UCC - Annual Report 2021 | FinancialReports.eu

Universal Cement Corporation and Subsidiaries

Consolidated Financial Statement for the Years Ended December 31, 2021 and 2020 and Independent Auditors ’ Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2021 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

UNIVERSAL CEMENT CORPORATION

BO YI HOU

Chairman March 28, 2022

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Universal Cement Corporation

Opinion

We have audited the accompanying consolidated financial statements of Universal Cement Corporation and its subsidiaries (the Group), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of Taiwan, the Republic of China (ROC).

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the ROC. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the ROC, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Group’s consolidated financial statements for the year ended December 31, 2021 is stated as follows:

Occurrence of sales of concrete products

Refer to Note 4(13) and Note 24. The Group mainly manufactures and sells cement, ready mixed concrete and gypsum board panels. The sales amount of some concrete products changed greatly in 2021 and the change can be due to changes in volume or price or both. Sales is the main source of the Group’s revenue and has a material impact on the Group’s consolidated financial statements. Consequently, occurrence of sales of concrete products is considered as a key audit matter.

Our audit procedures in respect of the above key audit matter are described as follows:

We understood the design of the Group’s internal controls on accounting for sales. We tested the implementation and operating effectiveness of the internal controls.
We selected samples from the sales records, and verified that the products and quantities listed on the delivery orders and the invoices are the same and for the same customers. We noted that the delivery orders are signed by the customers.

Other Matter

We have also audited the parent company only financial statements of Universal Cement Corporation as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion.

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

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the auditing standards generally accepted in the ROC, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

3 -
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Chi Chen Lee and Chao Chin Yang.

Deloitte & Touche Taipei, Taiwan

Republic of China

March 28, 2022

Notice to Readers

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

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

Universal Cement Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - current (Notes 4 and 8) Financial assets at amortized cost - current (Notes 4, 9, 10 and 33) Contract assets - current (Notes 4 and 24) Contract assets from related parties - current (Notes 4, 24 and 32) Notes receivable (Notes 4,11 and 24) Net Accounts receivable (Notes 4,11 and 24) Accounts receivable from related parties (Notes 4,11,24 and 32) Other receivables (Notes 4) Current tax assets (Notes 4 and 26) Inventories (Notes 4 and 12) Prepayments Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss – non-current (Notes 4 and 7) Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 8) Financial assets at amortized cost - non-current (Notes 4, 9, 10 and 33) Investments accounted for using equity method (Notes 4 and 14) Property, plant and equipment (Notes 4 and 15) Right - of - use assets (Notes 4 and 16) Investment properties (Notes 4 and 17) Other intangible assets (Notes 4 and 18) Deferred tax assets (Notes 4 and 26) Prepayments for equipment Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4 and 19) Short-term bills payable (Note 19) Contract liabilities - current (Notes 4 and 24) Notes payable (Note 20) Accounts Payable (Note 20) Accounts Payable to related parties (Notes 20 and 32) Other payables (Note 21) Current tax liabilities (Notes 26) Lease liabilities - current (Notes 4, 16 and 32) Other current liabilities (Note 21) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 26) Lease liabilities - non-current (Notes 4, 16 and 32) Net defined benefit liabilities - non-current (Notes 4 and 22) Guarantee deposits Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 23) Capital stock - common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON - CONTROLLING INTERESTS Total equity TOTAL		December 31, 2021 Amount % $ 292,032 1 90,366 1 2,549,259 10 80,537 - 2,625 - 4,437 - 450,089 2 1,177,212 5 34,164 - 2,473 - - - 297,842 1 18,910 - 4,715 - 5,004,661 20 22,022 - 1,999,074 8 17,148 - 9,892,845 39 6,890,696 28 281,342 1 935,834 4 8,404 - 20,690 - 24,106 - - - 20,092,161 80 $ 25,096,822 100 $ 1,780,000 7 1,224,036 5 10,275 - 69,270 - 638,543 3 32,168 - 296,404 1 119,517 1 54,192 - 20,638 - 4,245,043 17 1,187,811 5 233,167 1 35,041 - 11,284 - 1,467,303 6 5,712,346 23 6,536,092 26 66,950 - 2,607,075 11 3,185,793 13 6,092,023 24 11,884,891 48 745,532 3 19,233,465 77 151,011 - 19,384,476 77 $ 25,096,822 100		December 31, 2020
				Amount % $ 294,665 1 478 - 2,253,316 10 75,457 - 5,718 - 7,955 - 464,831 2 895,947 4 52,251 - 1,309 - 31 - 283,445 1 48,563 - 7,674 - 4,391,640 18 - - 1,499,279 6 41,797 - 10,077,521 42 6,680,071 28 308,924 1 444,858 2 8,075 - 8,245 - 642,147 3 379 - 19,711,296 82 $ 24,102,936 100 $ 1,467,000 6 1,231,875 5 4,457 - 132,997 1 494,546 2 45,801 - 294,528 1 48,156 - 56,039 1 20,025 - 3,795,424 16 1,188,219 5 259,001 1 64,050 - 10,889 - 1,522,159 6 5,317,583 22 6,536,092 27 65,822 - 2,491,500 11 3,185,793 13 5,838,490 24 11,515,783 48 538,530 2 18,656,227 77 129,126 1 18,785,353 78 $ 24,102,936 100

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

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 24 and 32) OPERATING COSTS (Notes 12, 22 and 32) GROSS PROFIT OPERATING EXPENSES (Notes 22, 25 and 32) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain) Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES(Notes 14, 25 and 32) Interest income Other income Other gains and losses Interest expenses Share of profit or loss of associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 26) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (Notes 23 and 26) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income or loss of associates accounted for using the equity method		2021 Amount % $ 6,079,107 100 4,947,290 82 1,131,817 18 84,347 2 261,793 4 78,683 1 (3,208 ) - 421,615 7 710,202 11 1,109 - 207,695 3 (22,352) - (29,292) - 372,900 6 530,060 9 1,240,262 20 126,036 2 1,114,226 18 9,967 1 243,289 4 6,884 -		2020
				Amount % $ 5,426,217 100 4,519,186 83 907,031 17 101,731 2 241,974 5 69,195 1 989 - 413,889 8 493,142 9 1,361 - 226,721 4 (100,096) (2) (31,401) - 707,787 13 804,372 15 1,297,514 24 37,719 1 1,259,795 23 (7,666) - (27,180) - (1,595) - (Continued)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Share of the other comprehensive income or loss of associates accounted for using the equity method Other comprehensive income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 27) Basic Diluted		2021 Amount % $ 351 - 260,491 5 (53,545 ) (1 ) (53,545 ) (1 ) 206,946 4 $ 1,321,172 22 $ 1,088,078 18 26,148 - $ 1,114,226 18 $ 1,295,080 21 26,092 1 $ 1,321,172 22 $ 1.66 $ 1.66		2020
				Amount % $ 1,533 - (34,908 ) - 114,138 2 114,138 2 79,230 2 $ 1,339,025 25 $ 1,247,252 23 12,543 - $ 1,259,795 23 $ 1,326,470 25 12,555 - $ 1,339,025 25 $ 1.91 $ 1.90

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

(Concluded)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

			Equity Attributable to Owners of	Equity Attributable to Owners of	Equity Attributable to Owners of	the Company						Non-controlling Interests $ 119,589 - - ( 2,238 ) - - 12,543 12 12,555 ( 780 ) - 129,126 - - ( 2,017 ) - - 26,148 ( 56 )	Total Equity
Capital Stock - Common Stock $ 6,536,092 - - - - - - - - - - 6,536,092 - - - - - - -		Capital Surplus Legal Reserve $ 41,430 $ 2,377,952 - 113,548 - - 418 - 1,491 - 22,483 - - - - - - - - - - - 65,822 2,491,500 - 115,575 - - 527 - 605 - 4 ) - - - - -	Retained Earnings Special Reserve Unappropriated Earnings $ 3,185,793 $ 5,449,899 - ( 113,548 ) - ( 653,609 ) - - - ( 7,266 ) - - - 1,247,252 - - - 1,247,252 - - - ( 84,238 ) 3,185,793 5,838,490 - ( 115,575 ) - ( 718,970 ) - - - - - - - 1,088,078 - -				Other Equity			Total $ 392,291 - - - 17,217 ) - - 79,218 79,218 - 84,238 538,530 - - - - - - 207,002
			Special Reserve $ 3,185,793 - - - - - - - - - - 3,185,793 - - - - - - -		Exchange Differences on Translating Foreign Operations ( $ 1,006,436 ) - - - - - - 114,138 114,138 - - ( 892,298 ) - - - - - - ( 53,545 )	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income $ 1,342,691 - - - - - - ( 29,936 ) ( 29,936 ) - 84,238 1,396,993 - - - - - - 241,879	Remeasurement of Defined Benefit Plans $ 56,036 - - - - - - ( 4,984 ) ( 4,984 ) - - 51,052 - - - - - - 18,668		other
	(			( ( ( ( ( (	( ( (	( (	( (	( (			( ( ( (	( ( ( (	$ 18,103,046 - ( 653,609 ) ( 1,820 ) ( 22,992 ) 22,483 1,259,795 79,230 1,339,025 ( 780 ) - 18,785,353 - ( 718,970 ) ( 1,490 ) 605 ( 4 ) 1,114,226 206,946 (Continued)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

			Equity Attributable to Owners of	Equity Attributable to Owners of	the Company					Non-controlling Interests 26,092 ( 2,190 ) $ 151,011	Total Equity	Total Equity
Capital Stock - Common Stock - - $ 6,536,092	Capital Surplus - - $ 66,950		Retained Earnings Special Reserve Unappropriated Earnings - 1,088,078 - - $ 3,185,793 $ 6,092,023			Other Equity			Total 207,002 - $ 745,532
		Legal Reserve - - $ 2,607,075	Special Reserve - - $ 3,185,793	Exchange Differences on Translating Foreign Operations ( 53,545 ) - ($ 945,843 )	Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income 241,879 - $ 1,638,872	Remeasurement of Defined Benefit Plans 18,668 - $ 69,720		other
				( (			(			(	(	1,321,172 2,190 ) $ 19,384,476

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

(Concluded)

10 -

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (gain) recognized Net gain on fair value changes of financial assets designated as at fair value through profit or loss Interest expenses Interest income Dividend income Share of profit of associates Loss (Gain) on disposal of property, plant and equipment net Gain on disposal of investment properties Gain on disposal of other intangible assets Inventory write-downs Impairment losses on assets Gain on lease modification Changes in operating assets and liabilities Contract assets (Including related parties) Notes receivable Accounts receivable (Including related parties) Other receivables Inventories Prepayments Other current assets Contract liabilities Notes payable (Including related parties) Accounts payable (Including related parties) Other payables Other current liabilities Net defined benefit liability Cash generated from operations Interest received Dividends received Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions of financial assets at fair value through other comprehensive income Proceeds from the liquidation of financial assets at fair value through other comprehensive income Increase in financial assets at amortized cost	2021 $ 1,240,262 173,235 3,183 (3,208) 4,201 29,292 (1,109) (160,502) (372,900) 17 - (2,989) 272 - - 8,234 14,742 (261,593) (1,164) (14,669) 29,653 2,959 5,818 (63,727) 130,364 7,284 613 (19,042 ) 749,226 1,109 699,022 (67,146 ) 1,382,211 (552,449) - (5,726)	2020 $ 1,297,514 135,260 1,800 989 23 31,401 (1,361) (172,561) (707,787) (760) (8,579) - 443 103,012 (3) 3,101 (46,691) (89,219) 471 (19,718) (26,630) 4,246 (2,911) 7,714 11,287 37,114 (9,015) (26,544 ) 522,596 1,385 532,834 (42,636 ) 1,014,179 (50,446) 21,039 (14,866) (Continued)

11 -

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Decrease in financial assets at amortized cost Acquisitions of financial assets at fair value through profit or loss Refunds from financial assets at fair value through profit or loss Acquisitions of investments accounted for using equity method Payments for property, plant and equipment Refunds from disposal of property, plant and equipment Payments for intangible assets Refunds from disposal of intangible assets Payments for investment properties Refunds from disposal of investment properties Decrease in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments from short-term bills payable Proceeds from guarantee deposits received Refund of guarantee deposits received Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Acquisitions of non-controlling interests Interest Paid Dividends paid to non-controlling interests Net cash used in financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2021 $ 25,295 (176,719) 60,608 (27,000) (203,984) 10 (3,523) 3,000 (210) - 379 (880,319 ) 313,000 (8,000) 655 (260) (59,836) (718,970) (1,490) (27,434) (2,190 ) (504,525 ) (2,633) 294,665 $ 292,032	2020 $ 39,512 - 877 - (168,830) 786 (2,021) - - 28,364 - (145,585 ) 185,000 (272,000) 200 (680) (49,533) (653,613) (1,820) (31,345) (780 ) (824,571 ) 44,023 250,642 $ 294,665

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

(Concluded)

12 -

Universal Cement Corporation and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Universal Cement Corporation (the Company) was incorporated in the Republic of China (ROC) in March 1960. The Company mainly manufactures and sells cement, ready mixed concrete and gypsum board panels.

The Company’s shares have been listed on the Taiwan Stock Exchange (TWSE) since February 1971.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved by the Company’s board of directors on March 28, 2022.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. The initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

Except for the following, the application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies:

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group’s accounting policies.

b. The IFRSs endorsed by the FSC for application starting from 2022

	Effective Date
New IFRSs	Announced by IASB
“Annual Improvements to IFRS Standards 2018-2020”	January 1, 2022 (Note 1)
Amendments to IFRS 3 “Reference to the Conceptual Framework”	January 1, 2022 (Note 2)
Amendments to IAS 16 “Property, Plant and Equipment: Proceeds	January 1, 2022 (Note 3)
before Intended Use”

Amendments to IAS 37 “Onerous Contracts—Cost of Fulfilling a January 1, 2022 (Note 4) Contract”

Note 1：The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied
13 -

retrospectively for annual reporting periods beginning on or after January 1, 2022.

Note 2：The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 3：The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 4：The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the financial statements were authorized for issue, the Group has assessed that the adoption of other standards or interpretations will not have a significant impact on the Group’s financial position and performance.

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

Effective Date New IFRSs Announced by IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contract” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS January 1, 2023 17-Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 2) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 3) Amendments to IAS 12 “Deferred Tax related to Assets and January 1, 2023 (Note 4) Liabilities arising from a Single Transaction”

Note 1：Except for otherwise stated, the newly issued/revised/amended standards or interpretations become effective after the annual reporting period starting on the respective dates.

Note 2：The amendments apply to the annual reporting period starting after January 1, 2023 in extension.
Note 3：The amendments apply to changes in accounting estimates and changes in accounting policies that occurred during the annual reporting period starting after January 1, 2023.
Note 4：Except for deferred taxes that will be recognized on January 1, 2022 for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.
Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments stated that the Group shall determine the information on significant accounting policies to be disclosed based on the definition of materiality. Where it is reasonably expected that the information on significant accounting policies would affect the decisions made by primary users of the financial statement for general purposes based on such financial statements, such information on significant accounting policies is material. The amendments also clarified ：

14 -
(1) Information on accounting policies related to immaterial transactions, other matters or circumstances is immaterial, and the Group is not required to disclose such information.
(2) The Group may determine the information on accounting policies related to immaterial transactions, other matters or circumstances is material due to its nature, even in the case when the amounts are immaterial.
(3) All information on accounting policies not related to immaterial transactions, other matters or circumstances is material.

In addition, the amendments provided examples describing that the information may be material when it is related to material transactions, other matters or circumstances under the following circumstances:

(1) The Group changed its accounting policies during the reporting period, and such changes resulted in significant changes in the information of the financial statements;
(2) The Group elected applicable accounting policies from options permitted by the standards;
(3) As no requirement is provided under any specific standards, the Group established the accounting policies based on IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”;
(4) Relevant accounting policies where the Group disclosed the decisions that required significant judgments or assumptions; or
(5) Information that involves complicated accounting requirements and users of the financial statements depends on such information to understand material transactions, other matters or circumstances.
Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments stipulated that accounting estimates are monetary amounts in the financial statements affected by measurement uncertainties. Upon the application of accounting policies, the Group may not be able to directly observe, but have to estimate the monetary amounts to measure the items in the financial statements. Therefore, accounting estimates shall be established by using the measuring techniques and inputs to serve such purposes. Where effects arising from the changes in measuring techniques and inputs are not corrections to errors during the previous period, such changes are changes in accounting estimates.

Except for the effects above, as of the date of approving the issuance of this consolidated financial report, the Group is still evaluating the effects of amendments to other standards and interpretations on the financial positions and financial performance; relevant effects are to be disclosed upon the completion of the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for

15 -

financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
3) Level 3 inputs are unobservable inputs for the assets or liabilities.
c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e. its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted

16 -

and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 13 and table 6 for detailed information on subsidiaries (including percentages of ownership and main business).

e. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting consolidated financial statements, the functional currencies of the Group entities (including subsidiaries in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

f. Inventories

Inventories consist of raw materials and supplies, merchandise, finished goods and work-in-process. Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

g. Investment in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates.

Under the equity method, an investment in an associate is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group’s share of equity of associates.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after

17 -

reassessment, is recognized immediately in profit or loss.

When the Group subscribes for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus – changes in capital surplus from investments in associates accounted for using the equity method. If the Group’s ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group’s consolidated financial statements only to the extent that interests in the associate are not related to the Group.

h. Property, plant and equipment

Property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

18 -
i. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

For a transfer of classification from property, plant and equipment to investment properties, the deemed cost of the property for subsequent accounting is its carrying amount at the end of owner-occupation.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

j. Intangible assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

k. Impairment of property, plant and equipment, investment properties, right-of-use assets and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, investment properties, right-of-use assets and intangible assets to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

l. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted

19 -

from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a) Measurement category

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with dividends or interest and any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 31.

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes receivable, accounts receivable, other receivables and financial assets at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

20 -
i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

b) Impairment of financial assets and contract assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable), as well as contract assets.

The Group always recognizes lifetime expected credit losses (i.e. ECLs) on accounts receivable and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group):

i. Internal or external information shows that the debtor is unlikely to pay its creditors.
21 -
ii. When a financial asset is more than 365 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

Equity instruments issued by a Group entity are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

Equity instruments issued by a Group entity are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

3) Financial liabilities

a) Subsequent measurement

All the financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

m. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of cement, ready mixed concrete and gypsum board panels. Sales of cement, ready mixed concrete and gypsum board panels are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Accounts receivable and contract assets are recognized concurrently. Certain payments,

22 -

which are retained by the customer as specified in the contract, are intended to ensure that the Group adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Group satisfies its performance obligations. When the customer initially purchases cement, the transaction price received is recognized as a contract liability until the goods have been delivered to the customer.

n. Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases.

When a lease includes both land and building elements, the Group assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the lessee. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. The Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

23 -

o. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

p. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service costs (including current service cost, as well as gains and losses on settlements) and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

The Group determines its current income (loss) according to the regulations established by the jurisdictions of the tax return to calculate its income tax payable (recoverable).

According to the Income Tax Law of ROC, an additional tax of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain the earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current years’ tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and

24 -

liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group's accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

Where the amendments to estimates only affect the current period, such amounts shall be recognized during the period when the amendments occurred. Where the amendments to estimates affect the current and future periods, such amounts shall be recognized during the period when the amendments occurred and in the future period.

The accounting policies adopted by the Group do not involve material accounting judgments, estimations and assumptions.

25 -

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalent (investments with original maturities less than 3 months) Time deposits		December 31	December 31
		2021 $ 414 239,618 52,000 $ 292,032	2020 $ 520 237,245 56,900 $ 294,665

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets mandatorily classified as at FVTPL-Current Non-derivative financial assets Domestic Listed shares and emerging market shares Mutual funds Financial assets mandatorily classified as at FVTPL-Non-current Non-derivative financial assets Limited Partnership		December 31	December 31
		2021 $ 89,895 471 $ 90,336 $ 22,022	2020 $ - 478 $ 478 $ -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Investments in equity instruments at FVTOCI-Current Domestic investments Listed shares and emerging market shares Investments in equity instruments at FVTOCI-Non-current Domestic investments Listed OTC Private Equity Unlisted shares		December 31	December 31
		2021 $ 2,549,259 $ 458,700 1,540,374 $ 1,999,074	2020 $ 2,253,316 $ - 1,499,279 $ 1,499,279

These investments in equity instruments are held for medium to strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for strategic purposes.

Chia Huan Tung Cement Corporation completed its liquidation and returned a share capital of $21,039 thousand during 2020. Relevant other interests – unrealized losses on financial assets at fair value through other comprehensive income of $84,238 thousand are transferred to retained earnings.

The Group purchase 22 million common share of Creative Sensor Inc. via private offering in November,

26 -
The holding of the share is still subject to three-year lock up period. The investment is regarded as for strategic purposes and therefore the value of which is assessed at FVTOCI.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturity of more than 3 months (a) Pledged time deposits (a) Non-current Pledged time deposits (a) Refundable deposits		December 31	December 31
		2021 $ 75,390 5,147 $ 80,537 $ 10,215 6,933 $ 17,148	2020 $ 75,390 67 $ 75,457 $ 35,864 5,933 $ 41,797

a. The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.09%-0.815% and 0.09%-0.815% per annum as of December 31, 2021 and 2020, respectively. The information on pledged time deposits is set out in Note 33.
b. Refer to Note 10 for information relating to the credit risk management and impairment of investments in financial assets at amortized cost.

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

Investments in debt instruments were classified as at amortized cost.

Financial assets at amortized cost - current Financial assets at amortized cost - non-current		December 31	December 31
		2021 $ 80,537 17,148 $ 97,685	2020 $ 75,457 41,797 $ 117,254

The Group invests only in debt instruments that have low credit risk for the purpose of impairment assessment. The credit rating information is supplied by independent rating agencies. In determining the expected credit losses for debt instrument investments, the Group considers the historical default rates of each credit rating supplied by external rating agencies, the current financial condition of debtors, and the future prospects of the industries. Due to the debt instrument investments have low credit risk and sufficient ability to settle contractual cash flows, as of December 31, 2021 and 2020, no expected credit losses have been recognized in financial assets measured at amortized cost.

27 -

11. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES)

Notes receivable At amortized cost Notes receivable - operating Notes receivable - non-operating Accounts receivable (Including related parties) At amortized cost Less: Allowance for impairment loss		December 31	December 31
		2021 $ 449,757 332 $ 450,089 $ 1,216,500 5,124 $ 1,211,376	2020 $ 462,720 2,111 $ 464,831 $ 957,906 9,708 $ 948,198

The average collection period for receivables due to sales was between 30 to 90 days. No interest was charged on accounts receivable. In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group recognizes loss allowance based on the use of lifetime expected credit losses on accounts receivable. The expected credit losses on accounts receivable are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off an account receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For account receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Notes receivable

The Group analyzed notes receivable was not past due based on past due status, and the Group did not recognize an expected credit loss for notes receivable as of December 31, 2021 and 2020.

Accounts receivable (Including related parties)

The following table details the loss allowance of accounts receivables based on the Group’s provision matrix.

28 -

December 31, 2021

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2020 Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Less than 30 Days 0.05% ~ 11.53% $ 878,071 (1,057) $ 877,014 Less than 30 Days 0.03% ~ 7.91% $ 732,181 (1,502) $ 730,679	31 to 60 Days 0.14% ~ 0.44% $ 193,615 (442) $ 193,173 31 to 60 Days 0.09 ~ 0.44% $ 129,885 (209) $ 129,676	61 to 90 Days 91 to 120 Days 0.41% ~ 0.75% 1.24% ~ 1.52% $ 88,756 $ 46,085 (480) (632) $ 88,276 $ 45,453 61 to 90 Days 91 to 120 Days 0.29% ~ 0.67% 1.13% ~ 1.33% $ 62,193 $ 18,612 (215) (230) $ 61,978 $ 18,382	121 to 150 Days 2.89% ~ 7.17% $ 5,255 (196) $ 5,059 121 to 150 Days 2.99% ~ 6.54% $ 6,499 (377) $ 6,122	151 to 365 Days 9.74% ~ 23.42% $ 2,508 (107) $ 2,401 151 to 365 Days 11.28% ~ 17.39% $ 1,982 (621) $ 1,361	Over 365 Days 100% $ 2,210 (2,210) $ - Over 365 Days 100% $ 6,554 (6,554) $ -	Total $1,216,500 (5,124) $1,211,376
							Total $ 957,906 (9,708) $ 948,198

The movements of the loss allowance of contract asset and accounts receivable (Including related parties) were as follows:

December 31,2021

Contract Asset (Including related parties) Accounts Receivable (Including related parties) Balance at January 1, 2021 $ 3,369 $ 9,708 Less: Net remeasurement of loss allowance (1,623) (1,585) Less: Amounts written off - (2,999 ) Balance at December 31, 2021 $ 1,746 $ 5,124 December 31, 2020	Total $ 13,077 (3,208) (2,999 )
	$ 6,870

Contract Asset (Including related parties) Accounts Receivable (Including related parties) Balance at January 1, 2020 $ 3,898 $ 8,190 Add: Net remeasurement of loss allowance (529 ) 1,518 Balance at December 31, 2020 $ 3,369 $ 9,708	Total $ 12,088 989
	$ 13,077

29 -

12. INVENTORIES

Merchandise Finished goods Work in process Raw materials and supplies		December 31	December 31
		2021 $ 9,608 82,971 10,037 195,226 $ 297,842	2020 $ 19,071 74,625 10,531 179,218 $ 283,445

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2021 and 2020 was $ 4,947,290 thousand and $ 4,519,186 thousand, respectively.

13. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements were as follows:

Investor
Investee
Nature of Activities
Universal Cement
Corporation
Chiayi Concrete Industrial
Corporation
Manufacturing and marketing of
ready-mixed concrete
〞
Huanchung Cement International
Corporation
Manufacturing, marketing, importing
and exporting of cement and
cement clinker
〞
Kaohsiung Harbor Transport
Company
Trucking operation
〞
Universal Investment Corporation
Investment activities
〞
Universal Concrete Industrial
Corporation
Manufacturing and marketing of
ready-mixed concrete and gravel
〞
Uneo Incorporated
Marketing of electronic products
Li Yong Development Corporation
Investment activities, trading for real
estate and leasing business
Universal Investment
Corporation
Universal Concrete Industrial
Corporation
Manufacturing and marketing of
ready-mixed concrete and gravel
〞
Chiayi Concrete Industrial
Corporation
Manufacturing and marketing of
ready-mixed concrete
〞
Huanchung Cement International
Corporation
Manufacturing, marketing, importing
and exporting of cement and
cement clinker Proportion of Ownership
December 31
2021
2020
Remark
86.63
86.63
-
69.99
69.99
-
100.00
100.00
-
100.00
100.00
-
58.12
57.19
Note
100.00
100.00
-
100.00
100.00
-
0.87
0.87
-
0.01
0.01
-
0.01
0.01
-

Note : The company obtained 124 thousand shares and 165 thousand shares held by the minority shareholders of Universal Concrete Industrial Corporation from June to August 2021 and October 2020, respectively, resulting in an increase in the shareholding ratio.

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Material associate Lioho Machine Works Ltd. Associates that are not individually material Tainan Concrete Industrial Corporation		December 31	December 31
		2021 $ 9,810,902 81,943 $ 9,892,845	2020 $ 10,023,552 53,969 $ 10,077,521

30 -

a. Material associates

Name of Associate Lioho Machine Works Ltd.	Proportion of Ownership and Voting Rights
	December 31
	2021 2020 29.86% 29.86%

Refer to Table 6 “Information on Investees” for the nature of activities, principal place of business and country of incorporation of the associates.

The share of net income and other comprehensive income from associates under equity method were accounted for based on the audited financial statements.

The summarized financial information below represents amounts shown in the financial statements of Lioho Machine Works Ltd. which were prepared in accordance with IFRSs and adjusted by the Group for equity accounting purposes.

Equity Operating revenue Net profit for the year Other comprehensive gain Dividends received from Lioho Machine Works Ltd.		December 31	December 31
		2021 2020 $ 32,856,494 $ 33,568,622 For the Year Ended December 31
		2021 $ 7,518,260 $ 1,240,141 $ (154,295 ) $ 537,489	2020 $ 4,505,629 $ 2,367,104 $ 378,456 $ 358,326

31 -

15. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2020 Additions Disposals Reclassification from investment properties Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposals Reclassification from investment properties Impairment Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Additions Disposals Reclassification to investment properties Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Disposals Balance at December 31, 2021 Carrying amounts at December 31, 2021	Land $ 4,692,446 - - 404,481 $ 5,096,927 $ - - - - - $ - $ 5,096,927 $ 5,096,927 - - (491,945 ) $ 4,604,982 $ - - - $ - $ 4,604,982	Buildings $ 1,638,183 42,127 (380 ) 11,853 $ 1,691,783 $ 1,116,578 21,633 (380 ) 12,097 - $ 1,149,928 $ 541,855 $ 1,691,783 359,503 (39 ) - $ 2,051,247 $ 1,149,928 24,257 (12 ) $ 1,174,173 $ 877,074	Machinery and equipment Transportation equipment $ 3,346,677 $ 544,029 66,683 31,013 (8,550 ) (14,260 ) - - $ 3,404,810 $ 560,782 $ 3,190,811 $ 482,891 30,847 14,365 (8,548 ) (14,236 ) - - - - $ 3,213,110 $ 483,020 $ 191,700 $ 77,762 $ 3,404,810 $ 560,782 67,043 111,831 (6,340 ) (5,812 ) - - $ 3,465,513 $ 666,801 $ 3,213,110 $ 483,020 36,831 31,131 (6,340 ) (5,812 ) $ 3,243,601 $ 508,339 $ 221,912 $ 158,462	Other equipment $ 748,423 33,092 (22,941 ) - $ 758,574 $ 563,242 16,349 (22,941 ) - 7 $ 556,657 $ 201,917 $ 758,574 27,159 (10,378 ) - $ 775,355 $ 556,657 20,100 (10,378 ) $ 566,379 $ 208,976	Construction in progress $ 564,611 5,299 - - $ 569,910 $ - - - - - $ - $ 569,910 $ 569,910 249,380 - - $ 819,290 $ - - - $ - $ 819,290	Total $11,534,369 178,214 (46,131 ) 416,334 $12,082,786 $ 5,353,522 83,194 (46,105 ) 12,097 7 $ 5,402,715 $ 6,680,071 $12,082,786 814,916 (22,569 ) (491,945 ) $12,383,188 $ 5,402,715 112,319 (22,542 ) $ 5,492,492 $ 6,890,696

Partial equipment of the Group’s building material segment is idle. According to the assessment, the future recoverable amount is less than its carrying amount; therefore, the Group recognized an impairment loss of $103,012 thousand under non-operating expenses during 2020.

The future recoverable amount is determined using the replacement cost method, taking into account all costs required to replace or build an entirely new asset under the current condition, less the physical depreciation, functional depreciation, and economic depreciation incurred to the assets of appraisal.

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:

Buildings
Main buildings	20-60 years
Outbuildings and construction	4-16 years
Engineering systems	9-16 years
Machinery and equipment	2-21 years
Transportation equipment	2-7 years
Other equipment	2-20 years

32 -

16. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Machinery Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Machinery		December 31	December 31
	2021 2020 $ 3,001 $ 3,089 269,633 297,251 8,708 8,584 $ 281,342 $ 308,924 For the Year Ended December 31
		2021 $ 32,251 $ 806 55,199 3,732 $ 59,737	2020 $ 134,385 $ 847 46,334 3,603 $ 50,784

b. Lease liabilities

Carrying amounts Current Non-current Ranges of discount rates for lease liabilities were as follows: Land Buildings Machinery		December 31
		2021 2020 $ 54,192 $ 56,039 $ 233,167 $ 259,001 December 31
	2021 2020 1.422% - 1.71% 1.422% - 1.71% 0.9% - 1.71% 0.9% - 1.71% 0.9% - 1.42% 0.9% - 1.42%

c. Material lease-in activities and terms

The Group leases certain land, buildings and machinery for the use of plants and offices with lease terms of 3 to 10 years. The Group is prohibited from subleasing or transferring all or any portion of the land and buildings leased from Taiwan International Port Corporation without the lessor’s consent.

d. Other lease information
33 -

Expenses relating to short-term leases Expenses relating to low-value assets leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 3,812 $ 430 $ 68,332	2020 $ 2,280 $ 430 $ 55,878

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

17. INVESTMENT PROPERTIES

Cost Balance at January 1, 2020 Disposals Reclassification to property, plant and equipment Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposals Reclassification to property, plant and equipment Balance at December 31, 2020 Carrying amounts at December 31, 2020	Land $ 913,602 (13,708 ) (404,481 ) $ 495,413 $ 80,167 - - - $ 80,167 $ 415,246	Buildings $ 189,269 (7,439 ) (11,853 ) $ 169,977 $ 152,542 1,282 (1,362 ) (12,097 ) $ 140,365 $ 29,612	Total $ 1,102,871 (21,147 ) (416,334 ) $ 665,390 $ 232,709 1,282 (1,362 ) (12,097 ) $ 220,532 $ 444,858 (Continued)

34 -

Cost Balance at January 1, 2021 Additions Reclassification from property, plant and equipment Balance at December 31, 2021 Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expense Balance at December 31, 2021 Carrying amounts at December 31, 2021	Land $ 495,413 210 491,945 $ 987,568 $ 80,167 - $ 80,167 $ 907,401	Buildings $ 169,977 - - $ 169,977 $ 140,365 1,179 $ 141,544 $ 28,433	Total $ 665,390 210 491,945 $ 1,157,545 $ 220,532 1,179 $ 221,711 $ 935,844

As of December 31, 2021 and 2020, the Group has not yet completed the property registration of the land amounting to $113,000 thousand and $112,790 thousand because of the restriction in the regulations but the property has been secured with mortgage registration.

The investment properties are depreciated using the straight-line method over 10-61 years of useful lives.

The determination of fair value was performed by independent qualified professional values. The valuation was arrived at by reference to market evidence of transaction prices for similar properties and the fair value as appraised or the management refer to actual transaction price in neighboring areas.

Fair value		December 31	December 31
		2021 $ 2,663,299	2020 $ 2,158,644

The maturity analysis of lease payments receivable under operating leases of investment properties were as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 onwards			December 31	December 31
		2021 $ 22,700 17,550 14,465 12,592 9,689 16,923 $ 93,919		2020 $ 24,040 15,816 7,090 4,649 4,560 2,280 $ 58,435

35 -

18. OTHER INTANGIBLE ASSETS

	Patents	Licenses and Franchises	Trademarks	Computer Software
					Total

Cost
Balance at January 1, 2020	$ 7,983	$ 5,000	$ 20	$ 4,858	$ 17,861
Additions	407	-	-	1,614	2,021

Balance at December 31, 2020	$ 8,390	$ 5,000	$ 20	$ 6,472	$ 19,882


Accumulated amortization
Balance at January 1, 2020	$ 3,793	$ 2,632	$ 7	$ 3,575	$ 10,007
Amortization expense	626	237	2	935	1,800

Balance at December 31, 2020	$ 4,419	$ 2,869	$ 9	$ 4,510	$ 11,807


Carrying amounts at December 31, 2020	$ 3,971	$ 2,131	$ 11	$ 1,962	$ 8,075


Cost
Balance at January 1, 2021	$ 8,390	$ 5,000	$ 20	$ 6,472	$ 19,882
Additions	288	773	-	2,462	3,523
Disposals	-	(11 )	-	-	(11 )

Balance at December 31, 2021	$ 8,678	$ 5,762	$ 20	$ 8,934	$ 23,394


Accumulated amortization
Balance at January 1, 2021	$ 4,419	$ 2,869	$ 9	$ 4,510	$ 11,807
Amortization expense	682	999	2	1,500	3,183

Balance at December 31, 2021	$ 5,101	$ 3,868	$ 11	$ 6,010	$ 14,990


Carrying amounts at December 31, 2021	$ 3,577	$ 1,894	$ 9	$ 2,924	$ 8,404

Other intangible assets are amortized on a straight-line basis over the estimated useful lives as follows:

Patents	3-20 years
Licenses and franchises	10 years
Trademarks	10 years
Computer Software	3 years

19. BORROWINGS

a. Short-term borrowings

Unsecured borrowings Line of credit borrowings		December 31	December 31
		2021 $ 1,780,000	2020 $ 1,467,000

The range of interest rates was 0.82% - 0.85% and 0.85% - 1.38% per annum as of December 31, 2021 and 2020.

36 -

b. Short-term bills payable

Commercial papers Less: Unamortized discount on bills payable		December 31	December 31
		2021 $ 1,225,000 964 $ 1,224,036	2020 $ 1,233,000 1,125 $ 1,231,875

The Group did not provide any collateral over these balance.

Outstanding short-term bills payable as follows:

Promissory Institutions
Nominal Amount
December 31, 2021
International Bills Finance Co., Ltd.
$ 305,000

Ta Ching Bills Finance Co., Ltd.
300,000
China Bills Finance Co., Ltd.
275,000
Taiwan Finance Co., Ltd.
190,000
Mega Bills Finance Co., Ltd.

155,000

$ 1,225,000

December 31, 2020
China Bills Finance Co., Ltd.
$ 350,000

International Bills Finance Co., Ltd.
338,000
Taiwan Finance Co., Ltd.
240,000
Ta Ching Bills Finance Co., Ltd.
200,000
Mega Bills Finance Co., Ltd.

105,000

$ 1,233,000

Discount
Amount
Carrying Value
Interest Rate
$ 164
$ 304,836
0.808% ~ 1.358%
91
299,909
0.848%
375
274,625
0.848% ~ 1.248%
88
189,912
0.848%

246

154,754
0.998% ~ 1.358%
$ 964
$ 1,224,036
$ 293
$ 349,707
0.858% ~ 1.28%
217
337,783
0.888% ~ 1.358%
158
239,842
0.858%
156
199,844
0.888%

301

104,699
1.218% ~ 1.458%
$ 1,125
$ 1,231,875

37 -

20. NOTES PAYABLE AND ACCOUNTS PAYABLE (INCLUDING RELATED PARTIES)

Notes payable and accounts payable (including related parties) were resulted from operating activities. The average credit period on purchases is 30 to 65 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms. Therefore, no interest was charged on the payables.

21. OTHER PAYABLES AND OTHER LIABILITIES

Other payable Payable for salaries or bonus Payable for taxes Payable for remuneration to directors Payable for remuneration to employees Payable for freight Payables for equipment Payable for annual leave Others Other liabilities Temporary receipts Receipts in advance Others		December 31	December 31
		2021 $ 115,370 25,157 22,419 21,399 20,359 13,912 12,039 65,749 $ 296,404 $ 19,637 340 661 $ 20,638	2020 $ 107,899 18,204 23,487 23,175 14,836 21,021 11,397 74,509 $ 294,528 $ 19,107 344 574 $ 20,025

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plan adopted by the Group in accordance with the Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Group contributes amounts equal to 2%~3% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Group has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans

38 -

were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability		December 31	December 31
		2021 $ 258,000 (222,959 ) $ 35,041	2020 $ 284,147 (220,097 ) $ 64,050

Movements in net defined benefit liability were as follows:

	Present Value of	Present Value of
	the Defined
		Benefit	Fair	Value of the	Net Defined
	Obligation		Plan Assets		Benefit Liability
Balance at January 1, 2020	$	279,649	$	(196,721 )	$	82,928
Current service cost		4,798		-		4,798
Net interest expense (income)		2,237		(1,603 )		634
Recognized in profit or loss		7,035		(1,603 )		5,432
Remeasurement
Return on plan assets (excluding		-		(6,842)		(6,842)
amounts included in net interest)
Actuarial loss - changes in		4,250		-		4,250
demographic assumptions
Actuarial loss - changes in financial		21,253		-		21,253
assumptions
Actuarial gain - experience		(10,995 )		-		(10,995 )
adjustments
Recognized in other comprehensive		14,508		(6,842)		7,666
income
Contributions from the employer		-		(31,976)		(31,976)
Benefits paid		(17,045 )		17,045		-
Balance at December 31, 2020		284,147		(220,097 )		64,050
Current service cost		4,284		-		4,284
Net interest expense (income)		995		(783 )		212
Recognized in profit or loss		5,279		(783 )		4,496
Remeasurement
Return on plan assets (excluding		-		(3,156)		(3,156)
amounts included in net interest)
Actuarial loss - changes in		12,988		-		12,988
demographic assumptions
Actuarial gain - changes in financial		(17,742)		-		(17,742)
assumptions
Actuarial gain - experience		(2,057 )		-		(2,057 )
adjustments
Recognized in other comprehensive		(6,811)		(3,156)		(9,967)
income
Contributions from the employer		-		(23,538)		(23,538)
Benefits paid		(24,615 )		24,615		-
Balance at December 31, 2021	$	258,000	$	(222,959 )	$	35,041

39 -

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 2,281 612 1,476 127 $ 4,496	2020 $ 2,822 757 1,696 157 $ 5,432

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
2) Interest risk: A decrease in the government and corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate Expected rate of salary increase	December 31
	2021 2020 0.75% 0.35% 1.63% - 4% 1.625% - 4%

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate 0.5% increase 0.5% decrease Expected rate of salary increase 0.5% increase 0.5% decrease		December 31	December 31
		2021 $ (10,956 ) $ 11,672 $ 11,013 $ (10,456 )	2020 $ (11,848 ) $ 12,648 $ 11,875 $ (11,254 )

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in

40 -

isolation of one another as some of the assumptions may be correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December 31	December 31
		2021 $ 6,926 7 - 10 years	2020 $ 7,019 7 - 11 years

23. EQUITY

a. Share capital

Number of shares authorized (thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued Capital surplus May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Treasury share transactions Differences between the actual equity value of subsidiaries acquired or disposed and its carrying amounts. May be used to offset a deficit only Share of changes in equities of associates Overdue dividends not collected by shareholders		December 31	December 31
		2021 2020 653,609 653,609 $ 6,536,092 $ 6,536,092 653,609 653,609 $ 6,536,092 $ 6,536,092 December 31
		2021 $ 21,606 945 21,920 22,479 $ 66,950	2020 $ 21,606 418 21,315 22,483 $ 65,822

b. Capital surplus

Note: Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, if the Company makes profit in a fiscal year, the profit shall be first utilized to pay taxes, offset losses of previous years, set aside as legal reserve with 10% of the remaining profit, set aside or reverse a special reserve in accordance with the laws and regulations, and lastly, together with any undistributed retained earnings, serve as the basis of

41 -

a distribution plan proposed by the Company’s board of directors in accordance with the resolution of the shareholders’ meeting pertaining to the distribution of dividends and bonus to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to employees’ compensation and remuneration of directors and supervisors in Note 25-f.

According to the Company’s Articles, dividends can be distributed by way of stock dividends and cash dividends. However, the ratio for stock dividend shall not exceed 50% of the total distribution unless the value of cash dividends is less than $ 0.5 per share. The distribution of dividends can be adjusted by shareholders based on the Company’s profit, capital status, and operating requirement.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company.

The appropriations of 2020 and 2019 earnings have been approved in the shareholders’ meetings on July 27, 2021 and June 15, 2020, respectively. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		2020 $ 115,575 $ 718,970 $ 1.1		2019
				$ 113,548 $ 653,609 $ 1

The appropriation of earnings for 2021 had been proposed by the Company’s board of directors on March 28, 2022. The appropriation and dividends per share were as follows:

	Appropriation of	Appropriation of	Dividends Per
		Earnings	Share (NT$)
Legal reserve	$	108,808
Cash dividends		653,609	$ 1

The appropriation of earnings for 2021 will subject to the resolution of the shareholders’ meeting.

d. Special reserves

First-time adoption IFRSs		December 31	December 31
		2021 $ 3,185,793	2020 $ 3,185,793

Because the increase in the retained earnings caused by the first-time adoption of IFRSs was insufficient to be appropriated for provision, the Company had provided for special reserve based on the increase of the retained earnings, an adjustment that was recorded per Company policy on first-time adoption.

42 -

e. Other equity items

1) Exchange differences on translating the financial statements of foreign operations

For the year Ended	For the year Ended	For the year Ended
2021 $ (892,298) (53,545 ) $ (945,843 ) For the year Ended

	2021 $ (17,217) - $ (17,217 )	2020 $ - (17,217 ) $ (17,217 )

Note: Refer to the forward contract initially recognized for acquiring the equity instruments of subsidiaries.

43 -

f. Non-controlling interests

Balance at January 1 Share in profit (loss) for the year Other comprehensive income/(loss) during the year Remeasurement on defined benefit plans Remeasurement on defined benefit plans related income tax Disposal of partial equity(Note 28) Non-controlling dividend distribution Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 129,126 26,148 (70) 14 (2,017) (2,190 ) $ 151,011	2020 $ 119,589 12,543 15 (3) (2,238) (780 ) $ 129,126

24. REVENUE

Revenue from contracts with customers Revenue from sale of goods Revenue from rendering of services a. Contract balances Notes and accounts receivable (Including related parties) Contract assets - current Sale of goods Less: Allowance for impairment loss Contract assets from related parties Sale of goods Less: Allowance for impairment loss Contract liabilities - current Sale of goods		For the Year Ended December 31 2021 2020 $ 6,072,453 $ 5,418,715 6,654 7,502 $ 6,079,107 $ 5,426,217 December 31 January 1 2021 2020 2020 $ 1,661,465 $ 1,413,029 $ 1,278,637 $ 3,262 $ 7,114 $ 4,772 637 1,396 880 2,625 5,718 3,892 5,546 9,928 15,371 1,109 1,973 3,018 4,437 7,955 12,353 $ 7,062 $ 13,673 $ 16,245 $ 10,275 $ 4,457 $ 7,368	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
					2020 $ 5,418,715 7,502 $ 5,426,217 January 1
		2021 $ 1,661,465 $ 3,262 637 2,625 5,546 1,109 4,437 $ 7,062 $ 10,275			2020 $ 1,278,637 $ 4,772 880 3,892 15,371 3,018 12,353 $ 16,245 $ 7,368

In accordance with the terms of the contract, the customers retain a portion of contract price and the Group recognizes the amount as contract assets before completing the contractual obligations. The Group considers the historical expected loss rates and the state of the industry in estimating expected loss.

44 -

Expected credit loss rate Gross carrying amount of retention receivable Allowance for impairment loss (Lifetime ECLs)		December 31	December 31
		2021 20% $ 8,808 (1,746 ) $ 7,062	2020 20% $ 17,042 (3,369 ) $ 13,673

The movements of the loss allowance of contract assets refer to Note11.

b. Disaggregation of revenue

Concrete Cement Gypsum board panels Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 3,971,701 1,284,859 787,072 35,475 $ 6,079,107	2020 $ 3,370,194 1,299,136 742,434 14,453 $ 5,426,217

25. PROFIT BEFORE INCOME TAX a. Interest income

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
2021 2020 $ 1,109 $ 1,361 For the Year Ended December 31
2021 2020 $ 25,345 $ 26,086 160,502 172,561 21,848 28,074 $ 207,695 $ 226,721 For the Year Ended December 31
	2021 $ - - (540) (17) 2,989 (4,201) (7,000) (6,286) (7,297 ) $ (22,352 )	2020 $ (103,012) 8,579 (1,066) 760 - (23) - - (5,334 ) $ (100,096 )

45 -

d. Interest expense

Interest on loans Interest on lease liabilities Depreciation and amortization Property, plant and equipment Right-of-use assets Investment properties Intangible assets An analysis of depreciation - by function Operating costs Operating expenses Others (as non-operating income and expense) An analysis of amortization - by function Operating costs Operating expenses Employee benefits expense Short-term benefits Salaries Labor and health insurance Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 22)	For the Year Ended December 31 2021 2020 $ 25,038 $ 27,766 4,254 3,635 $ 29,292 $ 31,401 For the Year Ended December 31 2021 2020 $ 112,319 $ 83,194 59,737 50,784 1,179 1,282 3,183 1,800 $ 176,418 $ 137,060 $ 119,825 $ 83,413 52,231 50,565 1,179 1,282 $ 173,235 $ 135,260 $ 204 $ - 2,979 1,800 $ 3,183 $ 1,800 For the Year Ended December 31 2021 2020 $ 523,765 $ 491,232 51,243 46,260 42,885 44,027 617,893 581,519 21,361 19,185 4,496 5,432 25,857 24,617 $ 643,750 $ 606,136 (Continued)	For the Year Ended December 31 2021 2020 $ 25,038 $ 27,766 4,254 3,635 $ 29,292 $ 31,401 For the Year Ended December 31 2021 2020 $ 112,319 $ 83,194 59,737 50,784 1,179 1,282 3,183 1,800 $ 176,418 $ 137,060 $ 119,825 $ 83,413 52,231 50,565 1,179 1,282 $ 173,235 $ 135,260 $ 204 $ - 2,979 1,800 $ 3,183 $ 1,800 For the Year Ended December 31 2021 2020 $ 523,765 $ 491,232 51,243 46,260 42,885 44,027 617,893 581,519 21,361 19,185 4,496 5,432 25,857 24,617 $ 643,750 $ 606,136 (Continued)
		2021 $ 523,765 51,243 42,885 617,893 21,361 4,496 25,857 $ 643,750

e. Depreciation and amortization

f. Employee benefits expense

46 -

An analysis of employee benefits expense - by function Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 440,139 203,611 $ 643,750	2020 $ 408,871 197,265 $ 606,136

g. Employees’ compensation and remuneration of directors

The Company accrued employees’ compensation and remuneration of directors at the rates no less than 1% and no higher than 3%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors.

The employees’ compensation and remuneration of directors for the year ended December 31, 2021 and 2020 have been approved on March 28, 2022 and March 23, 2021, respectively as follows:

Accrual rate Employees’ compensation Remuneration of directors Amount Employees’ compensation Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 1.68% 1.73% 1.68% 1.73% For the Year Ended December 31
		2021 $ 20,860 $ 20,860	2020 $ 22,946 $ 22,946

If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences will be recognized in the next year as a change in accounting estimate.

There was no difference between the actual amounts of employees’ compensation and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2020 and 2019.

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

47 -

26. INCOME TAX

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

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Adjustments for prior years		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
			2021 $ 134,778 7,979 (4,219 ) 138,538 5,605 (18,107 ) (12,502 ) $ 126,036		2020 $ 49,601 16,163 (23,615 ) 42,149 (4,430) - (4,430 ) $ 37,719

A reconciliation of accounting profit and income tax expenses is as follows:

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
2021 2020 $ 1,240,262 $ 1,297,514 $ 248,052 $ 259,503 (32,382) (35,470) (72,875) (141,314) - (47,628) 966 12,756 (3,378) (2,883) 7,979 16,163 - 207 (22,326 ) (23,615 ) $ 126,036 $ 37,719 For the Year Ended December 31
2021 2020 $ 351 $ 1,533 For the Year Ended December 31
	2021 $ - $ 119,517	2020 $ 31 $ 48,156

48 -
d. Deferred tax assets and liabilities

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

For the year ended December 31, 2021

Deferred Tax Assets Temporary differences Allowance for impairment loss Defined benefit obligation Unrealized foreign exchange loss Unrealized loss for impaired inventories and obsolete and slow-moving inventories Unrealized payable promotion expenses Others Deferred Tax Liabilities Temporary differences Land value increment tax Defined benefit obligation Cash surrender value of life insurance	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 943 $ (510) $ - $ 433 708 14,268 49 15,025 4 94 - 98 260 (97) - 163 4,940 (2,865) - 2,075 1,390 1,506 - 2,896 $ 8,245 $ 12,396 $ 49 $ 20,690 $ 1,179,798 $ - $ - $ 1,179,798 8,345 (30) (302) 8,013 76 (76) - - $ 1,188,219 $ (106 ) $ (302 ) $ 1,187,811

49 -

For the year ended December 31, 2020

Deferred Tax Assets Temporary differences Allowance for impairment loss Defined benefit obligation Unrealized foreign exchange loss Unrealized loss for impaired inventories and obsolete and slow-moving inventories Unrealized payable promotion expenses Others Deferred Tax Liabilities Temporary differences Land value increment tax Defined benefit obligation Cash surrender value of life insurance	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance $ 605 $ 338 $ - $ 943 866 (145) (13) 708 61 (57) - 4 170 90 - 260 - 4,940 - 4,940 2,158 (768 ) - 1,390 $ 3,860 $ 4,398 $ (13 ) $ 8,245 $ 1,179,798 $ - $ - $ 1,179,798 9,923 (32) (1,546) 8,345 76 - - 76 $ 1,189,797 $ (32 ) $ (1,546 ) $ 1,188,219

e. Deductible temporary differences, unused loss carryforwards and unused investment credits for which no deferred tax assets have been recognized in the consolidated balance sheets.

Loss carryforwards Expire in 2031 Expire in 2030 Expire in 2029 Expire in 2028 Expire in 2027 Expire in 2026 Expire in 2025 Expire in 2024 Expire in 2023 Expire in 2022 Expire in 2021 Deductible temporary differences Impaired inventories and obsoleteand slow-movinginventories Net defined benefit obligation Impairment losses on assets		December 31	December 31
		2021 2020 $ 3,887 $ - 8,003 8,788 10,273 10,273 57,779 57,779 69,078 81,196 47,759 56,417 58,819 58,819 40,128 40,128 24,120 24,120 3,368 3,368 6,945 6,945 $ 330,159 $ 347,833 December 31
		2021 $ 34,027 - 287,600 $ 321,627	2020 $ 33,274 90,533 287,601 $ 411,408

50 -

f. Income tax examinations

Income tax returns through 2020 of Universal Investment Corporation, and 2019 of the Uneo Incorporated, Kaohsiung Harbor Transport Company, Chiayi Concrete Industrial Corporation, Huanchung Cement International Corporation, Universal Concrete Industrial Corporation and the Company have been assessed by the tax authorities.

27. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:

Net Profit for the Year

For the Year Ended December 31 2021 2020 Profit for the year $ 1,088,078 $ 1,247,252 Weighted average number of ordinary shares outstanding (in thousand shares)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,088,078 shares)	2020 $ 1,247,252

Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 653,609 1,197 $ 654,806	2020 $ 653,609 1,311 $ 654,920

Since the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

51 -

28. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

From June to August 2021 and in October 2020, the Group acquired shares held by the non-controlling interest of Universal Concrete, and its shareholding increased from 58.06% to 58.99% and 56.81% to 58.06% respectively.

The above transactions were accounted for as equity transactions since the Group did not cease to have control over these subsidiaries.

Cash consideration paid The proportionate share of the carrying amount of the net assets of the subsidiary transferred to non-controlling interests Differences recognized from equity transactions Line items adjusted for equity transactions Capital surplus - changes in percentage of ownership interest in subsidiaries	2021 2020	2021 2020	2021 2020
	Obtaining non-controlling interests
		$ (1,490) 2,017 $ 527 $ 527	$ (1,820) 2,238 $ 418 $ 418

29. CASH FLOWS INFORMATION

Cash used in obtaining property, plant and equipment by the Group during 2021 and 2020 was as below:

Increase in property, plant and equipment Payables on equipment Prepaid on equipment Total cash paid	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 814,916 7,109 (618,041 ) $ 203,984	2020 $ 178,214 (20,969) 11,585 $ 168,830

30. CAPITAL MANAGEMENT

The Group requires significant amounts of capital to build and expand its production facilities and equipment. The Group manages its capital in a manner to ensure that it has sufficient and necessary financial resources for working capital needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing and future operations.

31. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

The Group believes that the carrying amounts of financial instruments that are not measured at fair value, including cash and cash equivalents, contract assets, notes and accounts receivable, financial assets at amortized cost, short-term loans, accounts payable, and guarantee deposits received, recognized in the consolidated financial statements approximate their fair value.

52 -
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2021 Financial assets at FVTPL Listed shares Mutual funds Limited partnership Financial assets at FVTOCI Investments in equity instruments -Listed shares -Unlisted shares December 31, 2020 Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Investments in equity instruments -Listed shares -Unlisted shares	Level 1 $ 89,895 471 - $ 90,336 $ 2,549,259 - $ 2,549,259 Level 1 $ 478 $ 2,253,316 - $ 2,253,316	Level 2 $ - - - $ - $ 458,700 - $ 458,700 Level 2 $ - $ - - $ -	Level 3 $ - - 22,022 $ 22,022 $ - 1,540,374 $ 1,540,374 Level 3 $ - $ - 1,499,279 $ 1,499,279	Total $ 89,895 471 22,022
				$ 112,388
				$ 3,007,959 1,540,374
				$ 4,548,333
				Total $ 478
				$ 2,253,316 1,499,279
				$ 3,752,595

There were no transfers between Level 1 and 2 in the current and prior years.

2) Adjustments for financial instruments measured using level 3 fair value

For the year ended December 31, 2021

Balance at January 1 Purchased Recognized in income(other gains and losses) Recognized in other comprehensive income`（`Unrealized valuation gain (loss) on financial assets at fair value through other comprehensive income`）` Balance at December 31	Financial assets at fair value through profit or loss $ - 25,000 ( 2,978) - $ 22,022	Financial assets at fair value through other comprehensive income $ 1,499,279 20,000 - 21,095 $ 1,540,374		Total
	(		(	$ 1,499,279 45,000 2,978) 21,095
				$ 1,562,396

53 -

For the year ended December 31, 2020

Balance at January 1 Recognized in other comprehensive income`（`Unrealized valuation gain (loss) on financial assets at fair value through other comprehensive income`）` Additions Share capital returned for liquidation Balance at December 31	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income
		$ 1,418,905 81,413 20,000 (21,039) $ 1,499,279

3) Input and measurement technique of Level 2 fair value measurement.

Category of financial instrument Measurement technique and input value Investment of Equity Instrument Purchase of stock via private offering which is subject to a three-year-lock-up period. In light of the impact on the target to be measured due to the restriction of transaction, a discount is imposed to reflect the restricted liquidity of the stock. The target to be measure is the stock of a public listed company. The Closing price at the day of measurement was adopted as the fair value of an unrestricted stock price. The fair value of the restricted stock price is then derived via the Black-Scholes model.

4) Valuation techniques and inputs applied for Level 3 fair value measurement

The fair values of unlisted equity securities in ROC was estimated based on the recent net equity or transaction price. The marketing valuation method is based on the prices of comparable companies, and the value of the securities is estimated by comparing, analyzing and adjusting.

c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2021 2020 $ 112,388 $ 478 2,053,655 1,826,257 4,548,333 3,752,595 4,051,705 3,677,636

54 -
1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, net accounts receivable (including related parties), other receivables, and financial assets at amortized cost (current and non-current).
2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, notes payable, accounts payable (including related parties), other payables and deposits received.

d. Financial Risk Management Objectives and Policies

The Group’s major financial instruments include accounts receivable, accounts payables and short-term loans. The Group’s Corporate Treasury function provides services to the business departments, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze the exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in interest rate risk (see (a) below) and other price risk (see (b) below).

a) Interest rate risk

The Group was exposed to interest rate risk arising from short-term borrowing at New Taiwan dollar (NTD) market rates of overweight interest rates. Due to lower NTD borrowing rates and small borrowing position, the interest rate sensitivity is lower, and the interest rate risk is little risk to the Company.

The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2021 2020
	$ 149,685 $ 174,154 1,511,395 1,546,915 218,725 203,864 1,780,000 1,467,000

b) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities and mutual funds. The Group manages this exposure by maintaining a portfolio of investments with different risks. The Group’s equity price risk was mainly concentrated on equity instruments operating in shares and open-end mutual funds quoted in the Taiwan Stock Exchange. In addition, the Group will evaluate the price by the closing price of the equity investments and the net asset value of the fund every month.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity price risks at the end of the reporting period.

55 -

If equity prices of domestic listed equity securities(excluding private placement), which was hold by the Group calculated by $ 2,549,259 thousand and $ 2,253,316 thousand, had been 1% higher/lower, the pre-tax other comprehensive income for the year ended December 31, 2021 and 2020 would have increased/decreased by $ 25,493 thousand and $ 22,533 thousand, as a result of the changes in fair value of financial assets at FVTOCI.

2) Credit risk

Financial assets are exposed to the potential effects of outstanding contracts between the Group and its counterparty or other parties. Such effects include the credit risk concentration, components, contractual amounts, and other receivables of financial products engaged by the Group.

As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of counterparties to discharge an obligation and financial guarantees provided by the Group, could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets

In addition to the following paragraph, the main customers of its credit are good, and the Group will regularly annually review the customer’s credit status, appropriately adjust the credit line, and will require customers to provide the necessary guarantees or trade by cash in special situations. The sales department understands the customer’s credit status through external peer visits. The customers mentioned above, had no significant credit risk exposure.

Part of the concrete customers of the Group are individuals and small-scale enterprises, except for a few large customers are concrete construction companies, industry characteristics resulting in some small-scale enterprises. In addition to using credit limit controls to reduce credit risks and the relevant proceedings to protect their claims, the Group has set adequate allowance for bad debts for higher credit risk customers in accordance with company policy. The credit risk arising from its maximum possible amount is disclosed in the Note 11.

The Group has no significant concentration of credit risk.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

a) Liquidity and interest risk rate table for non-derivative financial liabilities

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

56 -

December 31, 2021

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities December 31, 2020 Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities	On Demand or Less than 3 Month $ 1,036,385 14,688 1,781,972 1,225,000 $ 4,058,045 On Demand or Less than 3 Month $ 967,872 16,006 1,169,075 1,233,000 $ 3,385,953	3 Months to 1 Year 1 Year to 5 Year 5 Year to 10 Year $ - $ 11,284 $ - 42,248 193,763 48,300 - - - - - - $ 42,248 $ 205,047 $ 48,300 3 Months to 1 Year 1 Year to 5 Year 5 Year to 10 Year $ - $ 10,889 $ - 44,193 179,635 88,918 300,503 - - - - - $ 344,696 $ 190,524 $ 88,918

The amount included above for variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

b) Financing facilities

It is important for the Group that loan is a resource of liquidity. As of December 31, 2021 and 2020, the Group has loan commitments $ 2,634,559 thousand, and $ 1,943,439 thousand, respectively.

32. TRANSACTIONS WITH RELATED PARTIES

Besides information disclosed elsewhere in the other notes, details of transactions between the Group and other related parties are disclosed below.

a. Name and relationship of related party

Related Party Name	Relationships of the Group
CHC Resources Corp.	The key management of the Group serves as a member of
	its board directors
Universal Construction Corp.	The key management of the Group serves as a member of
	its board directors
Sheng Yuan Investment Corp.	The key management of the Group
Pan Asia Corp.	The key management of the Group serves as supervisor
Tainan Concrete Industrial Corp.	Associates

57 -

b. Sales of goods

Account Items Related Parties Category Sales revenue The key management of the Group serves as a member its board of directors The key management of the Group serves as supervisor	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 62,364 52,864 $ 115,228	2020 $ 65,595 91,022 $ 156,617

The prices and terms to related parties were not significantly different from transactions with third parties. The credit terms were 1 to 3 months.

c. Purchase of goods

Related Parties Category The key management of the Group serves as a member of its board of directors	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 264,867	2020 $ 245,547

The purchase of goods is mainly gravel. The prices and terms to related parties were not significantly different from transactions with third parties. The credit terms were 30 to 65 days.

d. Contract assets

Related Party Category / Name The key management of the Group serves as supervisor Pan Asia Corp. Less: Allowance for impairment loss		December 31	December 31
		2021 $ 5,546 1,109 $ 4,437	2020 $ 9,928 1,973 $ 7,955

e. Receivables from related parties (Excluding contract assets)

Account Items Related Parties Category / Name Accounts receivable from related parties The key management of the Group serves as supervisor Pan Asia Corp. The key management of the Group serves as a member of its board directors Less: Allowance for impairment loss		December 31	December 31
		2021 $ 26,432 7,744 12 $ 34,164	2020 $ 47,098 5,172 19 $ 52,251

The outstanding receivables from related parties are unsecured.

58 -

f. Payables to related parties

Account Items Related Parties Category Accounts payable - related parties The key management of the Group serves as a member of its board of directors		December 31	December 31
		2021 $ 32,168	2020 $ 45,801

The outstanding payables from related parties are unsecured and would be paid in cash.

g. Lease arrangements - Group is lessee

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 $ 27,585 $ - December 31
2021 2020 $ 25,785 $ 3,431 For the Year Ended December 31
	2021 $ 88	2020 $ 52

The Group leased offices from related parties under lease contracts with normal terms and rentals payable monthly at market rates.

h. Lease arrangements - Group is lessor

The Group leased its office building to related parties under operating leases for a term of 1 to 5 years. The rental prices are determined with reference to the market standards and charged on a monthly basis.

Total lease payment to be collected in the future is summarized as follows:

Related Party Category The key management of the Group serves as a member of its board of directors Another company holding the position as chief management of the Group Total lease revenue is summarized as follows: Related Party Category The key management of the Group serves as a member of its board of directors Another company holding the position as chief management of the Group		December 31	December 31
	2021 2020 $ 3,207 $ 8,705 23 46 $ 3,230 $ 8,751 For the Year Ended December 31
		2021 $ 5,498 23 $ 5,521	2020 $ 5,498 23 $ 5,521

59 -
i. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 39,726 504 $ 40,230	2020 $ 38,270 547 $ 38,817

The remuneration of directors and key executives was determined by the remuneration committee according to the performance of individuals and market trends.

33. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for engineering performance bonds.

Pledge deposits Current Non-current		December 31	December 31
		2021 $ 5,147 10,215 $ 15,362	2020 $ 67 35,864 $ 35,931

34. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group were as follows:

a. Unrecognized commitments are as follows:

Acquisition of property, plant and equipment		December 31	December 31
		2021 $ 82,593	2020 $ 104,529

b. As of December 31, 2021 and 2020, the promissory notes were $ 104,183 thousand and $ 96,499 thousand, respectively. These notes were provided as engineering performance bonds, which could be refunded when the guarantee is terminated.
c. As of December 31, 2021 and 2020, unused letters of credit for purchase of raw materials were $ 26,756 thousand and $ 6,561 thousand.
d. In June 2015, Cheng Da Construction Co., Ltd. (CDC) filed a complaint in the ROC. District Court of Taichung, alleging that the Group provided ready-mixed concrete with defects in quality. CDC claimed for compensation of $ 34,580 thousand. Subsequently, the claim was reduced to $ 27,930 thousand. The case is currently under trial for the third trial in Taichung Supreme Court. The Group cannot eliminate the possibility of defeated in the suit or possible settlement; therefore, an estimated contingent liability is recognized under Other Payables.
e. The Group supplied ready-mixed concrete to Chuan-Feng Construction Inc. (Chuan-Feng) Chuan-feng sought against the Group recovery of damage of $ 18,827 thousand due to defective found in the project
60 -

of “Guo-hsiung Grand Ju-li” (the Project) contracted by Chuan-Feng. The case is currently under trial for the first trial at Taichung District Court. Nevertheless, the recovery of damage sought by the resident of the Project against Guo-hsiung Enterprise is undecided and therefore it is adjudicated by the court that the case is temporarily stay. It is the assessment of the Group that the result of the legal proceeding is yet to be estimated, therefore no contingent liability is appropriated.

f. The Group entered into an contract with Chi-ying Inc. (Chi-ying) on the manufacturing and installation equipment and request a plan of change in accordance with the contract. Chi-ying contended that it has complete the manufacturing of the product and demand the payment of $ 5,967 thousand (VAT included). Subsequently, the claim was reduced to $ 5,120 thousand. The case is currently under trial for the first trial at Chiao-Tou District Court. It is the assessment of the Group that the result of the legal proceeding is yet to be estimated, therefore no contingent liability is appropriated.
g. The Group has outsourced its transportation of ready-mixed concrete to Lian-Chin Enterprise Inc. in 2020. The driver was sued for wrongful death due to malpractice. The family of the victim brought a claim against the driver and held the Group jointly liable for the loss of $ 5,681 thousand. The case is currently under trial at Feng-Shan Summary Court of Kaohsiung District Court. It is the assessment of the Group that the result of the legal proceeding is yet to be estimated, therefore no contingent liability is appropriated.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group entities’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2021

		Foreign			Carrying
		Currencies			Amount
	(In Thousand)		Exchange Rate	(In Thousand)
Financial assets
Monetary items
USD	$	431	27.68	$	11,937
RMB		902	4.344		3,918
EUR		136	31.32		4,244
December 31, 2020
		Foreign			Carrying
		Currencies			Amount
	(In Thousand)		Exchange Rate	(In Thousand)
Financial assets
Monetary items
USD	$	187	28.48	$	5,316
RMB		1,147	4.377		5,019

The Company is mainly exposed to USD. The following information was aggregated by the functional currencies of the group entities, and the exchange rates between respective functional currencies and the presentation currency were disclosed. The significant realized and unrealized foreign exchange gains (losses) were as follows:

61 -

Functional Currencies NTD	For the Year Ended December 31, 2021 Exchange Rate Net Foreign Exchange Loss 1(NTD:NTD) $ (540 )	For the Year Ended December 31, 2020
	Exchange Rate 1(NTD:NTD)	Exchange Rate Net Foreign Exchange Gain 1 (NTD:NTD) $ (1,066 )

36. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:
1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (Table 2)
3) Marketable securities held (excluding investment in subsidiaries and associates). (Table 3)
4) Marketable securities acquired and disposed of at costs or prices of at least NT$ 300 million or 20% of the paid-in capital. (Table 4)
5) Acquisition of individual real estate at cost of at least NT$ 300 million or 20% of the paid-in capital. (N/A)
6) Disposal of individual real estate at a price of at least NT$ 300 million or 20% of the paid-in capital. (N/A)
7) Total purchases from or sales to related parties amounting to at least NT$ 100 million or 20% of the paid-in capital. (Table 5)
8) Receivables from related parties amounting to at least NT$ 100 million or 20% of the paid-in capital. (N/A)
9) Trading in derivative instruments. (N/A)
10) Intercompany relationships and significant intercompany transactions. (Table 7)
b. Related information on investees. (Table 6)
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income or loss of investee and investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment from the mainland China area. (N/A)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: (N/A)
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: (N/A)
62 -
c) The amount of property transactions and the amount of the resultant gains or losses: (N/A)
d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: (N/A)
e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: (N/A)
f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: (N/A)
d. Information on major shareholders: name, number and percentage of shareholding of shareholders with ownership achieving 5% and above. (Table 8)
63 -

37. SEGMENT INFORMATION

a. Operating segments information

For the purpose of resource allocation and performance assessment, the chief operating decision maker assesses performance and allocates resources of the operating segments based on each operating segment’s products.

The Group’s reportable segments are as follows:

1) Building materials business - manufacture, sell and research cement, concrete and gypsum board
2) Assets management center - serve as the department of joint venture and others
b. Segment revenues and operating results

Analysis by reportable segment of revenue and operating results of continuing operations are as follows:

For the year December 31, 2021

Revenue from external customers Inter-segment revenues Segment revenues Segment profit Interest expenses Profit before income tax	Building Materials Division Assets Management Center $ 6,043,633 $ 35,475 22,784 - $ 6,066,417 $ 35,475 $ 886,262 $ 434,530	Adjustment and Elimination $ - (22,784 ) $ (22,784 ) $ (51,238 )	Total $ 6,079,108 - $ 6,079,108 $ 1,269,554 (29,292 ) $ 1,240,262

For the year December 31, 2020

Revenue from external customers Inter-segment revenues Segment revenues Segment profit Interest expenses Profit before income tax	Building Materials Division Assets Management Center $ 5,411,764 $ 14,453 10,296 - $ 5,422,060 $ 14,453 $ 572,332 $ 803,109	Adjustment and Elimination $ - (10,296 ) $ (10,296 ) $ (46,526 )	Total $ 5,426,217 - $ 5,426,217 $ 1,328,915 (31,401 ) $ 1,297,514

Segment profit represented the profit before tax earned by each segment. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

The chief operating decision maker of the Group makes decisions based on the operating results of each

64 -

segment, there was no information about the assessment of assets and liabilities classified through business activity performance, thence only listing revenue and results of reportable segments.

c. Geographical information

The Group’s revenues are mainly from Taiwan, ROC.

Refer to consolidated balance sheets for the information of non-current assets.

d. Revenue from major products and services

An analysis of the Group’s revenue is determined in the manner described in Note 24.b.

e. Information about major customers

Single customer who contributed 10% or more to the Group’s revenue is as follows:

Hung Hsin Building Materials Ltd. (Note)		For the Year Ended December	For the Year Ended December	For the Year Ended December	31
		2021 $ 526,861	`％` 9	2020 $ 525,912	`％` 10

Note : Revenue from selling cement

65 -

TABLE 1

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts In Thousands of New Taiwan Dollars, Unless Specified otherwise)

No. (Note 1)	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature for Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limits for Each Borrower `（`Note 2`）`	Aggregate Financing Limits (Note 3)
													Item	Value
0 0 0	The Company The Company The Company	Uneo Incorporated Universal Investment Corporation Universal Concrete Industrial Corporation	Other receivables Other receivables Other receivables	Yes Yes Yes	$ 100,000 800,000 300,000	$ 100,000 800,000 300,000	$ - 85,000 20,000	1 1 1	For short-term financing For short-term financing For short-term financing	$ - - -	Operating capital Operating capital Operating capital	$ - - -	None None Land	$ - - 185,609	$ 7,693,386 7,693,386 7,693,386	$ 7,693,386 7,693,386 7,693,386

Note 1: a: “0” is the Company.

b: Subsidiaries are numbered from “1”.

Note 2: The upper limit for each borrower is 40% of the Company’s net asset value as stated in the latest financial statements.

Note 3: The aggregate limit for each borrower is 40% of the Company’s net asset value as stated in the latest financial statements.

66 -

TABLE 2

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. (Note 1)	Endorser / Guarantor	Endorsee/ Guarantee	Endorsee/ Guarantee	Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3)	Maximum Amount Endorsed / Guaranteed During the Period	Outstanding Endorsement / Guarantee at the End of the Period (Note 6)	Actual Borrowing Amount	Amount Endorsed / Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 4 , Note 5, Note 7)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship (Note 2)
0 1 2	The Company Kaohsiung Harbor Transport Company Universal Investment Corporation	Uneo Incorporated Universal Investment Corporation Universal Concrete Industrial Corporation Universal Concrete Industrial Corporation The Company Universal Concrete Industrial Corporation The Company	(1) (1) (1) (3) (2) (3) (2)	$ 60,000 750,000 132,329 487,450 487,450 3,841,535 3,841,535	$ 50,000 400,000 120,000 166,541 409,929 9,949 279,816	$ 50,000 400,000 120,000 162,241 319,928 - 279,816	$ - 100,000 - - - - -	$ - - - - - - -	- 2 1 166 328 - 36	$ 19,233,465 19,233,465 19,233,465 974,900 974,900 7,683,070 7,683,070	Y Y Y N N N N	N N N N Y N Y	N N N N N N N

Note 1: a: “0” is the Company.

b: Subsidiaries are numbered from “1”.

Note 2: (1) The endorser / guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed / guaranteed subsidiary.

(2) The endorser / guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed / guaranteed company.

(3) The endorsed / guaranteed company owns directly and indirectly more than 50% voting shares of the endorser / guarantor parent company.

Note 3: The upper limit for the Company is equivalent to the capital of the endorsee; the upper limit for subsidiaries is equivalent to the net asset value of the subsidiaries as stated in its latest financial statements except that it is five times of the net asset value of Kaohsiung Harbor Transport Company and Universal Investment Corporation.

Note 4: The upper limit for the Company is equivalent to the net asset value of the Company.

Note 5: The upper limit for the subsidiary is equivalent to the net asset value of the subsidiary as stated in its latest financial statements, unless the Company or other subsidiaries give more guarantee.

Note 6: The limits were approved by the board of directors.

Note 7: The upper limit for the subsidiary is equivalent to ten times of the net asset value of the subsidiary as stated in its latest financial statements.

67 -

TABLE 3

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2021

(Amounts In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/ Units	Carrying Value	Percentage of Ownership (%)	Fair Value Or Net Equity
The Company Universal Investment Corporation	Listed shares Prince Housing & Development Corp. CTBC Financial Holding Co., Ltd. Asia Pacific Telecom Corp. CHC Resources Co., Ltd. Creative Sensor Inc. Creative Sensor Inc. Unlisted shares Grand Bills Finance Co., Ltd. Universal Cement Development Co., Ltd. Universal Venture Capital Co., Ltd. CTBC Investments Corp. Kaohsiung Rapid Transit Corp. Jie-Ho Development Co., Ltd. Huan Rong Hsin Resource Technology Corp. Mutual funds Cathay No. 2 Real Estate Investment Trust Listed shares Prince Housing & Development Corp. Tainan Spinning Co., Ltd. Teco Electric & Machinery Co., Ltd. Teco Image Systems Co., Ltd. Creative Sensor Inc. Unlisted shares Pan Asia (Engineers & Constructors) Corporation. Chinese Products Promotion Center	The president of the Company serves as a member of its board of directors - - The Company serves as a member of its board of directors - - The Company serves as a member of its board of directors The Company serves as a member of its board of directors - - - - - - The president of the Company serves as a member of its board of directors. The legal entity as director and the president of the Company serve as representatives of the legal entity. - - - Subsidiary serves as supervisor -	Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTOCI - non - current Financial assets at FVTPL - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non - current Financial assets at FVTPL - current Financial assets at FVTOCI - current Financial assets at FVTOCI - current Financial assets at FVTPL - current Financial assets at FVTPL - current Financial assets at FVTOCI - non - current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current	40,621,948 28,441,983 3,277,157 17,020,254 13,000,000 273,000 43,999,488 24,864,000 1,400,000 3,303,325 1,286,063 171,133 600,000 24,000 34,928,900 55 2,300,000 602,000 9,000,000 3,102,803 7,540	$ 544,334 738,069 26,938 771,869 271,050 6,866 764,711 513,193 11,413 139,219 10,350 - - 471 468,048 1 72,795 10,234 187,650 37,823 540	2.50 0.15 0.08 6.85 8.72 0.21 8.14 16.44 1.16 1.05 0.46 0.16 30.00 - 2.15 - 0.11 0.53 6.04 2.71 1.98	$ 544,334 738,069 26,938 771,869 271,050 6,866 764,711 513,193 11,413 139,219 10,350 - - 471 468,048 1 72,795 10,234 187,650 37,823 540

68 -

TABLE 3

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2021

(Amounts In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2021	December 31, 2021		Note
				Shares/ Units	Carrying Value	Percentage of Ownership (%)	Fair Value Or Net Equity
	Da Jen Venture Capital Co., Ltd. DarChan Venture Capital Co., Ltd. Limited partnership Taiwania Capital Buffalo Fund V, LP.	The legal entity as director of the Company serves as a member of its board of directors. The legal entity as director of the Company serves as supervisor. -	Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTPL - non-current	1,683,000 4,000,000 -	27,186 35,939 22,022	8.06 3.64 3.23	27,186 35,939 22,022

69 -

TABLE 4

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEARS ENDED DECEMBER 31, 2021

(Amounts In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Ending Balance	Ending Balance
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares	Amount
The Company Universal Investment Corporation	Listed shares Creative Sensor Inc. Privately offered shares Creative Sensor Inc. Listed shares Creative Sensor Inc. Privately offered shares Creative Sensor Inc.	Financial assets at FVTPL - current Financial assets at FVTOCI - non-current Financial assets at FVTPL - current Financial assets at FVTOCI - non-current	- - - -	- - - -	- - - -	$ - - - -	2,067,000 13,000,000 230,000 9,000,000	$ 59,033 305,370 6,599 211,410	1,794,000 - 230,000 -	$ 52,658 - 6,949 -	$ 51,248 - 6,599 -	$ 1,410 - 350 -	273,000 13,000,000 - 9,000,000	$ 6,866 271,050 - 187,650

70 -

TABLE 5

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEARS ENDED DECEMBER 31, 2021 (Amounts In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Company	Kaohsiung Harbor Transport Company CHC Resources Corp.	Subsidiary The key management of the Group serves as a member of its board of directors	Purchase (Freight) Purchase	$ 231,872 217,957	8 8	45 ~ 60 days after acceptance 30 ~ 65 days after acceptance	Note Equivalent	Equivalent Equivalent	($ 33,121) ( 26,611)	(5 ) (4 )

Note : The purchase prices have no comparison with those from third parties.

71 -

TABLE 6

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2021 (Amounts In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance a	s of December 31, 2021	s of December 31, 2021	Net Income (Loss) of the Investee	Share of Profits/Losses of Investee	Note
				December 31, 2021	December 31, 2020	Shares	Percentage of Ownership	Carrying Amount
The Company Universal Investment Corporation	Huanchung Cement International Corporation Chiayi Concrete Industrial Corporation Kaohsiung Harbor Transport Company Universal Investment Corporation Universal Concrete Industrial Corporation Uneo Incorporated Li Yong Development Corporation Lioho Machine Works Ltd. Tainan Concrete Industrial Corporation Universal Concrete Industrial Corporation Chiayi Concrete Industrial Corporation Huanchung Cement International Corporation Tainan Concrete Industrial Corporation Lioho Machine Works Ltd.	Taichung city Chiayi County Kaohsiung city Taipei city Taichung city Taipei city Taipei city Taoyuan city Tainan city Taichung city Chiayi County Taichung city Tainan city Taoyuan city	Import, export, and sale of cement, cement material, fuel, and production Manufacturing and marketing of ready-mixed concrete Trucking operation Investment activities Manufacturing and marketing of ready-mixed concrete and gravel Marketing of electronic Products Investment activities, trading for real estate and leasing business Manufacturing and marketing of metal parts and automotive components Manufacturing and marketing of ready-mixed concrete Manufacturing and marketing of ready-mixed concrete and gravel Manufacturing and marketing of ready-mixed concrete Import, export, and sale of cement, cement material, fuel, and production Manufacturing and marketing of ready-mixed concrete Manufacturing and marketing of metal parts and automotive components	$ 69,993 22,643 74,580 650,000 33,774 291,671 20,000 174,997 68,454 858 5 13 178 93	$ 69,993 22,643 74,580 250,000 32,284 291,671 20,000 174,997 41,454 858 5 13 178 93	6,999,333 2,252,378 7,560,000 75,000,000 7,691,411 6,000,000 2,000,000 89,581,468 1,265,000 115,494 361 667 10,000 1,680	69.99 86.63 100.00 100.00 58.12 100.00 100.00 29.86 42.17 0.87 0.01 0.01 0.33 -	$ 112,282 40,619 97,490 768,307 137,759 43,336 19,566 9,810,809 81,764 858 5 13 179 93	$ 17,591 (136) 2,950 9,170 50,220 (2,053) (434) 1,240,141 6,348 - - - - -	$ 12,314 (118) 2,950 9,170 29,331 (2,053) (434) 370,306 2,594 - - - - -

72 -

TABLE 7

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No.	Investee Company	Counterparty	Relationship (Note 1)			Transaction Details	Transaction Details
				Financial Statement Accounts	Amount	Payment Terms	% to Total Sales or Assets
0 1	The Company Huanchung Cement International Corporation	Kaohsiung Harbor Transport Company Kaohsiung Harbor Transport Company Kaohsiung Harbor Transport Company Uneo Incorporated Uneo Incorporated Universal Investment Corporation Universal Concrete Industrial Corporation Universal Concrete Industrial Corporation Universal Concrete Industrial Corporation	(1) (1) (1) (1) (1) (1) (1) (3) (3)	Freight expense Accounts payable Other payables Sales revenue Accounts receivable Other receivables Other receivables Sales revenue Accounts receivable	$ 231,872 13,918 19,203 22,784 5,013 85,000 20,000 102,379 15,103	The prices to related parties were not significantly different from those to third parties. Credit terms were 45 to 60 days after acceptance. The prices to related parties were not significantly different from those to third parties. Credit terms were 45 to 60 days after acceptance. The prices to related parties were not significantly different from those to third parties. Credit terms were 45 to 60 days after acceptance. The sales prices have no comparison with those from third parties, net 60 days after shipment. The sales prices have no comparison with those from third parties, net 60 days after shipment. Financing Financing The prices and terms to related parties were not significantly different from transactions with third parties. The credit terms were 90 to 120 days after shipment. The prices and terms to related parties were not significantly different from transactions with third parties. The credit terms were 90 to 120 days after shipment.	4 - - - - - - 2 -

Note 1: The transaction relationships with the counterparties are as follows:

No. 1: Represents transactions from parent Company to subsidiary.

No. 2: Represents transactions from the subsidiary to the parent Company. No. 3: Represents transactions among subsidiaries.

Note 2: All the transactions had been eliminated when preparing consolidated financial statements.

73 -

TABLE 8

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2021

Name of the major shareholder	Shares	Shares
	Number of shares held (share)	Shareholding (%)
Sheng Yuan Investment Corp. Yu-Sheng Investment Inc. HOU, BO-YI PICTET investment account entrusted to HSBC	65,255,811 64,532,037 50,888,251 38,867,405	9.98% 9.87% 7.78% 5.94%

Note 1: The information on major shareholders in the table is information related to shareholders with aggregate ownership in the Company achieving 5% and above by holding ordinary shares and special shares that completed the non-physical registration and delivery (including treasury shares), calculated by the TDCC on the last business day at the end of the quarter. The share capital stated in the consolidated financial report of the Company may differ from the number of shares that completed the non-physical registration and delivery due to the differences in the basis of preparation and calculation.
Note 2: Regarding the information above, where shareholders entrust their shares with a trust, the information shall be disclosed in a separate personal account of the client in the nature of a trust account opened by the trustee. When shareholders with shareholding over 10% carrying out the insider’s equity report according to laws and regulations related to securities trading, the shareholding shall include its personal shareholding, plus shares entrusted with trust and possessing the right of utilization and decision-making. For information on the insider’s equity report, please refer to MOPS.
74 -

For the year Ended	For the year Ended	For the year Ended
2021 $ (892,298) (53,545 ) $ (945,843 ) For the year Ended

	2021 $ (17,217) - $ (17,217 )	2020 $ - (17,217 ) $ (17,217 )

AI assistant

UCC — Annual Report 2021

51738_rns_2021-11-15_8d9cf824-c914-4453-8625-6e896c5b4ebf.pdf

Universal Cement Corporation and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Occurrence of sales of concrete products

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

Universal Cement Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Universal Cement Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars)

Universal Cement Corporation and Subsidiaries

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

e. Foreign currencies

f. Inventories

g. Investment in associates

1) Financial assets

b) Derecognition of financial liabilities

Revenue from the sale of goods

n. Leases

1) The Group as lessor

2) The Group as lessee

o. Borrowing costs

p. Employee benefits

2) Retirement benefits

1) Current tax

3) Current and deferred taxes

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

9. FINANCIAL ASSETS AT AMORTIZED COST

10. CREDIT RISK MANAGEMENT FOR INVESTMENTS IN DEBT INSTRUMENTS

11. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES)

Notes receivable

Accounts receivable (Including related parties)

December 31, 2021

December 31,2021

12. INVENTORIES

13. SUBSIDIARIES

14. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

a. Material associates

15. PROPERTY, PLANT AND EQUIPMENT

16. LEASE ARRANGEMENTS

a. Right-of-use assets

b. Lease liabilities

17. INVESTMENT PROPERTIES

18. OTHER INTANGIBLE ASSETS

19. BORROWINGS

b. Short-term bills payable

20. NOTES PAYABLE AND ACCOUNTS PAYABLE (INCLUDING RELATED PARTIES)

21. OTHER PAYABLES AND OTHER LIABILITIES

22. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

23. EQUITY

a. Share capital

b. Capital surplus

c. Retained earnings and dividend policy

e. Other equity items

UCC Annual Report 2021