referenced Jin-Guan-Cheng-Fa No. 1010012865, if the company uses, disposes of or reclassifies related assets later, it may convert the proportion of the original special reserve into retained earnings available for distribution.
The company’s earnings distribution plan and dividend per share for 2019 and 2018 as determined by the company in June 2020 and June 2019 are as follows:

143

	Earnings distributionplan	Earnings distributionplan		Dividendper share	Dividendper share	(NT$)
Item	2019	2018		2019	2018
Legal reserve	$ 3,313	$	6,568
Ordinary share dividend	57,200	57,200		0.1		0.1
Total	$60,513	$63,768
5. The board of	directors of the company proposed on			March 18, 2021 the		following
earnings distribution plan for 2020:
		Earnings distribution			Dividend per share
			plan		(NT$)
Legal reserve			$	3,631
Cash dividend				57,200	0.1
Total			$	60,831

The board of directors of the company proposed on March 18, 2021 the following earnings distribution plan for 2020:

The earnings distribution plan for 2020 is pending the resolution of the general shareholders’ meeting to be held in June 2021

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

(XXVI) Special reserve

pecial reserve
Item	December 31,2020	December 31,2019
Preparation for plant construction Provision due to the initial application of International Accounting Standards Total	$ 500,000 310,918	$ 500,000 310,918
	$810,918	$810,918

The preparation for plant construction is the special reserve proposed by the company in 1994 by the resolution of the shareholders’ meeting on plant construction at home or abroad.
Due to the initial application of International Accounting Standards, the company transferred NT$341,766 thousand to retained earnings from unrealized revaluation value previously recognized in accordance with the Generally Accepted Accounting Principles of our country. In accordance with the order referenced Jin-Guan-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, 2020, NT$8,094 thousand was reversed to undistributed earnings from the proportion of the original special reserve due to the disposal of investment property.

144

(XXVII) Other equity

Other equity
Item 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	Unrealized benefit (loss) of financial assets measured by fair value through other comprehensive income.
	2020	2019
	$ 514,103 (18,938) (14,320) 19,607 68	$ 450,959 54,608 (1,313) 9,849 -
	$500,520	$514,103

(XXVIII) Treasury shares

The investment in the shares of the company by subsidiaries is regarded as treasury shares, and the changes are summarized as follows: December 31, 2020:

December 31, 2020:
Item	Number of shares at the beginning of the period	Increase (decrease) in the currentperiod	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, 2019: Item	2,113	-	2,113
	Number of shares at the beginning of the period	Increase (decrease) in the currentperiod	Unit: 1000 shares Number of shares at the end of the period
The shares of the parent company held by subsidiaries are transferred from long-term investment to treasury shares	2,113	-	2,113

145

As the company acquired the control over Southeast Paper Co., Ltd. at the end of December 2011, the book amount NT$24,509 thousand of its reinvestment in the parent company (financial assets measured by fair value through other comprehensive income – non-current) was transferred to treasury shares according to the shareholding ratio of 49.71%. The amount as of December 31, 2020 and 2019 was both NT$12,185 thousand. The market prices of the company’s shares held by Southeast Paper Co., Ltd. on December 31, 2020 and 2019 were NT$37,820 thousand and NT$36,869 thousand, respectively. The shares of the parent company held by subsidiaries are treated as treasury shares and still enjoy the right of dividend distribution.

(XXIX) Non-controlling interests

on-controlling interests
Item	December 31,2020	December 31,2019
Opening balance Shares attributable to non-controlling interests: Net profit for the year Change of the year due to other comprehensive income Increase/decrease of non-controlling interests Ending balance	$ 46,809 (5,209) 118 17,192	$ 28,468 110 40 18,191
	$58,910	$46,809

(XXX) Operating income

Operating income
Item	2020	2019
Revenue from customer contracts Sales revenue Income from sale of property Total income from customer contracts Less: sales discount Net income from customer contracts Rental income Net operating income	$ 1,537,001 -	$ 1,519,001 12,172
	$ 1,537,001 -	$ 1,531,173 -
	$ 1,537,001 53,985	$ 1,531,173 53,767
	$1,590,986	$1,584,940

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:

2020 2019 Major regional markets Taiwan $ 1,537,001 $ 1,531,173

146

Mainproduct lines	$ 1,295,602 222,044 19,355 -	$ 1,290,214 201,159 27,628 12,172
Cement Furnace stone powder and other raw materials Land and housing Total Timepoint of revenue recognition
	$1,537,001	$1,531,173
	$ 1,537,001 -	$ 1,531,173 -
Fulfilling the performance obligation at a certain time point Gradually fulfilling the performance obligation over time Total
	$1,537,001	$1,531,173

3. Contract balance

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

contract income as follows:
Item	December31,2020	December31,2019
Receivables Contractual liabilities – current	$415,858	$397,060
	$90,425	$107,734

4. 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:

previous period is as follows:
Amount recognized as income in the currentperiod	2020	2019
From contract liabilities at the beginning of the period From performance obligations fulfilled in the previous period	$ 97,861	$ 61,606
	$ -	$ -

(XXXI) Employee benefits, depreciation, depletion and amortization

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

147

Nature		2019
	Belonging to operatingcosts	Belonging to operatingexpenses	Total
Employee benefits Salary expenses Labor and health insurance expenses Pension expenses Other employee benefits Depreciation expense Amortization expense Total	$ 45,893 3,039 1,834 5,339 41,441 -	$ 28,995 2,851 854 4,415 27,955 35	$ 74,888 5,890 2,688 9,754 69,396 35
	$97,546	$65,105	$162,651

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 2020 and 2019, 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 18, 2021 and March 17, 2020, the board meetings of the company respectively passed resolutions on the remuneration of employees and directors for 2020 and 2019, and the relevant amounts recognized in the financial report are as follows:

follows:
Item	2020		2019
	Employees’ remuneration	Directors’ remuneration	Employees’ remuneration	Directors’ remuneration
Amount to be distributed as resolved Amount recognized in annual financial report Difference amount	$ 267 267	$ 400 400	$ 915 915	$ 1,371 1,371
	$-	$-	$-	$-

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.

(XXXII) Interest income

Interest income
Item	2020	2019
Interest income Bank deposit interest Bond interest Interest income from lease payments	$ 3,410 2,545 60	$ 10,171 1,228 75

148

receivable Fund interest Total (XXXIII) Other income Item Dividend income Income from sale of scrap iron Income from rent concession Other Total (XXXIV) Other benefits and losses Item Financial assets and liabilities measured at fair value through income statement Gain (loss) on disposal of financial assets measured at fair value through income statement Net foreign exchange gain (loss) Gain (loss) from disposal of property, plant and equipment Impairment loss of property, plant and equipment Other losses Profit from lease revision Expenses related to city land rezoning (note 1) Refund of land preparation and clearance cost of the base (note 2) Total	213	-
	$6,228	$11,474
	2020	2019
	$ 46,500 797 4,733 4,966	$ 45,617 651 - 3,431
	$56,996	$49,699
	2020	2019
Financial assets and liabilities measured at fair value through income statement Gain (loss) on disposal of financial assets measured at fair value through income statement Net foreign exchange gain (loss) Gain (loss) from disposal of property, plant and equipment Impairment loss of property, plant and equipment Other losses Profit from lease revision Expenses related to city land rezoning (note 1) Refund of land preparation and clearance cost of the base (note 2) Total	$ 3,837 249 (7,208) - - (3,218) 7 - (25,714)	$ 27,423 566 (3,894) (2,974) (1,875) (47) - (22,400) -
	$ (32,047)	$ (3,201)

(Note 1) The cost of the above-mentioned land rezoning is due to the fact that after the rezoning of the land of the Group located at No. 3, Section 4, Economic and Trade Section, Qianzhen District, Kaohsiung with the Land Bureau of Kaohsiung Municipal Government and the completion of the land acceptance procedures in March 2019, in order to appease the resistance of the resigned and transferred employees of the former landlord (Taiwan Machinery Co., Ltd.), and avoid serious damage to the rights and interests of the Group, the Group, through the mediation of the Labor Bureau of the Kaohsiung Municipal Government, agreed to pay a total of NT$22,400 thousand of living allowance (expressed under non-business – other expenses). After the implementation of this agreement, the employers and the management no longer had any objection. The amount above was paid in full in December, 2019.

(Note 2) The refund of land preparation and clearance expenses of the base refers to the refund of the expenses of land preparation, clearance of debris and excavation of underground foundation for returning the land the Group leased for its base in Gaonan Section leased in 2021, as there is no longer the need to use the

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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).

(XXXV) Financial cost

Financial cost
Item	2020	2019 $ 1,720 3,019 202 $ 4,941 - $4,941
Bank loan interest Interest on lease liabilities Other interests Sub-total Less: capitalization amount of qualified assets Financial cost	$ 1,475 4,445 206
	$ 6,126 -
	$6,126

(XXXVI) Income tax

1. 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 Land value added tax Additional tax on undistributed earnings Total amount of current income tax Deferred income tax Origin of temporary difference and total amount of deferred income tax reversed Income tax expenses (benefits)	2020	2019
	$ - (2,153) - -	$ 283 - 59 5,664
	$ (2,153)	$6,006
	$ (7,366)	$3,895
	$ (7,366)	$ 3,895
	$ (9,519)	$ 9,901

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

income for the current year is as follows:
Item	2020		2019
Net profit before tax	$	7,430	$	43,144
Tax amount of net profit before tax calculated at statutory tax rate	$	1,486	$	8,628
Tax influence number of adjustment items:
Influence number of items not included in
the calculation of taxable income
Investment loss (profit) recognized by equity method		(2,590)		(276)

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Tax free disposal of land benefits Depreciation tax difference Income from suspension of securities transaction income tax Unrealized inventory depreciation loss (appreciation benefit) Realized liquidation loss Other adjustments Loss deduction to save income tax of subsequent years Additional tax on undistributed earnings Net change in deferred income tax Estimated higher or lower than in the previous year Land value added tax Income tax expense recognized in profit or loss	- (1,755) 239 (3,306) (11,641) 17,567 - - (7,366) (2,153) -	(162) (1,959) (376) (2,314) - (3,258) - 5,664 3,895 - 59
	$ (9,519)	$ 9,901

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

In July 2019, the president of the Republic of China promulgated an amendment to the Statute for Industrial Innovation, adding that if the amount of the undistributed earnings from 2018 onward is reinvested in specific assets or technologies to a certain amount, the amount of the investment may be included as a deduction item for calculating the undistributed earnings. When calculating the undistributed earnings tax in 2020 and 2019, the company has deducted the amount of capital expenditure reinvested from the undistributed earnings in 2019 and 2018.

In addition, in the amount of dividends or earnings distributed in 2020, the company listed the net increase of retained earnings at the beginning of 2018 which resulted from the initial application of IFRS 9 and IFRS 15 as the deduction item of undistributed earnings in 2018 in accordance with the order referenced Tai-Tsai- Shui No. 10904558730.

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 Impairment loss of investment property Property, plant and equipment impairment loss Investment income recognized by equity method		2020
	Opening balance	Recognized in profit (loss)	Ending balance
	$ 1,214 40,726 5,868 12,760	$ (387) - (378) (10,894)	$ 827 40,726 5,490 1,866

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12,604 9,010 6,112	(3,306) 1,214 22,872	9,298 10,224 28,984 $97,415 $ (260,570) (42,796) $ (303,366) $ (205,951)
$88,294	$9,121
$ (260,570) (41,041)	$ - (1,755)
$ (301,611)	$ (1,755)
$ (213,317)	$7,366
	2019
Opening balance	Recognized in profit (loss)	Ending balance $ 1,214 40,726 5,868 12,760 12,604 9,010 6,112 $ 88,294 $ (260,570) (41,041) $ (301,611) $ (213,317)
$ 822 40,726 6,985 11,964 14,918 9,022 6,083	$ 392 - (1,117) 796 (2,314) (12) 29
$ 90,520	$ (2,226)
$ (260,570) (39,372)	$ - (1,669)
$ (299,942)	$ (1,669)
$ (209,422)	$ (3,895)

4. Items not recognized as deferred income tax assets:

Item	December 31,2020 $ 11,335 25,170 $36,505	December 31,2019
Temporary difference subtractable Loss deduction Total		$ 11,889 36,988
		$48,877

The company’s profit-making enterprise income tax is approved by the tax collection authority up to 2018.

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(XXXVII) Other comprehensive income

(XXXVII) Other comprehensive income
Item		2020
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ (99) 3,386 (2,598)
	$ 689	$ -	$ 689
		2019
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ 10 4,261 60,236
	$ 64,507	$ -	$ 64,507

(XXXVIII) Earnings per share of ordinary shares

I) Earnings per share of ordinary shares
Item	2020	2019
		$ 33,133 569,887
	$ 0.04	$ 0.06
	$ 22,158 -	$ 33,133
	$ 22,158	$ 33,133
	$ 569,887 30	$ 569,887 74
	$ 569,917	$ 569,961

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Number of shares outstanding (1000 shares) Diluted earnings per share (after tax) (NT$)

$ 0.04 $ 0.06

(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 Industrial Construction Co., Ltd.

Nansha Wood Co., Ltd.

Taiji Ship Plant Co., Ltd.

Jiahuan Dongni Co., Ltd.

Penghu Cable TV Co., Ltd.

Penghu Bay Co., Ltd.

CHC Resources Co., Ltd.

Baifu Investment Co., Ltd.

Chentai Cement Co., Ltd.

Chentai Resource Development Co., Ltd.

Dongshu Investment Co., Ltd.

Taiwan Concrete Co., Ltd.

Taiwan Concrete Resource Development Co., Ltd.

Chen Chao-Shu Foundation

Tiancheng Concrete Industry Co., Ltd.

Tiancheng Concrete Industry Co., Ltd.

Dun-Ling Zheng-Chen

Li-Fei Chen

Mei-Yu Huang

Chian-Hao Chen

Yushun Environmental Protection Co., Ltd.

Dongyue Investment Co., Ltd.

Relationship with the merged
company

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

Operating income:

Category/name of Item 2020 2019 related party Sales revenue Other related party[Tiancheng ] Concrete $ 112,165 $ 92,428 industry Co., Ltd.

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Other Lease income Total Affiliated enterprise Other related party Total	38,746 $150,911 $ 170 34 $204	31,411
		$123,839
		$ 170 31
		$201

(1) Sales revenue:

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

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

2. Purchases:

Purchases:
Type of related party	2020	2019
Other related party Other	$1,622	$174

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

3. Contractual assets: None.

4. Contractual liabilities:

Contractual assets: None. Contractual liabilities:
Category/name of related party	December31,2020	December31,2019
Other related party	$1,464	$-

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

Item	Category/name of relatedparty	December 31, 2020	December 31, 2019
Accounts receivable Sub-total Less: allowance for loss Net Refundable deposits	Other related party Tiancheng Concrete industry Co., Ltd. Other Other related party	$ 33,667 3,607	$ 38,796 3,025
		$ 37,274 (447)	$ 41,821 (671)
		$36,827	$41,150
		$ 6,000	$ 6,000

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The expected credit losses recognized (reversed) for the receivables above from related parties in 2020 and 2019 were NT$(224) thousand and NT$390 thousand, respectively.

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

Item Type of relatedparty	Item Type of relatedparty	December 31,	December 31,	2020		December 31,	December 31,	2019
Accounts payable Other related party			$	325		$		86
Guarantee
deposits Other related party			$	60		$		60
received
7. Prepayments:
Category/name of related party		December31,2020			December31,			2019
Affiliated enterprise
Other			$	2		$		2
8. Asset transactions: None.
9. Lease agreements:
(1) Leasehold assets
Account item/type of related party/name	Subject matter of lease		2020			2019
Acquisition of right-of-use
assets
Other related party
Chentai Cement Co., Ltd.	Land in Gaonan and other sections		$		-	$ 115,928
Dun-Ling Cheng-Chen	6th floor, Southeast Building				-		18,839
Taiwan Concrete	The land in Shande Section		217,219					-
Other	Land in Gaonan and other sections				-			7,297
	Total		$217,219(Note)			$142,064(Note)
Account item/type of related party/name		December 31,		2020		December 31, 2019
Lease liabilities
Other related party
Chentai Cement Co., Ltd.			$ 72,271			$	95,168
Dun-Ling Cheng-Chen			17,058				18,321
Taiwan Concrete			144,735					5,990
Other				4,913				6,281
Total			$238,977(Note)			$125,760(Note)

(Note): It refers to the right-of-use assets and lease liabilities recognized in accordance with IFRS 16.

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Account item/type of related party/name Interest expense Other related party (2) Expenses: Account item/type of related party/name Rental expenses Affiliated enterprise	2020	2019
	$3,211	$1,475
	2020	2019
	$ 12	$ 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(3)A.
Loans to related parties: Please refer to the attached table 1 for the relevant explanation of the Group’s loans to related parties.
Borrowing from related parties: None.
Endorsements and guarantees: Please refer to the attached table 2 for the relevant contents of endorsements and guarantees of the Group for related parties.
Others
(1) Various income

rs arious income
Category/name of related party	2020	2019
Affiliated enterprise Other related party Total	$ 180 603	$ 117 640
	$783	$757

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

Type of related Major transactions party Other related party Mei-Yu Huang No. 0681, 0733, 0739, 0741, 0834-1, 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

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

(3) Collection for others

On December 31, 2020 and 2019, the Group collected land payments of NT$13,630,000 and NT$7,760,000, respectively on behalf of the affiliated enterprise Taiji Ship Plant Co., Ltd., and listed them under collection for others.

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(4) Conclusion of important contracts:
A. The Group has signed leases with related parties to acquire right-of-use assets. Please refer to note 9 for details.
B. Please refer to note 9 for the contents of the joint construction and sub-sale contracts with related parties.

(IV) Key management salary information

Key management salary information
Item	2020 $ 12,547 324 - - - $12,871	2019 $ 13,035 324 - - - $13,359
Salary and other short-term employee benefits Post-retirement benefits Other long-term employee benefits Termination benefits Share based payments Total

VIII. Pledging of Assets

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

guarantees:

guarantees:
Item	December 31,2020	December 31,2019
Investment property	$2,824,470	$2,824,470

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

IX. Significant Contingent Liabilities and Unrecognized Contractual Commitments
(I) As of December 31, 2020 and 2019, the issued but unused letters of credit by the Group: None.
(II) As of December 31, 2020 and 2019, the amount of the guarantee notes deposited by the Group for loan and performance guarantee, and the guarantee notes received for performance guarantee are as follows:

performance guarantee are as follows:
Item Guaranteed notes deposited (guaranteed notes payable) Guarantee notes received (guarantee notes receivable)	December31,2020 $ 895,452 66,287	December31,2019
		$ 1,062,398 80,654

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

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collected respectively. The price of the house and the land will be decided by both parties; the price split for townhouses will be 50% for the house price and 50% for the land price, and for elevatored mansions it is 57% for the house price and 43% for the land price. The ratio of house price to land price is determined by the appraisal report issued by a professional organization.

The land of Taiji Ship Plant Co., Ltd. located at No. 969, Dong’an Section, Dongshan District, Tainan with a land area of 4,819.86 square meters, or about 1,458 square meters. It is willing to have 41 townhouses built by the Group. Both parties agree that the houses will be sold respectively, and the proceeds will be collected respectively, of which 75% will be for the house price and 25% for the land price. The ratio of house price to land price is determined by the appraisal report issued by a professional organization.
(VI) On March 16, 2020, the board meeting of the Group acquired the right-of-use assets through leasing with the related party Taiwan Concrete Resource Development Co., Ltd. The important matters are described as follows:
Subject matter and purpose of lease
- (1) Subject matter: land and above-ground buildings in Shande Section, Renwu District, Kaohsiung.
- (2) Purpose: it is used to build a plant for the manufacturing and selling of CLSM.
Contract agreements
- (1) Lease term: from April 1, 2020 to March 31, 2040,
- (2) Rent:
  - A. Land: The rental area is 4,488 square meters, the monthly rent is NT$673 thousand (excluding tax), and the rent is increased by 3% every three years.
  - B. Buildings: The Group undertakes the construction cost of the leased property, totaling NT$64,457 thousand.
  - C. Construction costs: The construction and installation costs shall be borne by the Group, and the property shall be owned by the Group during the lease term. However, when the contract is terminated or expires, Taiwan Concrete Resource Development Co., Ltd. does not need to return the construction costs of the leased building paid by the Group.
Reference basis for price determination: the real estate appraisal report issued by Mega Real Estate Appraiser Firm.
( V ) Large capital expenditures that have been signed but not yet incurred:

Item	December31,2020	December31,2019
Property, plant and equipment Right-of-use assets Total	$ 7,491 33,996	$ 13,597 -
	$41,487	$13,597

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X. Losses from Major Disasters: None.

XI. Major Subsequent Events: None.

XII. Miscellaneous

(I) Capital risk management

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

(II) Financial instruments
Financial risk of financial instruments

Financial risk management policy

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

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

Nature and degree of major financial risks

(1) Market risks

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

(B) Exchange rate risk exposure and sensitivity analysis

Foreign currency Exchange rate		December 31,2020
	Amount posted (NT$)	Sensitivity analysis
		Range of change Impact on profit and loss Impact of equity

160

(foreign currency: functional currency) Financial assets Monetary items

US$: NT$

6,617 28.48 Foreign currency Exchange rate	188,466	Appreciation by 1% 1,885 - December31,2019
	Amount posted (NT$)	Sensitivity analysis
		Range of change Impact on profit and loss Impact of equity

(foreign currency: functional currency) Financial assets Monetary items

US$: NT$

==> picture [353 x 25] intentionally omitted <==

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, 2020 and 2019 will have an equal but opposite impact.

(C) The aggregate amount of all exchange gains and losses (including realized and unrealized) recognized in 2020 and 2019 due to exchange rate fluctuation of monetary items of the Group are NT$(7,208) thousand and NT$(3,894) thousand, respectively.
B. Price risk

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

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

If the equity price rises or falls by 1%, the after-tax income in 2020 and 2019 will increase or decrease by NT$2,327 thousand and NT$2,459 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 2020 and 2019 will increase or decrease by NT$11,789 thousand and NT$11,917 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

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

Item	Book amount	Book amount
	December31,2020	December31,2019
Fair value interest rate risk: Financial assets Financial liabilities Net Cash flow interest rate risk: Financial assets Financial liabilities Net	$ 268,339 (566,010)	$ 283,741 (441,086)
	$ (297,671)	$ (157,345)
	$ 112,085 -	$ 401,392 -
	$112,085	$401,392

Sensitivity analysis of fair value interest rate risk

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

Sensitivity analysis of cash flow interest rate risk

The financial instruments of the Group with variable interest rates are assets (liabilities) with floating interest rates, so the changes in market interest rates will cause the effective interest rates to change accordingly, and the future cash flow will therefore fluctuate. Every 1% decrease (increase) of the market interest rate will cause the net profit of 2020 and 2019 to increase (decrease) by NT$1,121 thousand and NT$4,014 thousand, respectively.

(2) Credit risk

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

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

Financial credit risk

The credit risk of bank deposits and other financial instruments is measured and monitored by the Finance Department of the Group. Since the trading counterparties and the performing counterparties of the Group are creditworthy

162

banks, financial institutions and company organizations above investment grade, and government agencies, there are no major performance doubts, so there is no significant credit risk. In addition, the Group does not classify debt instrument investment as investment measured at amortized cost and investment measured at fair value through other comprehensive income.

A. Credit concentration risk

As of December 31, 2020 and 2019, the accounts receivable balance of the top ten customers respectively accounted for 83.09% and 83.25% of the Group’s accounts receivable balance, and there is a credit concentration risk; the credit concentration risk of the remaining accounts receivable is relatively insignificant.

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

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

December 31, 2020	Book amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount
		Collateral	General agreement on netsettlement	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, 2019	$ - 232,667 1,178,923	$ - - -	$ - - -	$ - - -	$ - - -
	$ 1,411,590	$ -	$ -	$ -	$ -
	Book amount
		Collateral	General agreement on netsettlement	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	$ -	$ -	$ -	$ -	$ -

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provisions
of IFRS9:
Financial assets measured at fair value through	245,872	-	-	-	-
income statement
Financial assets measured at fair value through	1,191,681	-	-	-	-
other comprehensive income
Total	$ 1,437,553	$ -	$ -	$ -	$ -

(3) Liquidity risk

A. Liquidity risk management

The Group’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 Group has sufficient financial flexibility.

B. Analysis of financial liability maturities

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

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

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

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

Non-derivative financial liabilities				December 31, 2019	December 31, 2019
	Within 6 months	7–12 months	1–2 years	2–5 years	More than 5 years	Contractual cash flow	Book amount
Short-term loans notes payable Accounts payable Lease liabilities Other accounts payable Guarantee deposits received Total	$ 200,000 4,783 199,813 27,657 82,460 5,113	$ - - - 29,744 2,286 1,263	$ - - - 57,401 - 2,500	$ - - - 120,782 - 2,587	$ - - - 12,411 - 11,577	$ 200,000 4,783 199,813 247,995 84,746 23,040	$ 200,000 4,783 199,813 241,086 84,746 23,040
	$ 519,826	$ 33,293	$ 59,901	$ 123,369	$ 23,988	$ 760,377	$ 753,468

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

Lease liabilities	Less than 1 year	1–5 years	5–10 years	10–15 years	Total undiscounted leasepayments
	$57,401	$178,183	$7,301	$5,110	$247,995

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

Types of financial instruments

December 31, 2020 December 31, 2019

Financial assets
Financial assets measured at amortized
cost
Cash and cash equivalents			$ 176,743	$ 207,931
Notes and accounts receivable (including related parties)			415,858	397,060
Other receivables			5,092	33,053
Other financial assets – current			174,598	447,691
Refundable deposits			10,118	11,750
Financial assets measured at fair value through income statement – current			232,667	245,872
Financial assets measured at fair	value
through other comprehensive income		–	1,178,923	1,191,681
non-current
Financial liabilities
Financial liabilities measured		at
amortized cost
Short-term loans			235,000	200,000
Notes and accounts payable (including related parties)			225,652	204,596
Other accounts payable			89,625	84,746
Lease liabilities (including within one year)	those		331,009	241,086
Guarantee deposits received			23,957	23,040

(III) Fair value information:

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

Level 1:

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

165

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

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

Financial instruments not measured at fair value:

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

Information on different levels of fair value:

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

	December 31,2020	December 31,2020
Level 1	Level 2	Level 3	Total
	$ - - - - -	$ - - - - 315,420	$ 157,300 42,716 32,651 863,503 315,420
$1,096,170	$ -	$ 315,420	$ 1,411,590

Level 1	Level 2	Level 3	Total
	$ - - - - -	$ - - - - 324,319	$ 153,046 60,747 32,079 867,362 324,319
$1,113,234	$ -	$ 324,319	$ 1,437,553

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5. Fair value evaluation techniques for instruments measured at fair value:

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

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

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

(1) Stocks of listed companies: closing price.
(2) Open-end fund: net value.
Movement between level 1 and level 2: None.
Details of changes on level 3:

Item	Financial assets measured at fair value through other comprehensive income – unlisted and non-OTC stocks	Item	Financial assets measured at fair value through other comprehensive income – unlisted and non-OTC stocks
January 1, 2020 Acquired in the current period Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2020	$ 324,319 2,000 (4,800) - (6,099)	January 1, 2019 Acquired in the current period Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2019	$ 282,108 36,400 (10,966) - 16,777
	$ 315,420		$ 324,319

8. The evaluation process of fair value classified in level 3:

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

(IV) Transfer of financial assets: None.

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

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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: None.
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: None.
The receivables from related parties reachNT$100 million or 20% of the paid-in capital: None.
Engagement in derivative transactions: None.
Business relationship and important transactions between parent and subsidiary companies: The transaction amount is less than NT$10,000 thousand and is not significant, so it is not disclosed.
(II) Information of reinvestment businesses: Schedule 4.
(III) Mainland investment information: Not applicable.
(IV) Information of major shareholders: Schedule 5.

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Schedule 1

Southeast Cement Corporation and Subsidiaries Details of Loans to Others

December 31, 2020

Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020	Schedule 1 Southeast Cement Corporation and Subsidiaries Details of Loans to Others December 31, 2020
													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	93,000	0.975%	2	-	Operating turnover	-	-	-	424,490 (Note 1)	848,981 (Note 2)

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

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

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

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

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Schedule 2

Southeast Cement Corporation and Subsidiaries Endorsements and Guarantees for Others December 31, 2020

Unit: NT$ thousand

No.	Company name of endorsement and guarantee	Object 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)
0	Southeast Cement Corporation	Southeast Asset Development Co., Ltd.	2	1,697,962 (note 4)	100,000	-	-	-	-	3,395,924 (note 5)	Y	-	-
1	Southeast investment Co., Ltd.	Southeast Cement Corporation	3	200,826 (Note 2)	704	704	-	-	0.11%	267,768 (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. (Note 4) The limit is 20% of the net value in the company’s latest audited or reviewed financial statements. (Note 5): The limit is 40% of the net value in the company’s latest audited or reviewed financial statements.

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Schedule 3

Southeast Cement Corporation and Subsidiaries Details of securities held at the end of the period

December 31, 2020

			December 31, 2020	December 31, 2020
					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	85,807	0.29	85,807
	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	620,826	5.26	620,826
	Stock – Chunghwa Telecom	None.	Financial assets measured at fair value through other comprehensive income	360	39,240	-	39,240
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through other comprehensive income	949	41,007	-	41,007
	Stock – Yuanta Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	547	11,241	-	11,241
	Stock – TXC Corporation	None.	Financial assets measured at fair value through other comprehensive income	80	5,992	-	5,992
	Stock – Nantex Industry Co.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	1	22	-	22
	Stock – Taiwan Hong Chuan Group	None.	Financial assets measured at fair value through other comprehensive income	202	12,177	-	12,177
	Stock – CSRC	None.	Financial assets measured at fair value through other comprehensive income	354	9,175	-	9,175
	Stock – Sincere Navigation Corporation	None.	Financial assets measured at fair value through other comprehensive income	284	6,459	-	6,459
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	406	18,983	-	18,983
	Stock – Yonyu Plastic	None.	Financial assets measured at fair value through other comprehensive income	52	1,724	0	1,724
	Stock – China Carbon	None.	Financial assets measured at fair value through other comprehensive income	100	10,850	0	10,850

171

	Stock – Kaohsiung MRT	None.	Financial assets measured at fair value through other comprehensive income	11,117	60,017	3.99	60,017
	Stock – Huasheng Ventures	The company is a corporate supervisor of this company.	Financial assets measured at fair value through other comprehensive income	7	855	4.17	855
	Stock – Yuhua Venture Capital	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	293	1,034	5.00	1,034
	Stock – China National Products	None.	Financial assets measured at fair value through other comprehensive income	15	1,800	3.84	1,800
	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	17,453	16.67	17,453
	Stock – One Card Solution	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	3,199	11,011	3.51	11,011
		Total			955,673		955,673
	Fund – Alliance Bernstein America	None.	Financial assets measured at fair value through income statement	15	5,565	-	5,565
	Fund – JPMorgan Global	None.	Financial assets measured at fair value through income statement	21	5,562	-	5,562
	Fund – Amundi	None.	Financial assets measured at fair value through income statement	50	14,852	-	14,852
	Bond – Arabian Oil	None.	Financial assets measured at fair value through income statement	342	11,174	-	11,174
	Bond – Delhi International Airport	None.	Financial assets measured at fair value through income statement	500	14,862	-	14,862
	Bond – Pfizer	None.	Financial assets measured at fair value through income statement	200	6,615	-	6,615
		Total			58,630		58,630
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	136,714	13.86	136,714
	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	44,908	4.21	44,908

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	Stock – Taiwan Implant TechnologyCo.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	701	4,472	4.20	4,472
	Stock – Dushanlin Development	None.	Financial assets measured at fair value through other comprehensive income	3,840	37,156	-	37,156
		Total			223,250		223,250
	Fund – Cathay No. 2	None.	Financial assets measured at fair value through income statement	500	9,950	-	9,950
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through income statement	116	5,422	-	5,422
	Stock – Taiwan Chemical Fiber	None.	Financial assets measured at fair value through income statement	17	1,468	-	1,468
	Stock – ZTE Security	None.	Financial assets measured at fair value through income statement	292	25,929	-	25,929
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through income statement	2,710	117,083	-	117,083
	Stock – CHC Resources	None.	Financial assets measured at fair value through income statement	30	1,438	-	1,438
	Stock – Mega Financial Holdings	None.	Financial assets measured at fair value through income statement	200	5,960	-	5,960
		Total			167,250		167,250
Southeast Paper Co.,Ltd.	Stock – Southeast Cement	The company’s parent company.	Financial assets measured at fair value through other comprehensive income	2,113	37,820	0.37	37,820	Note
Southeast Gaoliang Recycling Co., Ltd.	Fund – President Good Strike Money Market Fund	None.	Financial assets measured at fair value through income statement	403	6,787	-	6,787

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

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Schedule 4

Southeast Cement Corporation and Subsidiaries Details of reinvestment businesses December 31, 2020

				Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020	Details of reinvestment businesses December 31, 2020
				Unit: 1000 shares;NT$thousand
Name of investing company	Name of investee company	Location	Main business items	Original investment amount		Holding at the end of the period			Investee companies Profit or loss in the current period	Investment profit or loss recognized in the current period	Remarks
				End of current period	End of last year	Number of shares	Ratio	Book amount
Southeast Cement Corporation	Southeast Investment	Kaohsiung	Securities investment	297,870	297,870	499	99.29	652,887	23,310	23,144	(note)
	Southeast Industrial Construction Co.,Ltd.	Kaohsiung	Construction industry	11,361	11,361	36	31.01	70,182	7,941	2,463
	Southeast Paper Co.,Ltd.	Kaohsiung	Cement paper bags	4,971	7,457	5	49.71	22,471	(346)	(172)	(note)
	Nansha Wood Co.,Ltd.	Kaohsiung	Wood products	8,540	8,540	1	27.56	11,203	2,244	618
	Southeast Asset	Kaohsiung	Construction industry	290,000	290,000	29,000	100.00	289,954	(5,213)	(5,213)	(note)
	Taiji Ship Plant Co.,Ltd.	Kaohsiung	Engineering industry	328,492	328,492	25,611	31.01	309,997	8,746	1,184
	Southeast Gaoliang Recycling Co., Ltd.	Kaohsiung	Waste removal	50,000	30,000	5,000	50.00	44,719	(10,614)	(5,307)	(note)
	Sub-total							1,401,413	26,068	16,717
	Less: parentcompany’s sharesheld by subsidiariesreclassifiedastreasury shares							(12,185)
	Total							1,389,228	26,068	16,717
Southeast investment Co.,Ltd.	Penghu Cable TV Co.,Ltd.	Penghu County	Cable TV	51,093	51,093	8,000	40.00	147,713	19,485	7,794
	Penghu Bay	Penghu	Beach	60,347	60,347	1,663	38.68	16,548	57	24

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	County
Southeast Industrial Construction Co., Ltd.	Kaohsiung	Construction industry	29,381	29,381	12	10.92	29,395	7,941	819
Taiji Ship Plant Co.,Ltd.	Kaohsiung	Engineering industry	5,826	5,826	454	0.55	5,608	8,746	50
Southeast Gaoliang Recycling Co., Ltd.	Kaohsiung	Waste removal	1,000	600	100	1.00	894	(10,614)	(106)	(note)
Total							200,158	25,615	8,581

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

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Schedule 5

Schedule 5	Schedule 5	Schedule 5
Southeast Cement Corporation and Subsidiaries Information of major shareholders December31,2020
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%
Consortium Legal Person Fukang Cultural and Educational Foundation	38,829,350	6.79%
Baifu Investment Co., Ltd.	35,008,148	6.12%
Changching Co., Ltd.	33,525,346	5.86%
Consortium Legal Person Southeast Cultural Foundation	33,421,803	5.84%
Yue-Ling Chen	30,464,760	5.33%

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

(I) General information:

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

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

3. Construction and Sale Department

(II) Measurement basis:

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

(III) Departmental financial information:

2020:

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

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

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2019:

2019:
Net income Revenue from external customers Inter departmental revenue Total net income Departmental interests General operating expenses of the company Non-operating income and expenditure Net profit before tax Income tax benefits (expenses) Net profit after tax Departmental assets Departmental liabilities	Production Department	Construction Department	Leasing Department,etc.	Adjustment and elimination	Total
	$ 1,519,001 173	$ 12,172 -	$ 53,767 15	$ - (188)	$ 1,584,940 -
	$ 1,519,174	$ 12,172	$ 53,782	$ (188)	$ 1,584,940 66,149 (74,658) 51,653
	$ 30,914	$ 3,716	$ 31,534	$ (15)

					$ 43,144 (9,901)
					$ 33,243
					$ 9,740,348
					$ 1,169,364

(IV) Product and service information by type:

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

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

==> picture [384 x 26] intentionally omitted <==

(2) Non-current assets:

==> picture [384 x 25] intentionally omitted <==

2. Important customer information:

2020

Customer	Amount	% of netsales
Customer A from Production Department Customer
	Amount	% of netsales
Customer A from Production Department	$ 262,863	16.59%

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V. The company’s individual financial report audited and certified by the independent auditor in the most recent year:

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, 2020 and 2019, 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, 2020 and 2019, and the individual financial performance and individual 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 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 2020 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 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(12) of the individual 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 individual financial report; for the impairment assessment of investment property, please refer to note 6(13) of the

179

individual financial report.

Description of key audit items:

As of December 31, 2020, the company held NT$5,338,862 thousand investment property, accounting for 56% 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:

Other Matters

The financial reports of some investee companies recognized by equity method in the individual financial reports of 2020 and 2019 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, 2020 and 2019 was NT$401,668 thousand and NT$1,010,191 thousand, respectively, accounting for 4.20% and 10.49% of the total assets, respectively; in 2020 and 2019, the share of profit and loss of subsidiaries and affiliated enterprises and joint ventures by equity method was NT$4,093 thousand and NT$36,517 thousand, respectively, accounting for 32.31% and 84.05% 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$3,046 thousand and NT$9,859 thousand, respectively, accounting for 533.45% and 15.29% 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

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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.

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We determined the key audit matters for the audit of the individual financial report of Southeast Cement Corporation 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

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Southeast Cement Corporation Individual 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 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)) $ 67,754 Financial assets measured at fair value through income statement – current (note 6(2)) 58,630 Net notes receivable (note 6(3)) 286,562 Net accounts receivable (note 6(4)) 92,498 Accounts receivable – related parties net (note 7) 36,827 Other receivables (note 6(5)) 2,047 Other accounts receivable – related parties (note 7) 93,000 Current income tax assets 168 Inventory (note 6(6)) 506,215 Prepayments (note 6(7)) 45,691 Other financial assets – current (note 6(8)) 174,598 Total current assets 1,363,990 Non-current assets Financial assets measured at fair value through other comprehensive income – non-current (note 6(9)) 955,673 Investment by equity method (note 6(10)) 1,389,228 Property, plant and equipment (note 6(11)) 226,744 Right-of-use assets (note 6(12)) 177,339 Net investment property (note 6(13)) 5,338,862 Deferred income tax assets 93,776 Refundable deposits (note 6(14)) 10,070 Other non-current assets – others (note 6(5)) 2,815 Total non-current assets 8,194,507 Total assets $9,558,497		1 1 3 1 - - 1 - 5 - 2	$ 137,647 44,055 273,650 82,302 41,289 26,602 - 443 551,492 35,709 233,891	1 - 3 1 - - - - 6 - 2
		1,363,990	14	1,427,080	15
		955,673 1,389,228 226,744 177,339 5,338,862 93,776 10,070 2,815	10 15 2 2 56 1 - -	986,703 1,337,233 209,545 229,026 5,336,778 84,687 11,734 4,199	10 14 2 2 55 1 - -
		8,194,507	86	8,199,905	85
		$9,558,497	100	$9,626,985	100

(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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(Continued)

Code	Liabilities and equity	December 31,2020	December 31,2020	December 31,2019	December 31,2019
		Amount	%	Amount	%
2100 2130 2170 2200 2230 2250 2280 21xx 2570 2580 2645 25xx 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3500 3xxx	Current liabilities Short term loans (note 6(15)) Contractual liabilities – current (note 6(16)) Accounts payable Other accounts payable (note 6(17)) Current income tax liabilities Provision for liabilities – current (note 6(18)) Lease liabilities – current (note 6(12)) Total current liabilities Non-current liabilities Deferred income tax liabilities Lease liabilities – non-current (note 6(12)) Guarantee deposit received (note 6(20)) Total non-current liabilities Total liabilities Equity Share capital (note 6(21)) Ordinary share capital Capital reserve (note 6(22)) Retained earnings Legal reserve Special reserve (note 6(24)) Undistributed earnings (note 6(23)) Other equity (note 6(25)) Treasury shares (note 6(26)) Total equity Total liabilities and equity	$ 235,000 73,582 192,899 68,736 2,220 1,553 60,370	2 1 2 1 - - 1	$ 200,000 98,712 189,879 65,387 5,103 1,440 58,028	2 1 2 1 - - 1
		634,360	7	618,549	6
		279,918 130,453 23,957	3 1 -	278,163 183,058 23,040	3 2 -
		434,328	5	484,261	5
		1,068,688	11	1,102,810	11
		5,720,008 188,267 1,052,057 810,918 230,224 500,520 (12,185)	60 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	89	8,524,175	89
		$9,558,497	100	$9,626,985	100

(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 Comprehensive Income January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

				Unit: NT$ tho	usand
Code 4000 5000 5900 6100 6200 6450 6000 6900 7100 7010 7020 7050 7070 7000 7900 7950 8200 8310 8316 8330 8300 8500 9750 9850	Item Operating income (note 6(28)) Operating costs (note 6(6)) Gross operating profit (loss) Operating expenses Sales expenses Management expenses Expected credit impairment benefits (expenses) (note 6(4)) Total operating expenses Operating profit (loss) Non-operating income and expenditure Interest income (note 6(29)) Other income (note 6(30)) Other benefits and losses (note 6(31)) Financial cost (note 6(32)) Share of profits/losses of affiliated enterprises and joint ventures recognized by equity method Total non-operating income and expenditure Net profit (loss) before tax Income tax benefits (expenses) (note 6(33)) Net profit (loss) for the period Other comprehensive income (note 6(34)) Items not reclassified as profit or loss Unrealized valuation gain/loss of equity instrument investment measured at fair value through other comprehensive income Share of other comprehensive income of affiliated enterprises and joint ventures recognized by equity method Other comprehensive income (net) Total comprehensive income in the current period Earnings per share Basic earnings per share (note 6(35)) Diluted earnings per share (note 6(35))	2020	% 100 (96) 4 (1) (4) - (5) (1) - 3 (2) - 1 2 1 1 2 (1) 1 - 2	2019
		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	%	Amount $ 1,572,842 (1,494,685) 78,157 (15,815) (67,769) 557 (83,027) (4,870) 8,646 39,938 (32,225) (4,927) 36,883 48,315 43,445 (10,312) 33,133 54,608 9,859 64,467 $ 97,600 $ 0.06 $ 0.06	%
			100 (96)		100 (95)
			4 (1) (4) -		5 (1) (4) -
			(5)		(5)
			(1)		-
			- 3 (2) - 1		1 3 (2) - 2
			2		3
			1 1		3 (1)
			2		2
			(1) 1		3 1
			-		4
			2		6

(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 Changes in Equity January 1 to December 31, 2020 and 2019

	Retained earnings	Unit: NT$ thousand Other equityitems Treasury stock Totalequity Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensiveincome $ 450,959 $ (12,185) $ 8,483,670 - - - - - (57,200) - - 33,133 64,457 - 64,467 64,457 - 97,600 - - 105 (1,313) - - 514,103 (12,185) 8,524,175 - - - - - (57,200) 68 - - - - 22,158 669 - 571 669 - 22,729 - - 105 (14,320) - - $ 500,520 $ (12,185) $8,489,809	Unit: NT$ thousand Other equityitems Treasury stock Totalequity Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensiveincome $ 450,959 $ (12,185) $ 8,483,670 - - - - - (57,200) - - 33,133 64,457 - 64,467 64,457 - 97,600 - - 105 (1,313) - - 514,103 (12,185) 8,524,175 - - - - - (57,200) 68 - - - - 22,158 669 - 571 669 - 22,729 - - 105 (14,320) - - $ 500,520 $ (12,185) $8,489,809
Legal reserve $ 1,042,176 6,568 - - - - - - 1,048,744 3,313 - - - - - - - $1,052,057	Special reserve $ 810,918 - - - - - - - 810,918 - - - - - - - - $ 810,918	Unrealized valuation gain/loss of financial assets measured at fair value through other comprehensiveincome
		$ 450,959 - - - 64,457	$ 8,483,670 - (57,200) 33,133 64,467
		64,457	97,600
		- (1,313)	105 -
		514,103 - - 68 - 669	8,524,175 - (57,200) - 22,158 571
		669	22,729
		- (14,320)	105 -
		$ 500,520	$8,489,809

(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, 2020 and 2019

Unit: NT$ thousand

Item 2020 Cash flow from operating activities Net profit (net loss) before tax of the current period $ 12,667 Adjustments Income, expense and loss items Depreciation expense 69,936 Expected credit impairment loss (profit) 236 Net loss (profit) of financial assets and liabilities measured at fair value through income statement 1,444 Interest expense 4,203 Interest income (5,459) Dividend income (35,471) Share of losses (profits) of affiliated enterprises and joint ventures recognized by equity method (16,717) Loss (profit) from disposal and retirement of property, plant and equipment - Profit from lease revision (7) Impairment loss of non-financial assets - Total income, expense and loss items 18,165 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 (16,019) Decrease (increase) in notes receivable (11,942) Decrease (increase) in accounts receivable (5,295) Decrease (increase) in other receivables 22,927 Decrease (increase) in inventory 41,070 Increase in prepayment (9,982) Decrease (increase) in other financial assets 59,293 Total net change in assets related to operating activities 80,052 Net change in liabilities related to operating activities Increase (decrease) in contractual liabilities (25,130) Increase (decrease) in accounts payable 3,020 Increase (decrease) in other payables (2,773) Increase (decrease) in provision for liabilities 113 Total net change in liabilities related to operating activities (24,770) Total net change in assets and liabilities related to operating activities 55,282 Total adjustments 73,447 Cash outflow from operations 86,114 Interest received 5,458 Dividends received 37,321 Interest paid (4,171) (continued)	2019
	$ 43,445 69,396 (557) 1,034 4,927 (8,646) (35,355) (36,883) 2,974 - 1,875
	(1,235)
	(45,089) (11,838) (2,082) 7,780 (5,973) 11,117 141,136
	95,051
	49,278 (32,331) (1,846) (3,155)
	11,946
	106,997
	105,762
	149,207 8,568 65,606 (4,847)

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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 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	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	2019
		$ (522)
		218,012
		(9,888) 8,084 10,966 (30,000) - (8,317) 213 - (200,820) 1,353
		(228,409)
		180,000 (30,000) 117 (51,213) (57,200)
		41,704
		31,307 106,340
		$ 137,647

(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 manufacturing, mining and sales of cement, limestone, 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 18, 2021.

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 2020 which are approved by the FSC.

Standards and interpretations of the new release, amendment and revision	Effective date of IASB release
Amendment to “Definition of business” in IFRS 3 Amendment to “Definition of significance” in IAS 1 and IAS 8 Amendment to “Reform of interest rate indicators” in IFRS 9, IAS 39 and IFRS 7 Amendment to “Rent concession related to COVID-19” in IFRS 16	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (note)

(Note) The FSC allows enterprises to apply them in advance on January 1, 2020.

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:

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

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Standards and interpretations of the new release, amendment and Effective date of IASB revision release

Amendment to “Temporary exemption from the extension of IFRS 9” of IFRS 4

Amendment to “Interest rate indicator reform – phase II” of IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

From 25 June, 2020 (effective the date of issue)

January 1, 2021 (note)

(Note) This amendment shall apply during the annual reporting period beginning from 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.

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

Standards and interpretations of the new release, amendment and revision

Effective date of IASB release (note 1)

Amendment to “Sale or investment of contingent assets between the Undecided investor and its affiliated enterprises or joint ventures” IFRS 10 and IAS 28 Amendment to “Insurance contract” of IFRS 17 January 1, 2023 Amendment to “Insurance contract” of IFRS 17 January 1, 2023 Amendment to IFR 17 January 1, 2023 Amendment to “Liabilities classified as current or non-current” of IAS 1 January 1, 2022 (note 2) Amendment to “Property, plant and equipment: the price of reaching the January 1, 2022 (note 3) intended state of use of IAS 16 Amendment to “Loss contract – cost of contract performance” of IAS 37 January 1, 2022 (note 4) Amendment to “Introduction to conceptual architecture” of IFRS 3 January 1, 2022 (note 5) 2018–2020 annual improvement of IFRS January 1, 2023 Amendment to “Disclosure of accounting policies” of IAS 1 January 1, 2023

(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.

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(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 “Liabilities classified as current or non-current” of IAS 1. When the amendment is used to determine whether the liabilities are classified as non-current, assessment shall be made on whether the company has the right at the end of the reporting period to defer the liquidation period to at least 12 months after the reporting period. If the company has the right at the end of the reporting period, the liabilities are classified as non-current, regardless of whether the company expects to exercise the right or not. If the company is subject to certain conditions to have the right to defer the liquidation of liabilities, the company must comply with such conditions at the end of the reporting period, even if the lender tests on a later date whether the company complies with such conditions. For the purpose of liability classification, the aforesaid liquidation refers to the elimination of liabilities by transferring cash or other economic resources or equity instruments of the company to the counterparty. However, if the terms of liabilities may be settled by transferring the equity instruments of the company according to the choice of the counterparty, and if the right of choice is recognized as equity separately in accordance with IAS 32 “Financial instruments: expression,” it does not affect the classification of liabilities.
Amendment to “Property, plant and equipment: the price for reaching the intended state of use” of IAS 16

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

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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.

5. 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.

Amendment to “Disclosure of accounting policies” of IAS 1

This amendment improves the disclosure of accounting policies to provide more useful information to major users of financial statements.

Amendment to “Definition of accounting estimates” of IAS 8

This amendment defines accounting estimate as the monetary amounts limited by measurement uncertainty in financial statements, and provides further interpretation and examples to help enterprises distinguish changes in accounting policies from changes in accounting estimates.

As of the date of issuance of the individual financial report, the company continues to assess the impact of the standards above and interpretations on the financial status and financial performance of the company; the relevant impact will be disclosed when the assessment is completed.

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:

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  - (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 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.

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C. The assets are expected to be realized within 12 months after the end of the reporting period.
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:

(V) Cash and cash equivalents

(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.

Financial assets

194

(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
c. An investment managed and evaluated on a fair value basis in accordance with a written risk management or investment strategy.

Financial assets measured at fair value through income statement are measured at fair value; the dividends 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.

195

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.

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.
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

196

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 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.

3. Financial liabilities

(1) Follow up measurement

Other than in the following circumstances, all financial liabilities are measured at amortized cost by effective interest method:

A. Financial liabilities measured at fair value through income statement refer to financial liabilities held for trading or financial liabilities designated to be

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measured at fair value through income statement when initially recognized. Financial liabilities classified as being held for trading are those for the purpose of buyback in a short term, and derivatives except financial guarantee contracts or those which are designated and effective in risk hedging. When financial liabilities meet any of the following conditions, the company will designate them to be measured at fair value through income statement when initially recognized:

a. A hybrid (mixed) contract; or
b. Can eliminate or significantly reduce measurement or recognition inconsistencies; or
c. The tool which is managed and the performance assessed based on fair value according to the written risk management policy.

(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

Manufacturing Department:

2. Construction Department:

(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,

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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 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

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  - 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, 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

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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

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,

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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.

(XI) 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.

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

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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

(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

Remuneration of employees, directors and supervisors

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

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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.

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 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

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subsidiary, and it is likely that the temporary difference will not be reversed in the foreseeable future, then it will not be recognized. The tax rate (and tax law) that has been legislated or substantially legislated on the balance sheet date and is expected to apply when the relevant deferred income tax assets are realized or when the deferred income tax liabilities are settled shall prevail.

Deferred income tax assets are recognized to the extent that temporary differences, unused tax losses and unused tax credits are likely to have future tax income available for use, and the unrecognized and recognized deferred income tax assets are reassessed at the end of each reporting period.
The current income tax assets and current income tax liabilities are offset only when there is legal execution power to offset the recognized amount of current income tax assets and liabilities, and there is the intention to pay off the net of assets and liabilities or realize the assets and pay off the liabilities at the same time; when there is legal execution power to offset the current income tax assets and current income tax liabilities, and the deferred income tax assets and liabilities are generated by the same taxable entity under the same tax authority, or generated by different taxable entities but each entity intends to pay off the net of assets and liabilities or realize the assets and pay off the liabilities at the same time, then the deferred income tax assets and liabilities can be offset.
Tax preference arising from the purchase of equipment or technology, research and development expenditure, personnel training expenditure and equity investment shall be accounted by income tax deduction.

(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

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.

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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

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.

2. 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.

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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
(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.

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 transaction price, the quoted price of the same equity instrument in the non-active

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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.

5. The realizability 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.

7. Incremental loan interest rate of the lessee

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VI. Explanation of Important Accounting Items

(I) Cash and cash equivalents

anation of Important Accounting Items ash and cash equivalents
Item	December 31,2020	December 31,2019
Cash Check deposit Current deposit Total	$ 202 3,255 64,297	$ 203 3,116 134,328
	$67,754	$137,647

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	December31,2020	December31,2019
Mandatory measurement at fair value through income statement Open-end funds Bonds Total	$ 25,979 32,651	$ 11,976 32,079
	$58,630	$44,055

The net (loss) income recognized by the company in 2020 and 2019 was NT$(1,444) thousand and NT$(1,034) 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 31,2020	December 31,2019
Measured at amortized cost Total book value Less: allowance for loss Net notes receivable	$ 290,042 (3,480)	$ 278,100 (4,450)
	$286,562	$273,650

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	December31,2020	December31,2019
Measured at amortized cost Total book value Less: allowance for loss Net accounts receivable	$ 108,673 (16,175)	$ 98,692 (16,390)
	$92,498	$82,302

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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, 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

December 31, 2019	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%	$ 430,302 - - - 15,052	$ (6,459) - - - (15,052)	$ 423,843 - - - -
		$445,354	$ (21,511)	$423,843

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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	2020	2019 $ 22,068 - (557) $21,511
Opening balance Plus: provision for impairment loss Less: reversal of impairment loss Ending balance	$ 21,511 236 -
	$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 2020 and 2019 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 31,2020 $ 1,384 - 411 1,897 $ 3,692 (1,645) $2,047	December 31,2019
Proceeds receivable from sale of shares Lease payments receivable Interests receivable Other receivables Sub-total Less: allowance for loss Net		$ 1,368 23,060 410 1,764
		$ 26,602 -
		$26,602

The composition of lease payments receivable is as follows:

Undiscounted lease payments Year 1 Year 2 Year 3 Year 4 Total Less: financing income not earned Less: allowance for loss Lease payments receivable Unguaranteed residual value Less: financing income not earned Present value of unguaranteed residual value Net lease investment reported as finance lease payment receivables	December 31,2020	December 31,2019
	$ 1,428 1,428 1,428 -	$ 1,428 1,428 1,428 1,428
	$ 4,284 (85) -	$ 5,712 (145) -
	$ 4,199	$ 5,567
	$ - -	$ - -
	$ -	$ -
	$ 4,199	$ 5,567

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Lease payments receivable (listed as other receivables) Long-term lease payments receivable (listed as other non-current assets)	$ 1,384 $ 2,815	$ 1,368 $ 4,199

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.

The receivables of share capital returned from liquidation is the company’s investment in Jiahuan Dongni Co., Ltd. which was originally evaluated by equity method because of the company’s significant influence on it. However, the company has no significant influence on it since the liquidation procedure started in the fourth quarter of 2019, and the NT$23,060 thousand investment by equity method is transferred to returned share capital receivable; in addition, the company has appointed a liquidator at the extraordinary shareholders’ meeting in April 2020, returned NT$22,695 thousand of investment money in 2020, recognized NT$365 thousand of liquidation loss, and completed the liquidation in December 2020.

(VI) Inventory and cost of goods sold

Inventory and cost of goods sold
Item	December 31,2020	December 31,2019
Manufacturing Department: Raw fuel Materials Work in process Finished products Sub-total Less: allowance for depreciation and losses from obsolete and slow-moving inventories Net – Manufacturing Department Construction Department: Construction land Net – Construction Department Total	$ 41,997 77,446 23,588 59,343	$ 104,739 73,314 17,446 68,678
	$ 202,374 (46,492)	$ 264,177 (63,018)
	$ 155,882	$ 201,159
	$ 350,333	$ 350,333
	$ 350,333	$ 350,333
	$ 506,215	$ 551,492

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

period are as follows:
Item	2020	2019
Cost of inventory sold Other operating costs	$ 1,497,844 37,765	$ 1,474,619 22,240

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Manufacturing cost not apportioned Inventory loss Provision for inventory depreciation and losses from obsolete and slow-moving inventories (appreciation benefits) Total operating costs	5,705 188 (16,526)	9,398 - (11,572) $1,494,685
	$1,524,976

The net realizable value of inventories appreciated due to consumption of some inventories in 2020 and 2019, so the recognized falling price and sluggish loss of inventory (recovery benefit) were NT$(16,526) thousand and NT$(11,572) 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:

statement in the current period is as follows:	statement in the current period is as follows:
Item 2020 Inventory decrease (increase) $ 45,277 Transfer in of property, plant and equipment (4,627) Transfer out to property, plant and equipment 420 Cash received (paid) from inventory decrease (increase) $ 41,070 ) Prepayments Item December31,2020 Prepayment for material purchase $ 45,210 Prepaid insurance premium 304 Tax allowance - Other prepayments 177 Total $45,691		2019
		$ (4,726) (1,247) -
		$ (5,973)
		December31,2019
Prepayment for material purchase Prepaid insurance premium Tax allowance Other prepayments Total		$ 31,953 401 2,529 826
		$35,709

(VII) Prepayments

(VIII) Other financial assets – current

I) Other financial assets – current
Item	December 31,2020	December 31,2019 $ 85,200 148,691 $233,891 1.01%-2.60%
Original maturity date more than 3 months away Time deposits: NT$ time deposits Foreign currency time deposits Total Interest rate range	$ 46,007 128,591
	$174,598
	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 31,2020	December 31,2019
Non-liquid Equity instruments Shares of domestic listed and OTC companies Shares of domestic unlisted and non-OTC companies Sub-total Evaluation adjustment Total	$ 263,160 172,028	$ 256,133 176,828
	$ 435,188 520,485	$ 432,961 553,742
	$955,673	$986,703

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 2020 and 2019, 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$14,320 thousand and NT$1,313 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	December31,2020	December31,2019
Subsidiaries: Southeast Investment Co., Ltd. Southeast Asset Development Co., Ltd. Southeast Gaoliang Recycling Co., Ltd. Southeast Paper Co., Ltd. Sub-total Less: the parent company’s shares held by subsidiaries reclassified as treasury shares Sub-total Significant affiliated enterprises: Taiji Ship Plant Co., Ltd. Sub-total Insignificant individual affiliated enterprises	$ 652,887 289,954 44,719 22,471	$ 613,280 297,016 30,026 25,024
	$ 1,010,031 (12,185)	$ 965,346 (12,185)
	$ 997,846	$ 953,161
	$309,997	$306,383
	$ 309,997 81,385	$ 306,383 77,689

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Sub-total Total	$391,382	$384,072
	$1,389,228	$1,337,233

1. Subsidiaries

(1) For information about the company’s subsidiaries, please refer to note 4 (3) of the company’s consolidated financial report for 2020.
(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.

2. Affiliated enterprises:

(1) The basic information of the company’s major affiliated enterprises is as follows:

Companyname	Shareholdingratio	Shareholdingratio
	December 31,2020	December 31,2019
Taiji Ship Plant Co., Ltd.	31.01%	31.01%

Please refer to Appendix 4 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

terprises is as follows: Balance Sheet
TaijiShipPlantCo.,Ltd. December 31,2020 December 31,2019 Current assets $ 426,129 $ 197,793 Non-current assets 1,127,494 1,112,565 Current liabilities (534,344) (307,663) Non-current liabilities - - Equity $1,019,279 $1,002,695 Share of net assets of affiliated enterprises $ 316,112 $ 310,969 Unrealized gain or loss from transactions with affiliated enterprises (6,115) (4,586) Book value of affiliated enterprises $ 309,997 $ 306,383 Comprehensive Income Statement Taiji ShipPlant Co.,Ltd. Companyname 2020 2019 Operating income $ - $ - Current net profit $ 8,746 $ (4,936) Other comprehensive income (net of tax) 7,837 (33,348) Total comprehensive income in the current period $ 16,583 $ (38,284) Dividends received from affiliated $ - $ 733	TaijiShipPlantCo.,Ltd.
	December 31,2020		December 31,2019
		$ 426,129 1,127,494 (534,344) -	$ 197,793 1,112,565 (307,663) -
		$1,019,279	$1,002,695
		$ 316,112 (6,115)	$ 310,969 (4,586)
		$ 309,997	$ 306,383
		2020		2019
Operating income Current net profit Other comprehensive income (net of tax) Total comprehensive income in the current period Dividends received from affiliated		$ -		$ -
		$ 8,746 7,837		$ (4,936) (33,348)
		$ 16,583		$ (38,284)
		$ -		$ 733

B. Comprehensive Income Statement

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enterprises

(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	2020	2019
	$ 3,081 615	$ 3,458 30
	$ 3,696	$ 3,488

  - (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, 2020 and 2019.
(XI) Property, plant and equipment

operty, plant and equipment
Item	December 31,2020	December 31,2019 $ 153,748 393,939 2,642,031 24,336 50,050 8,279 $ 3,272,383 (3,033,498) (29,340) $209,545
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	$ 153,748 388,959 2,646,621 25,036 50,050 25,191
	$ 3,289,605 (3,035,412) (27,449)
	$226,744

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 Transfer to inventory Disposal Reclassification Balance on December 31, 2020 Accumulated depreciation and
	$ 153,748	$ 388,959	$2,646,621	$ 25,036	$ 50,050	$ 25,191	$3,289,605

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impairment	$ - - - -	$ 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 Impairment reversal Balance on December 31, 2020
	$ -	$ 387,336	$2,601,783	$ 23,863	$ 49,879	$ -	$3,062,861

Cost	Land	Housing and construction	Machinery and equipment	Transportation equipment	Other equipment	Equipment pending inspection and unfinished construction	Total
	$ 153,748 - - - -	$ 398,948 - - (5,009) -	$2,655,687 2,443 - (14,113) (1,986)	$ 23,508 - 358 - 470	$ 50,050 - - - -	$ - 5,874 889 - 1,516	$3,281,941 8,317 1,247 (19,122) -
Balance on January 1, 2019 Acquisition Inventory transferred in Disposal Reclassification Balance on December 31, 2019 Accumulated depreciation and impairment
	$ 153,748	$ 393,939	$2,642,031	$ 24,336	$ 50,050	$ 8,279	$3,272,383
	$ - - - - -	$ 393,477 750 (2,035) - -	$2,599,919 10,047 (14,113) - 1,875	$ 22,589 582 - - -	$ 49,573 174 - - -	$ - - - - -	$3,065,558 11,553 (16,148) - 1,875
Balance on January 1, 2019 Depreciation expense Disposal Reclassification Provision for impairment loss Balance on December 31, 2019
	$ -	$ 392,192	$2,597,728	$ 23,171	$ 49,747	$ -	$3,062,838

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

Item	2020	2019
Increase of property, plant and equipment Increase or decrease of equipment purchase payable Cash paid for purchase of property, plant and equipment	$ 24,759 (6,090)	$ 8,317 -
	$ 18,669	$ 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 2020 and 2019 were NT$(1,891) thousand and NT$1,875 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

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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 2019, and the book value of related equipment could not be recovered by using or selling, an impairment loss of NT$1,875 thousand was therefore recognized. 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

Right-of-use assets

(XII) Lease agreement 1. Right-of-use assets	(XII) Lease agreement 1. Right-of-use assets	(XII) Lease agreement 1. Right-of-use assets	(XII) Lease agreement 1. Right-of-use assets
Item December31,2020 December31,2019 Land $ 263,390 $ 264,579 Buildings 18,839 18,839 Transportation equipment 4,220 - Total cost $ 286,449 $ 283,418 Less: accumulated depreciation (109,110) (54,392) Net $177,339 $229,026 Cost Land Buildings Transportation equipment Total Balance on January 1, 2020 $ 264,579 $ 18,839 $ - $ 283,418 Increase in current period - - 4,220 4,220 Decrease in current period (1,189) - - (1,189) Balance on December 31, 2020 $ 263,390 $ 18,839 $ 4,220 $ 286,449 Accumulated depreciation and impairment Balance on January 1, 2020 $ 53,046 $ 1,346 $ - $ 54,392 Depreciation expense 52,552 1,346 820 54,718 Provision for (reversal of) impairment loss - - - - Balance on December 31, 2020 $ 105,598 $ 2,692 $ 820 $ 109,110 Cost Land Buildings Transportation equipment Total Balance on January 1, 2019 $ - $ - $ - $ - IFRS 16 adjustment applied for the 264,382 18,839 - 283,221 first time
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 Cost
	$ 105,598	$ 2,692	$ 820
	Land	Buildings	Transportation equipment
Balance on January 1, 2019 IFRS 16 adjustment applied for the first time	$ - 264,382	$ - 18,839	$ - -

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Increase in current period Decrease in current period Balance on December 31, 2019 Accumulated depreciation and impairment	197 -	- -	- -		- -	197 -
	$ 264,579	$ 18,839		$	-	$ 283,418
	$ - 53,046 -	$ - 1,346 -		$	- - -	$ - 54,392 -
	$ 53,046	$ 1,346		$	-	$ 54,392

			$60,370		$58,028
			$130,453		$183,058
					December31,2019
Land Buildings Transportation equipment			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

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, 2020 and 2019, there was no sign of impairment of the right-of-use assets, so no impairment assessment was conducted. Due to the severe impact of COVID-19 on the market economy in 2020, the company negotiated the land lease with the lessor, and the lessor agreed to unconditionally reduce the rent by 20% from January 1 to December 31, 2020 and postpone the payment of rent from January 1 to June 30, 2020 to December 31, 2020.

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In 2020, the company recognized the influence number of the rent concession above as 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 2020 and 2019 was NT$60 thousand and NT$75 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	2020	2019
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)	$540	$1,532
	$48	$48
	$-	$-
	$ (53,875)	$ (52,793)

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

In 2020 and 2019, 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

nvestment property
Item	December 31,2020	December 31,2019
Land Housing, construction and equipment Equipment pending inspection and unfinished construction Total cost Less: accumulated depreciation Accumulated impairment Net	$ 5,272,583 754,283 5,535	$ 5,272,583 754,283 -
	$ 6,032,401 (489,909) (203,630)	$ 6,026,866 (486,458) (203,630)
	$5,338,862	$5,336,778

		Equipment
	Housing,	pending
Land	construction and	inspection and	Total
	equipment	unfinished
		construction

Cost

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Balance on January 1, 2020 Acquisition Disposal Balance on December 31, 2020 Accumulated depreciation and impairment	$ 5,272,583 - -	$ 754,283 - -	$ - 5,535 -	$ 6,026,866 5,535 -
	$ 5,272,583	$ 754,283	$ 5,535	$ 6,032,401
	$ - - -	$ 690,088 3,451 -	$ - - -	$ 690,088 3,451 -
Balance on January 1, 2020 Depreciation expense Disposal Balance on December 31, 2020 Cost
	$ -	$ 693,539	$ -	$ 693,539
	Land	Housing, construction and equipment	Equipment pending inspection and unfinished construction	Total
	$ 4,780,352 - - 492,231	$ 755,621 - (1,338) -	$ 291,411 200,820 - (492,231)	$ 5,827,384 200,820 (1,338) -
Balance on January 1, 2019 Acquisition Disposal Reclassification Balance on December 31, 2019 Accumulated depreciation and impairment
	$ 5,272,583	$ 754,283	$ -	$ 6,026,866
	$ - - -	$ 687,975 3,451 (1,338)	$ - - -	$ 687,975 3,451 (1,338)
Balance on January 1, 2019 Depreciation expense Disposal Balance on December 31, 2019
	$ -	$ 690,088	$ -	$ 690,088

1. Rental income and direct operating expenses of investment property:

Item	2020	2019
Rental income from investment	$53,886	$53,668

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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
	$ 37,765	$ 22,240
	$ 376	$ 330

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	Totalsignificant lease payment	Totalsignificant lease payment
	December 31,2020	December 31,2019
	$ 24,690 25,129 26,636 26,905 26,921 189,848	$ 22,411 22,500 22,500 23,531 23,625 178,148
	$320,129	$292,715

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 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, 2020 December 31, 2019 Fair value $ 7,735,534 $ 7,760,214

As of December 31, 2020 and 2019, 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 2020 and 2019.

(XIV) Refundable deposits Item Security deposit of mining area Lease security deposit	(XIV) Refundable deposits Item Security deposit of mining area Lease security deposit	December 31,2020	December 31,2019
	Security deposit of mining area Lease security deposit	$ 562 8,464	$ 562 6,764

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Security deposit of National Property Administration Membership deposit Other security deposits Total (XV) Short-term borrowings Nature ofborrowing Mortgage loan Credit loan Total Nature of borrowing Mortgage loan Credit loan Total	263 765 16	2,827 765 816 $11,734
	$10,070
	December 31,2020
	Amount
Mortgage loan Credit loan Total Nature of borrowing	$ 155,000 80,000
	$235,000
	Amount	Interest rate 0.90% 0.90%
Mortgage loan Credit loan Total	$ 80,000 120,000
	$200,000

For short-term borrowings, the company provides some investment property as the	For short-term borrowings, the company provides some investment property as the	For short-term borrowings, the company provides some investment property as the	For short-term borrowings, the company provides some investment property as the
guarantee for borrowing. Please refer to	note 8.
(XVI) Contractual liabilities
Item	December 31,2020		December 31,2019
Cement to be collected	$	73,555	$ 98,685
Prepayments		27	27
Total	$	73,582	$98,712
(XVII) Other payables
Item	December31,2020		December31,2019
Salary and bonus payable	$	14,007	$ 14,081
Commodity tax payable		18,372	16,329
Utilities payable		9,164	9,309
Tax payable		2,998	2,582
Dividend payable – previous period		3,983	3,985
Remuneration payable to employees and directors		667	2,286
Equipment payable		6,090	-
Other		13,455	16,815
Total	$	68,736	$65,387
(XVIII) Debt provision – current
Item	December31,2020		December31,2019
Employee benefits	$	1,553	$ 1,440
Decommissioning liabilities		-	-
Total	$	1,553	$1,440

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Item		2020
	Employee benefits	Decommissioning liabilities	Total
Balance on January 1 New liability reserve in the current period Liability reserve used in current use Balance on December 31 Item	$ 1,440 1,553 (1,440)	$ - - -	$ 1,440 1,553 (1,440)
	$ 1,553	$ -	$ 1,553
		2019
	Employee benefits	Decommissioning liabilities	Total
Balance on January 1 New liability reserve in the current period Liability reserve used in current use Balance on December 31	$ 1,570 1,440 (1,570)	$ 3,025 - (3,025)	$ 4,595 1,440 (4,595)
	$ 1,440	$ -	$ 1,440

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

In addition to its own mining area, the company has leased all the equipment and auxiliary equipment of the production system of Chentai Cement Company since 1982, and also leased its limestone mining right in the material area. According to the requirements of the Construction Bureau of Kaohsiung Municipal Government (renamed Economic Development Bureau later and then assigned under the Water Conservancy Bureau after the county and city merger), the competent authority of the target enterprise, the company has the land restoration obligations of 13.7601 hectares of the old mining area of the company and of the Banping Mountain of Chentai Cement Company after the mining activity is stopped. Since August 1997, the company has started the land restoration and greening work in the areas above, and has completed the restoration of all projects. However, only local correction is made due to the actual construction in line with terrain and geological conditions. Upon the resolution of the review committee, the company shall revise the plan according to the current completion status, and then the acceptance will be conducted accordingly. The company has submitted the revised plan to the review committee in April 2012, and in order to smooth the follow-up review work and meet the current laws and regulations, the company again submitted the review-version plan and the first design change to the review-version plan respectively in May 2017 and January 2018, in order to facilitate the continued review of the Water Conservancy Bureau. In December 2018,

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the company obtained the construction permit for soil and water conservation issued by the Water Conservancy Bureau, and started the work in February 2019. The construction was completed in April 2019, and the completion certificate of soil and water conservation issued by the Kaohsiung Municipal Government was obtained on November 19, 2019. The company has fulfilled its obligations of restoring the land to its original state required by the competent authority of the target enterprise, the land administration authority and the land ownership authority.

(XIX) 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 2020 and 2019 are NT$2,499 thousand and NT$2,494 thousand, respectively.

(XX) Guarantee deposits received

	Item		December	31,2020 December31,2019	31,2020 December31,2019	31,2020 December31,2019
Lease deposit			$		20,476 $	19,559
Cement deposit					3,481	3,481
Total			$		23,957 $	23,040
For the transaction of related parties,			please refer	to	note 7(3)(vi).
dinary share capital
		2020			2019
	Number of				Number of
Item	shares (thousand		Amount		shares (thousand	Amount
	shares)				shares)
January 1	572,000		$ 5,720,008		572,000	$ 5,720,008
Capital increase in
cash		-		-	-	-
Capital increase
from earnings		-		-	-	-
December 31	572,000		$5,720,008		572,000	$5,720,008

(XXI) Ordinary share capital

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As of December 31, 2020, the company’s rated capital is NT$8,000,000 thousand, divided into 800,000 thousand shares.

(XXII) Capital reserve

apital reserve
Item	December 31,2020	December 31,2019
Premium on shares issued Treasury share trading Recognized due to investment by equity method Total	$ 118,316 66,740 3,211	$ 118,316 66,635 3,211
	$188,267	$188,162

(XXIII) 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 2019 and 2018 as determined by the company in June 2020 and June 2019 are as follows:

Item	Earnings distributionplan	Earnings distributionplan	Dividendper share(NT$)	Dividendper share(NT$)
	2019	2018	2019	2018
Legal reserve Cash dividend of ordinary shares Total	$ 3,313 57,200	$ 6,568 57,200	0.1	0.1
	$60,513	$63,768

The board of directors of the company proposed on March 18, 2021 the following earnings distribution plan for 2020:

earnings distribution plan for 2020:
Legal reserve Cash dividend of ordinary shares Total	Earnings distribution plan	Dividend per share (NT$) 0.057
	$ 3,631 32,604
	$36,235

The earnings distribution plan for 2020 is pending the resolution of the general shareholders’ meeting to be held in June 2021

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.

(XXIV) Special reserve

pecial reserve
Item	December31,2020 $ 500,000 310,918 $810,918	December31,2019
Preparation for plant construction Provision due to the initial application of International Accounting Standards Total		$ 500,000 310,918
		$810,918

The preparation for plant construction is the special reserve proposed by the company in 1994 by the resolution of the shareholders’ meeting on plant construction at home or abroad.

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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, 2020, NT$8,094 thousand was reversed to undistributed earnings from the proportion of the original special reserve due to the disposal of investment property.

(XXVII) Other equity items

Other equity items
Item	Unrealized benefit (loss) of financial assets measured by fair value through other comprehensive income. 2020 2019 $ 514,103 $ 450,959 (18,938) 54,608 (14,320) (1,313) 19,607 9,849 68 - $500,520 $514,103
	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	$ 514,103 (18,938) (14,320) 19,607 68
	$500,520

(XXVI) Treasury shares

The investment in the shares of the company by subsidiaries is regarded as treasury shares, and the changes are summarized as follows: December 31, 2020:

Unit: 1000 shares[Number of shares ] Increase[Number of shares ] Item at the beginning of (decrease) in the at the end of the

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	theperiod	currentperiod	period
The shares of the parent company held by subsidiaries transferred from long-term investment to treasury shares December 31, 2019: Item	2,113	-	2,113
	Number of shares at the beginning of theperiod	Increase (decrease) in the currentperiod	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, 2020 and 2019 was both NT$12,185 thousand. The market prices of the company’s shares held by Southeast Paper Co., Ltd. on December 31, 2020 and 2019 were NT$37,820 thousand and NT$36,869 thousand, respectively. The shares of the parent company held by subsidiaries are treated as treasury shares and still enjoy the right of dividend distribution.

(XXVII) Operating income

Operating income
Item	2020	2019
Revenue from customer contracts Sales revenue Less: sales discount Net income from customer contracts Rental income Net operating income	$ 1,538,373 -	$ 1,519,174 -
	$ 1,538,373 53,886	$ 1,519,174 53,668
	$1,592,259	$1,572,842

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.

Other operating income

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

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	2020	2019
	$1,538,373	$1,519,174
Taiwan Mainproduct lines
	$ 1,296,974 222,044 19,355	$ 1,290,387 201,159 27,628
Cement Furnace stone powder and other raw materials Total Timepoint of revenue recognition
	$1,538,373	$1,519,174
	$ 1,538,373 -	$ 1,519,174 -
Fulfilling the performance obligation at a certain time point Gradually fulfilling the performance obligation over time Total
	$1,538,373	$1,519,174

Contract balance

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

customer contract income as follows:
Item	December 31,2020	December 31,2019
Receivables Contractual liabilities – current	$415,887	$397,241
	$73,582	$98,712

Significant changes in contractual assets and liabilities

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:

previous period is as follows:
Amount recognized as income in the currentperiod	2020	2019
From contract liabilities at the beginning of the period From performance obligations fulfilled in the previous period	$ 97,861	$ 49,434
	$ -	$ -

(XXVIII) Employee benefits, depreciation, depletion and amortization

Nature		2020
	Nature	Belonging to operatingcosts	Total

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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	$ 63,316 5,439 2,499 3,750 8,002 69,936
	$93,994	$58,548	$152,942

Nature		2019
	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	$ 44,523 3,039 1,834 - 5,279 41,441	$ 22,092 2,448 660 4,737 2,516 27,955	$ 66,615 5,487 2,494 4,737 7,795 69,396
	$96,116	$60,408	$156,524

Additional information on the number of employees and welfare expenses of the company in 2020 and 2019 is as follows:

Item	December31,2020	December31,2019
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 Supervisors’ remuneration	119	118
	7	7
	$708	$742
	$565	$600
	-5.83%	0.50%
	-	-

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.

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(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 2020 and 2019, 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 18, 2021 and March 17, 2020, the board meetings of the company respectively passed resolutions on the remuneration of employees and directors for 2020 and 2019, and the relevant amounts recognized in the financial report are as follows:

follows:
Item	2020		2019
	Employees’ remuneration	Directors’ remuneration	Employees’ remuneration	Directors’ remuneration
Amount to be distributed as resolved Amount recognized in annual financial report Difference amount	$ 267 267	$ 400 400	$ 915 915	$ 1,371 1,371
	$-	$-	$-	$-

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.

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(XXIX) Interest income

nterest income
Item	2020	2019
Interest income Bank deposit interest Bond interest Interest income from lease payments receivable Lending interest Total Other income Item	$ 2,638 2,545 60 216	$ 7,343 1,228 75 -
	$5,459	$8,646
	2020	2019
Dividend income Income from sale of scrap iron Income from rent concession Other Total	$ 35,471 797 4,733 5,875	$ 35,355 651 - 3,932
	$46,876	$39,938

(XXX) Other income

(XXXI) Other benefits and losses

ther benefits and losses
Item	2020	2019
Financial assets and liabilities measured at fair value through income statement Gain (loss) on disposal of financial assets measured at fair value through income statement Net foreign exchange gain (loss) Gain (loss) from disposal of property, plant and equipment Impairment loss of property, plant and equipment Other losses Profit from lease revision Expenses related to city land rezoning (note 1) Refund of land preparation and clearance cost of the base (note 2) Total	$ (1,457) 13 (7,208) - - (3,218) 7 - (25,714)	$ (1,354) 320 (3,894) (2,974) (1,875) (48) - (22,400) -
	$ (37,577)	$ (32,225)

(Note 1) The cost of the above-mentioned land rezoning is due to the fact that after the rezoning of the land of the company located at No. 3, Section 4, Economic and Trade Section, Qianzhen District, Kaohsiung with the Land Bureau of Kaohsiung Municipal Government and the completion of the land acceptance procedures in March 2019, in order to appease the resistance of the resigned and transferred employees of the former landlord (Taiwan Machinery Co., Ltd.), and avoid serious damage to the rights and interests of the company, the company, through the mediation of the Labor Bureau of the Kaohsiung Municipal Government, agreed to pay a total of NT$22,400 thousand of living

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allowance. After the implementation of this agreement, the employers and the management no longer had any objection. The amount above was paid in full in December, 2019.

(Note 2) 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).

(XXXII) Financial cost

Financial cost
Item	2020	2019
Bank loan interest Interest on lease liabilities Other interests Sub-total Less: capitalization amount of qualified assets Financial cost	$ 1,475 2,521 207	$ 1,706 3,019 202
	$ 4,203 -	$ 4,927 -
	$4,203	$4,927

(XXXIII) 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)	2020	2019
	$ - (2,157) -	$ - - 5,625
	$ (2,157)	$5,625
	$ (7,334)	$ 4,687
	$ (7,334)	$4,687
	$ (9,491)	$10,312

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

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Item	2020	2019
	$12,667	$43,445
		$ 8,689 (7,377) (536) (1,959) (327) (2,314) - (8,037) 11,861 5,625 4,687 -
	$ (9,491)	$ 10,312

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%.

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

2020[Recognized in profit ] Opening balance Ending balance (loss)

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$ 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)
	2019
Opening balance	Recognized in profit (loss)	Ending balance
$ 822 40,726 6,985 11,964 14,918 6,207 6,083	$ 392 - (1,117) 796 (2,314) (775) -	$ 1,214 40,726 5,868 12,760 12,604 5,432 6,083
$ 87,705	$ (3,018)	$ 84,687
$ (237,122) (39,372)	$ - (1,669)	$ (237,122) (41,041)
$ (276,494)	$ (1,669)	$ (278,163)
$ (188,789)	$ (4,687)	$ (193,476)

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Items not recognized as deferred income tax assets:

Item	December 31,2020	December 31,2019
Temporary difference subtractable Loss deduction Total	$ 11,335 24,129	$ 11,889 36,988
	$35,464	$48,877

The company’s profit-making enterprise income tax is approved by the tax collection authority up to 2018.

(XXXIV) Other comprehensive income

(XXXIV) Other comprehensive income
Item		2020
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ (98) 19,607 (18,938)
	$571	$-	$571
		2019
	Amount before tax	Income tax (expenses) benefits	Net after tax
		$ - - -	$ 10 9,849 54,608
	$ 64,467	$ -	$ 64,467

(XXXV) Earnings per share of ordinary shares

Earnings per share of ordinary shares
Item	2020	2019
		$ 33,133 569,887
	$0.04	$0.06

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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$)	$ 22,158 -	$ 33,133 -
	$ 22,158	$ 33,133
	$ 569,887 30	$ 569,887 74
	569,917	569,961
	$0.04	$0.06

(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 relatedparty
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.

Jiahuan Dongni Co., Ltd.

Penghu Cable TV Co., Ltd.

Penghu Bay Co., Ltd.

CHC Resources Co., Ltd.

Baifu Investment Co., Ltd.

Chentai Cement Co., Ltd.

Chentai Resource Development Co., Ltd.

Dongshu Investment Co., Ltd.

Taiwan Concrete Co., Ltd.

Taiwan Concrete Resource Development Co.,

Relationshipwith the company

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

238

Ltd.

Chen Chao-Shu Foundation Other related parties Tiancheng Concrete Industry Co., Ltd. Other related parties Tiancheng Concrete Industry Co., Ltd. Other related party Dun-Ling Zheng-Chen Other related party Li-Fei Chen Other related party Mei-Yu Huang Other related party Chian-Hao Chen Other related party Yushun Environmental Protection Co., Ltd. Other related party Dongyue Investment Co., Ltd. Other related party

(III) Major transactions with related parties

1. Operating income:

Item	Category/name of related party	2020	2019
Sales revenue Lease income	Other related party Tiancheng Concrete industry Co., Ltd. Other Subsidiary Total Affiliated enterprise Other related party Subsidiary Total	$ 112,165 38,746 1,371	$ 92,428 31,411 173
		$152,282	$124,012
		$ 44 160 15	$ 44 157 15
		$219	$216

(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 relatedparty	2020	2019
Other related party Other	$1,622	$174

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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 assets: None. Contractual liabilities:
Category/name of related party	December31,2020 $1,464	December31,2019
Other related party		$-

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

Item	Category/name of relatedparty	December 31, 2020
Notes receivable Accounts receivable Sub-total Less: allowance for loss Net Refundable deposits	Subsidiary Subsidiary Other related party Tiancheng Concrete industry Co., Ltd. Other Other related party	$29
		$ - 33,667 3,607
		$ 37,274 (447)
		$36,827
		$ 6,000

The expected credit losses recognized (reversed) for the receivables above from related parties in 2020 and 2019 were NT$(224) thousand and NT$390 thousand, respectively.

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

Item	Type of related party	December31,2020	December31,2019
Accounts payable Guarantee deposit received	Other related party Other related party	$ 325	$ 86
		$ 60	$ 60

7. Prepayments:

Prepayments:
Category/name of related party	December31,2020 $2	December31,2019
Other related party Other		$2

Asset transactions: None.

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9. Lease agreements:

(1) Leasehold assets

9. Lease agreements: (1) Leasehold assets
Account item/type of related party/name	Subject matter of lease	2020 2019 $ - $ 115,928 - 18,839 - 7,297 $- $142,064
Acquire right-of-use assets Other related party Chentai Cement Co., Ltd. Dun-Ling Zheng-Chen Other	Land in Gaonan and other sections 6th floor, Southeast Building Land in Gaonan and other sections Total

Account item/type of related party/name Lease liabilities Other related party Chentai Cement Co., Ltd. Dun-Ling Zheng-Chen Other Total Account item/type of related party/name Interest expense Other related party Rental expenses Other related party	December 31, 2020	December 31, 2019
	$ 72,271 17,058 9,462	$ 95,168 18,321 12,271
	$98,791	$125,760
	2020	2019
	$1,287	$1,475
	$ 12	$ 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(3)A.
Loans to related parties: Please refer to the attached table 1 for the relevant explanation of the company’s loans to related parties.
Borrowing from related parties: None.
Endorsements and guarantees: Please refer to the attached table 2 for the relevant contents of endorsements and guarantees of the company for related parties.
Others
(1) Various income

rs arious income
Category/name of relatedparty	2020	2019
Affiliated enterprise Other related party	$ 180 603	$ 117 640

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Subsidiary Total	1,518	702
	$2,301	$1,459

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

2020:

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

2019:

Category/name of relatedparty	Investment increase	Investment increase	Shareholdingratio	Shareholdingratio
	Number of shares (thousand shares)	Amount	Before capital increase	After capital increase
Subsidiary Southeast Gaoliang Co., Ltd.	3,000	$ 30,000	-	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

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

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

(4) Conclusion of important contracts: None.

(IV) Key management salary information

Key management salary information
Item	2020	2019
Salary and other short-term employee benefits Post-retirement benefits Other long-term employee benefits Termination benefits Share based payments Total	$ 11,836 324 - - -	$ 11,861 324 - - -
	$12,160	$12,185

VIII. Pledged assets

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

guarantees:
Item	December 31,2020	December 31,2019
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, 2020 and 2019, the issued but unused letters of credit by the company: None.
(II) As of December 31, 2020 and 2019, 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:

performance guarantee are as follows:
Item	December31,2020	December	31,2019
Guaranteed notes deposited (guaranteed notes payable)	$ 895,452	$	1,062,398
Guarantee notes received (guarantee notes receivable)	40,297		54,663
(III) Large capital expenditures that have been signed but not yet incurred:
Item	December 31,2020	December	31,2019
Real property, plant and equipment	$ 2,030	$

X. Losses from Major Disasters: None.

XI. Major Subsequent Events: None.

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), 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.

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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

Exchange rate		December31,2020	December31,2020	December31,2020
	Amount posted (NT$)	Sensitivity analysis
		Range of change	Impact on profit and loss	Impact of equity
28.48 Exchange rate	188,466			-
	Amount posted (NT$)	Sensitivity analysis
		Range of change	Impact on profit and loss	Impact of equity

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US$: NT$

==> picture [354 x 26] intentionally omitted <==

(C) The aggregate amount of all exchange gains and losses (including realized and unrealized) recognized in 2020 and 2019 due to exchange rate fluctuation of monetary items of the company are NT$(7,208) thousand and NT$(3,894) 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 2020 and 2019 will increase or decrease by NT$586 thousand and NT$441 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 2020 and 2019 will increase or decrease by NT$9,557 thousand and NT$9,867 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
	December31,2020	December31,2019
Fair value interest rate risk: Financial assets Financial liabilities Net Cash flow interest rate risk: Financial assets	$ 300,249 (425,823)	$ 233,891 (441,086)
	$ (125,574)	$ (207,195)
	$ 64,297	$ 167,207

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Financial liabilities - - Net $ 64,297 $ 167,207

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 2020 and 2019 to increase (decrease) by NT$643 thousand and NT$1,672 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 investment grade, and government agencies, there are no major performance doubts, so there is no significant credit risk. In addition, the company does not

246

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, 2020 and 2019, the accounts receivable balance of the top ten customers respectively accounted for 83.09% and 83.25% 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, 2020	Book amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount	Reduction of maximum credit risk exposure amount
		Collateral	General agreement on netsettlement	Other credit enhancements	Total
	$ - 58,630 955,673	$ - - -	$ - - -	$ - - -	$ - - -

December 31, 2019	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 netsettlement	Other credit enhancements	Total
Financial instruments subject to the impairment provisions of IFRS9 and whose credit has been impaired	$ -	$ -	$ -	$ -	$ -

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Financial instruments not subject to the impairment provisions of IFRS9: Financial assets measured at 44,055 - - - - fair value through income statement Financial assets measured at 986,703 - - - - fair value through other comprehensive income Total $ 1,030,758 $ - $ - $ - $ -

(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, 2020	December 31, 2020
	Within 6 months	7–12 months	1–2 years	2–5 years	More than 5 years	Contractual cash flow	Book amount
Short-term loans Accounts payable Lease liabilities Other accounts payable Guarantee deposit received Total	$ 235,000 192,899 28,202 68,069 7,282	$ - - 30,289 667 -	$ - - 59,088 - 1,797	$ - - 66,727 - 2,193	$ - - 10,951 - 12,685	$ 235,000 192,899 195,257 68,736 23,957	$ 235,000 192,899 190,823 68,736 23,957
	$ 531,452	$ 30,956	$ 60,885	$ 68,920	$ 23,636	$ 715,849	$ 711,415

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

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 $ 58,491 $ 125,815 $ 7,301 $ 3,650 $ 195,257

December 31, 2019 Non-derivative financial liabilities Within 6 months 7–12 months 1–2 years 2–5 years[More than 5 ] years[Contractual cash ] flow Book amount Short-term loans $ 200,000 $ - $ - $ - $ - $ 200,000 $ 200,000

248

Accounts payable Lease liabilities Other accounts payable Guarantee deposit received Total	189,879 - - - - 189,879 27,657 29,744 57,401 120,782 12,411 247,995 65,387 - - - - 65,387 5,113 1,263 2,500 2,587 11,577 23,040 $ 488,036 $ 31,007 $ 59,901 $ 123,369 $ 23,988 $ 726,301	189,879 241,086 65,387 23,040
		$ 719,392

Further information on the lease liability maturity analysis is as follows: 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 $ 57,401 $ 178,183 $ 7,301 $ 5,110 $ 247,995

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

different. Types of financial instruments
Financial assets Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable (including related parties) Other receivables (including related parties) Other financial assets – current Refundable deposits Other non-current financial assets Financial assets measured at fair value through income statement – current Financial assets measured at fair value through other comprehensive income – non-current Financial liabilities Financial liabilities measured at amortized cost Short-term loans Notes and accounts payable (including related parties) Other accounts payable Lease liabilities (including those within one year) Guarantee deposit received	December 31,2020	December 31,2019
	$ 67,754 415,887 95,047 174,598 10,070 2,815 58,630 955,673 235,000 192,899 68,736 190,823 23,957	$ 137,647 397,241 26,602 233,891 11,734 4,199 44,055 986,703 200,000 189,879 65,387 241,086 23,040

249

(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(3)A. For information on the fair value of the company’s investment property measured at cost, please refer to note 6(14).
Definitions of three level of fair value

Level 1:

The input value of this level refers to the 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:

Item		December 31,2020	December 31,2020
	Level 1	Level 2	Level 3	Total
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	$ 25,979 32,651 863,503	$ - - -	$ - - -	$ 25,979 32,651 863,503

250

-	-	92,170	92,170
$ 922,133	$ -	$ 92,170	$ 1,014,303

Level 1	Level 2	Level 3	Total
$ 11,976 32,079 867,287 -	$ - - - -	$ - - - 119,416	$ 11,976 32,079 867,287 119,416

Fair value evaluation techniques for instruments measured at fair value:

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

(1) Stocks of listed companies: closing price.

(2) Open-end fund: net value.
Movement between level 1 and level 2: None.
Details of changes on level 3:

Financial assets Item Item measured at fair value

Financial assets measured at fair value

251

	through other comprehensive income – unlisted and non-OTC stocks		through other comprehensive income – unlisted and non-OTC stocks
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)	January 1, 2019 Return of share capital from capital reduction in the current period Recognized in profit or loss Recognized in other comprehensive income December 31, 2019	$ 119,227 (10,966) - 11,155
	$92,170		$119,416

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: None.
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: None.
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 4.

(III) Mainland investment information: Not applicable.

(IV) Information of major shareholders: Schedule 5.

252

253

Schedule 1

Southeast Cement Corporation Details of Loans to Others December 31, 2020

Unit: NT$ thousand

No.	Name of company under loans to others	Loan recipient	Transaction item	~~W~~hether 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	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	93,000	0.975%	2	-	Operating turnover	-	-	-	424,490 (Note 1)	848,981 (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.

254

Schedule 2

Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020

Schedule 2	Schedule 2	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020	Southeast Cement Corporation Endorsements and Guarantees for Others December 31, 2020
		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)
0	Southeast Cement Corporation	Southeast Asset Development Co., Ltd.	2	1,697,962 (note 4)	100,000	-	-	-	-	3,395,924 (note 5)	Y	-	-
1	Southeast Investment Co., Ltd.	Southeast Cement Corporation	3	200,826 (Note 2)	704	704	-	-	0.11%	267,768 (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.

255

Schedule 3

Southeast Cement Corporation

Details of securities held at the end of the period

December 31, 2020

Schedule 3	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020	Southeast Cement Corporation Details of securities held at the end of the period December 31, 2020
	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	85,807	0.29	85,807
	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	620,826	5.26	620,826
	Stock – Chunghwa Telecom	None.	Financial assets measured at fair value through other comprehensive income	360	39,240	-	39,240
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through other comprehensive income	949	41,007	-	41,007
	Stock – Yuanta Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	547	11,241	-	11,241
	Stock – TXC Corporation.	None.	Financial assets measured at fair value through other comprehensive income	80	5,992	-	5,992
	Stock – Nantex Industry Co.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	1	22	-	22
	Stock – Taiwan Hong Chuan Group	None.	Financial assets measured at fair value through other comprehensive income	202	12,177	-	12,177
	Stock – CSRC	None.	Financial assets measured at fair value through other comprehensive income	354	9,175	-	9,175
	Stock – Sincere Navigation Corporation	None.	Financial assets measured at fair value through other comprehensive income	284	6,459	-	6,459
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through other comprehensive income	406	18,983	-	18,983
	Stock – Yonyu Plastic	None.	Financial assets measured at fair value through other comprehensive income	52	1,724	0	1,724

256

	Stock – China Carbon	None.	Financial assets measured at fair value through other comprehensive income	100	10,850	0	10,850
	Stock – Kaohsiung MRT	None.	Financial assets measured at fair value through other comprehensive income	11,117	60,017	3.99	60,017
	Stock – Huasheng Ventures	The company is a corporate supervisor of this company.	Financial assets measured at fair value through other comprehensive income	7	855	4.17	855
	Stock – Yuhua Venture Capital	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	293	1,034	5.00	1,034
	Stock – China National Products	None.	Financial assets measured at fair value through other comprehensive income	15	1,800	3.84	1,800
	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	17,453	16.67	17,453
	Stock – One Card Solution	The company is a corporate director of the company.	Financial assets measured at fair value through other comprehensive income	3,199	11,011	3.51	11,011
		Total			955,673		955,673
	Fund – Alliance Bernstein America	None.	Financial assets measured at fair value through income statement	15	5,565	-	5,565
	Fund – JPMorgan Global	None.	Financial assets measured at fair value through income statement	21	5,562	-	5,562
	Fund – Amundi	None.	Financial assets measured at fair value through income statement	50	14,852	-	14,852
	Bond – Arabian Oil	None.	Financial assets measured at fair value through income statement	342	11,174	-	11,174
	Bond – Delhi International Airport	None.	Financial assets measured at fair value through income statement	500	14,862	-	14,862
	Bond – Pfizer	None.	Financial assets measured at fair value through income statement	200	6,615	-	6,615
		Total			58,630		58,630
Southeast Investment Co.,	Stock – Chentai Cement Co.,Ltd.	Its chairman is the Chairman of the	Financial assets measured at fair value through other comprehensive income	2,383	136,714	13.86	136,714

257

Ltd.		company.
	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	44,908	4.21	44,908
	Stock – Taiwan Implant TechnologyCo.,Ltd.	None.	Financial assets measured at fair value through other comprehensive income	701	4,473	4.20	4,472
	Stock – Dushanlin Development	None.	Financial assets measured at fair value through other comprehensive income	3,840	37,156	-	37,156
		Total			223,251		223,251
	Fund – Cathay No. 2	None.	Financial assets measured at fair value through income statement	500	9,950	-	9,950
	Stock – Fubon Financial Holdings	None.	Financial assets measured at fair value through income statement	116	5,422	-	5,422
	Stock – Taiwan Chemical Fiber	None.	Financial assets measured at fair value through income statement	17	1,468	-	1,468
	Stock – ZTE Security	None.	Financial assets measured at fair value through income statement	292	25,929	-	25,929
	Stock – Taiwan Cement	None.	Financial assets measured at fair value through income statement	2,710	117,084	-	117,084
	Stock – CHC Resources	None.	Financial assets measured at fair value through income statement	30	1,438	-	1,438
	Stock – Mega Financial Holdings	None.	Financial assets measured at fair value through income statement	200	5,960	-	5,960
		Total			167,251		167,251
Southeast Paper Co.,Ltd.	Stock – Southeast Cement	The company’s parent company.	Financial assets measured at fair value through other comprehensive income	2,113	37,820	0.37	37,820	Note
Southeast Gaoliang Recycling Co., Ltd.	Fund – President Good Strike Money Market Fund	None.	Financial assets measured at fair value through income statement	403	6,787	-	6,787

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.

258

Schedule 4

Southeast Cement Corporation Details of reinvestment businesses December 31, 2020

Unit: 1000 shares; NT$ thousand

									Unit:1000	shares; NT$	thousand
Name of investing company	Name of investee company	Location	Major business items	Original investment amount		Holding at the end of the period			Investee companies Profit or loss in the current period	Investment profit or loss recognized in the current period	Remarks
				End of current period	End of last year	Number of shares	Ratio	Book amount
Southeast Cement Corporation	Southeast Investment	Kaohsiung	Securities investment	297,870	297,870	499	99.29	652,887	23,310	23,144
	Southeast Industrial Construction Co., Ltd.	Kaohsiung	Construction industry	11,361	11,361	36	31.01	70,182	7,941	2,463
	Southeast Paper Co.,Ltd.	Kaohsiung	Cement paper bags	4,971	7,457	5	49.71	22,471	(346)	(172)
	Nansha Wood Co.,Ltd.	Kaohsiung	Wood products	8,540	8,540	1	27.56	11,203	2,244	618
	Southeast Asset	Kaohsiung	Construction industry	290,000	290,000	29,000	100.00	289,954	(5,213)	(5,213)
	Taiji Ship Plant Co.,Ltd.	Kaohsiung	Engineering industry	328,492	328,492	25,611	31.01	309,997	8,746	1,184
	Southeast Gaoliang Recycling Co., Ltd.	Kaohsiung	Waste removal	50,000	30,000	5,000	50.00	44,719	(10,614)	(5,307)
	Sub-total							1,401,413	26,068	16,717
	Less:parent company’s shares held bysubsidiaries reclassified as treasuryshares							(12,185)
	Total							1,389,228	26,068	16,717

259

Penghu Cable TV Co.,Ltd.	Penghu County	Cable TV	51,093	51,093	8,000	40.00	147,713	19,485	7,794
Penghu Bay	Penghu County	Beach	60,347	60,347	1,663	38.68	16,548	57	24
Southeast Industrial Construction Co., Ltd.	Kaohsiung	Construction industry	29,381	29,381	12	10.92	29,395	7,941	819
Taiji Ship Plant Co.,Ltd.	Kaohsiung	Engineering industry	5,826	5,826	454	0.55	5,608	8,746	50
Southeast Gaoliang RecyclingCo.,Ltd.	Kaohsiung	Waste removal	1,000	600	100	1.00	894	(10,614)	(106)
Total							200,158	25,615	8,581

260

Schedule 5

Schedule 5	Schedule 5	Schedule 5
Southeast Cement Corporation Information of major shareholders December 31,2020
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%
Consortium Legal Person Fukang Cultural and Educational Foundation	38,829,350	6.79%
Baifu Investment Co., Ltd.	35,008,148	6.12%
Changching Co., Ltd.	33,525,346	5.86%
Consortium Legal Person Southeast Cultural Foundation	33,421,803	5.84%
Yue-Ling Chen	30,464,760	5.33%

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.

261

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.

262

Details of important accounting items

Details of important accounting items
Item	Number/index
Details of assets,liabilities and equity
Details ofcash and cashequivalents	86
Details of financial assets measured at fair value through income statement – current	87
Details of notesreceivable	88
Details of accounts receivable	89
Details ofother receivables	note 6(5)
Details of Inventory	90
Details ofprepayments	note 6(7)
Details of other financial assets – current	91
Details of financial assets measured at fair value through other comprehensiveincome– non-current	92
Details of investment changes byequitymethod	94
Details ofchangesinproperty, 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 ofchangesin investmentproperty	note 6(13)
Details of changes in accumulated depreciation of investmentproperty	note 6(13)
Details ofchangesin accumulatedimpairmentof investmentproperty	note 6(13)
Details of deferred income tax assets	note 6(33)
Details of refundable deposits	note 6(14)
Details of short-term loans	95
Details ofcontractual liabilities–current	96
Details of accounts payable	97
Details of other accountspayable	note 6(18)
Details ofprovision for liabilities–current	note 6(19)
Details of lease liabilities	note 6(12)
Details of deferred income tax liabilities	note 6(33)
Details ofguarantee deposit received	note 6(21)
Detailsprofit and loss items
Details ofoperatingincome	98
Details of operatingcosts	99
Details of manufacturing expenses	100
Details of sales expenses	101
Details of management expenses	102
Details of financialcosts	note 6(32)
Functional summary of employee benefits, depreciation, depletion and amortizationexpensesincurredin the currentperiod	note 6(29)

263

Southeast Cement Corporation Details of cash and cash equivalents December 31, 2020

Item	Abstract	Unit: NT$ and foreign currency thousand Amount Remarks $ 7 195 $202 $ 3,255 63,049 1,248 HKD 1；USD 44 $67,552 $67,754	Unit: NT$ and foreign currency thousand Amount Remarks $ 7 195 $202 $ 3,255 63,049 1,248 HKD 1；USD 44 $67,552 $67,754
Cash Subtotal of cash Bank deposits Subtotal of bank deposits Total	Cash on hand Working capital Check deposit Current deposit Foreign currency deposits	$ 7 195	HKD 1；USD 44
		$202
		$ 3,255 63,049 1,248
		$67,552
		$67,754

December 31, 2020 US dollar foreign exchange rate: 1:28.48 HK dollar foreign exchange rate 1:3.673

264

Southeast Cement Corporation

Details of financial assets measured at fair value through income statement – current December 31, 2020

Unit: 1000 shares: NT$ thousand

Name of financial instrument	Abstract	Number of shares or unit	Acquisition cost	Fair value	Fair value
				Unit price	Total amount
Alliance Bernstein America JPMorgan Global Amundi Sub-total Delhi International Airport Pfizer Arabian Oil Sub-total Total	Open-end funds Open-end funds Open-end funds Bonds Bonds Bonds	15 21 50 500 200 342	$ 6,139 6,151 14,708	12.91 9.28 10.43 1.0437 1.1613 1.14717	$ 5,565 5,562 14,852
			$ 26,998		$ 25,979
			$ 16,100 6,952 11,392		$ 14,862 6,615 11,174
			$ 34,444		$ 32,651
			$ 61,442		$ 58,630

265

Southeast Cement Corporation Details of notes receivable December 31, 2020

Object Company A Company B Company C Company D Company E Company F Other Total Less: allowance for loss Net	Abstract Payment notes Payment notes Payment notes Payment notes Payment notes Payment notes (5% or less)	Unit: NT$ thousand Amount Remarks $ 49,229 48,678 42,031 26,265 24,092 19,737 80,010 $ 290,042 (3,480) $286,562	Unit: NT$ thousand Amount Remarks $ 49,229 48,678 42,031 26,265 24,092 19,737 80,010 $ 290,042 (3,480) $286,562

266

Southeast Cement Corporation Details of accounts receivable December 31, 2020

Object Company A Company B Company C Company D Company E Company F Company G Other Total accounts receivable – general Less: allowance for losses Net receivables – general Tiancheng Company CHC Resources Co., Ltd. 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 Payments for goods receivable Rental income receivable (5% or less) Payments for goods receivable Payments for goods receivable	Unit: NT$ thousand Amount Remarks $ 21,020 8,681 8,310 7,138 6,307 5,632 23,318 28,267 $ 108,673 (16,175) $ 92,498 33,667 3,607 $ 37,274 (447) $ 36,827 $129,325	Unit: NT$ thousand Amount Remarks $ 21,020 8,681 8,310 7,138 6,307 5,632 23,318 28,267 $ 108,673 (16,175) $ 92,498 33,667 3,607 $ 37,274 (447) $ 36,827 $129,325

267

Southeast Cement Corporation Details of Inventory December 31, 2020

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 $ 41,997 $ 10,534 77,446 69,903 23,588 24,748 59,343 61,520 $ 202,374 $ 166,705 (46,492) - $ 155,882 $ 166,705 350,333 407,434 $ 350,333 $ 407,434 $506,215 $574,139	Remarks
		Cost $ 41,997 77,446 23,588 59,343 $ 202,374 (46,492) $ 155,882 350,333 $ 350,333 $506,215

268

Southeast Cement Corporation Details of other financial assets – current December 31, 2020

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	$ 6,007 113,354 40,000 15,237	USD 3,980 USD 535
		$ 174,598

On December 31, 2020, the foreign exchange rate of US dollar was 1:28.48

269

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 Number of shares	balance Amount	Increase in Number of shares	Increase in Number of shares	current period Amount	Decrease in current period Number of shares Amount	Decrease in current period Number of shares Amount	Decrease in current period Number of shares Amount	Decrease in current period Number of shares Amount	Ending Number of shares	Ending Number of shares	balance Amount	balance Amount	Guarantee or pledge status
Goldsun Co., Ltd.	4,011	$ 57,752		-	$ 33,838	579		$	5,783	3,432		$	85,807	None.
CHC Resources Co., Ltd.	13,084	658,115		-	-		-	37,289		13,084			620,826	None.
Chunghwa Telecom	360	39,600		-	-		-		360		360		39,240	None.
Taiwan Cement	904	39,506		45	1,501		-		-		949		41,007	None.
Yuanta Financial Holdings	526	10,625		21	616		-		-		547		11,241	None.
TXC Corporation	80	3,784		-	2,208		-		-		80		5,992	None.
Nantex Industry Co., Ltd.	63	1,906		-	-		62		1,884		1		22	None.
APTG	1,575	11,860		-	-	1,575		11,860			-		-	None.
CSRC	254	7,983	100		1,192		-		-		354		9,175	None.
Taiwan Hong Chuan Group	202	12,520		-	-		-		343		202		12,177	None.
Sincere Navigation Corporation	284	4,795		-	1,664		-		-		284		6,459	None.
Fubon Financial Holdings	406	18,841		-	142		-		-		406		18,983	None.
Yonyu Plastic	-	-		52	1,724		-		-		52		1,724	None.
China Carbon	-	-	100		10,850		-		-		100		10,850	None.
Kaohsiung MRT	11,117	82,070		-	-		-	22,053		11,117			60,017	None.
Huasheng Ventures	329	3,536		-	-	322			2,681		7		855	None.
Yuhua Venture Capital	450	2,697		-	-	157			1,663		293		1,034	None.
China National Products	15	1,035		-	765		-		-		15		1,800	None.
Global Alliance International	2,333	15,937		-	1,516		-		-	2,333			17,453	None.
One Card Solution	4,000	14,141		-	-	801			3,130	3,199			11,011	None.
Total		$ 986,703			$ 56,016			$ 87,046				$	955,673

Note: 1. The increase of NT$56,016 thousand in the current period is due to NT$14,010 thousand from additional purchase and NT$42,006 thousand from unrealized evaluation benefit.

The decrease of NT$87,046 thousand in the current period is due to NT$15,519 thousand from sales reversal, NT$60,944 thousand from the appraisal loss of unrealized financial assets, and NT$10,583 thousand of share capital return from investee companies due to capital reduction.

270

Southeast Cement Corporation Details of investment changes by equity method From January 1 to December 31, 2020

Name	Opening balance	Opening balance	Increase in current period	Increase in current period	Decrease in current period	Decrease in current period		Ending balance	Ending balance	Unit: 1000 shares; NT$ Market value or net equity value Guarantee or pledge status Unit price Total price 1,331.98 $ 664,657 None. 2,194.64 79,007 None. 8.94 44,719 None. 5,817.40 29,087 None. 11,202.00 11,202 None. 10.00 289,954 None. 13.48 345,158 None. $ 1,463,784 (12,185) $ 1,451,599	Unit: 1000 shares; NT$ Market value or net equity value Guarantee or pledge status Unit price Total price 1,331.98 $ 664,657 None. 2,194.64 79,007 None. 8.94 44,719 None. 5,817.40 29,087 None. 11,202.00 11,202 None. 10.00 289,954 None. 13.48 345,158 None. $ 1,463,784 (12,185) $ 1,451,599	Unit: 1000 shares; NT$ Market value or net equity value Guarantee or pledge status Unit price Total price 1,331.98 $ 664,657 None. 2,194.64 79,007 None. 8.94 44,719 None. 5,817.40 29,087 None. 11,202.00 11,202 None. 10.00 289,954 None. 13.48 345,158 None. $ 1,463,784 (12,185) $ 1,451,599
	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	468 36 3,000 7 1 29,000 25,611	$ 613,280 67,104 30,026 25,024 10,585 297,016 306,383	31 - 2,000 - - - -	$ 39,773 3,078 20,000 105 618 - 3,614	- - - 2 - - -	$ 166 - 5,307 2,658 - 7,062 -	499 36 5,000 5 1 29,000 25,611	99.29 31.01 50.00 49.71 27.56 100.00 31.01	$ 652,887 70,182 44,719 22,471 11,203 289,954 309,997	1,331.98 2,194.64 8.94 5,817.40 11,202.00 10.00 13.48	$ 664,657 79,007 44,719 29,087 11,202 289,954 345,158	None. None. None. None. None. None. None.
		$ 1,349,418 (12,185)		$ 67,188 -		$ 15,193 -			$ 1,401,413 (12,185)		$ 1,463,784 (12,185)
		$ 1,337,233		$ 67,188		$ 15,193			$ 1,389,228		$ 1,451,599

[(1) Market value or net equity value: based on the 2020 financial] statements audited and certified by the independent auditor.
(2) The increase of NT$67,188 thousand in the current period is due to NT$27,408 thousand from recognition of investment gains by equity method, NT$105 thousand from capital reserve transferred from cash dividends received by the subsidiaries from the parent company, NT$19,607 thousand of other comprehensive income, NT$68 thousand from disposal of financial assets measured at fair value through other comprehensive income, and $20,000 thousand from cash injection.
(3) The decrease of NT$15,193 thousand in the current period is due to the recognition of NT$10,691 thousand of investment loss by equity method, dividends of NT$1,850 thousand and NT$2,486 thousand from return of share capital due to capital reduction, NT$98 thousand of adjustment according to shareholding ratio – reevaluated amount of defined welfare plan, and an accumulated earnings of NT$68 thousand.

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Southeast Cement Corporation Details of short-term loans December 31, 2020

Ending balance	Term of contract	Financing limit	Pledges or guarantees
$ 30,000 80,000 40,000 30,000 15,000 40,000	1091016-1100104 1091211-1100111 1091211-1100111 1091222-1100121 1091224-1100121 1091230-1100330	1,200,000 200,000 270,000 270,000 270,000 270,000	Land None. Land Land Land Land
$235,000
0.85%

Southeast Cement Corporation Details of contractual liabilities – current December 31, 2020

Object Company A Other Total	Abstract Cement to be collected Total of those less than 5%	Unit: NT$ thousand Amount Remarks $ 41,412 32,170 $73,582	Unit: NT$ thousand Amount Remarks $ 41,412 32,170 $73,582

272

Southeast Cement Corporation Details of accounts payable December 31, 2020

Object Company A Other Subtotal of accounts payable – general Tiancheng Company Subtotal of accounts payable – related parties Total	Abstract Payment for goods payable (5% or less) Payment for goods payable	Unit: NT$ thousand Amount Remarks $ 168,840 23,734 $ 192,574 $ 325 $ 325 $192,899	Unit: NT$ thousand Amount Remarks $ 168,840 23,734 $ 192,574 $ 325 $ 325 $192,899

Southeast Cement Corporation Details of operating income 2020

	2020
Item Cement and furnace stone raw materials Less: sales returns and discounts Net sales Rental income Total	Quantity	Amount $ 1,519,018 19,355 - $ 1,538,373 53,886 $1,592,259	Unit: NT$ thousand Remarks
	738,851.00

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Southeast Cement Corporation Details of operating costs 2020

Southeast Cement Corporation Details of operating costs 2020
Item Inventory at the beginning of the period Add: current feeding Less: inventory at the end of the period Sale Consumption of raw materials Inventory at the beginning of the period Add: current feeding Transfer out to property, plant and equipment Less: inventory at the end of the period Sale Expenses transferred from collection Property, plant and equipment transferred from expenses from collection Inventory loss Materials consumed Direct labor Manufacturing expenses Manufacturing cost Add: work in process at the beginning of the period Outsourced WIP Less: work in process at the end of the period Cost of finished products Add: finished products at the beginning of the period Less: finished products at the end of the period 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 Cost of materials sold Inventory loss Manufacturing cost not apportioned Gains from recovery of inventory falling price Operating cost	Unit: NT$ thousand 2020
	$ 104,739 125,898 41,997 46,191
	$142,449
	$ 73,314 70,897 420 77,446 151 37,002 4,627 188
	$ 25,217 17,369 178,438
	$ 363,473 17,446 859,266 23,588
	$ 1,216,597 68,678 59,343
	$ 1,225,932 225,570
	$ 1,451,502 37,765 46,191 151 188 5,705 (16,526)
	$1,524,976

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Southeast Cement Corporation Details of manufacturing expenses From January 1 to December 31, 2020

Southeast Cement Corporation Details of manufacturing expenses From January 1 to December 31, 2020
Item Indirect labor Repair cost Utility cost Depreciation Pension Other expenses Manufacturing cost not apportioned Total	Unit: NT$ thousand 2020
	$ 23,981 11,574 83,924 37,953 1,063 25,648 (5,705)
	$178,438

Southeast Cement Corporation Details of sales expenses From January 1 to December 31, 2020

Unit: NT$ thousand

Southeast Cement Corporation Details of sales expenses From January 1 to December 31, 2020	Unit: NT$ thousand
Item Salary expenses Rental expenses Stationery Travel expenses Freight Insurance premium Entertainment expenses Donation Meals Training fee Pension Transportation expenses Other expenses Total	2020
	$ 2,229 48 4 40 8,929 10 858 30 115 2 118 136 2,424
	$14,943

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Southeast Cement Corporation Details of management expenses From January 1 to December 31, 2020

Southeast Cement Corporation Details of management expenses From January 1 to December 31, 2020
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 Transportation expenses Books, newspapers and magazines Other expenses Total	Unit: NT$ thousand 2020
	$ 21,695 540 183 62 414 437 21 857 2,739 194 217 1,994 28,658 634 1,814 45 2,350 559 97 19 3,180
	$66,709

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VI. Impact of financial difficulties on the financial situation of the company and its affiliated enterprises: None.

278

Seven. Review and Analysis of Financial Status and Financial Performance and Risk Management

I. Comparative Analysis of Financial Status

Consolidated financial status Unit: NT$ thousand

Year Item	2019	2020	Difference	Difference
			Amount	%
Current assets	2,026,192	1,963,779	(62,413)	(3.08)
Non-current assets	7,714,156	7,901,541	187,385	2.43
Total assets	9,740,348	9,865,320	124,972	1.28
Current liabili- ties	661,655	723,920	62,265	9.41
Non-current liabilities	507,709	592,681	84,972	16.74
Total liabilities	1,169,364	1,316,601	147,237	12.59
Share capital	5,720,008	5,720,008	0	0.00
Capital increase	188,162	188,267	105	0.06
Retain earnings	2,114,087	2,093,199	(20,888)	(0.99)
Other interests	514,103	500,520	(13,583)	(2.64)
Treasury stock	(12,185)	(12,185)	0	0.00
Total equity	8,570,984	8,548,719	(22,265)	(0.26)
Explanation of increase/decrease of ratio: (for changes of more than 20%) 1. The increase in current liabilities is mainly due to the increase in short-term borrowings. 2. The increase in non-current liabilities is mainly due to the increase in lease liabilities – non-current. 3. The increase in total liabilities is mainly due to the increase in short-term borrowings and lease liabilities – non-current.

279

Individual financial status Unit: NT$ thousand

Year Item	2019	2020	Difference	Difference
			Amount	%
Current assets	1,427,080	1,363,990	(63,090)	(4.42)
Non-current assets	8,199,905	8,194,507	(5,398)	(0.07)
Total assets	9,626,985	9,558,497	(68,488)	(0.71)
Current liabili- ties	618,549	634,360	15,811	2.56
Non-current liabilities	484,261	434,328	(49,933)	(10.31)
Total liabilities	1,102,810	1,068,688	(34,122)	(3.09)
Share capital	5,720,008	5,720,008	0	0.00
Capital increase	188,162	188,267	105	0.06
Retain earnings	2,114,087	2,093,199	(20,888)	(0.99)
Other interests	514,103	500,520	(13,583)	(2.64)
Treasury stock	(12,185)	(12,185)	0	0.00
Total equity	8,524,175	8,489,809	(34,366)	(0.40)
Explanation of changes in the ratios: (for changes more than 20%) There wasno changemorethan 20%.

II. Comparative analysis of financial performance

Analysis of consolidated financial status Unit: NT$ thousand

Year Item	2019	2020	Increase (de- crease) amount	Change ratio %
Net operating income Operating cost Operating gross profit Operating expenses Operating income Operating income and expenditure Net profit before tax	1,584,940 1,502,651	1,590,986 1,523,614	6,046 20,963 (14,917) 7,147 (22,064) (13,650)	0.38 1.40 (18.13) 7.87 (259.30) (26.43)
	82,289 90,798	67,372 97,945
	(8,509) 51,653	(30,573) 38,003
	43,144	7,430	(35,714)	(82.78)

280

Income tax expenses (benefits) Net profit of the current period Other comprehensive profit (net) Total comprehensive profit of the current period	9,901	(9,519)
	33,243 64,507	16,949 689
	97,750	17,638

Explanation of changes in the ratios: (for changes more than 20%) (1) The decrease in business profit was mainly due to the decrease of gross profit caused by the increase of land price tax by NT$15,218 thousand in 2020. (2) The decrease in non-operating income and expenditure was mainly due to the increase of land preparation and clearance expenses returned to the base in 2020. (3) Decrease in net profit before tax: Same as in (1) and (2) above. (4) Decrease in net profit in the current period: Same as in (1) and (2) above. (5) Increase in income tax expense: Mainly due to the high or low income tax esti- mate in the previous year and the original generation and reversal of temporary difference in deferred income tax. (6) Decrease in other comprehensive income: Mainly due to the decrease in unreal- ized appraisal gains and losses caused by the decrease in the share price of eq- uity instrument investment measured at fair value through other comprehensive income. (7) Decrease in total comprehensive income in the current period: Same as in (2) and(4)above.

281

2.Analysis of individual financialstatus Unit: NT$thousand	2.Analysis of individual financialstatus Unit: NT$thousand	2.Analysis of individual financialstatus Unit: NT$thousand	2.Analysis of individual financialstatus Unit: NT$thousand	2.Analysis of individual financialstatus Unit: NT$thousand
Year Item	2019	2020	Increase (de- crease)amount	Change rate %
Net operating income Operating cost Operating gross profit Operating expenses Operating income Operating income and expenditure Net profit before tax Income tax expenses (benefits) Net profit of the current period Other comprehensive profit (net) Total comprehensive profit of the current period	1,572,842 1,494,685	1,592,259 1,524,976	19,417 30,291 (10,874) (1,139) (9,735) (21,043) (30,778) (19,803) (10,975) (63,896) (74,871)	1.23 2.03 (13.91) (1.37) (199.90) (43.55) (70.84) 192.04 33.12 (99.11) (76.71)
	78,157 83,027	67,283 81,888
	(4,870) 48,315	(14,605) 27,272
	43,445 10,312	12,667 (9,491)
	33,133 64,467	22,158 571
	97,600	22,729

Explanation of changes in the ratios: (for changes more than 20%) Same as the analysis of the consolidated financial report.

III. Cash Flow Analysis

(I) Liquidity analysis of the last two years:
Analysis of consolidated liquidity

Year Item	2019	2020	Increase/decrease of ratio(%)
Cash flow ratio	26.87	15.29	(43.10)
Cash flow adequacy ratio	32.81	23.59	(28.19)
Cash reinvestment ratio	1.87	0.84	(55.08)

282

Explanation of changes in the ratios:

The decrease in cash flow ratio was mainly due to the decrease of net cash inflow from operating activities caused by the increase of inventory.

The decrease in cash flow adequacy ratio was mainly due to the decrease of net cash flow from operating activities and the increase of inventory in 2020.

Decrease in cash reinvestment ratio: The same reason for the decrease in cash flow ratio.

2. Analysis of individual liquidity

2. Analysis of	individual liquidity
Year Item	2019	2020	Increase/decrease of ratio(%)
Cash flow ratio	35.25	19.59	(35.91)
Cash flow adequacy ratio	34.01	79.07	(7.84)
Cash reinvestment ratio	2.50	1.05	(58.00)
Explanation of changes in the ratios: Decrease in cash flow ratio: Mainly due to the decrease of net cash flow from operating activities caused by the decrease in profit before tax and decrease of cement to be withdrawn. Decrease in cash flow adequacy ratio: Mainly due to the decrease of net cash flow of operating activities in 2020. Decrease in cash reinvestment ratio: The same reason for the decrease in cash flow ratio.

(II) Cash flow analysis for the next year:

Opening cash balance (1) Annual net cash flow from operating activi- ties (2) Annual cash outflow (3) Cash surplus (shortage) amount (1) + (2) - (3) Remedial measures for cash shortage Investment plan Wealth manage- mentplan 137,647 130,011 57,867 209,791 None None 1. Analysis of cash flow changes in the current year: (1) Operating activities: The estimated operating condition of this year is equivalent to that of 2020, with a net cash inflow of NT$130,011 thousand. (2) Investment and financing activities: Cash dividends, directors' remuneration and employees' remuneration are expected to be distributed this year, which will result in a net cash outflow of NT$57,867 thousand. 2. Remedial measures and flow analysis of expected cash shortage: Not applicable.	Annual net cash flow from operating activi- ties (2)	Annual cash outflow (3)	Cash surplus (shortage) amount (1) + (2) - (3)	Remedial measures for cash shortage	Remedial measures for cash shortage
				Investment plan	Wealth manage- mentplan
	130,011	57,867	209,791	None	None

(1) Operating activities: The estimated operating condition of this year is equivalent to that of 2020, with a net cash inflow of NT$130,011 thousand.

(2) Investment and financing activities: Cash dividends, directors' remuneration and employees' remuneration are expected to be distributed this year, which will result in a net cash outflow of NT$57,867 thousand.

283

IV. Impact of major capital expenditures in the most recent year on the financial status: None.
V. Reinvestment policy in the most recent year, the main reason for its profit or loss, improvement plan and investment plan for the next year: None.

VI. Risk Management

(I) Impact of changes in interest rate, exchange rate and inflation on the company’s profit in 2020 and future countermeasures:
Interest rate:
(1) In 2020, due to the successful land preparation of the plant in 2019, there is a slight capital gap. The annual interest cost is about NT$1,475 thousand, accounting for6.66% of the current net profit.
(2) Future countermeasures: Demand for loans in 2021 is expected, but the amount is low; besides, as the NT$ interest rate was lowered in 2020 due to the outbreak of COVID-19, the interest rate impact on the company is lowered.
Exchange rate:
(1) In 2020, the exchange rate of the US dollar against the New Taiwan dollar rose from 30.09 at the beginning of the year to 28.48 at the end of the year; the company holds a US dollar position of about US$6.62 million; therefore, the depreciation of the US dollar resulted in an exchange loss of about NT$10.66 million.
(2) Future countermeasures: The US dollar has become an important currency due to the outbreak of COVID-19 in 2020, and the company will continue to hold a US dollar position. Although the interest rate of the US dollar has dropped sharply with an unlimited supply of the currency due to quantitative easing, it has the function of risk hedging, and there is little change in the exchange rate against NT$. It is expected that the exchange rate of the US dollar against NT$ will remain unchanged in 2021, and there will be little impact on the exchange profit.
Inflation:
(1) The purchase price of raw materials was flat in 2020, and there was no significant impact on the production cost.
(2) Future countermeasures: It is estimated that the price of raw materials and fuels in 2021 will be approximately the same as that in 2020, and there will be little impact on the production cost.
(II) Policies, main reasons for profit or loss, and future countermeasures for engage-

284

ment in high-risk or high-leverage investment, loans to others, endorsements and guarantees, and derivative trading in 2020:

Engagement in high-risk or high-leverage investment:
(1) There will be no high-risk or high-leverage investment in 2020.
(2) Future countermeasures: The company does not expect to engage in high-risk or high-leverage investment in 2021.
Loans to others:
(1) On November 10, 2020, the board meeting approved a loan of NT$200 million to Southeast Asset Development Co., Ltd., a 100% owned subsidiary of the company; NT$93,000 thousand has been used as of the end of 2020.
(2) Future countermeasures: The company’s credit line available at banks is NT$2 billion, which is sufficient to provide the subsidiary Southeast Asset Development Co., Ltd. with a loan of NT$200 million in 2021. If the subsidiary Southeast Asset Development Co., Ltd. has any loan drawdown, it should be able to repay it because the company’s house sales are in good condition.
Endorsement guarantees:
(1) In 2020, the company provided an endorsement guarantee for Southeast Asset Development Co., Ltd., a 100% owned subsidiary, with an amount of NT$100,000 thousand.
(2) Future countermeasures: The company does not expect to provide any endorsement guarantee to the subsidiary Southeast Asset Development Co., Ltd. any longer in 2021.
Derivative transaction:
(1) There will be no forward purchase of US dollar derivatives in 2020.
(2) Future countermeasures: The company does not expect to purchase any forward US dollar derivatives in 2021.
(III) 2020 R&D plan, current progress of unfinished R&D plans, R&D expenses to be further invested, expected completion time of mass production, and main factors affecting the success of R&D in the future:
2020 R&D plan: None.
Current progress of unfinished R&D plan: None.
R&D expenses to be further invested: None.
Expected completion time of mass production: None.
Main factors affecting the success of R&D in the future: None.
(IV) Impact of major domestic and foreign policy and law changes on the compa-

285

ny’s financial status in 2020 and countermeasures: None.

(V) Impact of technological and industrial changes on the company’s financial status in 2020 and countermeasures: None
(VI) Impact of corporate image change on the company’s corporate crisis management in 2020 and countermeasures: None.
(VII) Expected benefits and possible risks of M&A and countermeasures: None.
(VIII) Expected benefits and possible risks of plant expansion and countermeasures: None.
(IX) Risks of centralized purchase or sales and countermeasures: None.
(X) Impact, possible risks and countermeasures of the substantial transfer or replacement of shares by directors, supervisors or major shareholders holding more than 10% of the shares of the company: None.
(XI) Impact and risks of the change of management right of the company and countermeasures: None.
(XII) Litigation or non-litigation cases: None.
(XIII) Other important risks and countermeasures: None.

VII. Other important matters: None.

286

Eight. Special Records

I. Relevant information of affiliated enterprises

(I) Organization chart of affiliated enterprises:

==> picture [390 x 328] intentionally omitted <==

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

Southeast Cement Cor-
99.29% 100% 50.00% 49.71%
1%
ment Co., Ltd.
Southeast Invest-
velopment Co., Ltd. Southeast Asset De- Recycling Co., Ltd. Southeast Gaoliang Southeast Paper Co., Ltd.
----- End of picture text -----

287

(II) Basic information of affiliated enterprises:

Unit: NT$ thousand

Enterprise name	Date of establishment	Address	Paid-in capital	Main business orproduction items
Southeast Investment	October 4, 1988	Floor 5-1, No. 21, Wufu 3rd Road, Qianjin District,Kaohsiung	502,355	Securities investment
Southeast Gaoliang	March 8, 2019	Floor 5-1, No. 21, Wufu 3rd Road, Qianjin District,Kaohsiung	140,000	Resource recovery
Southeast Asset	May 30, 2014	Floor 5-1, No. 21, Wufu 3rd Road, Qianjin District, Kaohsiung	290,000	Lease and sale of residential and office building development
Southeast Paper	November 24, 1966	Floor 5-1, No. 21, Wufu 3rd Road, Qianjin District, Kaohsiung	10,000	Paper manufacturing, etc.

Note :The capital increase of Southeast Gaoliang Resources Recycling Co., Ltd. was approved on April 22, 2021.

(III) Information about the supervisors, directors and presidents of the enterprises:

Unit: shares; %

			Unit: shares;%	Unit: shares;%
Enterprise name	Job title	Name or representative	on election date
			Number of shares	shareholdi ng ratio
Southeast Investment Co., Ltd.	Chairman	Min-Tuan Chen, Southeast CementCorporation	467,504	99.29
	Director	Kuan-Hua Chen, Southeast CementCorporation	467,504	99.29
	Director	Yen-Hui Wu, Southeast Cement Corporation	467,504	99.29
	Director	Chang-Chih Wu, Southeast Cement Corporation	467,504	99.29
	Supervisor	Ming-Chuan Kuo, Dongshu InvestmentCo.,Ltd.	559	0.12
	President	Min-Tuan Chen	0	0
Southeast Asset Development Co., Ltd.	Chairman	Min-Tuan Chen, Southeast Cement Corporation	29,000,000	100.00
	Director	Ta-Lu Chiu, Southeast Cement Corporation	29,000,000	100.00
	Director	Chun-Chieh Lin, Southeast Cement Corporation	29,000,000	100.00
	Director	Kuan-Hua Chen, Southeast CementCorporation	29,000,000	100.00
	President

288

Enterprise name	Job title	Name or representative	onelectiondate	onelectiondate
			Number of shares	shareholdi ng ratio
	Supervisor	Ming-Chi Hsieh, Southeast Cement Corporation	29,000,000	100.00
Southeast Paper Co., Ltd.	Chairman	Tien-ChihChen	82	0.82
	Director	Min-Tuan Chen, Southeast Ce- ment Corporation	4,971	49.71
	Director	Kuan-Hua Chen, Dongshu In- vestment Co., Ltd.	159	1.59
	Director	Chiu-Shui Chen	148	1.48
	Director	Shu-Yuan Lin	82	0.82
	Director	Li-Hsiang Cheng, Chentai Cement Company.	628	6.28
	Director	Po-Sheng Chao	41	0.41
	Supervisor	Li-Kun Wu, Fuhsing Co., Ltd.	415	4.15
	Supervisor	You-Tsai Chen	157	1.57
	President	Min-Tuan Chen	0	0
Southeast Gaoliang Recycling Co., Ltd.	Chairman	Min-Tuan Chen, Southeast Ce- ment Corporation	7,000,000	50.00
	Director	Kuan-Hua Chen, Southeast Ce- mentCorporation	7,000,000	50.00
	Director	Chang-Chih Wu, Southeast Ce- mentCorporation	7,000,000	50.00
	Director	Jun-Long Ho, Gaoliang Invest- ment DevelopmentCo.,Ltd.	6,860,000	49.00
	President
	Director	Hsing-Dian Ho, Gaoliang Invest- ment Development Co., Ltd.	6,860,000	49.00
	Supervisor	Hsin-Han Huang, Southeast In- vestment Co., Ltd.	140,000	1.00
	Supervisor	Hsiu-Chin Kuo	0	0

Note :The capital increase of Southeast Gaoliang Resources Recycling Co., Ltd. was approved on April 22, 2021.

289

(IV) Operation of all affiliated enterprises:

V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:	V) Operation of all affiliated enterprises:
Unit: NT$ thousand
Enterprise name	Capital amount	Assets Total	Liabilities Total	Net value	Operating income	Operating profit (loss)	Current profit (after tax)	Earnings per share (NT$) (after tax)
Southeast Investment Co., Ltd.	502,355	670,710	1,288	669,422	25,286	22,504	23,310	46.40
Southeast Gaoliang Recy- clingCo.,Ltd.	100,000	247,150	157,712	89,438	0	(8,759)	(10,614)	(1.33)
Southeast Asset Develop- ment Co.,Ltd.	290,000	448,439	158,485	289,953	0	(5,547)	(5,213)	(0.18)
Southeast Paper Co.,Ltd.	10,000	81,969	23,456	58,513	114	(395)	(134)	(13.45)

II. Handling of private placement securities: None.

III. Status of holding or disposing of the company’s shares by subsidiaries in the most recent year and as of the date of publication of the annual report:

								Unit: NT$thousand;share;%	Unit: NT$thousand;share;%	Unit: NT$thousand;share;%	Unit: NT$thousand;share;%
Name of subsidiary	Paid-in capital	Source of funds	Shareholding ratio of the com- pany	Date of acquisition or disposal	Number and monetary amount of shares acquired	Number and monetary amount of shares disposed of	Investment profit	Number and monetary amount of shares held as of the date of pub- lication of the annual report	Pledging situation	The company’s endorsement guarantee amount for subsidiar- ies	Monetary amount of loans from the company to subsidiaries
Southeast Paper Co., Ltd.	15,000	None	49.71%	None	None	None	None	Number of shares: 2,112,865 Amount: 37,820	None	None	None

290

IV. Other necessary supplementary explanations: None.
V. Whether there is any event in the most recent year and as of the date of publication of the annual report with significant impact on shareholders’ rights and interests or the price of securities as specified in the second subparagraph of second paragraph under Article 36 of the Securities and Exchange Act: None.

291

Southeast Cement Corporation

==> picture [82 x 82] intentionally omitted <==

Min-Tuan Chen, Chairman

==> picture [57 x 55] intentionally omitted <==

292

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SE CEMENT — Annual Report 2020

51741_rns_2021-09-14_f49c4e75-7b78-4098-997f-abef09cb6b4f.pdf

URL of the annual report

Southeast Cement Corporation

2020

Annual Report

VI: Company website

Table of Contents

Page

ONE. Report to Shareholders

Dear shareholders,

II. R&D Status

III. Summary of This Year’s Business Plan

Two. Company Profile

I. Date of establishment: December 28, 1956

II. Company History

Three. Corporate Governance Report

I. Company structure

II. Information of directors, supervisors, the president, vice presidents, function directors and heads of various departments and branches

- Major shareholders of corporate shareholders (shareholders with top ten shareholdings)

April 30, 2021

Director Information

(III) Remuneration of general directors and independent directors, the president and vice presidents:

1. Remuneration of general directors and independent directors:

Remuneration Tier Table

2. Remuneration of the president and vice presidents:

Remuneration Tier Table

3. Name of the manager assigning employees’ remuneration and dispatch situation:

IV. Corporate governance operation status

(I) Board meeting operation status:

(IX) Internal control system implementation status:

Southeast Cement Corporation Statement of Internal Control System

V. Accountant Fee Information:

VI. Change of independent auditor: None.

Equity transfer information

Equity pledge information

IX. Information on the relationship among the top 10 shareholders in terms of shareholding ratio

X. Number of shares in the same reinvested business held by the company, its directors, managers and businesses directly or indirectly controlled by the compa-

ny

Four. Fundraising Situation

I. Capital and shares

(I) Source of share capital:

(II) Shareholder structure:

(III) Diversified holding of ordinary shares:

NT$10 per share

(IV) List of major shareholders:

(V) Market price, net value, earnings and dividend information in the last two years:

II. Handling of corporate bonds, preferred shares and overseas depositary receipts:

III. Handling of employee stock option certificates:

IV. Handling of new shares with restricted employee rights:

V. Handling of new shares issued for M&A or transfer of shares of other companies:

VI. Implementation of Fund Utilization Plan:

Five. Operation Overview

I. Business Contents

2. Business proportion in 2020:

(II) Industry Overview:

(2) Construction industry

II. Overview of the market and production and sales

(I) Market analysis:

(1) Cement industry

1. Favorable factors:

(1) Cement industry

(III) Main original fuel supply status:

(VI) Major product sales volume in the last two years:

III. Employee profile in the last two years

(I) The company

(II) All companies in the financial report

IV. Environmental protection expenditure information

(II) Countermeasures:

V. Labor Relations

VI. Important Contracts

Six. Financial Overview

I. Condensed Balance Sheet and Comprehensive Income Statement of the Last Five Years

(II) Condensed individual balance sheet:

(III) Condensed consolidated income statement:

(IV) Condensed individual comprehensive income statement:

(V) Independent auditors in the last five years:

II. Financial Analysis of the Last Five Years

(1) Analysis of consolidated financial statements:

SE CEMENT Annual Report 2020