UCC — Annual Report 2021

Jun 27, 2022

Stock Code: 1104

Universal Cement Corp.

2021 Annual Report

(MOPS) Market Observation Post System website: http://mops.twse.com.tw Universal Cement Corp. Annual Report is available at: http://www.ucctw.com Published on April 30, 2022

Spokesperson

Name: YANG, Tsung-Jen Title: Vice President Tel: 886-2-2507-7801 E-mail: ucc@ucctw.com

Deputy Spokesperson

Name: CHAN, Chih-Hung Title: Asst. VP Tel: 886-2-2507-7801 E-mail: ucc@ucctw.com

Stock Transfer Agent

SinoPac Securities

Address: 3F., No.17, Bo'ai Rd., Zhongzheng Dist., Taipei City, Taiwan Tel: 886-2-2381-6288

Website: https://securities.sinopac.com

Auditors

CPA Firm: Deloitte & Touche

Auditors: LEE, Chi-Chen, YANG, Chao-Chin Address: 20F., No. 100, Songren Rd., Xinyi Dist., Taipei City, Taiwan Tel.: 886-2- 2725-9988

Website: http://www.deloitte.com.tw

Overseas Securities Exchange

N/A.

Corporate Website

http://www.ucctw.com

Head Office, Plant and Local Office Head Office 10F., No.125, Sec.2, Nanjing E. Rd., Zhongshan Dist., Taipei City TEL：(02)2507-7801 FAX：(02)2507-5870 Microelectronic Division 8F., No.6, Jiankang Rd., Zhonghe Dist., New Taipei City TEL：(02)2225-2018 FAX：(02)2225-2056 Tainan Office 6F., No.83, Sec. 2, Yongfu Rd., West Central Dist., Tainan City TEL：(06)228-7123 FAX：(06)229-6600 Alian Cement Plant No.95-2, Gangshan, Alian Dist., Kaohsiung City TEL：(07)631-2111 FAX：(07)631-2117 Kaohsiung Luzhu Gypsum Board Plant No.461-2, Huanqiu Rd., Luzhu Dist., Kaohsiung City TEL：(07)697-2181 FAX：(07)697-1898 Hai-Fu Gypsum Board Plant No.18, Haishan Central St., Lujhu Dist., Taoyuan City TEL：(03)354-3056 FAX：(03)354-1711 Ta-Fu Ready-mixed Concrete Plant No.461-1, Huanqiu Rd., Luzhu Dist., Kaohsiung City TEL：(07)696-5131 FAX：(07)696-1220 Nantz Ready-mixed Concrete Plant No.58, Fenglong Ln., Yanchao Dist., Kaohsiung City TEL：(07)615-3190 FAX：(07)615-3186 Yeun Kung Ready-mixed Concrete Plant No.20, Hsin Con Road, Yeun Kung Dist., Tainan City TEL：(06)233-6052 FAX：(06)233-6106 Tainan Ready-mixed Concrete Plant No.59, Sec. 1, Zhonghua W. Rd., South Dist., Tainan City TEL：(06)291-7731 FAX：(06)291-7641 Xiaogang Ready-mixed Concrete Plant No.20, Yanhai 3rd Rd., Xiaogang Dist., Kaohsiung City TEL：(07)871-3143 FAX：(07)871-5594 Fengshan Ready-mixed Concrete Plant No.146, Fengping 1st Rd., Daliao Dist., Kaohsiung City TEL：(07)703-7512 FAX：(07)703-9114 Chaozhou Ready-mixed Concrete Plant No.53, Sec.1, Guangfu Rd., Chaozhou Township, Pingtung County TEL：(08)788-9945 FAX：(08)788-9906 Taipei Office 10F., No.125, Sec.2, Nanjing E. Rd., Zhongshan Dist., Taipei City TEL：(02)2507-7801 FAX：(02)2506-7580 Taichung Office 5F.-6, No.201, Sec. 2, Wenxin Rd., Xitun Dist., Taichung City TEL：(04)2258-5180 FAX：(04)2258-5190 Kaohsiung Office 4F.-5, No.110, Sanduo 4th Rd., Lingya Dist., Kaohsiung City TEL：(07)269-6771 FAX：(07)269-6873

Contents I. Letter to Shareholders ............................................................................................. 1 II. Introduction of the company ................................................................................. 3 2.1 Date of Establishment....................................................................................................... 3 2.2 History of the company .................................................................................................... 3 III. Report on Corporate Governance ....................................................................... 7 3.1 Organization ..................................................................................................................... 7 3.2 Profile of Directors, President, Vice Presidents, and head of divisions ........................... 8 3.3 Remuneration of Directors, Supervisors, President, and Vice Presidents ..................... 13 3.4 Implementation of Corporate Governance ..................................................................... 18 3.5 Information of CPA Service Fee .................................................................................... 49 3.6 Replacement of certified public accountants .................................................................. 49 3.7 The chairman, president and/or managerial officers in charge of finance or accounting served at the firm(s) or affiliate(s) of the auditing CPAs in the preceding year ................... 50 3.8 Equity transfers and changes or pledge of equity interests by directors, supervisors, managers, and major shareholders holding more than 10% of the shares in last fiscal year and up to the date of publication of this annual report ......................................................... 51 3.9 Information about Spouses, Kinship within Second Degree, and Relationships between Any of the Top Ten Shareholders ........................................................................................ 53 3.10 The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company ......................................................................... 54 IV. Capital and Share ................................................................................................ 55 4.1 Capital and Share ............................................................................................................ 55 4.2 Information on the company’s issuance of corporate bonds .......................................... 60 4.3 Information on the company’s issuance of preferred shares .......................................... 60 4.4 Information on the company’s issuance of global depository receipts ........................... 60 4.5 Information on employee share subscription warrants and new restricted employee shares .................................................................................................................................... 60 4.6 New shares in connection with mergers or acquisitions or with acquisitions of shares of other companies .................................................................................................................... 60 4.7 Implementation of the company's capital allocation plans ............................................. 60 V. Operational Highlights ......................................................................................... 61 5.1 Business .......................................................................................................................... 61 5.2 Market and Sales Overview ............................................................................................ 63 5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels ........................................................................... 73 5.4 Environmental Expenditure ............................................................................................ 74 5.5 Labor Relations .............................................................................................................. 76 5.6 Cyber Security Policy Purpose and Objectives .............................................................. 77 5.7 Material Contract ............................................................................................................ 78 VI. Financial Information ......................................................................................... 79 6.1 Five-Year Financial Summary ....................................................................................... 79

6.2 Five-Year Financial Analysis ......................................................................................... 83 6.3 Review Report on Financial Report of Recent Fiscal Year by Audit Committee .......... 86 6.4 Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019, and Independent Auditors’ Report ....................................................................................... 87 6.5 Financial Statements for the Years Ended December 31, 2020and 2019, and Independent Auditors’ Report ............................................................................................ 162 6.6 The company and its subsidiaries Disclosure to make if the company and its affiliates have experienced financial difficulties in recent fiscal year till the publication date ......... 249 VII. Review of Financial Conditions, Financial Performance, and Risk Management ............................................................................................................. 250 7.1 Analysis of Financial Status ......................................................................................... 250 7.2 Analysis of Financial Performance .............................................................................. 251 7.3 Analysis of Cash Flow.................................................................................................. 252 7.4 The effect upon financial operations of any major capital expenditures during the most recent fiscal year ................................................................................................................. 252 7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and Investment Plans for the Coming Year .............................................................. 253 7.6 Risk Assessment ........................................................................................................... 254 7.7 Other Important Matters. .............................................................................................. 257 VIII. Special items to be included ........................................................................... 258 8.1 Information related to the company's affiliates ............................................................ 258 8.2 Private Placement Securities in the previous year and by the date of report publication ............................................................................................................................................ 263 8.3 The Shares in the company Held or Disposed of by Subsidiaries in the previous year and by the date of report publication .................................................................................. 263 8.4 Other required supplementary notes ............................................................................. 263 - IX. Events with material impacts on equity or stock price as specified in sub section 2, section 3, Article 36 of the Securities and Exchange Act in the previous year and by the date of report publication. ........................................................... 264

I. Letter to Shareholders

Greetings to all of our valued shareholders,

In 2021, we can see the global economy recovery had been growing slowly in spite of COVID-19, whereas Taiwan was much less affected as a result of the success of pandemic-prevention policies. Meanwhile, the government kept promoting Forwardlooking Infrastructure Development Program and the varying international situation brought corporates to invest in Taiwan, increasing the demand for new factory facilities and office building and contribute steady growth of sales of building material business of the company. The following is the company’s business performance in 2021.

1. In 2021, the sales of cement were 530 thousand tons, representing a YOY decline of 3%, the sales of ready-mixed concrete (RMC) were 1.82 million cubic meters, representing a YOY growth of 5% and the sales of gypsum boards were 14.83 million square meters, representing a YOY growth of 7%. Total consolidated revenue for 2021 was NT$ 6.08 billion, showing a growth of 12% compared with last year; Net profit after tax of the year was NT$ 1.11 billion representing a YOY decline of 12% due to the decline in investment earnings; Earnings per share had reached NT$ 1.66.

2. The company not only endeavored to enhance the functional performance of gypsum board such as moisture resistance, fire resistance, sound insulation, convenience in construction and recycling, but also developed gypsum board system for rooftop and cladding system. Furthermore, the company combined our diverse gypsum board products with the exterior wall panel system of the brand “NICHIHA” from Japan to extend the application from the interior to the outside of buildings, offering a new option for customers.

3. Ready-mixed concrete business group continued to supply for the demand for factories, offices, public construction, and the residences on the periphery of Hsinchu, Taichung, Tainan, Kaohsiung and Pingtung.

4. Micro-Deformable Piezoresistive Sensor, the technology by our subsidiary company, Uneo Inc. was making a great progress in consumer electronics, stylus, industrial and semiconductor equipment, smart health, and smart warehouses. Uneo Inc. also collaborated with world-renowned corporates in standardizing, systemizing, and modularizing the product development based on the advanced technology and the past experiences of customization to shorten the product development cycle and raise the profit.

Looking into 2022, the company will continue to aim for the participation in public construction, factories, commercial buildings, and housing projects. To expand production capacity, our Kaohsiung Luzhu gypsum board plant and Ta-Fu Readymixed concrete mill’s second concrete mixer are estimated to be put into operation in the third quarter of 2022. With nine Ready-mixed concrete mills and two gypsum board plants, the company expects to achieve the cement sales volume target of 520 thousand tons, RMC sales volume target of 1.8 million cubic meters, and gypsum board sales volume target of 16.3 million square meters.

As a pioneer in film type pressure sensor industry, Uneo Inc. has been the designated

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smart manufacturing sensor system supplier for various world-renowned companies since Industry 4.0 has been a clear trend. Moreover, our module products for smart health and smart inventory control are also highly regarded that the company have won contracts with key customers for new product development targeting the North American market. With the steadily-growing market demand for consumer electronics, we are anticipating a significant growth in sales performance of the sensor component business for 2022.

In conclusion, we are sincerely grateful for the support from all of our shareholders. The company will continue to strive for the corporate’s innovation and steady growth, keeping to corporate governance, ethical corporate management, sustainable development, fulfillment of social responsibility to make UCCTW thriving in the future.

Chairman

HOU, Bo-Yi

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、 II Introduction of the company

2.1 Date of Establishment: March 1[st] , 1960

2.2 History of the company：

• Sept., 1959 Founded by distinguished Mr. Wu, Shan-Lien, Mr. Hou, Yu-Li, Mr. Wu, Hiu-Chi and Mr. Wu, Tsun-Hsien.

• Mar., 1960 Company established. Paid-in capital of NTD100 Million.

• Feb., 1963 Establishment of Ta-Fu Cement Plant. Annual production capacity of 0.2 Million (0.3Mta) mt and occupying land of 19.4 hectare for the plant.

• Feb., 1965 Establishment of second kiln in Ta-Fu Plant, annual capacity reached 0.3 Million mt (0.3 Mta).

• Feb., 1971 Publicly listed on TWSE.

• Jan., 1974 Location of Alian Cement Plant decided on plot of 22.3 hectare.

• May, 1976 Establishment of Alian Cement Plant with annual capacity of 0.8 Million mt(0.8Mta).

• May, 1983 In order to reduce consumption of energy, Alian Cement Plant replace its oil-burning system with coal burning system.

• June, 1985 One of the two production line in Ta-Fu plant converted into latest NSP production system and increase annual capacity to 0.7 Million mt.

• Sept., 1988 Establishment of Ta-Fu Ready-Mixed Concrete (RMC) Plant, hourly production capacity of 120 m[3] .

• Dec., 1990 Pre-heating system at Alian Cement Plant was converted from semiN.S.P. system to R.S.P. system.

• Jan., 1991 Establishment of Ta-Fu gypsum board plant, annual capacity of 7.5 Million m[2] , which was later increased to 9 Million m[2] due to expansion of capacity.

• May, 1992 Completion of expansion of second production system in Ta-Fu RMC plan, hourly production capacity of 180 m[3] .

• Jan., 1993 Evaluation of establishment of Hai-Fu gypsum plant.

• Oct., 1994 Establishment of Nantz RMC Plant, hourly production capacity of 270 m[3] .

• Mar., 1995 Establishment of Hai-Fu gypsum board plant, annual production capacity of 20 Million m[2] .

• Apr., 1995 Establishment of Ling-feng-ying RMC plant, hourly production capacity of 180m[3] .

• Sept., 1995 Both Ta-Fu gypsum board plant and cement plant were awarded the certificate of ISO 9002 by Bureau of Standards, Metrology and Inspection, Ministry of Economic Affairs, BSMI of MOEA.

• Oct., 1995 Alian Cement plant was awarded the certificate of ISO 9002 by BSMI of MOEA.

• Feb., 1996 Joint Meeting of Board of Directors and Supervisors approved, in principle, an investment in Vietnam on establishment of cement plant of 1.5 Million mt annual production capacity. The same resolution was submitted to and approved by the Annual General Meeting in April 1996.

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• Apr., 1996 Hai-Fu gypsum plant was awarded the certificate of ISO 9002 by BSMI of MOEA.

• June, 1996 Investment of cement plant in Vietnam was approved and awarded license by Ministry of Planning and Investment of President Office of Vietnam.

• Aug., 1996 Huan-ni Investment, subsidiary of UCC, invested in Ilocos Norte Mining, Philippines.

• Aug., 1996 Paid-in capital reached NTD 4 Billion and 5.57Million dollar. Oct., 1996 Establishment of Joint Venture of Quảng Ninh Universal Cement, Vietnam.

• Sept., 1997 Paid-in capital reached NTD 4Billion and 205.9Million dollar.

• Dec., 1997 Announcement by MOEA to ban mining of limestone at east of Taiwan since Jan. 1998.

• May, 1998 Suspension of Ta-Fu Cement plant.

• July., 1998 Implementation of Favorable Retirement and Severance Package. Apr., 1999 Ta-Fu, Ling-feng-ying and Nantz RMC plant were awarded the certificate of ISO 9002.

• Oct., 1999 Expansion of RMC network by leasing of Yeun Kung RMC plant. Jan., 2000 Establishment of pier in Pagudpud, Ilocos Norte, Philippines.

• Mar., 2001 Suspension on establishment of cement plant in Quảng Ninh, Vietnam. Apr., 2001 The company repurchased treasury shares for purpose of capital reduction. Paid-in capital reached NTD 3 Billion and 933 Million dollar.

• June, 2001 Suspension of production at Ta-Fu gypsum board plant. July., 2001 Hai-Fu gypsum plant received certification from Underwriters Laboratories Inc, U.S.A..

• Feb., 2002 The company repurchased treasury shares for purpose of capital reduction. Paid-in capital reached NTD 3 Billion and 580 Million dollar.

• Mar., 2002 Establishment of Ning-Bo, the Yings’ & Universal Building Material Company and its RMC plant in Bei-lun, Ning-bo, Zhe-jiang province, China.

• Sept., 2002 Hai-Fu gypsum board plant received Green Mark from EPA.

• Nov., 2002 Investment in cement grinding facility in Der-qing County, Guangdong province by contribution of idle grinding facility from Ta-Fu Cement Plant.

• Dec., 2002[The company repurchased treasury shares for purpose of capital ] reduction. Paid-in capital reached NTD 3 Billion and 469 Million dollar.

• Mar., 2003 Establishment of integrated cement plant in Ping-ling Township, Longmen County, Hui-zhou City, Guangdong Province, China.

• July., 2003 Entering an investment agreement with Long-men County government in integrated cement plant.

• Sept., 2003 Paid-in capital reached NTD 3 Billion and 711.83 Million dollar. Feb., 2004 Establishment of Feng-hua Universal Building Material Company and its RMC plant in Feng-hua, Zhe-jiang province, China.

• Mar., 2004 Commencement of construction of Long-Men Cement Plant in Huizhou, Guangdong Province, China.

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• Aug., 2004 Establishment of Ning-Bo, Bei-lun, the Yings’ & Universal Building Material Company and its RMC plant in Bei-lun, Ning-bo, Zhe-jiang province, China.

• Sept., 2004 Paid-in capital reached NTD 4 Billion and 157.25 Million dollar. Mar., 2005 Establishment of Hui-zhou RMC Inc., in Hui-cheng Dist., Hui-zhou city, Guangdong Province, China.

• June, 2005 License to build second production line of Hui-zhou Universal Cement Corporation approved.

• Aug., 2005 Paid-in capital reached NTD 4 Billion and 614.55 Million dollar. Aug., 2005 Establishment of subsidiary, Hui-zhou Universal Transportation Corporation approved.

• Aug., 2005 Ta-Fu gypsum board plant relocated to Ho-Chi-minh, Vietnam. Establishment of Yong-hsiang Joint Venture Company.

• Sept., 2005 Activation of first production line in Hui-zhou Universal Cement Corporation.

• Dec., 2005 The company repurchased treasury shares for purpose of capital reduction. Paid-in capital reached NTD 4 Billion and 586.93 Million dollar.

• Aug., 2006 Paid-in capital reached NTD 5 Billion and 91.49 Million dollar. Nov., 2006 Establishment of Ning-Bo Universal Building Material Company and its RMC plant in Jiang-Bei District, Ning-bo, Zhe-jiang province, China.

• Dec., 2006 The company repurchased treasury shares for purpose of capital reduction. Paid-in capital reached NTD 5Billion and 83.26 Million dollar.

• Apr., 2007 Construction of second cement production line of Hui-zhou Universal Company.

• Apr., 2007 Establishment of Hui-zhou Universal Building Material Company. June, 2007 Divestment all shares in Yong-hsiang Joint Venture Company. Aug., 2007 Paid-in capital reached NTD 5 Billion and 591.59 Million dollar. Sept., 2007 Suspension of Ling-feng-ying RMC plant. Sept., 2008 Paid-in capital reached NTD 6 Billion and 38.91 Million dollar. Mar., 2009 Acquire sole ownership of Ning-bo, Ying’s & Universal Building Material Company and Ning-Bo, Bei-lun, the Yings’ & Universal Building Material Company. Divestment of complete ownership in Ning-bo Universal Building Ready-mixed Concrete Company, Ning-bo Universal Cement Product Company, Ning-bo Universal Building Material Company, Feng-hua Universal Building Material Company.

• June, 2009 Addition of fabrication plant of Hai-Fu Gypsum Board Plant. July., 2009 Merger of Kao-hsiung RMC Industrial Company into the company. Nov., 2009 Divestment of sole ownership of Der-qing Universal Building Material Company.

• Jan., 2010 Reduction of operation cycle of front end of burning system in Alian Cement Plant for resizing of staff.

• Jan., 2010 Awarded patent of Micro-Deformable Piezoresistive Sensor from Industrial Technology Research Institute and technological cooperation development therewith.

• July., 2010 Entering an agreement of divestment of Iloco Norte Mining Company, Philippines.

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Aug., 2010 Divestment of shares in six subsidiaries in Hui-zhou and Ning-bo area in China. Aug., 2010 Setting up of office of Microelectronics Division and its plant. Aug., 2010 Expansion of RMC network by leasing of Fengshan RMC plant. Nov., 2011 Planning the construction of office, plant, and equipment of Microelectronics Division in southern Taiwan. Aug., 2012 Founding of Uneo Incorporated. Mar., 2013 Addition of second production system in Yeun Kung RMC plant. Aug., 2014 Planning the construction of new plant and equipment of Luzhu Gypsum Board Plant, Kaohsiung. Oct., 2015 Addition of second production system in Nantz RMC plant. Aug., 2016 Paid-in capital reached NTD 6 Billion and 336.09 Million dollar. Aug., 2017 Paid-in capital reached NTD 6 Billion and 536.09 Million dollar. Dec., 2019 Addition of second production system in Ta-Fu RMC plant. Nov., 2020 Expansion of RMC network by leasing of Hsin-Chu RMC plant.

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III Report on Corporate Governance

3.1 Organization (Apr. 16, 2022)

==> picture [417 x 657] intentionally omitted <==

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3.2 Profile of Directors, President, Vice Presidents, and head of divisions

3.2.1 Directors Apr. 16, 2022

Title	Nationality	Name	Gender / Age	Date of appoint ment	Tenure	First Appointment	Share held upon appointment	Share held upon appointment	As of date of report,	As of date of report,	As of date of report,	As of date of report,	As of date of report,	As of date of report,	Professional experience and Education	Other position held in the Company or Other Company	Executives, Directors or Management who are spouses or within two degrees of kinship	Executives, Directors or Management who are spouses or within two degrees of kinship	Executives, Directors or Management who are spouses or within two degrees of kinship	Remark
									Share held		Share held by spouse and underage children		Share held under name of third-party
							No. of Share	Ratio	No. of Share	Ratio	No. of Share	Ratio	No. of Share	Ratio			Title	Name	Relation
Chairman	Republic of China	Bo-Chih Investment Co., Ltd.		2020.06.1 5	3 years	2011.6.22	27,893,282	4.26％	27,893,282	4.26％	-	-	-	-			N/A	N/A	N/A
		Represented by: HOU, Bo-Yi	Male/ 71~80	-	-	-	-	-	50,888,251	7.78％	22,393,735	3.42%	-	-	Dept. of Transportation Management, NCKU	 Director, Tainan Spining  Director, Lio-ho Machine  Director, Prince Housing & Development  Chairman, Hsin Fu Hsing Industrial Co., Ltd.  Chairman, Hou Yong-Du Social Welfare and Charity Foundation	Director	HOU, Chih- Sheng	Son
																	Director	HOU, Chih- Yuan	Son
Director	Republic of China	Sheng-Yuan Investment Co., Ltd.		2020.06.1 5	3 years	2008.12.02	63,355,157	9.98％	65,255,811	9.98％	-	-	-	-			N/A	N/A	N/A
		Represented by: HOU, Chih-Sheng	Male 31~40	-	-	-	-	-	116,890	0.01％	-	-	-	-	Ph.D, Electrical Engineering, Massachusetts Institute of Technology MS/BS, Electrical Engineering, Biomedical Informatics, Stanford University	 Director, Tainan Spin  Director, UCC Investment  Supervisor, Huan-Chung Cement International Co.  Supervisor, Lio-ho Machine	Chairman	HOU, Bo-Yi	Son	President of the Company
																	Director	HOU, Chih- Yuan	Sibling
Director	Republic of China	Yu-Sheng Investment Co., Ltd.		2020.06.1 5	3 years	2017.6.14	62,652,464	9.87％	64,532,037	9.87％	-	-	-	-			N/A	N/A	N/A
		Represented by: HOU, Chih-Yuan	Male 31～40	-	-	-	-	-	35,066	0.005％	-	-	-	-	BA, Political Science, Columbia University AM, East Asia Studies, Harvard University	 Director, Tainan Spining  Director, UCC Investment  Director, Huan-Chung Cement International Co.  Director, Lio-ho Machine  Director, Grand Bills Finance Corp.  Director, Nantex Industry Co., Ltd.	Chairman Director	HOU, Bo-Yi HOU, Chih- Sheng	Son Sibling
Director	Republic of China	Hsin-Han Investment Co., Ltd.		2020.06.1 5	3 years	2017.6.14	35,450	0.005％	220,450	0.03％	-	-	-	-			N/A	N/A	N/A
		Represented by: CHEN, Jing-Hsing	Male 61～70	-	-	-	-	-	1,120,926	0.17％	-	-	629,850	0.08%	MBA, University of Michigan.	 Manager, IT department, President Corporation.	N/A	N/A	N/A
Independe nt Director	Republic of China	CHAN, Yi-Jen	Male 61～70	2020.06.1 5	3 years	2017.6.14	-	-	-	-	-	-	-	-	PhD/EECS, The University of Michigan, Ann Arbor, USA	 Chief Technology Officer, Cyntec Co., Hsinchu, Taiwan	N/A	N/A	N/A
Independe nt Director	Republic of China	HO, Yi-Da	Male 41～50	2020.06.1 5	3 years	2020.06.15	-	-	-	-	-	-	-	-	MBA, Sloan School of Management, Massachusetts Institute of Technology	 Chairman, YFY Inc.	N/A	N/A	N/A
Independe nt Director	Republic of China	WANG, Yong- Chun	Male 51～60	2020.06.1 5	3 years	2020.06.15	-	-	-	-	-	-	-	-	Bachelor, Dept. of Law, China Culture University	 Managing Attorney, Ning-yuan Law Firm	N/A	N/A	N/A

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Major Shareholders of Institutional Shareholders

	Apr. 16, 2022	Apr. 16, 2022
Name of Institutional Shareholder	Main Shareholder of Institutional Shareholder
	Name	Holding Ratio
Sheng-Yuan Investment Co., Ltd.	HOU, Bo-Yi	99.00%
	HOU, Chih-Sheng	0.30%
	HOU, Chih-Yuan	0.30%
	HOUSU, Ching Chieh	0.40%
Bo-Chih Investment Co., Ltd.	HOU, Bo-Yi	50.00%
	HOU, Chih-Yuan	6.62%
	HOUSU, Ching Chieh	43.38%
Yu-Sheng Investment Co., Ltd.	HOU, Bo-Yi	97.32%
	HOU, Chih-Sheng	2.49%
	HOUSU, Ching Chieh	0.19%
Hsin-Han Investment Co., Ltd.	CHEN, Jing-Hsing	99.00%
	CHEN, Mei-Ru	1.00%

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Apr. 16, 2022

Profile of Directors

	Qualification Name	Qualification Name	Professional qualification and Experience	Independence Status	Number of Other Public Companies in Which the Individual is Concurrently Serving as a Independent Directors
	Chairman
		Bo-Chih Investment Co., Ltd. Represented by: HOU, Bo-Yi	Since Mr. Hou, Bo-Yi took office of Chairman of the Board, he has led the Company through one of the most profitable time in the history. Mr. Hou is also on the board of Tainan Spin, Prince Housing & Development, and STUST. Mr. Hou has leveraged his abundant experience in business administration and led the Company with steady growth and kept supervising long-term development goal when the global community is facing social and economic impact. Under his leadership, the footprint of the Company has extended to fields of application of electronics in medical industry, multinational development alliance of building material business and vitalization idle asset to create higher profit for the investors. Mr. Hou does not possess any of the conditions listed byArticle 30 of CompanyAct.	Not Required	None
	Director
		Sheng-Yuan Investment Co., Ltd. Represented by: HOU, Chih- Sheng	Dr. Hou, Chih-Sheng has a PhD. Degree in Electronic Engineering from MIT, USA, Master and Bachelor degree in Electronic Engineering from Stanford and is the current President of the Company. Dr. Hou was also previously working in Electronic and Optoelectronic System Research Laboratories, Industrial Technology Research Institute. Dr. Hou and his research team had receiver Edison Awards and R&D 100 Awards due to their outstanding researches. Dr. Hou recognize high efficiency and accountability as the core of his believe in terms of the management of business and thus keep the Company in the leading positions in terms of the profitability among our peers in the industry in addition to his continuous effort in innovations and steady growth. Dr. Hou does not possess any of the conditions listed byArticle 30 of CompanyAct.	Not Required	None
		Yu-Sheng Investment Co., Ltd. Represented by: HOU, Chih- Yuan	Mr. Hou, Chih-Yuan holds a master degree in East Asia Study from Harvard University, a bachelor degree in Political Science from Columbia University. Mr. Hou is currently the Executive VP of the Company and Vice Chairman and of Harvard Club of the Republic of China, and also sits on the board of Tainan Spin Ltd., Nantex Industry Co. Ltd., CHC Resource Co., Ltd. Mr. Hou is in charge of marketing of the Company and dedicated in expanding customer base. Since Mr. Hou took office, he has led to the growth of revenue by our building material sector by 60% and continued on expanding market share domestically and prepared for set foot in North America, South East Asia and other oversea market. Mr. Hou does not possess any of the conditions listed by Article 30 of CompanyAct.		None
		Hsin-Han Investment Co., Ltd. Represented by: CHEN,	Mr. CHEN, Jing-Hsing holds an MBA degree from Michigan University and another master’s degree in Cerebral Science from George Washington Univsersity. Mr. Chen was the Chief of IT in President Enterprise and a key member of the modernization of infrastructure of the group in the field of ERP, CRM and management of supply chain. Since his presence in President in 1984, Mr. Chen has participated in several multinational business negotiations and a core member in the project of merger with Starbucks. In the meantime, Mr. Chen has also acquired abundant experience in real estate and led the team of performance enhancement in Prince Housing & Development. Mr. Chen can contribute to growth of the Company with his versatile and abundant experience in IT, international M&A and real estate. Mr. Chen does not possess anyof the conditions listed byArticle 30 of CompanyAct.		None
	Independent Director

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	CHAN, Yi-Jen	Dr. Chan is currently the Chief Officer of Technology of Cyntec Co., Ltd., a Delta Group Company, and held the office of Chief Officer of Strategy of Hermes-Epitek Corp. from 2016 to 2018 and office of CEO of EPISIL Holding Inc. from 2013 to 2016. Dr. Chan is the renowned expert of high-speed and power semiconductor and contributes to the governance of the enterprise with his abundant experience in strategical planning. During his time serving as independent director, he also assist in cooperation between the electronic production section of the Company and internationally renowned manufacturers. Dr. Chan does not possess any of the conditions listed byArticle 30 of CompanyAct.	All independent directors of the Company is verified to comply with the independency requirement stipulated by Art. 3 of “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies”	None
	HO, Yi-Da	Mr. Ho is currently the Chairman of YFY Consumer Products Co. Ltd., and has served in AT Kearney and former Citigroup Salomon Brothers. Mr. Ho has hold various executive positions within the group of YFY, including business of consumer products, packaging and international radio frequency and CEO of E ink Co. Ltd.. Mr. Ho contributes to the board with his unique insight into the organization of the Company and diversified dynamics for growth of core business of the Company as well as professional advices in financial planning, corporate governance and expansion of oversea business. Mr. Ho does not possess any of the conditions listed by Article 30 of CompanyAct.		None
	WANG, Yong-Chun	Mr. Wang is a licensed attorney in Taiwan with abundant experience of practice of law. Mr. Wang does not possess any of the conditions listed by Article 30 of Company Act.		None

3.2.1.2 Diversity and independence of the Board

3.2.1.2.1 Diversity of the Board

It is stipulated in Art. 20.3 of “Corporate Governance Best Practice Principles of UCC” that it is the duty of the Company to ensure the diversity of the board of the Company. It is fully considered, upon selection, that all candidates of the board member has equipped with the diversified backgrounds stipulated by the rule cited above to ensure the diversity goal of the board members are met.

The board consists of 7 members including three independent directors and one of which was reelected while the rest are new to the board. As to the age structure of the board, one of which is within range of 71 to 80, two of which is within range of 61 to 70, one of which is within range of 51 to 60, one of which is within range of 41 to 50 while the rest of the two is within range of 31 to 40. In addition to possessing the knowledge in the profession required by the operation of the Company, the members of the board also equipped with diversified background in Finance, Law and other professional fields which would benefit the governance of the Company and strengthen the management of operation, supervision and evaluation of execution of managerial policy and operation strategy. 3.2.1.2.2 Independence of the Board

The board consists of 7 members including three independent directors. All members of the board and the composition of which is qualified for the independence requirement pursuant to sec. 3 and sec. 4 of Art. 263 of Securities and Exchange Act.

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3.2.2 Profile of President, Vice Presidents, Assistant Vice Presidents and the chief of divisions and branches of the company.

Apr. 16, 2022

													Apr	Apr	Apr	. 16, 2022
Position	Nationa lity	Name	Gende r	Date of Appointmen t	Share Held		Share held by spouse and underaged children as of date of report		Share held under name of third-party		Professional experience and Education	Other position held in the Company or Other Company	Manager who is a spouse or relative within second degree of kinship			Remark
					Share	Ratio	Share	Ratio	Share	Ratio			Position	Name	Relatio n
President	R.O.C.	HOU, Chih- Sheng	Male	2020.07.01	116,890	0.02％	-	-	~~-~~	~~-~~	Ph.D, Electrical Engineering, Massachusetts Institute of Technology MS/BS, Electrical Engineering, Biomedical Informatics, Stanford University	 Director, Tainan Spin  Director, UCC Investment  Supervisor, Huan-Chung Cement International Co.  Supervisor, Lio-ho Machine	Chairm an	HOU, Bo-Yi	Father & Son
													Executi ve VP	HOU, Chih- Yuan	Sibling
Executive Vice President	R.O.C.	HOU, Chih- Yuan	Male	2020.07.01	35,066	0.005％	-	~~-~~	~~-~~	~~-~~	BA, Political Science, Columbia University AM, East Asia Studies, Harvard University	Director, Tainan Spining Director, UCC Investment Director, Huan-Chung Cement International Co. Director, Lio-ho Machine Director, Grand Bills Finance Corp. Director, Nantex Industry Co., Ltd.	Chairm an	HOU, Bo-Yi	Father & Son
													Preside nt	HOU, Chih- Sheng	Sibling
Chief of Auditing	R.O.C.	CHIAN G, Hai- Wei	Femal e	2018.08.20	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Accounting, National Kaohsiung University of Applied Sciences	-	-	-	-
Vice President, Financial Division	R.O.C.	YANG, Tsung- Jen	Male	2009.03.01	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Economics, China Culture University	Director, Lio-ho Machine Supervisor, UCC Investment Director, Universal Ready-mixed Concrete Industry Chairman, Chia-yi Ready-mixed Concrete	-	-	-
Asst. VP, Sales Division	R.O.C.	CHAN, Chih- hung	Male	2015.03.24	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Industrial Management, National Taiwan Institute of Technology	Director, Huan-Chung Int’l	-	-	-
Director, Accounting Division	R.O.C.	TSENG, Pei-Hsin	Femal e	2019.05.01	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Accounting, Ming-Chuan University	-	-	-	-
Asst. VP, Office of President	R.O.C.	CHANG , Pei-De	Male	2018.03.01	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Finance, National Taiwan University	Director, Universal Ready-mixed Concrete Director, Tainan Ready-mixed Concrete	-	-	-
Asst. VP , Building Material Division	R.O.C.	KAO, Tsung- Yao	Male	2020.04.10	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Chemical Engineering, Nan- Tai Junior College of Engineering	-	-	-	-
Plant Manager, Ah-Lien Cement Plant	R.O.C.	CHEN, Heng- Chuan	Male	2019.08.01	-	-	-	~~-~~	~~-~~	~~-~~	Master, Institute of Earth Sciences, National Taiwan Ocean University	-	-	-	-
Plant Manager, Hai-fu Gypsum Board Plant	R.O.C.	WU, Chong- Lun	Male	2020.11.1	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Marine Engineering, China Maritime College	-	~~-~~	~~-~~	~~-~~
Chief Supervisor, Ready-mixed Concrete Division	R.O.C.	CHOU, Shih- Kuei	Male	2010.08.30	-	-	-	~~-~~	~~-~~	~~-~~	Dept. of Chemistry, National Cheng- Kung University	Chairman, Universal Ready-mixed Concrete Industry Chairman, Tainan Ready-mixed Concrete Director, Chia-yi Ready-mixed Concrete	~~-~~	~~-~~	~~-~~

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3.3 Remuneration of Directors, Supervisors, President, and Vice Presidents

3.3.1 Remuneration of Directors and Independent director Unit： ‘000 NTD

3.3.1	Remuneration of	Directors and Independent director	Directors and Independent director	Directors and Independent director	Directors and Independent director	Directors and Independent director	Directors and Independent director	Directors and Independent director	Directors and Independent director													Unit：‘000 NTD
Position	Name	Remuneration								Ratio of Total Remuneration (A+B+C+D) to Net Income (%)		Remuneration Received by Directors as Employees								Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)		Remuneration from ventures other than subsidiaries or from the parent company (Note 1)
		Base Compensation (A)		Severance Pay (B)		Directors Compensation(C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Employee Compensation (G)
		The com pany	All companies in the consolidat ed financial statements	The com pany	All companies in the consolidat ed financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidate d financial statements
																Cash	Stock Value in Cash	Cash	Stock Value in Cash
Chairman	Bo-Chih Investment Inc.	0	0	0	0	11,920	11,920	960	960	12,880 (1.18%)	12,880 (1.18%)	0	0	0	0	0	0	0	0	12,880 (1.18%)	12,880 (1.18%)	None
	Represented by: HOU, Bo-Yi	0	0	0	0	0	0	1,314	1,314	1,314 (0.12%)	1,314 (0.12%)	9,050	9,050	0	0	1,500	0	1,500	0	11,864 (1.09%)	11,864 (1.09%)
Director	Sheng-Yuan Investment Inc.	0	0	0	0	2,980	2,980	240	240	3,220 (0.30%)	3,220 (0.30%)	0	0	0	0	0	0	0	0	3,220 (0.30%)	3,220 (0.30%)
	Represented by: HOU, Chih-Sheng	0	0	0	0	0	0	90	90	90 (0.01%)	90 (0.01%)	7,663	7,663	0	0	1,260	0	1,260	0	9,013 (0.83%)	9,013 (0.83%)
Director	Yu-Sheng Investment Inc	0	0	0	0	2,980	2,980	240	240	3,220 (0.30%)	3,220 (0.30%)	0	0	0	0	0	0	0	0	3,220 (0.30%)	3,220 (0.30%)
	Represented by: HOU, Chih-Yuan	0	0	0	0	0	0	90	90	90 (0.01%)	90 (0.01%)	7,479	7,479	0	0	1,240	0	1,240	0	8,809 (0.81%)	8,809 (0.81%)
Director	Hsing-Han Investment Inc	0	0	0	0	2,980	2,980	240	240	3,220 (0.30%)	3,220 (0.30%)	0	0	0	0	0	0	0	0	3,220 (0.30%)	3,220 (0.30%)
	Represented by: CHEN, Jing-Hsing	0	0	0	0	0	0	90	90	90 (0.01%)	90 (0.01%)	0	0	0	0	0	0	0	0	90 (0.01%)	90 (0.01%)
Independent Director	CHAN, Yi-Ren	0	0	0	0	0	0	570	570	570 (0.05%)	570 (0.05%)	0	0	0	0	0	0	0	0	570 (0.05%)	570 (0.05%)
Independent Director	HO, Yi-Da	0	0	0	0	0	0	570	570	570 (0.05%)	570 (0.05%)	0	0	0	0	0	0	0	0	570 (0.05%)	570 (0.05%)
Independent Director	WANG, Yong-Chun	0	0	0	0	0	0	570	570	570 (0.05%)	570 (0.05%)	0	0	0	0	0	0	0	0	570 (0.05%)	570 (0.05%)

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3.3.2 Remuneration of President and Vice President

Unit ： ‘000 NTD

Position	Name	Salary(A)	Salary(A)	Pensions(B)	Pensions(B)	Reward and Allowance etc. (C)	Reward and Allowance etc. (C)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Total Amount (A+B+C+D)/Net Income	Total Amount (A+B+C+D)/Net Income	Remuneration from ventures other than subsidiaries or from the parent company
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
								Cash	Stock Value in Cash	Cash	Stock Value in Cash
President	HOU, Chih- Sheng	3,000	3,000	0	0	4,050	4,050	1,260	0	1,260	0	8,310 (0.76%)	8,310 (0.76%)	None
Executive Vice President	HOU, Chih- Yuan	2,880	2,880	0	0	3,940	3,940	1,240	0	1,240	0	8,060 (0.74%)	8,060 (0.74%)

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3.3.3 Name and Title of the Top 5 Manager Who Were Distributed Employees Remuneration

Unit: ‘000 NTD

Position	Name	Salary(A)	Salary(A)	Pensions(B)	Pensions(B)	Reward and Allowance etc. (C)	Reward and Allowance etc. (C)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Employees bonus from Distributable Earnings (D)	Total Amount (A+B+C+D)/Net Income	Total Amount (A+B+C+D)/Net Income	Remuneration from ventures other than subsidiaries or from the parent company
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
								Cash	Stock Value in Cash	Cash	Stock Value in Cash
Chief Strategy Officer	HOU, Bo-Yi	4,200	4,200	0	0	4,850	4,850	1,500	0	1,500	0	10,550 (0.97%)	10,550 (0.97%)	None
President	HOU, Chih- Sheng	3,000	3,000	0	0	4,050	4,050	1,260	0	1,260	0	8,310 (0.76%)	8,310 (0.76%)
Executive Vice President	HOU, Chih- Yuan	2,880	2,880	0	0	3,940	3,940	1,240	0	1,240	0	8,060 (0.74%)	8,060 (0.74%)
Vice President	YANG, Tsung-Jen	1,828	1,828	0	0	346	346	64	0	64	0	2,238 (0.21%)	2,238 (0.21%)
Director	CHANG, Pei-De	1,524	1,524	0	0	336	336	69	0	69	0	1,929 (0.18%)	1,929 (0.18%)

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3.3.4 Employees Remuneration to Management Team

Unit： ‘000 NTD

						Unit：‘000 NTD
Managers	Position	Name	Stock Value in Cash	Cash	Total	Total Amount/Net Income(％)
	Chief Strategy Officer	HOU, Bo-Yi	-	4,264	4,264	4,264
	President	HOU, Chih-Sheng
	Executive Vice President	HOU, Chih-Yuan
	Chief Supervisor, Ready-mixed Concrete Division	ZHOU, Shih-Gui
	Director, Sales Division	CHAN, Chih-Hung
	Asst. VP, Building Material Division	KAO, Tsung-yao
	Vice President, Finance Division, CFO	YANG, Tsung-Jen
	Asst. VP, Finance Division	TSAI, Wen-Chang
	Director, Accounting Division (Head of Accounting)	TSENG, Pei-Hsin

• 3.3.5 Analysis on the Remuneration received by Directors, President, and Vice Presidents

• 1.Ratio of Total Compensation received by Directors (Independent Directors), President, and Vice Presidents to Net Income for last two fiscal years,

The ratio for year of 2021 was 4.97% (comparing to Net Income of the Company) and 4.97%(comparing the Net Income of all companies in consolidated financial report). The ratio for year of 2020 was 5.19% (comparing to Net Income of the Company) and 5.18%(comparing the Net Income of all companies in consolidated financial report).

• 2.Connections between Policy, Criteria & Package for Remuneration Paid, Process of Decision and Operation Performance & Future Risk,

• (1) Pursuant to Article 29 of the Article of Association of the Company, all directors of the Company is entitled to remuneration for execution of its duty which shall be decided according to the contribution to the Company. The remuneration for Chairman and Vice Chairman and Directors shall be decided by considering the level or peer company of the same industry, contribution of the directors and future risk of the Company. In addition, Article 33 of the Article of Association also provides that the Board of Directors is authorized to appropriate a remuneration of no higher than 3% of net profit for directors for the year with net profit. Such Remuneration is to be paid in cash only.

• (2) Pursuant to Article 29 of Company Act and Article 31 of Article of Association

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of the Company, the Board of Directors authorize the President and Vice President to oversee the business of the Company, whose remuneration was decided by consideration of individual performance and contribution the comprehensive operation performance of the Company and market level of similar position.

• (3) Policies illustrated in (1)(2) above is in compliance with “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange” and submitted to Remuneration Committee for deliberation. The deliberation of which includes remuneration and bonus. The remuneration of managers are evaluate by taking into consideration the title, ranking, education achievement, professional knowledge and duty; whereas, the bonus awarded to directors or managers are recommended by considering the performance includes financial performances indicators, revenue of the Company, achievement rate of profit before and after tax, and non-financial performance indicators, the implementation of the core value of the Company, operation management, participation in continuing education and sustainable operation. The remuneration committee will then advise on the remuneration based on the indicators above.

• (4) The remuneration of employee is decided by considering individual ability, contribution to the Company, performance, market level for equivalent position and future risk of the Company and should be positively co-related to performance of the Company. Pursuant to Article of the Company, the Company shall appropriate amount no less than 1% of net profit for remuneration to employee for fiscal years that generates net profit. The combination of remuneration of employee includes basic salary, bonus, and benefits. The basic salary is decided according to market level for equivalent position whereas the bonus is decided in connection with achievement of individual employee and the department associated with as well as the performance of the Company. The benefits are designed pursuant to applicable law and by consideration of the needs of the employee.

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3.4 Implementation of Corporate Governance

3.4.1 Board of Directors

There are 9 meetings of the Board of Directors held in the year reported. Directors’ attendance is reported as follows:

Position	Name	Attendance	Attendance	Attendance Rate	Remark
		In Person	By Proxy
Chairman	Bo-Chih Investment Inc. Represented by: HOU, Bo-Yi	9	0	100%	NA
Director	Sheng-Yuan Investment Inc. Represented by: HOU,Chih-Sheng	9	0	100%
Director	Yu-Sheng Investment Inc. Represented by: HOU,Chih-Yuan	9	0	100﹪
Director	Hsing-Han Investment Inc. Represented by: CHEN,Jing-Hsing	9	0	100﹪
Independe nt Director	CHAN, Yi-Ren	9	0	100﹪
Independe nt Director	HO, Yi-Da	9	0	100﹪
Independe nt Director	WANG, Yong-Chun	9	0	100﹪
Other matters that require reporting： 1. Please specify the date of BOD meeting, term, content of the resolution, all statement made by independent directors and how the company respond to such statement for following occasions, (1) Items listed in the Article 14-3 of the Securities Exchange Act: Date and Term of BOD meeting Content of Proposal Resolution of the Proposal Measure implemented by the Company 1st Interim Meeting of the 23th BOD held on Spet. 23, 2021 Purchase of stock via private offering. The Board adopted such proposal via 6 votes for the proposal and 1 vote against the proposal. The Company had announced on MOPS, pursuant to the regulation, as material information on Spet. 23,2021. (2) Other than the aforementioned, any resolution to which the independent hold opposing position against or reservation and were recorded or made recorded in written: N/A. 2.In the case where a director needs to recuse himself/herself, please specify the name of the director, the content of the resolution, the reason for the recusal and the result of voting on the specific resolution: N/A. 3. The implementation of the peer evaluation of the Board : Evaluation frequency Evaluated period Evaluation scope Evaluation method Annually 2021.01.01~2021.12.13 The Board and members of Functional Committees Peer-evaluation Item evaluated: 1. Participation of operation of the Company; 2. Awareness of the goal and mission of the Company; 3. Enhancing the quality of decision-making of the Board or Committees; 4. Awareness of the duty of the Board or the committees; 5. Composition and Structure of the Board or the Committees; 6. Selection of the members of the Board or Committees and continuous training; 7. Management of internal networking and communication; 8. Internal Control; 4.Measures taken to strengthen the function of the Board：N/A.

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3.4.2 Operation of Auditing Committees

1. Operation of Auditing Committees

There are 6 meetings of the Auditing Committees held in the year reported. Members’ attendance is reported as follows:

Name	Name	Attendance	Attendance	Attendance Rate	Remark
		In Person	By Proxy
CHAN, Yi-Ren		6	0	100%
HO, Yi-Da		6	0	100%
WANG, Yong- Chun		6	0	100%
	Other matters that require reporting： 1. Please specify the date of Auditing Committee meeting, term, content of the resolution, all statement made by members and how the company respond to such statement for following occasions, (1) Report required pursuant to Article 14-5 of Security Exchange Act： Term/ Date of BOD meetings Content of the Resolution Resolution of the Committee Actions of the Company 7th meeting of 23th BOD held on Mar. 23, 2021 Financial Report for year of 2020 Resolved by the Committee with unanimous approval by all members presented and advise to submit to the Board of Directors. Resolved by the board with unanimous approval by all directors presented. The company executed as per board’s resolution. Change of CPA Ratification of Protocol of Internal Control 10th meeting of 23th BOD held on July 26, 2021 Ratification of “Regulations Governing Loaning of Funds” 12th meeting of 23th BOD held on July 26, 2021 Increase the Credit for Loan of Funds to UCC Investment, subsidiary of the Company 1st Interim Meeting of the 23th BOD held on Spet. 23, 2021 Purchase of stock via private offering. Resolved by the Committee with 2 votes for the proposal and 1 vote against the proposal and advise to submit to the Board of Director. The Board adopted such proposal via 6 votes for the proposal and 1 vote against the proposal. The Company had announced on MOPS, pursuant to the regulation, as material information on Spet. 23, 2021. 13th meeting of 23th BOD held on Nov. 15, 2021 Ratification of “Regulations Governing the Acquisition and Disposal of Assets” Resolved by the Committee with unanimous approval by all members presented and advise to submit to the Board of Directors. Resolved by the board with unanimous approval by all directors presented. The company executed as per board’s resolution. (2) Except for the aforementioned, any matters not passed by the committee and was resolved by the board with approval of two-third of Board members: N/A. 2. In case of recusal of Independent Directors due to conflict of Interest, please specify the name of the independent director, the content of the resolution, the reason for the recusal and the result of voting on the specific resolution: N/A. 3. Communication between the Independent Directors and Chief of Internal Audit / CPA: (1) An audit report with following up is submitted to the members of the committee for review. The members of the committee are, at their discretion, request to review the data on the business operation and financial status of the Company.

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• (2) Chief of Internal Audit and Auditors has both attended meetings of the committee to report on the implementation of Internal Audit, method adopted by the CPA during auditing and its scope, material adjustment and explanation thereof in order to maintain effective communication with independent directors.

• (3) The Company has called on respectively independent meeting between independent directors and Chief of Internal Audit and Auditors, without the participation of members of the management team. No independent directors have expressed comments on the items communicated on the meetings.

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3.4.3 Compliance Status of Corporate Governance and Deviations from “Corporate Governance

Best-Practice Principles for TWSE/ TPEx” and reasons thereof.

Evaluation Item	Compliance Status	Compliance Status	Compliance Status	Deviation from the Practice and reasons
	Y	N	Remark
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	ˇ		The Company has adopted “Corporate Governance Best-Practice Principles” by reference to “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and disclosed on website of Market Observation Post System and the Company.	No major deviation identified.
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?	ˇ ˇ ˇ ˇ		The Company has appointed spokesperson, deputy spokesperson and shareholders’ affair unit to respond to advise and dispute raised by shareholders. The Company keep track of list of major shareholders and its controller and disclose monthly pursuant to relevant regulation. The Company has established policies for managements and control of subsidiaries by specially appointed unit pursuant to Internal Control system, protocol and operation guidelines and relevant regulations. The Company has adopted “Procedure Dealing with Internal Material Information” to prevent insider from trading of securities by leveraging unpublished information.	No major deviation identified. No major deviation identified. No major deviation identified. No major deviation identified.
3. Composition and Duties of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the company establish a standard to measure the performance of the Board, and implement it annually?	ˇ ˇ	ˇ	The Company has considered from many aspect during the nomination and selection of candidates of directors to assure the appointee possess quality that might benefit the Company. The Company has appointed Remuneration Committee and Audit Committee pursuant to applicable regulation. The appointment of other functional committee will be deliberated according to the need of the Company. The Company has conducted a peer evaluation among members of the BOD and functional committees for the year of 2020. The result is reported on meeting of Board of Directors on Mar. 23,2021.	No major deviation identified. No major deviation identified. No major deviation identified.

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(4) Does the company regularly assess the independence of CPA certifying the financial report of the Company?	ˇ		The Accounting Department of the Company evaluates independency of the CPA annually. The result is submitted to the BOD meeting and approved on Mar. 23, 2021. It is the conclusion of the Company that CPA Ms. LEE, Ji-Chen and Mr. YANG, Chao-Chin has satisfied the standard of independency recognized by the Company (Note 1).	No major deviation identified.
4. Does the company establish specialized units or dedicated members and personnel responsible for corporate governance affairs, as well as carrying out key actions and reporting statuses (e.g. : including but not limited to provide the information that board directors and supervisors request to perform their duties, ensuring the general affairs of board meetings and shareholders’ meetings are held in accordance with regulations, applying and changing of company registration, and taking meeting minutes for board meetings and shareholders’ meetings.)	ˇ		The Board of Directors has appointed Mr. YANG, Tsung-Jen to be the Chief Officer of Corporate Governance on its meeting on Aug. 11, 2020, effective from Jan. 1st, 2021.	No major deviation identified.
5. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	ˇ		The Company has appointed Spokesman and deputy spokesperson. Relevant information has been disclosed on MOPS pursuant to applicable regulations. To maintain good communication with our investors, we also publish financial information and matters regarding shareholding. A bulletin for stakeholders has been established on the website of the Company.	No major deviation identified.
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	ˇ		The Company has delegated the shareholder service to a professional service agency - Department of Stock Agency, SinoPac Securities Inc., effective from Apr. 8, 2021.	No major deviation identified.
7、 Information Disclosure （1） Does the company have a corporate website to disclose both financial standings and the status of corporate governance? （2） Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? （3） Does the Company publish and file annual financial report within two months after the end of fiscal year and quarterly financial report and monthly			The Company had designated personnel responsible for collections and publications of various information pursuant to applicable regulations as well as information regarding Spokesman. Investors can access to financial, business operation, and corporate governance information on MOPS website.	No major deviation identified.

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operation report for first three quarters, respectively, prior to the deadline pursuant to relevant regulations?
8. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	ˇ		1. Benefit and Care for Employee The Company has always lead the employee with integrity and establish close bond with employee with various benefits and on-job training. (1) Insurance: Group commercial insurance policy. (2) Remuneration: Annual Bonus, Performance-based Salary Adjustment. (3) Benefits: Meal subsidy/ holidays gift money (Dragon Boat Festival, Labor Day, Mid- Autumn and Chinese New Year)/ birthday gift money/ gift money for wedding, funeral birth and children’s education/ emergency aid fund/ subsidy for traveling/ year-end party/ uniform/ annual health check. (4) Activities: Ad hoc sport event and encourage of participation in various sport event. (5) Training: Comprehensive training including orientation for new employee, on-job training, out-sourced training, online learning platform, subsidized training courses, incentive for advanced studies. (6) Pension System: The Company has organized Supervisory Committee of Business Entities’ Labor Retirement Reserve pursuant to applicable regulations and allocate retirement reserve monthly as required. For employee qualified for old pension system, the Company has appropriated a lump-sum amount of retirement reserve fun to account under Bank of Taiwan as advised by the actuary in 2016. In compliance with implementation of Labor Pension Act on July 1, 2005, the Company has appropriated pension fund for employee qualified for new pension system at the rate of 6% and	No major deviation identified. No major deviation identified. No major deviation identified.

23

	deposit to the account under	No major deviation
	Bureau of Labor Insurance.	identified.
2.	Investor Relationship：
	The Company has appointed
	Spokesman and deputy
	spokesperson. The Company has
	delegated the shareholder service
	to a professional service agency -
	Department of Stock Agency,
	Sino Pac Securities, effective	No major deviation
	from Apr. 8, 202. The Company	identified.
	has endeavored to maintain
	effective communication with
	investors via full disclosure of
	information on MOPS website
	and participation on AGM.
3.	Supplier:
	The Company and its supplier maintain good relationship to ensure competitive and stable	No major deviation identified.
	supply for the Company. In
	addition, we dedicate to building
	healthy partnership with
	reciprocal dynamics to maintain	No major deviation
	a reliable chain of supply. The	identified.
	Company also conducts ad hoc
	auditing on the supplier to ensure
	the quality of supply.。
4.	Rights of Stakeholders:
	(1) For Customers：The Company
	supplies products with safety as
	well as superb quality, values
	the feedback from clients and
	take prompt actions on
	complaint from clients to ensure	No major deviation
	satisfactory result.	identified.
	(2) For shareholders: It is the goal
	to safeguard the rights of
	shareholder.
5.	Training for Directors:
	The Company encourages
	directors to participate trainings
	offered by qualified institutions
	as individual directors sees the
	topic complies with the need and
	also offer suggestions to
	directors and help organizing as
	needed. Please see below a list of
	training classes taken for 23rd
	Board of Directors.
6.	Risk Management and
	implementation:
	The Company has implemented
	“Guidelines of Standard for Risk
	Management and Evaluation” for
	management and evaluation of
	various type of risks.
7.	Customer Management Policy：
	The Companyhas implemented a

24

credit allowance system for each client, maintain a comprehensive records of transactions with each clients to decide appropriate credit and payment terms to ensure smooth transaction. The Company also follow ISO quality assurance system during production to ensure the compatibility with product standard as well as the interest of the client and consumer. It is also the top priority of the Company to enhance the protection on the privacy of the client with random internal audit to make sure all measures remains effective. 8. Insurance for Directors The Board of Directors has approved on its meeting on May 11, 2021, to insure the members of the board for its liability during executing its duty.

1. Base on the result of “Corporate governance Evaluation” announced by TWSE ( Taiwan Stock Exchange Corporation) in a recent year to illustrate the status of matters have been already improved and priority measures to reinforce matters haven’t been improved：Pursuant to the evaluation result for 2021 Evaluation on Corporate Governance published by TWSE, the Company will take into account the result and evaluate and form action plans for improvement.

25

Annex: Training Records for Board of Directors members.

		Chairm an	Directors	Directors	Directors	Independent Directors	Independent Directors	Independent Directors
Date	Institution/ Course	HOU, Bo-Yi	HOU, Chih- Sheng	HOU, Chih- Yuan	CHEN, Jing- Hsin	CHAN, Yi-Jen	HO, Yi-Da	WANG , Yong- Chun
Jan. 20	TCGA/ Prevention of Insiders’ Trading and Implementation of Corporate Governance						3.0
Apr. 14	TID/ Lectures for Directors			3.0
May 6	TCGA/ Comprehension Aspects of Liabilities of Director	3.0		3.0
Aug. 5	TCGA/ Corporate Governance and Insiders’ Trading	3.0		3.0
Aug. 9	TCGA/ Risk management under impact of COVID-19	3.0	3.0	3.0
Sept. 9	TCGA/ 2021Sustainable Governance and Trend of ESG/CSR						3.0
Sept. 15	DGA/ Seminar on Liabilities of Directors and Supervisors and Risk Management		3.0			3.0
Oct. 21	SFI/ Digital Transformation of Tradition Industry				3.0
Oct. 28	SFI/ Liabilities of Directors and Supervisors for fraudulent financial reports				3.0	3.0
Nov. 25	SFI/ Review of Financial Reports by members of Audit Committee							3.0
Dec. 14	TABF/ Lecture on Corporate Governance						3.0
Dec. 23	SFI/ Advanced Seminar on the Practice of Directors and Supervisors							3.0
TCGA: Taiwan Corporate Governance Association TID: Taiwan Institute of Directors SFI: Securities & Futures Institution DGA: Digital Governance Association TABF: Taiwan Academy of Banking and Finance

26

(Note 1) Checking List on the qualification and independency of CPA

Item Assessed	Ms. LEE, Chi-Chen, CPA	Mr. YANG, Chao-chin, CPA
1. Profile	Chi Chen Lee is currently a certified public accountant in the Tainan of Deloitte & Touche. She joined Deloitte in 1990 and then got the license of Taiwan CPA in 1999. In 2004, he was promoted to Audit Partner.	Chao Chin Yang is currently a certified public accountant in the Tainan of Deloitte & Touche. He joined Deloitte in 1998 and then got the license of Taiwan CPA in 2012. In 2017, he was promoted to Audit Partner.
2. No significant financial interest related to the company.	ｖ	ｖ
3. Avoid any inappropriate relationship related to the company.	ｖ	ｖ
4. Not serving as a director, supervisor or manager of the company or a position that has a significant influence on the audit case in the last two years	ｖ	ｖ
5. During the audit, the accountant, his spouse, dependent relatives, or fourth relatives and other close relatives did not serve as directors, supervisors, managers, or positions that have a significant impact on the audit case	ｖ	ｖ
6. Accountants must not use their own name for others	ｖ	ｖ
7. No shares of the company	ｖ	ｖ
8. No money loan with our company	ｖ	ｖ
9. No joint investment or interest- sharing relationship with the company.	ｖ	ｖ
10. No part-time job or fixed salary of the company.	ｖ	ｖ
11. Must not involve the management function of the companyin makingdecisions.	ｖ	ｖ
12. Do not charge commissions related to the business.	ｖ	ｖ
13. Do not concurrently operate other businesses that may lose independence.	ｖ	ｖ
14. Accountants should ensure that their assistants are honest, impartial, and independent.	ｖ	ｖ

27

3.4.4 The Composition, Duty, and Implementation Status of the Remuneration Committee

1. Profile of Members of the Remuneration Committee

Qualification Identity Name	Qualification Identity Name	Professional Qualification and Experience	Independence	Number of Companies in which the member served as member of Remuneration Committee
Independent Director, Chairman	HO, Yi-Da	Mr. Ho is currently the Chairman of YFY Consumer Products Co. Ltd., and has served in AT Kearney and former Citigroup Salomon Brothers. Mr. Ho has held various executive positions within the group of YFY, including business of consumer products, packaging and international radio frequency and CEO of E ink Co. Ltd.. Mr. Ho contributes to the board with his unique insight into the organization of the Company and diversified dynamics for growth of core business of the Company as well as professional advices in financial planning, corporate governance and expansion of oversea business. Mr. Ho does not possess any of the conditions listed by Article 30 of CompanyAct.	The members of the committee meet the independence requirement stipulated by Art. 6 of “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange.”	None
Independent Director	CHAN, Yi- Ren	Dr. Chan is currently the Chief Officer of Technology of Cyntec Co., Ltd., a Delta Group Company, and held the office of Chief Officer of Strategy of Hermes-Epitek Corp. from 2016 to 2018 and office of CEO of EPISIL Holding Inc. from 2013 to 2016. Dr. Chan is the renowned expert of high- speed and power semiconductor and contributes to the governance of the enterprise with his abundant experience in strategical planning. During his time serving as independent director, he also assists in cooperation between the electronic production section of the Company and internationally renowned manufacturers. Dr. Chan does not possess any of the conditions listed by Article 30 of Company Act.		None
	CHANG, Wen-Chang	Dr. Chang, Wen-chang holds a PhD degree in Pharmacy from Dept. of Pharmacy of Tokyo University, Japan and was elected as Academician of Academia Sinica. Dr. Chang is currently the Chairman of the Board of Taipei Medical University and former Vice-Chairman of National Science Council. Under the leadership of Dr. Chang, TMU has become the top private medical school in Taiwan and expand the number of hospital to seven which contribute to the economic scale of the researches conducted. Dr. Chang’s abundant experience has offered valuable assistance to the Company.		None

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2. Implementation Status of the Remuneration Committee

• (1) There are 3 members in the Remuneration Committee.

• (2) Tenure for 4[th] Remuneration Committee: June 15, 2020~June 14, 2023.

The Committee held 2 meetings in the year reported with attendance record as follow,

follow,
Position	Name	Attendance		Attendance Rate (%)	Remark
		In Person	By Proxy
Chairperson	HO,Yi-Da	2	0	100%
Member	CHAN,Yi-Ren	2	0	100%
Member	CHANG, Wen Chang	2	0	100%
Mandate of the Remuneration Committee This committee shall act with care of a good administrator, faithfully execute the following duties and submit its advice to the Board of Directors for discussion. 1. Implement, with regular review, standards applicable to evaluation of the performance of the Directors and managers, annual and log-term key performance indicators as well as the policies, systems, standards, and structure thereof. 2. Regularly review performance of the Directors and managers with reference to key indicators and advice on the content and amount of the remuneration packages of the Directors and managers according to the result of review. 3. The performance evaluation and advice on the remuneration shall refer to usual standard applied by peers in the same industry, evaluation on individual performance, amount of time invested, position held by individual, performance while holding of other positions, packages offered by to Company to equivalent position and reach a conclusion of reasonableness demonstrate the reasonable connection between achievement of short-term and long-term goal of the Company, financial status of the Company and individual performance, performance of the Company and future risks. Meetings of Remuneration Committee The Committee has held the following meetings to review and evaluate remuneration policies of the Company in the year of 2021. Date and Terms of the meetings Agenda Recommendation Actions by the Company 4thmeeting of 4thTerm, held on Mar. 23 1. Review of the remuneration policy structure for Directors and Managers and Key Performance thereof for the year of 2021. 2. Review of distribution of remuneration of employee and directors for the year of 2020. The Chairperson consulted with members presented and approve unanimously. The Board of Directors has adopted according to recommendation by the Committee and proceed accordingly and compliance with applicable regulations. 5thmeeting of 4thTerm, held on Nov. 15 1. Review of salary, key performance evaluation, remuneration and bonus policies to be adopted of 2022. 2. Review of the remuneration of Directors of 2022 3. Review of the salary and bonus distributable to the managers in 2022. 4. Discussion of working plan of the committee for theyear of 2021. The Chairperson consulted with members presented and approve unanimously. The Board of Directors has adopted according to recommendation by the Committee and proceed accordingly and compliance with applicable regulations. Other matters that require reporting： 1. If the board of directors declined to adopt, or modified a recommendation of the Remuneration Committee, please specify the date, term, content, resolution, and the Company’s processing situations for Remuneration Committee’s resolution: None.。 2. Anyobjections or reservations expressed byanycommittee member in record or in written to Remuneration

follow,
Position	Name	Attendance		Attendance Rate (%)	Remark
		In Person	By Proxy
Chairperson	HO,Yi-Da	2	0	100%
Member	CHAN,Yi-Ren	2	0	100%
Member	CHANG, Wen Chang	2	0	100%
Mandate of the Remuneration Committee This committee shall act with care of a good administrator, faithfully execute the following duties and submit its advice to the Board of Directors for discussion. 1. Implement, with regular review, standards applicable to evaluation of the performance of the Directors and managers, annual and log-term key performance indicators as well as the policies, systems, standards, and structure thereof. 2. Regularly review performance of the Directors and managers with reference to key indicators and advice on the content and amount of the remuneration packages of the Directors and managers according to the result of review. 3. The performance evaluation and advice on the remuneration shall refer to usual standard applied by peers in the same industry, evaluation on individual performance, amount of time invested, position held by individual, performance while holding of other positions, packages offered by to Company to equivalent position and reach a conclusion of reasonableness demonstrate the reasonable connection between achievement of short-term and long-term goal of the Company, financial status of the Company and individual performance, performance of the Company and future risks. Meetings of Remuneration Committee The Committee has held the following meetings to review and evaluate remuneration policies of the Company in the year of 2021. Date and Terms of the meetings Agenda Recommendation Actions by the Company 4thmeeting of 4thTerm, held on Mar. 23 1. Review of the remuneration policy structure for Directors and Managers and Key Performance thereof for the year of 2021. 2. Review of distribution of remuneration of employee and directors for the year of 2020. The Chairperson consulted with members presented and approve unanimously. The Board of Directors has adopted according to recommendation by the Committee and proceed accordingly and compliance with applicable regulations. 5thmeeting of 4thTerm, held on Nov. 15 1. Review of salary, key performance evaluation, remuneration and bonus policies to be adopted of 2022. 2. Review of the remuneration of Directors of 2022 3. Review of the salary and bonus distributable to the managers in 2022. 4. Discussion of working plan of the committee for theyear of 2021. The Chairperson consulted with members presented and approve unanimously. The Board of Directors has adopted according to recommendation by the Committee and proceed accordingly and compliance with applicable regulations. Other matters that require reporting： 1. If the board of directors declined to adopt, or modified a recommendation of the Remuneration Committee, please specify the date, term, content, resolution, and the Company’s processing situations for Remuneration Committee’s resolution: None.。 2. Anyobjections or reservations expressed byanycommittee member in record or in written to Remuneration

29

Committee’s resolution, please specify the date, term, content, and the committee’s processing situations for objections or reservations: None.

3. Member of the Nomination Committee and Operation thereof

Not applicable as the Company is not required to establish this committee.

30

3.4.5 Fulfillment of sustainable development and discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and reasons:

Action Items			Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
1. Does the company establish exclusively (or concurrently) dedicated unit authorized by the Board to be in charge of enforcing sustainable development and the execution be supervised by the Board?	ˇ		1. The company’s Chairman chairs sustainable development committee to give guidance in sustainable development; the President and heads of divisions are in charge of long term operations. 2. (1) The Board of approved the appointment of the Office of President as the CSR responsible unit on August 11, 2020 and the unit was renamed to sustainable development responsible unit in March, 2021. (2) Sustainable development responsible unit comprises the head of department and dedicated staff in charge of the policies, implementation, risk management, education and training for sustainable development. (3) Sustainable development responsible unit reports the implementation to the Board at least once a year. The latest reporting date: March 28, 2022. For the full report, please view the company’s website: “Corporate Governance” → “Operation of the Board’s meeting.” 3. The management team reports to the Board on the company’s ESG sustainable development at least once a year and the strategies and implementations of ESG sustainable development are regularly reviewed and supervised bythe Board.	None.
2. Does the company assess environmental, social and governance risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies?	ˇ		1. The company makes risk assessment based on major issues such as environment, society and governance, negotiates with stakeholders, and establishespolicies on ESG	None.

31

Action Items			Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
			issues and risk management. For the full policies and strategies, please view the company’s website: “Sustainable Development” → “Risk Policy and Strategy.” 2. The following information covers the sustainable development performance of the company’s main sites in 2021. The risk assessment covers the parent company.
3. Environmental issues (1) Does the company establish proper environmental management systems based on the characteristics of its industries?	ˇ		1. The company established environment protection measures including scrappage of old diesel cars in accordance with Environmental Protection Administration, Executive Yuan, regular inspection and retirement of energy-intensive facilities, local procurement of main materials, recycling process wastewater for road sprinkling to decrease air pollution. For the full measures, please view the company’s website: “Sustainable development” → “The Policy on energy saving and carbon reduction.” 2. Verification: None.	None.
( 2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	ˇ		The company has endeavored to make the production line more efficient and eco-friendly to reduce the impact and burden of the environment. For the policy and achievement of energy saving and carbon reduction, the consumption of electricity and water, the amount of waste, please view the company’s website: “Sustainable development” → “The Policy on energysavingand carbon reduction.”	None.

32

Action Items			Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
( 3) Does the company evaluate the potential risks and opportunities under climate change and take measures in response to climate related issues? (4) Does the company record greenhouse gas emissions, water consumption, and weight of waste over the last two years and establish policies on energy efficiency, reduction of carbon dioxide and greenhouse gas, water-saving and other waste management?	ˇ ˇ		Sustainable development committee is the company’s highest organization in charge of climate change issues. As the chair of the committee, the company’s Chairman reviews the strategies, goals, risks, opportunities, plans and action on climate change and reports to the Board. The company assesses the risks and opportunities of climate change according to the TCFD structure published by Financial Stability Board (FSB). The latest assessment was finished in 2021. For the full assessment, please view the company’s website: “Sustainable Development” → “TCFD.” 1. The past two years’ indirect greenhouse gas emission, consumption of water, amount of non-toxic waste, intensity of energy and water are disclosed on the company’s website: “Sustainable development” → “The Policy on energy saving and carbon reduction”, “Greenhouse gas emission, water and the waste.” 2. For the policy and achievement of energy saving and carbon reduction, the consumption of electricity and water, the amount of waste, please view the company’s website: “Sustainable development” → “The Policy on energy saving and carbon reduction.” 3. The following information covers the company’s main sites. 4. Greenhouse gas emission inventory will be finished in 2023 and acquire verification in 2024.	None. None.

33

Action Items			Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	ˇ		1. The company not only complies with local regulations but also upholds the internationally- recognized human rights for labor and respects the United Nations Universal Declaration on Human Rights, the International Labor Organization’s fundamental conventions on core labor standards, the International Covenant on Civil and Political Rights and the International Covenant on Economic Social and Cultural Rights. The company formulates human rights policies and expects all the business partners to comply with them. 2. For more specific measures, please view the company’s website: “About UCCTW” → “Human Rights Policy.”	None.
(2) Does the company have reasonable employee benefit measures (including remuneration, leave, and other benefits) and appropriately reflect the business performance or results on the employee remuneration policy?	ˇ		1. The company stipulates employee benefit measures and reflects business performance on employees’ remuneration. For the full policy and measures, please view the company’s website: “Sustainable Development” → “Employee Benefit Measures.” 2. In 2021, the company’s female employment rate was 18.3% and female supervisor rate was 9.8%.	None.

34

Action Items			Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
(3) Does the company provide employees with a safe and healthy working environment and regularly organize training on health and safety?	ˇ		1. The company conforms to government regulations on labor health and safety, formulating corresponding measures, holding training courses, offering protective equipment, and making annual environmental inspection by external units and re-inspection by the fire department. Also, the supervisors and the personnel of environmental safety and health manage and inspect operating fields by patrolling every day, controlling deficiencies, following up on improvement, and regularly reporting to the President at monthly meetings. 2. Verification: None. 3. In 2021, the case of the company occupational accidents: None.	None.
(4) Does the company have an effective career development training program for employees?	ˇ		The company not only assesses and provides feedback on employees’ skills and interests, but also offers training and development activities that match their career development objectives and job needs. For the full training programs, please view the company’s website: “Sustainable Development ” → “Employee Benefit Measures.”	None.
(5) Does the company follow relevant laws, regulations and international guidelines for customer health and safety, customer privacy, and marketing or labeling of products and service, and also formulate customer protection policies and procedures for consumer complaints?	ˇ		The company not only complies with local regulations and relevant international standards to label and promote products, but also provide customer service through email and hotline responding to consumer’s queries and grievances to improve products and service efficiency. For the customer service and customer relationship performance, please view the company’s website: “Sustainable Development ” → “Stakeholders.”	None.

35

Action Items	Implementation Status	Implementation Status	Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
(6) Does the company implement supplier management policies, requiring suppliers to observe relevant regulations on environmental protection, occupational health and safety or labor and human rights? If so, describe the results.	ˇ		The company established the supplier management policy to require suppliers to enforce environment protection, occupational safety and health, and labor rights. The company carries out the supplier evaluation at least once a year. For the full policy and implementation, please view the company’s website: “Corporate Governance” → “Supplier management.”	None.
5. Does the company adopt internationally recognized standards or guidelines in the preparation of sustainability reports disclosing its non- financial information? Does the reports above obtain assurance from a third party verification unit?	ˇ		1. The company’s Sustainability reports are written on the basis of the GRI Standards core options. 2. The CPA firm of Legendary & Steadfast Accountancy will be retained to provide an independent limited assurance of the 2021 sustainability report based on the standards in SAES No.1 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, established in accordance with ISAE 3000 and issued by Taiwan’s Accounting Research and Development Foundation.	None.
6. If the company has established its own sustainable development principles in accordance with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, please describe the implementation and the discrepancies if there’s any: None.

36

Action Items	Implementation Status	Implementation Status	Implementation Status	Discrepancies with Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Explanation
7. Other important information facilitating understanding of the state of sustainable development implementation: The company endeavors to carry out environmental protection, contribute to community activities and industry events, and donate to schools or charity organizations. The following are the contributions of 2021. (1) Visit local representatives of our factories’ neighborhood to understand residents’ needs. (2) Industry-academia cooperation: a. Sponsor free gypsum boards for the 51thNational Skills Competition. b. Internship program with Department of Civil Engineering from National Cheng Kung University. c. Participation in National Cheng Kung University’s liberal education program. d. Provide mentorship for Seed Talent Program. (3) Donations: a. National Taiwan Sport University: NT$ 200 thousand. b. National Taiwan University of Science and Technology: NT$ 100 thousand. c. Wu San-Lien Awards Foundation: NT$ 200 thousand. d. Southern Taiwan University of Science and Technology: NT$ 200 thousand. e. Scholarship Foundation of the Harvard Club of the R.O.C.: NT$ 50 thousand. f. Chinese National Federation of Industries: NT$ 60 thousand. g. Taoyuan Enterprise Chamber: NT$ 30 thousand.

3.4.6 Fulfillment of Ethical Corporate Management and Discrepancies from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

==> picture [462 x 313] intentionally omitted <==

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

Discrepancies from
Implementation Status [1]
the “Ethical
Corporate
Management Best
Evaluation Item
Y N Abstract Illustration Practice Principles
for TWSE/GTSM
Listed Companies”
and Reasons
1. Establishment of ethical corporate
management policies and programs
(1) Does the company have a Board- ˇ A. The Board of Directors has None.
approved ethical corporate approved the formulation of
management policy and stated in its “Ethical Corporate Management
regulations and external Best Practice Principles,” and
correspondence the ethical corporate established the “Procedures for
management policy and practices, as Ethical Management and
well as the active commitment of the Guidelines for Conduct”,
Board of Directors and management specifying matters that should be
towards enforcement of such policy? noted by all employees of the
company and companies of UCC
Group while performing duties.
The Office of the President is
responsible for formulating ethical
corporate management policies
and prevention plans, reporting the
operation of ethical corporate
management and its status of
----- End of picture text -----

37

Evaluation Item			Implementation Status1	Discrepancies from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Y	N	Abstract Illustration
(2) Does the company have mechanisms in place to assess the risk of unethical conduct, and perform regular analysis and assessment of business activities with higher risk of unethical conduct within the scope of business? Does the company implement programs to prevent unethical conduct based on the above and ensure the programs cover at least the matters described in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies? (3) Does the company clearly provide the operating procedures, code of conduct, disciplinary actions, and appeal procedures in the programs against unethical conduct? Does the company enforce the programs above effectively and perform regular reviews and amendments?	ˇ ˇ		implementation to the Board of Directors regularly. B. Ethical corporate management policies are published on the company’s website, as well as promotional materials or external activities, so that managements, employees, suppliers, customers or other business-related institutions and personnel can understand the company’s ethical corporate management philosophy and regulations. The company has always been committed to business integrity and does not engage in business activities involving unethical conducts in the scope of business. The Office of the President regularly analyzes and evaluates the risks of dishonest behavior within the business scope and formulates the "Integrity Management Operating Procedures and Behavior Guidelines" accordingly. Such reviews cover at least the preventive measure described in Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies. The company has clear stipulations and ethical business conduct and relevant guidelines covering code of conducts, whistleblowings, punitive measures for violations, and grievances in company articles and systems, such guidelines include the “Ethical Corporate Management Best Practice Principles,” “Procedures for Ethical Management and Guidelines for conduct,” “Whistleblowing Procedures of Unethical Behaviors,” and “Guidelines to Employee Grievances.”. The company has established “Code of Ethical Conduct” for the Directors and Managers of the company to adhere to. The adequacy and effectiveness of regulations andpolicies or ethical	None. None.

38

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Discrepancies from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Y	N	Abstract Illustration
			business conduct are reviewed on a regular basis.
2. Implementation of operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company have a unit responsible for ethical corporate management on a full-time basis under the Board of Directors which reports the ethical corporate management policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations?	ˇ ˇ ˇ		In the “Ethical Corporate Management Best Practice Principles” and “Procedures for Ethical Management and Guidelines for conducts,” it is specified that the company shall refrain from having any engagements with parties that have any records of unethical conducts. Before dealing with any parties, the company shall assess whether there has been a record of unethical behavior, and try as much as possible to incorporate the ethical corporate management clause in the contract. A. The company has designated The Office of the President to support ethical corporate management and be responsible for devising and overseeing the ethical corporate management policy and prevention programs against unethical conducts. The company reports the implementation of the above to the Board on March 23, 2021 and March 28, 2022. The frequency of report is at least once a year. B. The company implements the ethical corporate management policy, and the relevant implementation in 2021 is as follows: a. Establish evaluation system for trading counterparties and require suppliers to comply with the ethical management principles. b. Program the internal and external regulations and conduct case studies based on real cases and training related to ethical management,with a total	None. None.

39

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Discrepancies from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Y	N	Abstract Illustration
(3) Does the company establish and implement policies to prevent conflicts of interest and provide appropriate communication channels? (4) Does the company have effective accounting and internal control system in place to implement ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the system to prevent unethical conduct, or hire outside accountants to perform the audits?	ˇ ˇ		participant of 488. A. The company's “Procedures for Ethical Management and Guidelines for Conduct” specifies policies for preventing conflicts of interests. When employees have conflicts of interest in business, they should report to their direct supervisors and The Office of the President and receive appropriate guidance from direct supervisors. B. The company's “Rules of Procedure for Board of Directors Meetings” has clearly stated that if Directors has a stake in the proposal of the legal persons represented, they shall disclose the key aspects of the interest in the meeting. If their interest may compromise the interests of the company, the said Director shall not participate in the discussion of nor cast the vote on items involved and shall excuse himself from the proceeding of the specific agenda item involved. Also, they shall not stand proxy for other Directors to exercise the voting right on the same item. The company has established an effective and mature accounting and internal control system to connect the function of personnel, finance, sales, production and materials layer by layer, inspecting and managing abnormalities. The Audit Office under the company’s Board of Directors formulates an audit plan every year to check compliance with rules and regulations and reduce the risk of unethical behavior. In addition, since internal audit is the responsibility of all employees, all units of the company also conduct self- assessment of internal control in January each year to facilitate the implementation of the spirit of internal control to all levels.	None. None.

40

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Discrepancies from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Y	N	Abstract Illustration
(5) Does the company regularly hold internal and external educational training on ethical management?			The company regularly conducts education and training related to ethical management to employees so that they can fully understand the company's determination, policies, prevention plans and the consequences of violations of unethical behavior. The ethical management education and training in 2021 is with a total participant of 488.	None.
3. The implementation of the company’s whistle-blowing system. (1) Has the company establish concrete whistle-blowing and reward system as well as accessible whistle- blowing channels? Does the company assign a suitable and dedicated individual for the case being exposed by the whistle- blower?	ˇ		The company has established the “ Whistle-blowing Procedures of Unethical Behaviors” and “ Guidelines to Employee Grievances” providing multiple reporting channels such as whistle-blowing mailboxes and whistle-blowing hotlines, assigning Audit Offices and Management Division of the company as the responsible units, and clearly stipulated reward systems.	None.
(2) Does the company establish standard operating procedures for whistle- blowing cases, follow-up measures and relevant system of confidentiality after the investigation?	ˇ		The company’s “Whistle-blowing Procedures of Unethical Behaviors” and “Guidelines to Employee Grievances” clearly stipulate the relevant standard operating procedures for following steps of cases, acceptance, investigation, closing and filing, and the above-mentioned rules stipulate that any unauthorized disclosure of the any details of the case, where on-going or not, is strictly forbidden and the entire proceedings shall remain confidential.	None.
(3) Does the company provide proper whistle-blower protection?	ˇ		During and after an investigation, it is strictly forbidden to disclose any information to unauthorized parties. All information must be well-managed and archived according to confidential document procedures to ensure the informant does not experience any unjust treatment.	None.
4. Strengthening information disclosure (1) Does the company disclose its ethical corporate management	ˇ		The company discloses its “Ethical Corporate Management Best Practice	None.

41

Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Discrepancies from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies” and Reasons
	Y	N	Abstract Illustration
policies and the results of its implementation on the company’s website and MOPS?			Principles” and “Procedures for Ethical Management and Guidelines for Conduct” as well as other related measures on its website and the TWSE’s Market Observation Post System website.
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation. There has been no difference.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies): None.

3.4.7 Corporate Governance Guidelines and Regulations

Please refer to the "Investor Area" → "Corporate Governance" → "Important Company Regulations" on the company's website to inquire about corporate governance-related regulations, etc. The company's website: http://www.ucctw.com.

3.4.8 Other Important Information Regarding Corporate Governance

1. Chief Officer of Corporate Governance

The Board of the Company has resolved to establish the position of Chief Officer of Corporate Governance in its meeting on Aug. 11, 2020 and appointed Mr. Yang, TsungJen, CFO, to take the office of the position effective from Jan. 1, 2021. Mr. Yang has hold the position of CFO for more than three years and thus comply with the requirement by law and is qualified for implementation of corporate governance.

Profile of Chief Officer of Corporate Governance

Name: Yang, Tsung-Jen

Education: Bachelor, Dept. of Economics, Chinese Culture University

Continuing Education: 19.5 hrs. qualified education for 2021.

42

Institution	Courses	Date	Date	Hour
		From	To
Taiwan Listed Company Association	Post-Pandemic economy development and overlook in Taiwan	2021/1/15	2021/1/15	2.0
Taiwan Listed Company Association	50 years forward and backward- Cultivation of talents and prevention of disaster	2021/3/15	2021/3/15	2.0
Securities & Futures Institute	Practice of Directors, Supervisors and Chief Officer of Corporate Governance	2021/8/23	2021/8/24	12.0
Taiwan Listed Company Association	Industry Merger and Transitional Innovation in Taiwan	2021/9/15	2021/9/15	2.0
Taiwan Listed Company Association	To keep up with global development trend and new initiatives	2021/12/15	2021/12/15	1.5

2. Scope of Corporate Governance

• (1) To keep members of the board updated with latest development of the regulations in the field which the Company operates or field of Corporate Governance.

• (2) To assist Board member in continuing education. Evaluate appropriate proposal of “Liability Insurance for Directors” and report to the Board of Directors.

• (3) To convene ad hoc meetings among CPA, independent directors, chief internal auditor for the implementation of internal control system.

• (4) To coordinate and mange the agenda of Board of Directors meeting, and other administrative matters. To remind any appliable directors if the conflict of interests exist. To furnish and circulate meeting minutes within 20 days of the meeting.

• (5) To carry out the goal of corporate governance and perform an annual evaluation on the performance of the Board as a whole and individual directors according to “Performance Evaluation Policy of the Board of Directors and Functional Committee” and delegate such evaluation to an external professional institute at least once evert three years.

• (6) To register the date of Annual General Meeting of Shareholders, issue a notice of AGMS, Agenda Handbook and meeting minutes pursuant to timeframe stipulated by applicable laws.

43

• (7) To carry out the goal of Corporate Governance and improve the performance of Corporate Governance Assessment.

3. For more information on Corporate Governance, please refer to The company's website: http://www.ucctw.com and announcement on TWSE’s Market Observation Post System website at http://mops.twse.com.tw

44

3.4.9 Implementing the internal control system

1. Statement of internal control

==> picture [483 x 626] intentionally omitted <==

1. The company auditing its internal control system by a CPA shall disclose the CPA audit report: NA.

45

• 3.4.10 During the most recent fiscal year and the current fiscal year up to the date of printing of this annual report, any punishment occurred for the Company and its employees violating laws, and any punishment, fault and improvement occurred for the Company’s employees against the regulations of Internal Audit System: None.

• 3.4.11 Major Resolutions of Shareholders’ Meeting and Board Meetings as of the date of publication.

• Shareholders’ Meeting

Implementation of resolutions of 2021 Shareholder’s Meeting,

Matters for Acknowledgement:

PROPOSITION 1 : Acknowledging Operation Report, Individual Financial Report and Consolidated Financial Report of the Company for the year of 2020.

COUNTING OF VOTES : The result of voting on this Proposition as follow, The number of shares presented: 446,052,009 shares. 417,895,307 shares voted FOR the proposition, including 77,318,656 voted online, representing 93.68% of share presented upon casting of votes. 80,757 shares voted AGAINST the proposition, including 80,757 shares voted online. 28,075,945 shares voted abstention, including 5,599,737 shares voted online.

RESOLUTION : The number of votes FOR the proposition has reached legal threshold, the proposition is adopted as proposed.

IMPLEMENTATION : All relevant report has been filed at regulatory agencies and published pursuant to Company Act and relevant regulations.

PROPOSITION 2 : Acknowledging Distribution of Dividend for the year of 2020.

COUNTING OF VOTES : The result of voting on this Proposition as follow, the number of shares presented: 446,052,009 shares. 418,414,708 shares voted FOR the proposition, including 77,838,057 voted online, representing 93.80% of share presented upon casting of votes. 54,788 shares voted AGAINST the proposition, including 54,788 shares voted online. The share of void vote was 0. 27,582,513 shares voted abstention, including 5,106,305 shares voted online.

RESOLUTION : The number of votes FOR the proposition has reached legal threshold, the proposition is adopted as proposed.

IMPLEMENTATION : All dividend for the year of 2020 has been distributed on Sept. 8, 2021 at the rate of 1.1 NTD per share.

Matters for Discussion I:

PROPOSITION 1 : Amendment to Rules of Procedure for Shareholders’ Meeting.

COUNTING OF VOTES : The result of voting on this Proposition as follow, The number of shares presented: 446,052,009 shares. 418,420,849 shares voted FOR the proposition, including 77,844,198 voted online, representing 93.80% of share presented upon casting of votes. 55,433 shares voted AGAINST the proposition, including 55,433 shares voted online. The share of void vote was 0. 27,575,727 shares voted abstention, including 5,099,519 shares voted online.

46

RESOLUTION : The number of votes FOR the proposition has reached legal threshold, the proposition is adopted as proposed.

IMPLEMENTATION : The amendment is effective as of the day of adoption by the Shareholders’ meeting and will be announced on the website of MOPS and the Company.

MOTION

PROPOSITION ：Ratification of “Regulations Governing Loaning of Funds”.

COUNTING OF VOTES : The result of voting on this Proposition as follow, The number of shares presented: 446,052,009 shares. 418,420,849 shares voted FOR the proposition, including 77,844,198 voted online, representing 93.80% of share presented upon casting of votes. 55,433 shares voted AGAINST the proposition, including 55,433 shares voted online. The share of void vote was 0. 27,575,727 shares voted abstention, including 5,099,519 shares voted online.

RESOLUTION : The number of votes FOR the proposition has reached legal threshold, the proposition is adopted as proposed.

IMPLEMENTATION : The amendment is effective as of the day of adoption by the Shareholders’ meeting and will be announced on the website of MOPS and the Company.

1. Meeting of Board of the Directors

The Board of Directors has convened 9 meetings for the year of 2021 with summary of major resolutions as follow,

• (1)The 23rd Board has adopted in its 6th meeting on Feb. 2, 2021 the following, Appointment of Shareholders’ Service Agent.

• (2)The 23rd Board has adopted in its 7th meeting on Mar. 23, 2021 the following, Proposal of Bonus to Directors and Employee for the year of 2020, Operation Report, Individual Financial Report and Consolidated Financial Report of the Company for the year of 2020, Distribution of Dividend for the year of 2020, Call for 2021 Shareholders’ Meeting, 2020 Statement on Internal Control, Loan of Funds to Subsidiary, Replacement of CPA, Evaluation of Independence and Qualification of the CPA, Amendment of “Rules of Procedure for Shareholders’ Meeting” of the Company, Amendment of “Audit Committee Charter” of the Company, Amendment of “Remuneration Committee Charter” of the Company, Amendment of “Rules Governing Financial and Business Matters Between this Corporation and its Affiliated Enterprises” of the Company, Amendment of “Rules Internal Control Systems” and “Internal Audit Implementation Rules” of the Company, Purchase of Insurance Policy for Liability of Directors and Managers of the Company, Approval of Fee of Engagement of CPA for Auditing of Financial Report, Amendment of “Ethical Corporate Management Best Practice Principles” of the Company.

• (3) The 23rd Board has adopted in its 8th meeting on May 11, 2021 the following, Credit of Loans of Funds to Subsidiaries of UCC, Insurance for liability of the Directors and Managers, Review of proposition by shareholders.

• (4) The 23rd Board has adopted in its 9th meeting on June 28, 2021 the following, Revision of the Date and Venue for 2021 Annual General Meeting of Shareholders.

47

• (5) The 23rd Board has adopted in its 10th meeting on July 26, 2021 the following, Ratification of “Regulations Governing Loaning of Funds”

• (6) The 23rd Board has adopted in its 11th meeting on July 27, 2021 the following, Authorization to Chairman for deciding record date for distribution of dividend and the date of distribution。

• (7) The 23rd Board has adopted in its 12th meeting on July 27, 2021 the following, Capital Injection by Cash for UCC Investment Inc., Increase of credit of load of funds to UCC RMC Industry Inc., Increase of credit of load of funds to UNEO Inc..

• (8) The 23rd Board has adopted in its 1[st] extraordinary meeting on Sept. 23, 2021 the following, Purchase of Stock via private offering.

• (9) The 23rd Board has adopted in its 13th meeting on July 27, 2021 the following, 2022 Internal Audit Plan, Ratification of “ Regulations Governing the Acquisition and Disposal of Assets”, Ratification of partial of the Chart of Organization, Enactment of Policies and Protocol of Risk Management, Enactment of “Procedures for Handling Material Inside Information”, Appointment of high rank manager.

• 3.4.12 As of the date of publication, dissenting opinion against resolutions of the Board of Directors meeting made by Directors with record or by submission in writing and its content.：

ts content.：
Meeting Date	Resolution Involved	Directors with DissentingOpinion	Actions by the Company
May 11, 2021	Review of proposition by shareholders	Mr. CHAN, Yi-Jen, Independent Director and Mr. Ho, Yi-Da, Independent Director	To announce on MOPS website pursuant to relevant regulations.
Sept 23, 2021	Purchase of Stock via private offering	Mr. WANG, Yong- Chun, Independent Director	To announce on MOPS website pursuant to relevant regulations.

• 3.4.13 As of the date of publication, resignation or dismissal of the Chairman, General Manager, Chief Accounting Officer, Chief Financial Officer, Chief Internal Auditor, Chief Corporate Governance Officer, and Chief Research and Development Officer: N/A

48

3.5 Information of CPA Service Fee

Unit: NT$ thousands

Accounti ng Firm	Name of CPA	Period Covered by CPA’s Audit	Audit Fee	Non-audit Fee	Total	Remarks
Deloitte & Touche	Chi Chen Lee	01.01.2021 ～ 12.31.2021	2,340	180	2,520	Note
	Chao Chin Yang

Note: Non-audit fee including -Transfer Pricing report

3.5.1. The audit fee of the year is less than that of the previous years after changing CPA firm: NA.

3.5.2. The audit fee is less than that of the previous year by over 10%: NA.

3.6 Information on Replacement of CPAs

3.6.1. Information regarding the former CPAs

Date of replacement	Approved by BOD meeting on March 23, 2021	Approved by BOD meeting on March 23, 2021	Approved by BOD meeting on March 23, 2021	Approved by BOD meeting on March 23, 2021	Approved by BOD meeting on March 23, 2021
Reason for replacement and explanation	The Company commissioned Deloitte & Touche-Taiwan to audit the financial statements. Due to internal adjustments and maintain the independence of the accountant, the audit has been commissioned from CPA Chao Chin Yang and Lee Yuan Kuo to CPA Chi Chen Lee and Chao Chin Yang since 2021Q1.
Describe whether the Company terminated or the CPAs terminated or did not accept the engagement	Parties Circumstances			CPAs	The Company
	Terminated the engagement			Not applicable	Not applicable
	No longer accepted (discontinued) the engagement			Not applicable	Not applicable
If the CPAs issued an audit report expressing any opinion other than an unqualified opinion during the 2 most recent years, specify the opinion and the reasons	None
Disagreement with the Company?	Yes		Accounting principles or practices
			Disclosure of financial reports
			Audit scope or steps
			Other
	No	V
	Specify details

49

Other disclosures (Any matters required to be disclosed under subNone items d to g of Article 10.6.A)

3.6.2. Information Regarding the Successor CPAs

Name of accounting firm Deloitte & Touche-Taiwan Names of CPAs CPA Chi Chen Lee and Chao Chin Yang Date of engagement Approved by BOD meeting on March 23, 2021 Subjects discussed and results of any consultation with the CPAs prior to the engagement, regarding the accounting treatment of or application of accounting None principles to any specified transaction, or the type of audit opinion that might be issued on the company's financial report Successor CPAs’ written opinion regarding the matters of disagreement None between the Company and the former CPAs

3.6.3. The reply letter from the former CPA regarding the Company’s disclosures regarding the matters under Article 10.6.A and 10.6.B(c) of the Regulations.

3.7 The chairman, president and/or managerial officers in charge of finance or accounting served at the firm(s) or affiliate(s) of the auditing CPAs in the preceding year: NA.

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• 3.8 Equity transfers and changes or pledge of equity interests by directors, supervisors, managers, and major shareholders holding more than 10% of the shares in last fiscal year and up to the date of publication of this annual report

3.8.1 Chang in equity interests of the Directors, Managers and Major Shareholders.

Position	Name	Year of 2021	Year of 2021	As of Apr. 30 of 2022	As of Apr. 30 of 2022
		Chang in share held	Change in share pledged	Chang in share held	Change in share pledged
Chairman	Bo-Chih Investment Co., Ltd.	-	-	-	-
	Bo-Chih Investment Co., Ltd. Represented by: HOU, Bo-Yi	-	-	-	-
Director	Sheng Yuan Investment Co., Ltd.	-	-	-	-
	Sheng Yuan Investment Co., Ltd. Represented by: HOU, Chih-Sheng	-	-	-	-
Director	Yu-Sheng Investment Co., Ltd.	-	-	-	-
	Yu-Sheng Investment Co., Ltd. Represented by: HOU, Chih-Yuan	-	-	-	-
Director	Hsin-Han Investment Co., Ltd.	-	-	-	-
	Hsin-Han Investment Co., Ltd. Represented by: CHEN, Jing-Hsing	-	-	-	-
Independent Director	CHAN, Yi-Jen	-	-	-	-
Independent Director	HO, Yi-Da	-	-	-	-
Independent Director	WANG, Yong-Chun	-	-	-	-

51

Position	Name	Year of 2021	Year of 2021	As of Apr. 30 of 2022	As of Apr. 30 of 2022
		Chang in share held	Change in share pledged	Chang in share held	Change in share pledged
Chief Strategy officer	HOU, Bo-Yi	-	-	-	-
President	HOU, Chih-Sheng	-	-	-	-
Executive Vice President	HOU, Chih-Yuan	-	-	-	-
Vice President, Building Material Division	CHANG, Ching-Tse	-	-	-	-
Supervisor, Ready-Mixed Concrete Division	CHOU, Shih-Kuei	-	-	-	-
Assistant Vice President	CHAN, Chih-Hong	-	-	-	-
Assistant Vice President	KAO, Tsung-yao	-	-	-	-
Assistant Vice President	TSAI, Wen-Chang	-	-	-	-
Vice President, Finance Division (Chief Financial Officer)	YANG, Tsung-Jen	-	-	-	-
Director (Chief of Accounting)	TSENG, Pei-Hsin	-	-	-	-

3.8.2 Where the counterparty in any transfer of equity interests is a related party. None.

3.8.3 Where the counterparty in any pledge of equity interests is a related party. None.

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3.9 Information about Spouses, Kinship within Second Degree, and Relationships between Any of the Top Ten Shareholders

Disclosure of Top Ten Shareholders and relationships among which.

2022.04.16

Name	Shares held by the individual	Shares held by the individual	Shares held by spouse and underage children	Shares held by spouse and underage children	Total shares held in names of thirdparties	Total shares held in names of thirdparties	Titles, names and relationships between top 10 shareholders (related party, spouse, or kinship within the second degree)	Titles, names and relationships between top 10 shareholders (related party, spouse, or kinship within the second degree)	Remark
	Share held	Ratio	Share held	Ratio	Share held	Ratio	Name	Relation
Sheng-Yuan Investment Co.,Ltd.	65,255,811	9.98%	-	-	0	0%	Bo-Chih Investment Co., Ltd.	Same Chairman
Representative of Sheng- Yuan Investment Co., Ltd.: HOU, Bo-Yi	50,888,251	7.79%	22,393,735	3.43％	0	0%	HOU, Bo-Yi Representative of Bo-Chih Investment Co.,Ltd.: HOU,Bo-Yi	Same Individual
							HOU SU, Ching-Chieh Representative of Yu-Sheng Investment Co., Ltd.: HOU SU,Ching-Chieh	Spouse
							HOU,Bo-Yu	Spouse
Yu-Sheng Investment Co., Ltd.	64,532,037	9.87%	-	-	0	0%	Bo-Chih Investment Co., Ltd.	Same Director
Representative of Yu- Sheng Investment Co., Ltd.: HOU SU, Ching- Chieh	22,393,735	3.43%	50,888,251	7.79%	0	0%	HOU, Bo-Yi Representative of Sheng-Yuan Investment Co., Ltd.: HOU, Bo-Yi Representative of Bo-Chih Investment Co.,Ltd.: HOU,Bo-Yi	Spouse
HOU, Bo-Yi	50,888,251	7.79%	22,393,735	3.43％	0	0%	Representative of Sheng-Yuan Investment Co., Ltd.: HOU, Bo-Yi Representative of Bo-Chih Investment Co.,Ltd.: HOU,Bo-Yi	Same Individual
							HOU SU, Ching-Chieh Representative of Yu-Sheng Investment Co., Ltd.: HOU SU,Ching-Chieh	Spouse
							HOU, Bo-Yu	Siblings
stodian Pictet investment accounts	38,867,405	5.95%	-	-	0	0%	None	None
Bo-Chih Investment Co., Ltd.	27,893,282	4.27%	-	-	0	0%	Sheng-Yuan Investment Co., Ltd.	Same Chairman
Representative of Bo-Chih Investment Co., Ltd.: HOU, Bo-Yi	50,888,251	7.79%	22,393,735	3.43％	0	0%	HOU, Bo-Yi Representative of Sheng-Yuan Investment Co.,Ltd.: HOU,Bo-Yi	Same Individual
							HOU SU, Ching-Chieh Representative of Yu-Sheng Investment Co., Ltd.: HOU SU,Ching-Chieh	Spouse
							HOU, Bo-Yu	Siblings
HOU SU, Ching-Chieh	22,393,735	3.43％	50,888,251	7.79%	0	0%	Representative of Yu-Sheng Investment Co., Ltd.: HOU SU, Ching-Chieh	Same Individual
							HOU, Bo-Yi Representative of Sheng-Yuan Investment Co., Ltd.: HOU, Bo-Yi Representative of Bo-Chih Investment Co.,Ltd.: HOU,Bo-Yi	Spouse
Standard Chartered custodian DBS Bank 0600049662	20,221,281	3.09%	-	-	0	0%	None	None
Long-Yi-Chang Sand & Stone Co.,Ltd.	17,814,243	2.73%	-	-	0	0%	無	無
Representative of Long- Yi-Chang Sand & Stone Co.,Ltd.: Yang,Chin-Song	42,447	0.01%	-	-	0	0%	無	無
HOU, Bo-Yu	17,113,105	2.62%	-	-	0	0%	HOU, Bo-Yi Representative of Sheng-Yuan Investment Co., Ltd.: HOU, Bo-Yi Representative of Bo-Chih Investment Co.,Ltd.: HOU,Bo-Yi	Siblings
T.H. Wu Foundation	11,670,151	1.79%	-	-	0	0%	None	None

53

3.10 Syndicated Shareholdings

The stakes and the syndicated stakes in the same investee of the company; directors, supervisors, and managers of the company; and institutions under the company’s direct or indirect control.

company’s direct or indirect control.	company’s direct or indirect control.	company’s direct or indirect control.	company’s direct or indirect control.	company’s direct or indirect control.	company’s direct or indirect control.	company’s direct or indirect control.
December 31, 2021(expressed in shares and %)
Investment business (Note 1)	Shareholding of the company		Shareholding of directors and supervisors, and managers or investees under direct or indirect control		Syndicated Shareholdings
	Shares	Percentage	Shares	Percentage	Shares	Percentage
Universal Investment corporation.	75,000,000	100	-	-	75,000,000	100.00
Kaohsiung Harbor Transport Company.	7,560,000	100	-	-	7,560,000	100.00
Universal Concrete Industrial Corporation.	7,691,411	58.12	115,494	0.87	7,806,905	58.99
Chiayi Concrete Industrial Corporation.	2,252,378	86.63	361	0.01	2,252,739	86.64
Tainan Concrete Industrial Corporation.	1,265,000	42.17	10,000	0.33	1,155,000	42.50
Lioho Machine Works ~~Ltd~~	89,581,468	29.86	1,680	-	89,583,148	29.86
~~.~~ Huanchung Cement Inernational Corporation.	6,999,333	69.99	667	0.01	7,000,000	70.00
Uneo Incorporated.	6,000,000	100	-	-	6,000,000	100.00
Li Yong Development Corporation.	2,000,000	100	-	-	2,000,000	100.00

Note 1：Investments made by the company with the equity method

54

IV. Capital and Share

4.1 Capital and Share

4.1 Capital and Share

4.1.1 Source of Capital Unit: NTD

4.1.1	4.1.1	Sourc	Sourc	e of Capital	e of Capital	e of Capital	e of Capital	e of Capital						Unit: NTD	Unit: NTD	Unit: NTD	Unit: NTD	Unit: NTD
Month/Year		Issued Price		Authorized Capital					Paid-in Capital					Remark
				Number of Share		Amount			Number of Share		Amount			Source of Capital			Shares acquired by non-cash assets
Sept.,2008		10		603,891,908		6,038,919,080			603,891,908		6,038,919,080			Undistributed earnings(Note 1)			None
Aug.,2014		10		615,969,746		6,159,697,460			615,969,746		6,159,697,460			Undistributed earnings(Note 2)			None
Aug.,2015		10		628,289,140		6,282,891,400			628,289,140		6,282,891,400			Undistributed earnings(Note 3)			None
Aug.,2016		10		634,572,031		6,345,720,310			634,572,031		6,345,720,310			Undistributed earnings(Note 4)			None
Aug.,2017		10		653,609,192		6,536,091,920			653,609,192		6,536,091,920			Undistributed earnings(Note 5)			None
Category of Share			Authorized Share													Remark
			OutstandingShare					Unissued Share					Total
Common Share 653,609,192 shares 0 share Information on the shelf registration system: None. 4.1.2 Structure of Shareholders Type of Shareholders Government Agencies Financial Institution Other Institutional Investor Number 0 15 149 Share held - 6,171,355 239,525,227 Ratio of share held - 0.95% 36.65％			653,609,192 shares					0 share					653,609,192 shares
																		2022.04.16 Total 48,425 653,609,192 100.00％
	Type of Shareholders				Government Agencies		Financial Institution			Other Institutional Investor			Individual		Foreign Institution and Natural Person			Total
	Number				0		15			149			48,097		164			48,425
	Share held				-		6,171,355			239,525,227			327,952,193		79,960,417			653,609,192
	Ratio of share held				-		0.95%			36.65％			50.18％		12.23％			100.00％

Note1: Jing-Shou-Shang Order No. 09701211070 Note4: Jing-Shou-Shang Order No. 10501195270 Note2: Jing-Shou-Shang Order No. 10301159730 Note5: Jing-Shou-Shang Order No. 10601111250 Note3: Jing-Shou-Shang Order No. 10401165930

55

4.1.3 Distribution of share held: (Face Value: NTD 10 per share)

1. Common Share

2022.04.16

1. Common Share	1. Common Share	1. Common Share			2022.04.16
Categories(Share)			Number of Shareholders	Total of Share held	Ratio
1	to	999	25,938	5,638,752	0.86％
1,000	to	5,000	16,404	37,086,185	5.67％
5,001	to	10,000	3,052	23,703,097	3.63％
10,001	to	15,000	922	11,417,854	1.75％
15,001	to	20,000	590	10,649,371	1.63％
20,001	to	30,000	532	13,229,292	2.02％
30,001	to	40,000	226	7,960,339	1.22％
40,001	to	50,000	171	7,885,851	1.21%
50,001	to	100,000	276	19,635,277	3.00％
100,001	to	200,000	149	21,630,643	3.31％
200,001	to	400,000	67	18,780,303	2.87％
400,001	to	600,000	29	13,802,338	2.11％
600,001	to	800,000	14	9,785,549	1.50％
800,001	to	1,000,000	7	6,518,651	1.00％
1,000,001 and above			48	445,885,690	68.22％
Total			48,425	653,609,192	100.00％

2. Special Stock: None.

4.1.4 List of Major Shareholders

1.4 List of Major Shareholders
Name of Major Shareholder	Share held	Ratio
Sheng-Yuan Investment Co., Ltd.	65,255,811	9.98%
Yu-Sheng Investment Co., Ltd.	64,532,037	9.87%
HOU, Bo-Yi	50,888,251	7.79%
HSBC custodian Pictet investment accounts	38,867,405	5.94%
Bo-Chih Investment Co., Ltd.	27,893,282	4.27%
HOU SU, Ching-Chieh	22,393,735	3.43%
Standard Chartered custodian DBS Bank 0600049662	20,221,281	3.09%
Long-Yi-Chang Sand & Stone Co., Ltd.	17,814,243	2.73%
HOU, Bo-Yu	17,113,105	2.62%
T.H. Wu Foundation	11,670,151	1.79%

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4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$/thousand shares

Items	2021	2020	01/01/2022 -03/31/2022
Market Price per Share
Highest Market Price	29.80	24.45	21.85
Lowest Market Price	20.25	13.65	20.6
Average Market Price	24.18	19.51	21.33
Net Worth per Share
Before Distribution	29.43	28.54	Note 5
After Distribution	-	27.44	-
Earnings per Share
Weighted Average Shares (thousand shares)	653,609	653,609	653,609
Diluted Earnings Per Share	1.66	1.91	Note 5
Adjusted Diluted Earnings Per Share	-	-	-
Dividends per Share
Cash Dividends	1.0(Note 4)	1.1	-
Stock Dividends
 Dividends from Retained Earnings	-	-	-
 Dividends from Capital Surplus	-	-	-
Accumulated Undistributed Dividends	-	-	-
Return on Investment
Price / Earnings Ratio (Note 1)	14.57	10.21	-
Price / Dividend Ratio (Note 2)	24.18	17.74	-
Cash Dividend Yield Rate (Note 3)	4.14%	5.64%	-

Note 1: Price / Earnings Ratio = Average Market Price / Earnings per Share Note 2: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share Note 3: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price Note 4: The resolution is finalized after the shareholders' meeting. Note 5: As of the publication date of the annual report, the financial information for the current year ended March 31, 2022 has not been reviewed by an accountant.

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4.1.6 Dividend Policy and Implementation thereof

1. Dividend Policy of the company

For fiscal year where a profit is recognized in final report of the Company, the Company shall fulfill its tax liability according to applicable law, cover loss from previous fiscal year and set aside 10% of the profit as legal reserve. In case where accumulated legal reserve has reached paid-in capital, the Company may cease setting aside such legal reserve and only set aside reserve as per other applicable regulation or reverse the special reserve. Further surplus, if any, shall be incorporated with accumulated reserve which is yet distributed and proposed by Board of Directors as Proposition of Distribution of Reserve and submitted to Shareholders’ Meeting for adoption. The ratio of distribution shall be,

• A. Bonus for Employee: No less than 1%.

• B. Bonus for Directors and Supervisors: No more than 3%.

C. Dividend for common share shall be decided by the remainder after appropriation of amount stipulated in clause A and B and proposed by the Board of Directors as proposition of distribution of reserve and submitted to Shareholders’ Meeting for adoption.

The Company is currently located at a steady cycle of growth whereas the high technology industry is located at the developing cycle. In consideration of the Company’s future demand of funds and long-term financial planning, the dividend shall all be distributed in cash. The Company may decide to distribute the reserve in both cash and stock for fiscal year during which the demand for fund is considered whereas stock dividend shall not exceed 50% of total dividend.

Shareholders’ Meeting may adopted to adjust distribution ratio stipulate above by considering the profitability and demand for funds of the Company.

2. Implementation

ntation
Form of Dividend Year	Cash Dividend	Stock Dividend(Cash equivalent)
2017	1.1	0
2018	1.0	0
2019	1.0	0
2020	1.1	0
2021	To be adopted by Shareholders’ Meeting

Dividend for year of 2020 has been distributed on Sept. 8, 2021. Dividend for year of 2021 shall be adopted by 2022 Shareholders’ Meeting. The record date shall be decided after the adoption of proposition.

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1. The proposition of distribution of reserve for 2021 is as follow:

The proposition of distribution of reserve for 2021 is as follow:
Item	Amount
Unappropriated Retained Earnings of Previous Years	5,003,945,573
Plus: Net Profit of 2021 after tax	1,088,078,375
Minus: Setting aside of legal reserve	(108,807,838)
Earnings available for distribution	5,983,216,110
Distribution of：
Dividend (NTD 1 in cash per share)	653,609,192
Unappropriated Retained Earnings for year ended in 2021	5,329,606,918

4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent shareholders' meeting – The Company proposes to distribute dividend in cash for year of 2020 and there for no disclose under this section is required.

4.1.8 Compensation of employees, directors, and supervisors ：

1. The percentages or ranges with respect to employee, director, and supervisor compensation, as set forth in the company's articles of incorporation ：

The Company shall set aside no less than 1% of profit, if any, as compensation for employee in the year where the Company reports profit. The Board of Director may resolve to distribute in cash or stock and may apply to employee of subordinating company. The Board of Directors may resolve to set aside no more than 3% as compensation for Directors and may only distribute in cash. Proposition of distribution of compensation for both employee and directors shall be submitted to Shareholders’ meeting for report.

If the Company still recognize accumulated loss, compensation for loss shall be appropriated before setting aside of compensation for employee and directors.

1. The basis for estimating the amount of employee, director, and supervisor compensation, for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period ： Any difference between the estimate and the actual distribution of compensation for employee and directors, bonus in stock for the year of 2021 shall be regarded as changes in accounting estimates and be treated as profit or loss of 2022.

2. Information on any approval by the board of directors of distribution of compensation:

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• (1) The amount of any employee compensation distributed in cash or stocks and compensation for directors. If there is any discrepancy between that amount and the estimated figure for the fiscal year these expenses are recognized, the discrepancy, its cause, and the status of treatment is disclosed as follow,

  • The Board of Directors has resolved on Mar. 28, 2022 to distribute compensation of NTD 20,859,864 in cash for employee and same amount for directors. The amount matches the estimate of record for year of 2021.

• (2). The amount of any employee compensation distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee compensation: Not applicable as the employee compensation will be distributed in cash.

• The actual distribution of employee, director, and supervisor compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor compensation, additionally the discrepancy, cause, and how it is treated.-No difference identified.

	Amount Distributed	Amount Estimated	Difference
Compensation for Employee	22,945,855	22,945,855	0
Compensation for Directors	22,945,855	22,945,855	0

• 4.1.9 Status of a company repurchasing its own shares: None.

• 4.2 Information on the company’s issuance of corporate bonds: None.

• 4.3 Information on the company’s issuance of preferred shares: None.

• 4.4 Information on the company’s issuance of global depository receipts: None.

• 4.5 Information on employee share subscription warrants and new restricted employee shares: None.

• 4.6 New shares in connection with mergers or acquisitions or with acquisitions of shares of other companies: None.

• 4.7 Implementation of the company's capital allocation plans: Not applicable as the Company did not offer or issue securities by shelf registration.

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V. Operational Highlights

5.1 Business

5.1.1 Business Scope

• A. Main areas of business operations

• a. Manufacturing, sales and transportation of Cement.

• b. Manufacturing, sales and transportation of Ready-mixed concrete(RMC).

• c. Manufacturing and distribution of fire-resistant material.

• d. Indoor light steel framing.

• e. Retail of Building Materials.

• f. Manufacturing and sales of other non-metallic mineral products.

• g. Manufacturing and sales of electronic components.

• h. Wholesale of electronic materials.

• i. Manufacturing and sales of Computer and peripheral equipment.

• j. Waste disposal industry.

• B. Distribution of Revenue among products sectors

Cement	RMC	Gypsum board
21%	65%	13%

• C. Main products

• a. Cement.

• b. RMC.

• c. Gypsum board.

• d. Other building materials.

• e. Hair-thin pressure-sensing electronic technology products.

• D. New products development

• a. Various innovative performance building materials.

• b. New type of pressure sensor.

5.1.2 Industry Overview

• A. Status and Future Development

The cement, ready-mixed concrete and gypsum boards produced by the company are basic building materials and the company is one of the suppliers of main raw material in Taiwan's construction industry. In 2021, the government promotes Forward-looking Infrastructure Development Program to drive public projects; and enterprises actively invest in new factories and offices. The Chief Accounting Office of the Executive Yuan has calculated that the total floor area of the buildings and construction licenses approved and issued is 43.42 million square meters with an increase of 4.5% from 2020. The overall demand for the industry is on the increase.

Our important subsidiary company, Uneo Inc., leading role of pressure sensor technology in Taiwan, Uneo’s major products are flexible electronic pressure sensors, pressure sensor modules, and flexible microelectromechanical pressure sensing instruments. The

61

applications and products are widely used in computer, communication and consumer electronics, stylus, industrial and semiconductor equipment, smart warehouse and medical monitoring industries.

• B. Illustration of the supply chain of the industry

The cement, concrete and gypsum boards produced by the company are basic building materials, and the industry chain relationship is illustrated as below:

==> picture [418 x 169] intentionally omitted <==

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

Chemical admixtures,
mineral powder
admixtures, sand and Other building
gravel, mixing water materials industry
Cement RMC
Gypsum board and
other indoor
Building industry building materials Residential
Civil contractor Public construction
Government building unit Commercial real estate
----- End of picture text -----

• C. Product Development Trends and Competitions

In recent years, the government has developed forward-looking plans to drive public projects and enterprises have actively invested in new factories and offices. The market has strong demand for the company's products. The company has provided good quality and service to customers for a long time, and the competition among the peers in the industry is expected to remain reasonable and stable. The Executive Yuan announced that starting from January 1, 2020, the application of green building materials for interior decoration and floor materials in all buildings has increased from 45% to 60% due to the global trend of using green building materials. The company's gypsum board products have obtained the healthy and recycling green building materials label, which is advantageous for sales and promotion.

5.1.3 Research and Development

• A. Continue to expand the application of gypsum board and develop gypsum board systems for rooftop and cladding system.

• B. Introduce Japanese exterior wall systems to the domestic market and combine it with the company's products, continuing to develop new exterior wall systems and optimize performance and hence extend the company's gypsum board application from indoor to outdoor for the product’s progress and diversity.

• C. Continue to improve the performance of the company’s products in terms of moisture resistance, fire-resistant, heat insulation, sound insulation, convenience in construction and recycling to consolidate the company’s industry leading position.

• D. Develop various ready-mixed concrete formula and implement standard production processes in response to different customer needs.

• E. The R&D expenditures and budget of all companies in the financial report for 2019 to 2021 are as follow,

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Year	2022(Budget)	2021	2020
R&D Expenditure(in ‘000 NTD)	62,592	78,683	69,195
Ration to revenue	1.3％	1.5％	1.5％

Note: expenditure for 2021 and 2020 are audited by CPA.

5.1.4 Long-term and Short-term Development

• A. Short-term Development Plan

• a. Cement: Strike the balance between production and sale, manage the production cost, and create profit stably.

• b. RMC & Gypsum Board: Increase production capacity, control costs, and increase sales.

• c. Pressure Sensor: Combined with pressure sensor, it is made into a standard-like module, allowing customers to quickly apply and import it in the fields of stylus, medical monitoring, etc., and quickly expand to China and other markets. And develop a new type of pressure sensor, introduce it into the smart storage product market, and conduct mass production. According to the needs of Taiwanese semiconductor, panel, and production process customers, we provide the measuring instruments required by manufacturers.

• B. Long-term Development Plan

• a. Cement: Optimize the structure of the sale and enhance profitability.

• b. RMC: Coordinate production capacity and supply network to increase market share.

• c. Gypsum Board: Continue to promote the advantages of gypsum boards such as fire resistance, earthquake resistance, heat insulation, sound insulation, stability, easy construction, recycling, environmental friendliness and non-toxicity for the diverse applications of gypsum boards.

• d. Pressure Sensor: Sign new agency cooperation and develop strategic partners, use the solution to provide each type of standard product module, deploy overseas bases, expand business in China and overseas markets, and provide complete products for target markets.

5.2 Market and Sales Overview

5.2.1 Market Analysis

• A. Sales (Service) Region of Major Products

• a. Cement: Sales area covers the western half of Taiwan.

• b. RMC: Sales area in Taiwan covers Hsinchu, Taichung, Tainan, Kaohsiung and Pingtung.

• c. Gypsum Board: Sales area of gypsum boards is mainly domestic with partial exported.

• d. Pressure Sensor: The key marketing areas to focus on are Asia, Europe and the United States.

• B. Market Share of Major Products

Cement	Gypsum board
2.95%	91.3%

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RMC
Tainan	Kaohsiung	Pingtung
17.64%	13.01%	26.23%

• C. Future Growth of Major Products

In recent years, the government has promoted Forward-looking Infrastructure Development Program to drive public projects, and enterprises have actively invested in new factories and offices. The market has strong demand for the company’s products. The company has been offering good quality and service for a long time, and actively improving product performance. The future market share is expected to maintain stable growth.

Under the trend of developing eHealth, checkout-free supermarkets and Industry 4.0, pressure-sensing film-related products will be the main innovation driving force for the group's rapid growth in the future.

• D. Competitive Niche

The quality of the company's products has been highly recognized by customers and has established a good brand image and reputation in the market. The company is the sole domestic gypsum board manufacturer with more than 90% of market share national-wide. The company’s cement and ready-mixed concrete are local brands in the south and are widely designated by customers. Uneo Inc.'s pressure sensing film technology has been recognized by global market, and Uneo Inc. has cooperated with world well-known customers from various industries.

Favorable and Unfavorable Factors for Industry Development and Countermeasures for Unfavorable Factors

Favorable Factors for Industry:

• a. Due to the frequent occurrence of earthquakes, the trend of disaster prevention urban renewal is clear. The government will speed up the urban renewal review system, which will help shorten the time period and energize civil engineering.

• b. In recent years, the government has promoted Forward-looking Infrastructure Development Program to drive public projects, and enterprises have actively invested in new factories and offices, and there is a strong demand for basic building materials.

• c. The company’s long-term management for good quality, service, and making progress in product performances is deeply recognized by customers.

• d. Actively implement cost management to ensure market competitive advantages.

Unfavorable Factors for Industry:

• a. Since the government's energy policy is aiming for natural gas and wind power generation in place of coal-fired power generation, it is getting more challenging to obtain synthetic gypsum, major raw material, domestically.

• b. The dumping of low-priced gypsum boards has made the gypsum board market competitive.

• c. Operating costs of keep factors such as sand and gravel, transportation, and wages are rising year by year.

Countermeasures for Unfavorable Factors:

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• a. Manufacture with efficient in off-peak hours for lower electricity expenses, keep up with raw material cost fluctuations, and implement cost management. Proactively implement cost management policies by leveraging the benefit of off-peak electricity tariff when conducting production planning and keep sensitive to the fluctuation of cost of raw material.

• b. Encourage employees to develop diverse skill, increase the competitiveness in gypsum board systems, and perform job rotations in a timely and appropriate manner to deploy human resources flexibly.

• c. Set up a new gypsum board factory in Luzhu, Kaohsiung, to raise production efficiency.

5.2.2 Production Procedures of Main Products

• A. Major Products and Their Main Uses

• a. Cement, RMC and Gypsum Board: For construction projects.

• b. Pressure Sensor: Apply to stylus, industrial and semiconductor equipment, pressure distribution measuring instruments, smart healthcare monitoring, medical beds, etc.

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• B. Major Products and Their Production Processes

• a. The company's cement production process

==> picture [316 x 494] intentionally omitted <==

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

Raw material input
(Clinker)
Adding gypsum
Grinding
Stock in
In bulk Package
Shipment Shipment
Client
----- End of picture text -----

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b. The company's gypsum board production process

==> picture [477 x 608] intentionally omitted <==

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

Raw material input
(Gypsum quantitative feed) Crushing and screening
Drying
Site recycling
(Demolition, scraps, etc.)
Grinding
Additive
(Quantitative feed)
Calcining
Raw paper feeding
Mixing
Forming
Wet Board
Drying
Cutting edge material
Finished product cut
recycling
Processed board
processing Automatic stacking
Stock in Stock in
Shipment Shipment
Client
----- End of picture text -----

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c. The company's ready-mixed concrete production process

==> picture [388 x 540] intentionally omitted <==

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

Raw material input
(Cement, Bone material)
Weighing
Sampling Raw material Storage
Temporary bucket
Bone material analysis
1. Sieve analysis
Measurement
2. Mud content
3. Moisture content
4. Water content Mixing
5. Unit weight
6. Bone material proportion
7. Salt (chloride ion) test Discharge funnel
Loading ready-mixed
Proportion design
concrete truck
Premixing Weighing & shipping
(Computer Delivery Note)
Compression test
Duration: 7, 14, 28 days Client
----- End of picture text -----

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5.2.3 Supply Status of Main Materials

Materials Item	Clinker	Gravel	Gypsum	Gypsum	Raw paper
			Natural	Desulfurization
Monthly requirement(tons)	32,000	260,000	0	9,300	350
Safety stock(days)	30	30	0	60	60

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5.2.4 Major Suppliers and Clients

A. Major Suppliers in the Last Two Calendar Years

Unit: NT$ thousands

Item		2021	2021			2020	2020		2022(As of March 31)Note 1	2022(As of March 31)Note 1	2022(As of March 31)Note 1	2022(As of March 31)Note 1
	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer
1	The Taiwan Cement Corporation	1,387,028	36%	-	The Taiwan Cement Corporation	1,389,141	37%	-	-	-	-	-

Note 1: As of the publication date of the annual report, the consolidated financial information as of March 31, 2022 has not been reviewed by accountant.

B. Major Clients in the Last Two Calendar Years

Unit: NT$ thousands

Item		2021				2020	2020		2022(As of March 31)Note 1	2022(As of March 31)Note 1	2022(As of March 31)Note 1	2022(As of March 31)Note 1
	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer
1	Hung Hsin Building Mate rials Co.,Ltd	526,861	9%	-	Hung Hsin Building Mate rials Co.,Ltd	525,912	10%	-	-	-	-	-

Note 1: As of the publication date of the annual report, the consolidated financial information as of March 31, 2022 has not been reviewed by accountant.

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5.2.5 Production in the Last Two Years

Unit: NT$ thousands

Year Production Major Products (or bydepartment)	2021	2021	2021	2020	2020	2020
	Capacity	Production	Value of Production	Capacity	Quantity	Amount
Cement	800,000(t)	369,100(t)	640,979	800,000(t)	411,700(t)	642,315
Ready-mixed concrete	2,448,000(M 3)	1,546,268( M 3)	2,716,910	2,448,000(M 3)	1,577,266(M 3)	2,591,889
Gypsum board	20,000,000(M 2)	15,004,180(M 2)	479,827	20,000,000(M 2)	13,957,821(M 2)	436,653
Other			26,119			22,756
Individual production value Consolidated production value	- -	- -	3,863,835 (Note1) 4,432,487	- -	- -	3,693,613 (Note1) 3,975,173

Note 1: Including Uneo Incorporated and Universal Concrete Industrial Corporation (Excluding Huanchung Cement International Corporation as the trading business, Kaohsiung Harbor Transport Company as the dispatch and transportation industry, and the remaining subsidiaries as the holding and investment industry).

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5.2.6 Shipments and Sales in the Last Two Years

Unit: NT$ thousands

					Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Shipments & Sales Major Products (or bydepartments)	2021				2020
	Domestic Sales		Export		Domestic Sales		Export
	Quantity	Revenue	Quantity	Revenue	Quantity	Revenue	Quantity	Revenue
Cement	(Note 1) 273,026(t)	677,812	-	-	(Note 2) 283,486(t)	685,331	-	-
Ready-mixed concrete	1,546,268(M3)	3,338,771	-	-	1,577,266(M3)	3,057,455	-	-
Gypsum board	13,927,765(M 2)	758,891	903,858(M 2)	28,181	12,820,290(M 2)	710,182	1,028,755(M 2)	32,252
Other	-	22,784	-	-	-	10,296	-	-
Individual sales value Consolidated sales value	- -	4,798,258 6,033,170	- -	28,181 45,937	- -	4,463,264 5,389,381	- -	32,252 36,836

Note 1：Cement sales did not include self-use cement 100,928 (t) in 2021.

Note 2：Cement sales did not include self-use cement 126,993 (t) in 2020.

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• 5.3 The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels

The information of employees for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report

Duration of Report	Duration of Report	Duration of Report	2020	2021	Till Apr. 30, 2022
Number of Employee		Total	432	445	462
Age in Average			43.28	42.40	41.85
Seniority in Average			11.12	10.92	10.24
Education level	Ph. D		0.69%	0.45%	0.43%
	Master		7.65%	10.56%	11.26%
	Bachelor		58.15%	50.79%	50.43%
	High School		30.96%	35.51%	35.50%
	Below		2.55%	2.70%	2.38%

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5.4 Environmental Expenditure

During the most recent fiscal year and the current fiscal year up to the printing date of the annual report, the loss (including compensation) and penalty resulted from environmental pollution:

Competent Authority	Description of Violation	Date of Sanction	Reference of Sanction Order	Regulation Violated	Sanction	Countermeasures and estimated amount for fine in the future
Environmental Protection Bureau, Kao-Hsiung City Government (Appealing)	Former Class B Dedicated Air Pollution Control Specialist Mr. Chen, Geng-Ben resigned on Mar. 12, 2021. The filing of such was not submitted until May 31, 2021.	Dec. 27, 2021	EPB, Kao-hsiung City Gov’t, Kong-Chu No. 20-110-120029 order	Art. 34, Air Pollution Control Act	Fine: NTD 200,000 Deadline of improvement: Jan. 28, 2022 Environmental workshop 2 hours	Reinforce management of licensed specialist personnel.
Environmental Protection Bureau, Kao-Hsiung City Government	Former professional technical personnel on site, Mr. Tsai, Ming-Tse resigned on May 12, 2021, and was succeeded by Mr. Tsai, Ming- Fu. The succession was not filed within 15 days after the change.	Aug. 12, 2021	EPB, Kao-hsiung City Gov’t, Fei-Chu No. 40- 110-080009 order	Sec. 2 of Art. 28, Waste Disposal Act	Fine: NTD 6,000 Environmental workshop 1 hours	Reinforce management of licensed specialist personnel.
	The output and storage volume of waste, code:D-0899, was filed as “0” from Jan. to Oct. 2020. It was found during a plant inspection that there are record of routine replacement of filter monthly according to cement manufacturing procedure. Thus, it’s determined that this to be a clear violation due to fraudulent filingof volume of waste.	Jan. 13, 2021	EPB, Kao-hsiung City Gov’t, Fei-Chu No. 40- 110-010020 order	Sub.-Sec. 2, Sec. 1, Art. 31 of Waste Disposal Act	Fine: NTD 6,000 Environmental workshop 1 hours	Modification to Plan for Disposal of Waste has been made and filed monthly at Industrial Waste Management System.
	Wasted filter bags were founded at the packing area on the second floor of the plant. However, no sign or labeling with the name of the industrial waste was placed with clear vision and hence violates relevant regulations as cited.	Jan. 13, 2021	EPB, Kao-hsiung City Gov’t, Fei-Chu No. 40- 110-010021 order	Sec. 1, Art. 36 of Waste Disposal Act and Sub.-sec. 4, Sec. 1, Art. 6 of Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste	Fine: NTD 6,000 Environmental workshop 1 hours	Already relocate the wasted filter bag to designated storage area as recorded by Plan for Waste Disposal and establish label of the name of waste in Chinese with clear vision.
Environmental Protection Bureau, Kao-Hsiung City Government	Mixture of wasted oil produced from the plant was stored outdoor in torn container without remedial facility or measure to prevent the inflow of rain or leakage and leakage and pollution of the ground was identified.	Jan. 13, 2021	EPB, Kao-hsiung City Gov’t, Fei-Chu No. 40- 110-010022 order	Sub.-Sec. 1, Sec. 1, Art. 31, Sec. 2, Art. 31, Sec. 1, Art. 36 of Waste Disposal Act and Sub.-sec. 4, Sec. 1, Art. 6 and Sub.-sec. 1, Sec. 1, Art. 10 of Methods and Facilities Standards for the Storage, Clearance, and Disposal of Industrial Waste	Fine: NTD 6,000 Environmental workshop 1 hours	Modification to Plan for Disposal of Waste has been made and filed monthly at Industrial Waste Management System and another copy of such filing has been served to licensed disposal facility.

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Competent Authority	Description of Violation	Date of Sanction	Reference of Sanction Order	Regulation Violated	Sanction	Countermeasures and estimated amount for fine in the future
	Production of Noise exceed the level allowed due to the use of power tool during prohibited hours of a day.	Jan. 26, 2022	EPB, Kao-hsiung City Gov’t, Zao-Chu No. 22-111-010076 order	Sec. 4, Art. 8, Noise Control Act and Sec. 4 of No. 104391770001 order by Kao-hsiung City Government where it stipulates that “No usage of power tool to the extend that such usage creates noise by construction activities at restricted zone from 10pm to 8am of next dayand 12pm to 2pm on holiday.	Fine: NTD 3,000	Avoid construction during holiday.
Bureau of Environmental Protection, Taoyuan City Government	Failure to equip the premises with a Class B Waste Disposal Technician	Feb. 18, 2021	Tao-yuan City Gov’t Huan No. 1100011671 Order	Sec. 2 of Art. 28, Waste Disposal Act	Fine: NTD 6,000	Already assigned a Class B Waste Disposal Technician

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5.5 Labor Relations

• 5.5.1 Illustration various measures of employee benefit, advanced studies, training and retirement and its implementation.

• Employee Benefit:

The company has established Employee’s Welfare Committee pursuant to official confirmation by Taipei City Government in 1969. The goal of the committee is to make sure the implementation of various benefits of the employee, including subsidy to the tuition of employee’s children, gift money for festivals, monthly birthday party, company tour.

1. Advanced Studies:

The company encourages employee to take on-job study degree program and provide loans of tuition for employees and their children.

1. Training:

Training for new employee,

In order to enhance the understanding of the job description and the environment, the company has implemented necessary training on new employee.

On-job Training,

The company provides ad hoc on-job training hosted in-house or by external institution in order to enhance the employee’s knowledge required by his/her position.

1. Retirement:

The company has filed and established Supervisory Committee of Labor Retirement Reserve in 1980. Internal regulation governing retirement of the employee has been adopted in 1984 pursuant to Labor Standards Act. The company has appropriated retirement reserve monthly according to relevant regulations and deposited into special account registered in Dept. of Trust, Bank of Taiwan.

Labor Pension Act has been implemented on July 1[st] , 2005 which allows employees the liberty to choose applicable scheme. For employee who chose this scheme, the company shall appropriate a reserve for pension equivalent to 6% of salary pursuant to applicable regulations.

1. Other important agreement:

The employment agreement between the employee and the company has followed the principle stipulated by Labor Standards Act and supplemented by Working Guideline of the company.

• 5.5.2 In the most recent year and up to the date of publication of the annual report, losses suffered due to labor disputes: Not applicable.

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5.6 Cyber Security Policy Purpose and Objectives

5.6.1 Cyber Security Policy Purpose

1. This policy is made in order to make the company's business run smoothly, ensure the security of the company's mainframe, network equipment and network communications, and prevent information or information and communication system from being unauthorized access, use, control, disclosure, damage, alteration, destruction, or other infringement, and establish cyber security management specifications.

2. This policy will ensure the confidentiality, integrity and availability of the company's business information and system.

3. Confidentiality: It ensures that only authorized personnel can use the

4. information.

5. Integrity: It ensures that the information used is correct and has not been

6. doctored.

Availability: It ensures that authorized personnel have access to the required information.

5.6.2 Cyber Security Policy Objectives

1. When a cyber security incident happens, it can be timely informed, dealt with and restored within the specified time. The information system structure will gradually establish a high-availability backup and off-site data backup mechanism according to its risk level to ensure uninterrupted services. It will also strengthen system recovery drills to ensure that the system recovery time meets the expectation.

2. In response to changes in the cyber security threat, cyber security education and training will be conducted to boost the staff’s awareness of cyber security. Most of the cyber security incidents come from the negligence and lack of cyber security awareness of staff. Thus, regular cyber security publicity and education training is necessary.

3. Please do not open emails from unknown sources or unidentifiable senders. Regular email social engineering drills will be conducted every year. Colleagues who open such emails or links by mistake will receive further training and records of the training will be recorded for future reference.

4. We aim to enhance the level and mechanism of cyber security equipment, improve defense capabilities, and prevent virus or intrusion and extortion events.

5. Be alert to security bugs notices, patch high-risk bugs in real time, and regularly assess and handle security bugs repairs for equipment, system components, database systems, and software.

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5.7 Material Contract

Type	Contracting Party	Contracting Period	Desc	Restriction Clause
Leasing Agreement	Feng-Li Enterprise Inc.	2015.09.01. ~ 2022.08.31.	Leasing of Fengshan RMC Plant	None
Leasing Agreement	International Textile Co. Ltd.	2018.10.11. ~ 2021.10.10.	Leasing of Yeung Kung RMC Plant	None
Leasing Agreement	Tai-Nan Ready-mixed Concrete Inc.	2021.09.01. ~ 2026.08.31.	Leasing of Tai-Nan RMC Plant	None
Leasing Agreement	Universal Real Estate Development Inc.	2017.08.01. ~ 2022.07.31.	Leasing of office space in San-Lien Building	None
Leasing Agreement	Global Town Business Center Inc.	2019.04.01. ~ 2029.06.31.	Leasing of office space in San-Lien Building	None
Leasing Agreement	Hao-Chun Enterprise Inc.	2020.09.01 ~ 2024.08.31	Leasing of plot of Ling Feng Ying	None

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VI. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed Balance Sheet

A. Consolidated Condensed Balance Sheet

Unit: NT$ thousands

Year Item	Year Item	Financial Summary for The Last Five Years( Note 1)	Financial Summary for The Last Five Years( Note 1)	Financial Summary for The Last Five Years( Note 1)	Financial Summary for The Last Five Years( Note 1)	Financial Summary for The Last Five Years( Note 1)	2022 (As of March 31) (Note 2)
		2021	2020	2019	2018	2017
Current assets		5,004,661	4,391,640	4,267,262	4,058,612	3,863,038
Property, Plant and Equipment		6,890,696	6,680,071	6,180,847	6,050,677	5,902,802
Intangible assets		8,404	8,075	7,854	8,548	8,400
Other assets( Note 3)		13,193,061	13,023,150	12,945,970	12,458,735	11,454,968
Total assets		25,096,822	24,102,936	23,401,933	22,576,572	21,229,208
Current liabilities	Before distribution	4,245,043	3,795,424	3,831,854	3,435,479	2,730,633
	After distribution	( Note 4)	4,514,394	4,485,463	4,089,088	3,449,603
Non-current liabilities		1,467,303	1,522,159	1,467,033	1,311,820	1,343,814
Total liabilities	Before distribution	5,712,346	5,317,583	5,298,887	4,747,299	4,074,447
	After distribution	( Note 4)	6,036,553	5,952,496	5,400,908	4,793,417
Shareholders’ Equity attributable to the parent company		19,233,465	18,656,227	17,983,457	17,715,321	17,036,903
Paid-in Capital		6,536,092	6,536,092	6,536,092	6,536,092	6,536,092
Capital surplus		66,950	65,822	41,430	41,265	46,951
Retained earnings	Before distribution	11,884,891	11,515,783	11,013,644	10,562,324	10,109,852
	After distribution	( Note 4)	10,796,813	10,360,035	9,908,715	9,390,882
Other equity		745,532	538,530	392,291	575,640	344,008
Treasury stock		-	-	-	-	-
Non-controlling interest		151,011	129,126	119,589	113,952	117,858
Total equity	Before distribution	19,384,476	18,785,353	18,103,046	17,829,273	17,154,761
	After distribution	( Note 4)	18,066,383	17,449,437	17,175,664	16,435,791

Note 1: The financial information has been audited and certified by CPAs.

Note 2: As of the publication date of the annual report, the consolidated financial information as of March 31, 2022 has not been reviewed by accountant.

Note 3: Including financial assets at fair value through profit or loss - non-current, financial assets at fair value through other comprehensive income - non-current, financial assets at amortized cost - non-current, investments accounted for using equity method, right - of - use assets, investment properties, deferred tax assets, prepayments for equipment and other non-current assets.

Note 4: The proposal on 2021 profit distribution is pending ratification by the AGM.

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B. Individual Condensed Balance Sheet

Unit: NT$ thousands

		Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Item		Financial Summary for The Last Five Years( Note 1)
		2021	2020	2019	2018	2017
Current assets		4,025,665	3,496,309	3,474,856	3,285,678	3,120,241
Property, Plant and Equipment		6,629,770	6,414,931	5,920,949	5,474,006	5,324,620
Intangible assets		8,051	7,611	7,452	7,873	7,604
Other assets( Note 2)		13,591,503	13,110,276	13,020,770	13,011,495	12,047,983
Total assets		24,254,989	23,029,127	22,424,027	21,779,052	20,500,448
Current liabilities	Before distribution	3,860,294	3,198,586	3,240,529	2,853,848	2,224,308
	After distribution	( Note 3)	3,917,556	3,894,138	3,507,457	2,943,278
Non-current liabilities		1,161,230	1,174,314	1,200,041	1,209,883	1,239,237
Total liabilities	Before distribution	5,021,524	4,372,900	4,440,570	4,063,731	3,463,545
	After distribution	( Note 3)	5,091,870	5,094,179	4,717,340	4,182,515
Paid-in capital		6,536,092	6,536,092	6,536,092	6,536,092	6,536,092
Capital surplus		66,950	65,822	41,430	41,265	46,951
Retained earnings	Before distribution	11,884,891	11,515,783	11,013,644	10,562,324	10,109,852
	After distribution	( Note 3)	10,796,813	10,360,035	9,908,715	9,390,882
Other equity		745,532	538,530	392,291	575,640	344,008
Treasury stock		-	-	-	-	-
Total equity	Before distribution	19,233,465	18,656,227	17,983,457	17,715,321	17,036,903
	After distribution	( Note 3)	17,937,257	17,329,848	17,061,712	16,317,933

Note 1: The financial information has been audited and certified by CPAs.

Note 2: Including financial assets at fair value through other comprehensive income - non-current, financial assets at amortized cost - non-current, investments accounted for using equity method, right - of - use assets, investment properties, deferred tax assets, prepayments for equipment and other non-current assets.

Note 3: The proposal on 2021 profit distribution is pending ratification by the AGM.

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6.1.2 Condensed Statement of Comprehensive Income/Condensed Statement of

Income

A. Consolidated Condensed Statement of Comprehensive Income

Year Item	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	2022 (As of March 31) (Note 2)
	2021	2020	2019	2018	2017
Operating revenue	6,079,107	5,426,217	5,005,731	4,780,994	4,405,376
Gross profit	1,131,817	907,031	586,765	571,082	537,908
Profit /loss from operations	710,202	493,142	170,895	182,646	150,227
Non-operating income and expenses	530,060	804,372	1,027,783	945,220	1,274,987
Profit before tax	1,240,262	1,297,514	1,198,678	1,127,866	1,425,214
Net profit from continuing operation	1,114,226	1,259,795	1,141,682	1,051,568	1,389,535
Loss of discontinued operations	-	-	-	-	-
Net profit	1,114,226	1,259,795	1,141,682	1,051,568	1,389,535
Other comprehensive income/loss (net amount after tax)	206,946	79,230	(183,256)	(335,953)	121,925
Total comprehensive income/loss	1,321,172	1,339,025	958,426	715,615	1,511,460
Net profit attributable to owners of parent company	1,088,078	1,247,252	1,135,477	1,057,293	1,411,666
Net profit attributable to non-controlling interests	26,148	12,543	6,205	(5,725)	(22,131)
Total comprehensive income/loss attributable to owners ofparent company	1,295,080	1,326,470	952,128	721,035	1,533,947
Total comprehensive income/loss attributable to non-controllinginterest	26,092	12,555	6,298	(5,420)	(22,487)
Earnings per share	1.66	1.91	1.74	1.62	2.16

Note 1: The financial information has been audited and certified by CPAs.

Note 2: As of the publication date of the annual report, the consolidated financial information as of March 31, 2022 has not been reviewed by accountant.

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B. Individual Condensed Statement of Comprehensive Income

Year Item	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)	Financial Summary for The Last Five Years ( Note 1)
	2021	2020	2019	2018	2017
Operating revenue	4,826,439	4,495,516	4,149,136	3,865,046	3,518,563
Gross profit	962,604	801,903	495,207	496,833	478,624
Profit /loss from operations	629,650	469,884	158,345	236,966	235,915
Non-operating income and expenses	571,451	811,505	1,029,563	897,534	1,209,175
Profit before tax	1,201,101	1,281,389	1,187,908	1,134,500	1,445,090
Net profit from continuing operations	1,088,078	1,247,252	1,135,477	1,057,293	1,411,666
Loss of discontinued operations	-	-	-	-	-
Net profit	1,088,078	1,247,252	1,135,477	1,057,293	1,411,666
Other comprehensive income/loss (net amount after tax)	207,002	79,218	(183,349)	(336,258)	122,281
Total comprehensive income/loss	1,295,080	1,326,470	952,128	721,035	1,533,947
Earnings per share	1.66	1.91	1.74	1.62	2.16

Note 1: The financial information has been audited and certified by CPAs.

6.1.3 Auditors’ Opinions from 2017 to 2021

Year	CPA	Audit Opinion	Accounting Firm
2017	Hung Ju Liao、Chao Chin Yang	Unmodified opinion with the Other Matterparagraph	Deloitte & Touche
2018	Hung Ju Liao、Chao Chin Yang	Unmodified opinion	Deloitte & Touche
2019	Hung Ju Liao、Chao Chin Yang	Unmodified opinion	Deloitte & Touche
2020	Chao Chin Yang、Lee Yuan Kuo	Unmodified opinion	Deloitte & Touche
2021	Chi Chen Lee、Chao Chin Yang	Unmodified opinion	Deloitte & Touche

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6.2 Five-Year Financial Analysis

A. Consolidated Financial Analysis

Item	Year	Year	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	2022 (As of March 31) Note 2
			2021	2020	2019	2018	2017
Financial structure (%)	Liabilities to assets ratio		22.76	22.06	22.64	21.03	19.19
	Long-term capital to property, plant and equipment ratio		302.60	304.00	316.62	316.35	313.38
Solvency	Current ratio (%)		117.89	115.70	111.36	118.14	141.47
	Quick ratio (%)		110.32	106.75	103.58	108.91	126.04
	Interest coverage ratio (times)		43.34	42.32	37.42	52.87	81.14
Operations	Accounts receivable turnover (times)		3.93	4.00	3.98	4.24	4.20
	Average collection cycle		92.87	91.25	91.70	86	87
	Inventory turnover (times)		17.02	16.50	15.83	14.10	12.62
	Accounts payable turnover (times)		7.00	6.80	6.60	6.91	6.84
	Average days in sales		21.44	22.12	23	26	29
	Property, plant and equipment turnover(times)		0.89	0.84	0.81	0.80	0.75
	Total assets turnover (times)		0.24	0.22	0.21	0.22	0.21
Profitability	Return on assets (%) (ROA)		4.63	5.43	5.10	4.89	6.77
	Return on equity (%) (ROE)		5.83	6.83	6.35	6.01	8.28
	Net income before tax as a percentage ofpaid-in capital(%)		18.97	19.85	18.33	17.26	21.80
	Net profit rate (%)		18.32	23.21	22.80	21.99	31.54
	EPS (NT$)	Before retrospective	1.66	1.91	1.74	1.62	2.16
		After retrospective	1.66	1.91	1.74	1.62	2.16
Cash flow	Cash flow ratio (%)		32.56	26.72	19.56	17.54	23.67
	Cash flow adequacy ratio (%)		93.99	77.47	69.43	69.41	71.34
	Cash reinvestment ratio (%)		3.01	1.26	0.42	(0.23)	(0.33)
Leverage	Operating leverage		1.71	1.90	3.53	3.08	3.68
	Financial leverage		1.04	1.06	1.23	1.14	1.13
Analysis of financial ratio differences for the last two years: 1 D i Nt Mi Mil b f th i i th t l b d t fit ft t liht
. ecrease n e argn: any ecause o e ncrease n e ne saes e cause ne pro aer ax a sg decrease in 2021.
2. Increase in Cash Flow Ratio and Cash Flow Adequacy Ratio: Mainly because of the increase in the inflow of net cash from the operating activities in 2021.
3. Increase in Cash Reinvestment Ratio: Mainly because of the increase in the inflow of net cash from the operatingactivities and decrease in dividend distribution bycash in 2021.

Note 1: The financial information has been audited and certified by CPAs. Note 2: As of the printing date of the annual report, the consolidated financial information as of March 31, 2022 has not been reviewed by accountant.

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B. Individual Financial Analysis

Item	Year	Year	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)	Financial Analysis for the Last Five Years ( Note 1)
			2021	2020	2019	2018	2017
Financial structure (%)	Liabilities to assets ratio		20.70	18.98	19.80	18.66	16.89
	Long-term capital to property, plant and equipment ratio		307.62	309.13	323.99	345.73	343.24
Solvency	Current ratio (%)		104.28	109.30	107.23	115.13	140.28
	Quick ratio (%)		96.86	99.97	99.63	106.55	128.19
	Interest coverage ratio (times)		58.36	56.61	54.19	67.65	103.62
Operations	Accounts receivable turnover (times)		3.64	3.87	3.89	4.25	4.22
	Average collection cycle		100	94	94	86	86
	Inventory turnover (times)		15.04	15.84	16.31	14.28	12.77
	Accounts payable turnover (times)		6.74	7.20	7.22	7.60	7.52
	Average days in sales		24	23	22	26	29
	Property, plant and equipment turnover(times)		0.73	0.72	0.72	0.72	0.67
	Total assets turnover (times)		0.20	0.19	0.18	0.18	0.18
Profitability	Return on assets (%) (ROA)		4.68	5.58	5.23	5.08	7.10
	Return on equity (%) (ROE)		5.74	6.80	6.36	6.08	8.48
	Net income before tax as a percentage ofpaid-in capital(%)		18.37	19.60	18.17	17.36	22.11
	Net profit rate (%)		22.54	27.74	27.36	27.36	40.12
	EPS (NT$)	Before retrospective	1.66	1.91	1.74	1.62	2.16
		After retrospective	1.66	1.91	1.74	1.62	2.16
Cash flow	Cash flow ratio (%)		32.77	29.02	21.53	20.90	33.19
	Cash flow adequacy ratio (%)		90.99	74.83	69.40	69.92	70.74
	Cash reinvestment ratio (%)		2.4	0.91	0.20	(0.26)	(0.09)
Leverage	Operating leverage		1.56	1.67	2.96	2.00	1.96
	Financial leverage		1.03	1.05	1.16	1.08	1.06
Analysis of financial ratio differences for the last two years: 1. Increase in Cash Flow Adequacy Ratio: Mainly because of the increase in the inflow of net cash from the operating activities in 2021. 2. Increase in Cash Reinvestment Ratio: Mainly because of the increase in the inflow of net cash from the operating activities and decrease in dividend distribution by cash in 2021.

Note 1: The financial information has been audited and certified by CPAs.

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Note: The equations for calculation in financial analysis.

[I] Financial structure

(1) Liabilities to assets ratio = Total liabilities/ Total assets

(2) Long-term capital to PP&E ratio = (Gross shareholder’s equity + Non-current liabilities) / Net PP&E [II] Solvency (1) Current ratio = Current assets / Current liabilities (2) Quick ratio = (Current assets – Inventory – Prepayments) / Current liabilities (3) Interest coverage ratio =EBIT / Interest expense for current period

[III] Operations

(1) Account receivable (including account receivable and note receivable from operation) turnover = Net revenue /Balance of average account receivable (including account receivable and note receivable from operation) (2) Average collection period=365 / Account receivable turnover (3) Inventory turnover= Cost of goods sold / Average inventory (4) Account payable (including account payable and note payable from operation) turnover = Cost of goods sold / Balance of average account payable (including account payable and note payable from operation) (5) Average daily sales = 365 / Inventory turnover (6) PP&E turnover = Net revenue / Average Net PP&E (7) Total assets turnover = Net revenue / Average total assets

[IV] Profitability

(1) ROA = [Profit(loss) after tax + Interest expenses x (1 – tax rate)] / Average total assets

(2) ROE = Profit(Loss) after tax / Average equity

(3) Net income before tax as a percentage of paid-in capital = pre-tax profit / Paid-in Capital

(4) Net profit rate = Profit(Loss) after tax / Net revenue

(5) EPS = (Net profit attributable to owners of the parent – dividend from preferred shares) / Weighted average number of outstanding shares

[V] Cash flow

(1) Cash flow ratio = Net cash flow from operating activities / Current liabilities

(2) Cash flow adequacy ratio = Net cash flow from operating activities for the past five years / (Capital Expenditure + Increases in inventory + Cash dividends) over the past five years

(3) Cash reinvestment ratio = (Net cash flow from operating activities – Cash dividends) / (Gross PP&E + Longterm investments + Other non-current assets + Working capital)

[VI] Leverage

(1) Operations leverage = (Net revenue – Variable cost and expenses from operations) / Operating profit

(2) Financial leverage = Operating profit / (Operating profit-interest expenses)

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6.3 Review Report on Financial Report of Recent Fiscal Year by Audit Committee

==> picture [416 x 492] intentionally omitted <==

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

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

87

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:

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:

1. 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.

2. 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

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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:

1. 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.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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.

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1. 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.

2. 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.

90

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.

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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.

92

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		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		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) -

93

Share of the other comprehensive income or
loss of associates accounted for using the
equity method	6,884	-	(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)

94

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)

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings (Note 23) Legal reserve Cash dividends distributed by the Company - NT$ 1 per share From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries ( Note 28) Changes in recognition of associates accounted for using equity method Overdue dividends not collected by shareholders Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 Change in non-controlling interests (Note 23) Disposal of investments in equity instruments at fair value through other comprehensive income (Note 8 and 23) BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings (Note 23) Legal reserve Cash dividends distributed by the Company - NT$ 1.1 per share From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries (Note 28) Changes in recognition of associates accounted for using equity method Overdue dividends not collected by shareholders Net profit for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021, net of income tax					Equity Attributable to Owners of	Equity Attributable to Owners of	Equity Attributable to Owners of	the Company							Total $ 17,983,457 - 653,609 ) 418 22,992 ) 22,483 1,247,252 79,218 1,326,470 - - 18,656,227 - 718,970 ) 527 605 4 ) 1,088,078 207,002	Non-controlling Interests $ 119,589 - - ( 2,238 ) - - 12,543 12 12,555 ( 780 ) - 129,126 - - ( 2,017 ) - - 26,148 ( 56)	Total Equity	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 - ) ) - - - - -		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 **
		( 4				( ( ( ( ( (	( ( (	( (	( (	( ) ( ) -				( ( ( (		( ( ( (	( ( ( ( ( ( (	$ 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

95

(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)

Total comprehensive income (loss) for the year ended December 31, 2021 Change in non-controlling interests (Note 23) BALANCE AT DECEMBER 31, 2021					Equity Attributable to Owners of	Equity Attributable to Owners of	Equity Attributable to Owners of	the Company							Total 1,295,080 - $ 19,233,465	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)

96

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	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)	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)

• 97 -

Proceeds from the liquidation of financial assets at fair value
through other comprehensive income	-	21,039
Increase in financial assets at amortized cost	(5,726)	(14,866)
		(Continued)

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)

2021 Decrease in financial assets at amortized cost $ 25,295 Acquisitions of financial assets at fair value through profit or loss (176,719) Refunds from financial assets at fair value through profit or loss 60,608 Acquisitions of investments accounted for using equity method (27,000) Payments for property, plant and equipment (203,984) Refunds from disposal of property, plant and equipment 10 Payments for intangible assets (3,523) Refunds from disposal of intangible assets 3,000 Payments for investment properties (210) Refunds from disposal of investment properties - Decrease in other non-current assets 379 Net cash used in investing activities (880,319) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings 313,000 Repayments from short-term bills payable (8,000) Proceeds from guarantee deposits received 655 Refund of guarantee deposits received (260) Repayment of the principal portion of lease liabilities (59,836) Dividends paid to owners of the Company (718,970) Acquisitions of non-controlling interests (1,490) Interest Paid (27,434) Dividends paid to non-controlling interests (2,190) Net cash used in financing activities (504,525) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,633) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 294,665 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 292,032 The accompanying notes are an integral part of the consolidated financial statements.

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

(Concluded)

• 98 -

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	January 1, 2022 (Note 2)
Framework”
Amendments to IAS 16 “Property, Plant and Equipment:	January 1, 2022 (Note 3)
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts—Cost of Fulfilling	January 1, 2022 (Note 4)
a 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

• 99 -

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 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 Announced by IASB (Note New IFRSs 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets 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 January 1, 2023 IFRS 17-Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2023 or 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.

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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 ：

• (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

• 101 -

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 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

• 102 -

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 noncontrolling 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 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

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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 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.

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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.

• 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.

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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 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.

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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:

• 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-

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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.

• 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.

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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, 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

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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-ofuse 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.

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

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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 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

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period.

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

6. CASH AND CASH EQUIVALENTS

December 31 2021 2020 Cash on hand $ 414 $ 520 Checking accounts and demand deposits 239,618 237,245 Cash equivalent (investments with original maturities less than 3 months) Time deposits 52,000 56,900 $ 292,032 $ 294,665 FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31 2021 2020 Financial assets mandatorily classified as at FVTPL-Current Non-derivative financial assets Domestic Listed shares and emerging market shares $ 89,895 $ - Mutual funds 471 478 $ 90,336 $ 478 Financial assets mandatorily classified as at FVTPL-Non- current Non-derivative financial assets Limited Partnership $ 22,022 $ - FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME December 31 2021 2020 Investments in equity instruments at FVTOCI-Current Domestic investments Listed shares and emerging market shares $ 2,549,259 $ 2,253,316 Investments in equity instruments at FVTOCI-Non-current Domestic investments Listed OTC Private Equity $ 458,700 $ - Unlisted shares 1,540,374 1,499,279 $ 1,999,074 $ 1,499,279		**December 31 **	**December 31 **
	2021 2020 $ 89,895 $ - 471 478 $ 90,336 $ 478 $ 22,022 $ - COMPREHENSIVE INCOME December 31
		2021 $ 2,549,259 $ 458,700 1,540,374 $ 1,999,074	2020 $ 2,253,316 $ - 1,499,279 $ 1,499,279

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

These investments in equity instruments are held for medium to strategic purposes. Accordingly, the

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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, 2021. 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.

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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.

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.

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Accounts receivable (Including related parties)

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

December 31, 2021

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	31 to 60 Days 0.14% ~ 0.44% $ 193,615 $ (442) $ 193,173 $	61 to 90 Days 0.41% ~ 0.75% $ 88,756 $ (480) $ 88,276 $	91 to 120 Days 1.24% ~ 1.52% $ 46,085 $ (632) $ 45,453 $	121 to 150 Days 2.89% ~ 7.17% $ 5,255 $ (196) $ 5,059 $	151 to 365 Days 9.74% ~ 23.42% $ 2,508 (107) $ 2,401	Over 365 Days 100% $ 2,210 $ (2,210) $ - $	Total $1,216,500 (5,124) $1,211,376

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Less than 30 Days 0.03% ~ 7.91% $ 732,181 (1,502) $ 730,679	31 to 60 Days 0.09 ~ 0.44% $ 129,885 (209) $ 129,676	61 to 90 Days 0.29% ~ 0.67% $ 62,193 (215) $ 61,978	91 to 120 Days 1.13% ~ 1.33% $ 18,612 (230) $ 18,382	121 to 150 Days 2.99% ~ 6.54% $ 6,499 (377) $ 6,122	151 to 365 Days 11.28% ~ 17.39% $ 1,982 (621) $ 1,361	Over 365 Days 100% $ 6,554 (6,554) $ -	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

			Accounts
	Contract Asset		Receivable
	(Including		(Including
	related	parties)	related parties)	Total
Balance at January 1, 2021	$	3,369	$ 9,708 $	13,077
Less: Net remeasurement of loss		(1,623)	(1,585)	(3,208)
allowance

( 1 , 6 2 3 ) Less: Amounts written off - (2,999) (2,999)

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Balance at December 31, 2021 December 31, 2020	$ 1,746	$ 5,124	$ 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

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

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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

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

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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) ( 4 9 1 , 9 4 5 ) $ 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) ( 4 9 1 , 9 4 5 ) (5,812) ( 4 9 1 , 9 4 5 ) $ 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) ( 4 9 1 , 9 4 5 ) $ 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:

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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

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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		December 31	December 31
		2021 $ 54,192 $ 233,167	2020 $ 56,039 $ 259,001

Ranges of discount rates for lease liabilities were as follows:

Land Buildings Machinery	**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.

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d. Other lease information

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)

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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

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18. OTHER INTANGIBLE ASSETS

		Patents	Patents	Licenses and Franchises	Licenses and Franchises	Trademarks	Trademarks	Computer Software	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,		$ 5,101		$ 3,868		$ 11		$ 6,010		$ 14,990
2021
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 Licenses and franchises Trademarks Computer Software

3-20 years 10 years 10 years 3 years

19. BORROWINGS

a. Short-term borrowings

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

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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 $ 164 91 375 88 246 $ 964 $ 293 217 158 156 301 $ 1,125	Carrying Value Interest Rate $ 304,836 0.808% ~ 1.358% 299,909 0.848% 274,625 0.848% ~ 1.248% 189,912 0.848% 154,754 0.998% ~ 1.358% $ 1,224,036 $ 349,707 0.858% ~ 1.28% 337,783 0.888% ~ 1.358% 239,842 0.858% 199,844 0.888% 104,699 1.218% ~ 1.458% $ 1,231,875

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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.

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

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

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

Net Defined Benefit Liability $ 82,928 4,798 634 5,432 (6,842) 4,250 21,253 (10,995) 7,666 (31,976) - 64,050 4,284 212 4,496 (3,156) 12,988 (17,742) (2,057) (9,967) (23,538)

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Benefits paid Balance at December 31, 2021	(24,615) $ 258,000	24,615 $ (222,959)	- $ 35,041

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		December 31	December 31
		2021 $ (10,956) $ 11,672 $ 11,013	2020 $ (11,848) $ 12,648 $ 11,875

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$ (10,456) $ (11,254)

0.5% decrease

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 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

b.	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

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

• 128 -

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 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	Appropriation	Dividends Per
	of	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

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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.

• e.

• Other equity items

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

Balance at January 1 Share of exchange difference of associates accounted for using the equity method Balance at December 31	For the year Ended	For the year Ended	December 31
		2021 $ (892,298) (53,545) $ (945,843)	2020 $ (1,006,436) 114,138 $ (892,298)

• 2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain (loss) - equity instruments Share from associates accounted for using the equity method Other comprehensive income/(loss) during the year The cumulative profit or loss arising from the disposals of equity instruments is transferred to retained earnings. Balance at December 31 3) Remeasurement of defined benefit plans Balance at January 1 Remeasurement Remeasurement on defined benefit plans related income tax Share from associates accounted for using the equity method Balance at December 31 4) Other equity items

**For the year Ended **

2021 2020

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Balance at January 1 Share of associates accounted for using the equity method (Note) Balance at December 31	$ (17,217) - $ (17,217)	$ - (17,217) $ (17,217)

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

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		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	**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			2020 $ 1,278,637 $ 4,772 880 3,892

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Sale of goods Less: Allowance for impairment loss Contract liabilities - current Sale of goods	5,546 1,109 4,437 $ 7,062 $ 10,275	9,928 1,973 7,955 $ 13,673 $ 4,457	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.

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

Disaggregation of revenue
Concrete Cement Gypsum board panels Others	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

a. Interest income
Bank deposits b. Other income Rental income - investment properties (Note 17) Dividend income Others	For the Year Ended December 31
	2021 2020 $ 1,109 $ 1,361 For the Year Ended December 31
		2021 $ 25,345 160,502 21,848	2020 $ 26,086 172,561 28,074

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$ 207,695 $ 226,721

c. Other gains and losses

Impairment losses on assets Gain on disposal of investment properties Net foreign exchange gains and losses Gain (loss) on disposal of property, plant and equipment Gain on disposal of intangible assets Fair value changes of financial assets Financial assets mandatorily classified as at FVTPL Litigation reserve Development and design expenses Others d. Interest expense Interest on loans Interest on lease liabilities e. 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	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 $ - $ (103,012) - 8,579 (540) (1,066) (17) 760 2,989 - (4,201) (23) (7,000) - (6,286) - (7,297) (5,334) $ (22,352) $ (100,096) 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 $ 112,319 59,737 1,179 3,183 $ 176,418 $ 119,825 52,231 1,179 $ 173,235 $ 204 2,979 $ 3,183	2020 $ 83,194 50,784 1,282 1,800 $ 137,060 $ 83,413 50,565 1,282 $ 135,260 $ - 1,800 $ 1,800

f. Employee benefits expense

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Short-term benefits Salaries Labor and health insurance Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 22) 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 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 $ 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	For the Year Ended December 31
	2021 2020 1.68% 1.73% 1.68% 1.73%

Employees’ compensation Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31	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.

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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.

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 **	**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:

	Profit before tax Income tax expense calculated at the statutory rate Tax-exempt income Nondeductible expenses in determining taxable income Realized investment losses Unrecognized deductible temporary differences Net operating loss carryforwards used Additional income tax on unappropriated earnings Land value increment tax Income tax adjustments on 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 $ 1,240,262 $ 248,052 (32,382) (72,875) - 966 (3,378) 7,979 - (22,326) $ 126,036
b.	Income tax recognized in other comprehensive income	For the Year Ended December 31
			2021	2020
	Deferred tax In respect of the current year Remeasurement of defined benefit plans		$ 351	$ 1,533

b.	Income tax recognized in other comprehensive income
		For	the Year Ended		December 31
			2021			2020
	Deferred tax
	In respect of the current year
	Remeasurement of defined benefit plans	$		351	$	1,533

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c. Current tax assets and liabilities

For the Year Ended December 31 2021 2020 Current tax assets Tax refund receivable $ - $ 31 Current tax liabilities Income tax payable $ 119,517 $ 48,156

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

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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	2020 $ 33,274 90,533 287,601

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$ 321,627 $ 411,408

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

Profit for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 1,088,078	2020 $ 1,247,252

Weighted average number of ordinary shares outstanding (in thousand shares)

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.

28. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

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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.

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• 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)	Financial assets at fair value through profit or loss $ - 25,000 ( 2,978)	Financial assets at fair value through other comprehensive income $ 1,499,279 20,000 -	Total
			$ 1,499,279 45,000 ( 2,978)

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Recognized in other comprehensive income(Unrealized valuation gain (loss) on financial assets at fair value through other comprehensive income) Balance at December 31		- $ 22,022		21,09 $ 1,540,374		21,09
			5		5	$ 1,562,396

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 v a l u e Investment of Equity Instrument Purchase of stock via private offering which is subject to a three-yearlock-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

December 31 2021 2020

• 141 -

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

• 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

• 142 -

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.

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

• 143 -

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 nonderivative 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.

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.

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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 Associates

Sheng Yuan Investment Corp. Pan Asia Corp. Tainan Concrete Industrial Corp.

• 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)

• 145 -

December 31

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	2021 $ 26,432 7,744 12 $ 34,164	2020 $ 47,098 5,172 19 $ 52,251

The outstanding receivables from related parties are unsecured.

• 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

Related Parties Category Acquisitions of Right - of - use assets Associates Line Item Related Party Category Lease liabilities Associates Line Item Related Party Category Interest expense Associates	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:

• 146 -

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 theGroup i. Compensation of key management personnel Short-term employee benefits Post-employment benefits		December 31	December 31
	2021 2020 $ 3,207 $ 8,705 23 46 $ 3,230 $ 8,751 For the Year Ended December 31
	2021 2020 $ 5,498 $ 5,498 23 23 $ 5,521 $ 5,521 **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:

• 147 -

• 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 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)

• 148 -

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:

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.

• 149 -

(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)

  • 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)

• 150 -

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

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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 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

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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.

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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.

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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

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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

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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

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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.

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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 - - - - -

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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.

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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.

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6.5 Financial Statements for the Years Ended December 31, 2021 and 2020, and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Universal Cement Corporation

Opinion

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

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2021 and 2020, and its financial performance and its 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 Financial Statements section of our report. We are independent of the Corporation 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 financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on

• 162 -

these matters.

The key audit matter of the Corporation’s 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 22, the Corporation 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 Corporation’s revenue and has a material impact on the Corporation’s 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:

1. We understood the design of the Corporation’s internal controls on accounting for sales. We tested the implementation and operating effectiveness of the internal controls.

2. 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.

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

Management is responsible for the preparation and fair presentation of the 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 financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Corporation’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 Corporation 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 Corporation’s financial reporting process.

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Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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:

1. Identify and assess the risks of material misstatement of the 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.

2. 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 Corporation’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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 Corporation’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 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 Corporation to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Corporation to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the Corporation 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

• 164 -

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 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 financial statements are intended only to present the 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 financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying 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 financial statements shall prevail.

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Universal Cement Corporation

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

ASSETS CURRENT ASSETS Cash (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 32) Contract assets - current (Notes 4 and 23) Contract assets from related parties - current (Notes 4, 23 and 31) Notes receivable (Notes 4 ,11 and 23) Net Accounts receivable (Notes 4,11 and 23) Accounts receivable from related parties (Notes 4, 11,23 and 31) Other receivables (Notes 4 and 31) Inventories (Notes 4 and 12) Prepayments Other current assets Total current assets NON-CURRENT ASSETS 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 32) Investments accounted for using equity method (Notes 4 and 13) Property, plant and equipment (Notes 4 and 14) Right - of - use assets (Notes 4 and 15) Investment properties (Notes 4 and 16) Other intangible assets (Notes 4 and 17) Deferred tax assets (Notes 4 and 25) Prepayments for equipment Other non-current assets Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 4 and 18) Short-term bills payable (Note 4 and 18) Contract liabilities - current (Notes 4 and 23) Notes payable (Note 19) Accounts Payable (Note 19) Accounts Payable to related parties (Notes 19 and 31) Other payables (Note 20 and 31) Current tax liabilities (Notes 25) Lease liabilities - current (Notes 4, 15 and 31) Other current liabilities (Note 20) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 25) Lease liabilities - non-current (Notes 4, 15 and 31) Guarantee deposits Net defined benefit liabilities - non-current (Notes 4 and 21) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 22) Capital stock - common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity TOTAL		December 31, 2021 Amount % $ 104,869 - 6,866 - 2,081,210 9 67 - 2,545 - 4,437 - 395,276 2 1,000,841 4 36,742 - 106,365 1 266,451 1 16,310 - 3,686 - 4,025,665 17 1,709,936 7 4,707 - 11,111,932 46 6,629,770 27 39,323 - 685,616 3 8,051 - 16,702 - 23,287 - - - 20,229,324 83 $ 24,254,989 100 $ 1,780,000 7 1,059,292 4 1,224 - - - 581,335 3 40,529 - 258,827 3 107,052 1 13,445 - 18,590 - 3,860,294 16 1,088,997 5 26,072 - 8,827 - 37,334 - 1,161,230 5 5,021,524 21 6,536,092 27 66,950 - 2,607,075 11 3,185,793 13 6,092,023 25 11,884,891 49 745,532 3 19,233,465 79 $ 24,254,989 100		December 31, 2020
				Amount % $ 125,182 1 - - 1,851,633 8 67 - 5,578 - 4,228 - 362,052 2 796,302 3 52,308 - 592 - 247,290 1 45,918 - 5,159 - 3,496,309 15 1,419,292 6 15,195 - 10,808,078 47 6,414,931 28 27,007 - 194,028 1 7,611 - 5,344 - 640,952 3 380 - 19,532,818 85 $ 23,029,127 100 $ 1,285,000 6 1,039,284 5 565 - 209 - 471,001 2 52,662 - 268,209 1 46,077 - 16,897 - 18,682 - 3,198,586 14 1,089,408 5 10,315 - 8,432 - 66,159 - 1,174,314 5 4,372,900 19 6,536,092 29 65,822 - 2,491,500 11 3,185,793 14 5,838,490 25 11,515,783 50 538,530 2 18,656,227 81 $ 23,029,127 100

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

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Universal Cement Corporation

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, 23 and 31) OPERATING COSTS (Notes 12, 21, 24 and 31) GROSS PROFIT OPERATING EXPENSES (Notes 21, 24 and 31) 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 13, 24 and 31) 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 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (Notes 21, 22 and 25) 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		2021 Amount % $ 4,826,439 100 3,863,835 80 962,604 20 90,348 2 167,842 3 76,718 2 (1,954) - 332,954 7 629,650 13 141 - 177,733 4 (9,544) - (20,939) (1) 424,060 9 571,451 12 1,201,101 25 113,023 2 1,088,078 23 10,048 - 199,183 4		2020
				Amount % $ 4,495,516 100 3,693,613 82 801,903 18 105,770 2 157,467 3 68,246 2 536 - 332,019 7 469,884 11 273 - 178,891 4 (98,927) (2) (23,044) (1) 754,312 17 811,505 18 1,281,389 29 34,137 1 1,247,252 28 (7,712) - (28,404) (1)

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Share of the other comprehensive income or
loss of associates accounted for using the
equity method	50,981	1	(346)	-
			(Continued)

Universal Cement Corporation

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 of associates accounted for using the equity method Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 26) Basic Diluted		2021 Amount % $ 335 - 260,547 5 (53,545) (1) (53,545) (1) 207,002 4 $ 1,295,080 27 $ 1.66 $ 1.66		2020
				Amount % $ 1,542 - (34,920) (1) 114,138 3 114,138 3 79,218 2 $ 1,326,470 30 $ 1.91 $ 1.90

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

(Concluded)

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Universal Cement Corporation

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

BALANCE AT JANUARY 1, 2020 Appropriation of 2019 earnings (Note 22) Legal reserve Cash dividends distributed by the Company - NT$ 1 per share Differences between the actual equity value of subsidiaries acquired or disposed and its carrying amounts. ( Note 27) Changes in recognition of associates accounted for using equity method Overdue dividends not collected by shareholders Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income (loss) for the year ended December 31, 2020 Disposal of investments in equity instruments at fair value through other comprehensive income (Note 8 and 22) BALANCE AT DECEMBER 31, 2020 Appropriation of 2020 earnings (Note 22) Legal reserve Cash dividends distributed by the Company - NT$ 1.1 per share Differences between the actual equity value of subsidiaries acquired or disposed and its carrying amounts. (Note 27) Changes in recognition of associates accounted for using equity method Overdue dividends not collected by shareholders Net profit for the year ended December 31, 2021 Other comprehensive income (loss) for the year ended December 31, 2021, net of income tax	Capital Stock - Common Stock $ 6,536,092 - - - - - - - - 6,536,092 - - - - - - -		Capital Surplus $ 41,430 - - 418 418 1,491 22,483 - - - - 65,822 - - 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 - ( 84,237) 3,185,793 5,838,490 - ( 115,575 ) - ( 718,970 ) - - - - - - - 1,088,078 - -	Retained Earnings Special Reserve Unappropriated Earnings $ 3,185,793 $ 5,449,899 - ( 113,548 ) - ( 653,609 ) - - - - ( 7,266 ) - - 1,247,252 - - - 1,247,252 - ( 84,237) 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	Total Equity	Total Equity
				Legal Reserve $ 2,377,952 113,548 - - - - - - - 2,491,500 115,575 - - - - - -	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
						( ( ( ( ( (	( ( (	( (	( (	( (				( ( ( (	$ 17,983,457 - 653,609 ) 418 22,992 ) 22,483 1,247,252 79,218 1,326,470 - 18,656,227 - 718,970 ) 527 605 4 ) 1,088,078 207,002

(Continued)

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Universal Cement Corporation

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

Total comprehensive income (loss) for the year ended December 31, 2021 BALANCE AT DECEMBER 31, 2021	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	Retained Earnings Special Reserve Unappropriated Earnings - 1,088,078 $ 3,185,793 $ 6,092,023			Other Equity				Total 207,002 $ 745,532	Total Equity	Total Equity
				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
							( (			(					1,295,080 $ 19,233,465

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

(Concluded)

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Universal Cement Corporation

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 Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss (gain) recognized Interest expenses Interest income Dividend income Share of profit of associates Loss (Gain) on disposal of property, plant and equipment net Net gain on fair value changes of financial assets designated as at fair value through profit or loss Gain on disposal of investment properties Gain on disposal of other intangible assets Inventory write-downs Impairment loss 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 Financial assets at fair value through other comprehensive income Proceeds from the liquidation of financial assets at fair value through other comprehensive income		2021 $ 1,201,101 114,763 2,992 (1,954) 20,939 (141) (142,112) (424,060) 17 (491) (424,060) (2,989) 752 - - 3,531 (33,224) (187,726) (772) (19,913) 29,608 1,473 659 (209) 98,201 (2,555) (92) (18,777) 639,021 141 689,375 (63,482) 1,265,055 (321,038) -		2020
				$ 1,281,389 93,211 1,511 536 23,044 (273) (137,256) (754,312) (328) - (8,579) - - 103,012 (3) 3,056 (44,157) (66,336) 10,149 (28,323) (26,160) 2,184 (4,411) (361) 22,118 27,951 (9,030) (25,276) 463,356 273 504,481 (39,777) 928,333 (9,468) 21,039

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Increase in financial assets at amortized cost	(541)	(9,683)
Decrease in financial assets at amortized cost	11,029	26,447
Acquisitions of financial assets at fair value through profit or loss	(59,033)	-
		(Continued)
Universal Cement Corporation
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)

Acquisitions of investments accounted for using equity method Refunds from financial assets at fair value through profit or loss 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 Increase in other receivables Decrease in other receivables Decrease in other non-current assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Increase (decrease) in 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 Interest Paid 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 ($ 428,490) 52,658 (191,534) 214 (3,443) 3,000 (210) - (147,000) 42,000 380 (1,042,008) 495,000 20,000 655 (260) (19,132) (718,970) (20,653) (243,360) (20,313) 125,182 $ 104,869	2020 ($ 71,820) - (152,316) 330 (1,670) - - 28,364 - - - (168,777) 185,000 (260,000) 200 (130) (20,141) (653,613) (22,756) (771,440) (11,884) 137,066 $ 125,182

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

(Concluded)

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

Universal Cement Corporation

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

2. APPROVAL OF FINANCIAL STATEMENTS

The accompanying 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 amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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).

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 Company’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 January 1, 2022 (Note 2) Framework” Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 3) Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling January 1, 2022 (Note 4) a 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 retrospectively for annual reporting periods beginning on or after January 1, 2022.

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• 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 Company has assessed that the adoption of other standards or interpretations will not have a significant impact on the Company’s financial position and performance.

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

Effective Date Announced by IASB (Note New IFRSs 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets 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 17January 1, 2023 Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2023 or 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 Liabilities January 1, 2023 (Note 4) 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 Corporation shall determine the information on significant accounting policies to be disclosed based on the definition of materiality. Where it is reasonably

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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 ：

• (1) Information on accounting policies related to immaterial transactions, other matters or circumstances is immaterial, and the Corporation is not required to disclose such information.

• (2) The Corporation 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:

• (6) The Corporation changed its accounting policies during the reporting period, and such changes resulted in significant changes in the information of the financial statements;

• (7) The Corporation elected applicable accounting policies from options permitted by the standards;

• (8) As no requirement is provided under any specific standards, the Corporation established the accounting policies based on IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”;

• (9) Relevant accounting policies where the Corporation disclosed the decisions that required significant judgments or assumptions; or

• (10) 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 Corporation 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.

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 financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers .

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• b. Basis of preparation

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

The equity method is adopted. To align the profit or loss for the year, other comprehensive income, and equity in this individual financial report with the profit or loss attributable to the owner of the Company for the year other comprehensive income, and equity in the Company’s consolidated financial report, certain differences in accounting under the individual and consolidated bases are due to the adjustments in “investments using equity method,” “share of profit or loss from subsidiaries and associates using equity method,” “share of other comprehensive income from subsidiaries and associates using equity method,” and relevant items of equity.

• 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 Corporation 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. Foreign currencies

In preparing the financial statements of each individual Corporation 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

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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 financial statements, the functional currencies of the Corporation 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).

e. 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 Corporation 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.

• f. Investments in subsidiaries

Equity method is adopted for investments in subsidiaries.

A subsidiary is an entity in which that the Company has control.

Under the equity method, the investments are initially recognized at costs, and the subsequent carrying amount upon acquisition shall increase/decrease according to the share of profit or loss from subsidiaries and other comprehensive income, and profit allocation entitled to the Company. In addition, changes in other interests in subsidiaries entitled to the Company are recognized according to the shareholding.

Changes in the Company's ownership interests in subsidiaries not resulting in the loss of control are accounted for as equity transactions. The differences between the carrying amount of investments and the fair value of the paid or received consideration are directly recognized as equity.

Where the Company's share of loss from a subsidiary equal to or exceeds the interests in the subsidiary (including the carrying amount of the subsidiary using equity method and other long-term interests substantially are a part of net investments of the Company in the subsidiary), the Company continues to recognize losses according to the shareholding.

Where the acquisition costs exceed the share of net fair value of the subsidiary's identifiable assets and liabilities entitled to the Company on the date of acquisition, such amount is recognized as goodwill. Goodwill is included in the carrying amount of such investments and shall not be amortized. The exceeding amount of the share of net fair value of the subsidiary's identifiable assets and liabilities entitled to the Company on the date of acquisition to the acquisition costs is recognized as gains of the year.

For impairment evaluation, the Company considers cash-generating units (the "CGUs") and compares its recoverable amount based on the individual financial report, as a whole. Subsequently, where the recoverable amount of the assets increases, the Company recognizes the reversal of impairment loss as

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gains. However, the carrying amount of the assets less the reversal of impairment loss shall not exceed the carrying amount of the asset less the amortization should have been recognized under the condition where no impairment loss is recognized.

When losing control over a subsidiary, the Company measure its remaining investments in its former subsidiary based on the fair value on the date when control is lost. The differences between the fair value of the remaining investments and any consideration from disposals, and the carrying amount of the investment on the date when control is lost are recognized in profit or loss for the year. Furthermore, the accounting for all amounts related to the subsidiary that is recognized in other comprehensive income shall be on the basis required for the Company in direct disposals of assets or liabilities.

The unrealized gain or loss from downstream transactions between the Company and its subsidiaries is written off in the individual financial report. Gain or loss from upstream and side stream transactions between the Company and its subsidiaries are recognized in the individual financial report, to the extent where the Company is not related to the interests of subsidiaries.

• g. Investment in associates

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

The Corporation 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 Corporation’s share of the profit or loss and other comprehensive income of the associate. The Corporation also recognizes the changes in the Corporation’s share of equity of associates.

Any excess of the cost of acquisition over the Corporation’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 Corporation’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Corporation 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 Corporation’s proportionate interest in the associate. The Corporation 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 Corporation’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 Corporation’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 longterm interests that, in substance, form part of the Corporation’s net investment in the associate), the Corporation discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Corporation 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

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recognized to the extent that the recoverable amount of the investment subsequently increases.

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

• 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.

• 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

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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 Corporation 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 Corporation 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 Corporation 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 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 30.

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• 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:

• 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 Corporation 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

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

The Corporation always recognizes lifetime expected credit losses (i.e. ECLs) on accounts receivable and contract assets. For all other financial instruments, the Corporation 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 Corporation 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 Corporation determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Corporation):

• i. Internal or external information shows that the debtor is unlikely to pay its creditors.

• ii. When a financial asset is more than 365 days past due unless the Corporation 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 Corporation 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. 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 Corporation entity are classified as equity in accordance with the substance of the contractual arrangements and the definitions of an equity instrument.

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Equity instruments issued by a Corporation 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

All the financial liabilities are measured at amortized cost using the effective interest method. 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 Corporation 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 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, which are retained by the customer as specified in the contract, are intended to ensure that the Corporation adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Corporation 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 Corporation assesses whether the contract is, or contains, a lease.

1) The Corporation 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 Corporation 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 Corporation as lessee

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The Corporation 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 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 Corporation 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 Corporation remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the rightof-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 balance sheets.

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.

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Net defined benefit liability (asset) represents the actual deficit (surplus) in the Corporation’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 Corporation 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 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 Corporation 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 Corporation 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.

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5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Corporation'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.

The Corporation included the economic effects caused by COVID-19 into its consideration for significant accounting estimates. The management will continue to examine the estimated and basic assumptions. 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 Corporation do not involve material accounting judgments, estimations and assumptions.

6. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Cash on hand Checking accounts and demand deposits		**December 31 **
		2021 $ 282 104,587 $ 104,869	2020 $ 413 124,769 $ 125,182

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Non-derivative financial assets Listed shares and emerging market shares		December 31
		2021 2020 $ 6,866 -

Investments in equity instruments at FVTOCI - Non-current

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		December 31	December 31
		2021 $ 2,081,210	2020 $ 1,851,633

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Domestic investments Listed OTC Private Equity Unlisted shares		$ 271,050 1,438,886 $ 1,709,936		1,419,292
				$ 1,419,292

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 merged company subscribed 13,000 thousand shares of Lingguang private common stock in November 2020, totaling 305,370 thousand yuan. The above-mentioned shares have not passed the lock-up period of 3 years. Because it is a strategic investment, it is designated to be measured at fair value through other comprehensive gains and losses.

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 $ - 67 $ 67 $ - 4,707 $ 4,707	2020 $ - 67 $ 67 $ 10,488 4,707 $ 15,195

• a. The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.815% and 0.13%-0.815% per annum as of December 31, 2021 and 2020, respectively. The information on pledged time deposits is set out in Note 32.

• 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 $ 67 4,707	2020 $ 67 15,195

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$ 4,774 $ 15,262

The Company 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 Company 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.

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 $ 395,276 $ 395,276 $ 1,040,873 3,290 $ 1,037,583	2020 $ 360,273 1,779 $ 362,052 $ 853,683 5,073 $ 848,610

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 Company 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 Company’s credit risk was significantly reduced.

The Company applies the simplified approach to providing for expected credit losses prescribed, which permits the use of lifetime expected loss provision for all 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 Company’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 Company’s different customer base.

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

Accounts receivable (Including related parties)

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

December 31, 2021

		Less than 30 Days		31 to 60 Days		61 to 90 Days		91 to 120 Days	91 to 120 Days		121 to 150 Days	121 to 150 Days		151 to 365 Days	151 to 365 Days		Over 365 Days	Over 365 Days		Total
Expected credit loss rate		0.05%		0.14%		0.41%			1.52%			7.17%		16.16%～ 23.42%				100%
Gross carrying amount		$ 824,965		$ 136,489		$ 53,953		$	21,972		$	1,041		$	243		$	3,703		$1,040,873
Loss allowance (Lifetime	(	202 )	(	191 )	(	221 )	(		334 )	(		75 )	(		57 )	(		3,703 )	(	3,290)
ECL)
Amortized cost		$ 824,763		$ 136,298		$ 53,732		$	21,638		$	966		$	186		$	-		$1,037,583
December 31, 2020
		Less than 30 Days		31 to 60 Days		61 to 90 Days		91 to 120 Days			121 to 150 Days			151 to 365 Days			Over 365 Days			Total
Expected credit loss rate		0.03%		0.09%		0.29%			1.33%			6.54%		11.28%～ 15.03%				100%
Gross carrying amount		$ 680,182		$ 101,273		$ 53,084		$	9,697		$	5,132		$	612		$	3,703		$ 853,683
Loss allowance (Lifetime	(	116 )	(	87 )	(	155 )	(		129 )	(		336 )	(		547 )	(		3,703 )	(	5,073 )
ECL)
Amortized cost		$ 680,066		$ 101,186		$ 52,929		$	9,568		$	4,796		$	65		$	-		$ 848,610

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

December 31, 2021

Balance at January 1, 2021 Add: Net remeasurement of loss allowance Less: Amounts written off Balance at December 31, 2021

Contract Asset (Including related parties) Accounts Receivable (Including related parties) $ 2,452 $ 5,073 ( 707) (1,247) - ( 536) ( $ 1,745 $ 3,290	Total $ 7,525 (1,954) 536) $ 5,035

December 31,2020

Balance at January 1, 2020 Add: Net remeasurement of loss allowance

Less: Amounts written off Balance at December 31, 2020

Contract Asset (Including related parties) Accounts Receivable (Including related parties) $ 3,063 $ 3,926 ( 611) 1,147 - ( 139) ( $ 2,452 $ 5,073	Total $ 6,989 536 139) $ 7,525

12. INVENTORIES

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Finished goods Work in process Raw materials and supplies		**December 31 **	**December 31 **
		2021 $ 81,421 9,872 175,158 $ 266,451	2020 $ 72,136 10,184 164,970 $ 247,290

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2021 and 2020 was $ 3,693,613 thousand and $ 3,653,929 thousand, respectively.

13. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in Subsidiaries Investments in Associates a. Investments in Subsidiaries Chiayi Concrete Industrial Corporation Huanchung Cement International Corporation Kaohsiung Harbor Transport Company Universal Investment Corporation Universal Concrete Industrial Corporation Uneo Incorporated Li Yong DevelopmentCorporation. Proportion of Ownership and Voting Rights Percentage Chiayi Concrete Industrial Corporation. Huanchung Cement International Corporation. Kaohsiung Harbor Transport Company. Universal Investment Corporation. Universal Concrete Industrial Corporation (note 1) Uneo Incorporated. Li Yong DevelopmentCorporation. (note 2)		**December 31 **
		2021 2020 $ 1,219,359 $ 730,829 9,892,573 10,077,249 $ 11,111,982 $ 10,808,078 **December 31 **
		2021 2020 $ 40,619 $ 40,737 112,282 105,232 97,490 98,044 768,307 315,031 137,759 106,396 43,336 45,389 19,566 20,000 $ 1,219,359 $ 730,829 **December 31 **
		2021 2020 86.63% 86.63% 69.99% 69.99% 100.00% 100.00% 100.00% 100.00% 58.12% 57.19% 100.00% 100.00% 100.00% 100.00%

Note 1: Between June and August 2021 and October 2019, the Company acquired 124 thousand shares and 165 thousand shares held by the non-controlling interest of Universal Concrete Industrial Corporation, and increase in shareholding

• b. Investments in Associates

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Material associate Lioho Machine Works Ltd. Associates that are not individually material Tainan Concrete Industrial Corporation 1. Material associates Name of Associate Lioho Machine Works Ltd.	$ 10,077,249		**December 31 **	**December 31 **
		2021 2020 $ 9,810,809 $ 10,023,459 81,764 53,790 $ 9,892,573 $ 10,077,249 Proportion of Ownership and Voting Rights		2020 $ 10,023,459 53,790
	53,790
	$ 10,077,249			$ 10,077,249
	53,790
		**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 Company for equity accounting purposes.

Equity Operating revenue Net profit for the year Other comprehensive loss 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

1. Associates that are not individually significant

Share of the company Net profit for the year Other comprehensive income Total comprehensive income	For the Year Ended December 31	For the Year Ended December 31
		2021 2020 $ 2,594 $ 969 ( 589) ( 464) $ 2,005 $ 505

Profit and Loss of affiliated enterprise of equity method and other comprehensive P&L are recognized

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according to the financial statements of respective affiliated enterprises under the same period which is audited by CPA.

14. 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 loss Balance at December 31, 2020 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Additions Disposals Reclassification from 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 $ 4,474,972 - - ( $ 4,879,453 - - - ( - - $ - $ 4,879,453 $ 4,879,453 - - ( (491,945) $ 4,387,508 $ - - - ( $ - $ 4,387,508	Buildings $ 1,595,995 41,438 380) ( $ 1,648,906 $ 1,081,618 20,218 380) ( 12,097 - $ 1,113,553 $ 535,353 $ 1,648,906 358,602 39) ( $ 2,007,469 $ 1,113,553 22,619 12) ( $ 1,136,160 $ 871,309	Machinery and equipment Transportation equipment $ 3,099,884 $ 393,831 65,912 19,886 3,432) ( 9,058) ( $ 3,162,364 $ 404,659 $ 2,959,217 $ 350,182 27,393 9,001 3,430) ( 9,058) ( - - - - $ 2,983,180 $ 350,125 $ 179,184 $ 54,534 $ 3,162,364 $ 404,659 64,748 104,134 6,864) ( 5,812) ( - - $ 3,220,248 $ 502,981 $ 2,983,180 $ 350,125 33,272 20,006 6,660) ( 5,812) ( $ 3,009,792 $ 364,379 $ 210,456 $ 138,602	Other equipment $ 726,263 29,589 22,278) $ 733,574 $ 543,590 15,758 22,278) - 7 $ 537,077 $ 196,497 $ 733,574 25,226 10,336) - $ 748,464 $ 537,077 19,118 10,336) $ 545,859 $ 202,605	Construction in progress $ 564,611 5,299 - $ 569,910 $ - - - - - $ - $ 569,910 $ 569,910 249,380 - - $ 819,290 $ - - - $ - $ 819,290	( ( ( (	Total $10,855,556 162,124 35,148) $ 11,398,866
							$ 4,934,607 72,370 35,146) 12,097 7
							$ 4,983,935
							$ 6,414,931
							$ 11,398,866 802,090 23,051) 491,945
						(	$ 11,685,960
							$ 4,983,935 95,075 22,820) $ 5,056,190
							$ 6,629,770

Part of the equipment of the company's building materials business department has been idle, and the estimated future recoverable amount is less than the book amount.; therefore, the Company recognized an impairment loss of NT$103,012 thousand and included it under the item of 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	2-16 years
Engineering systems	9-16 years
Machinery and equipment	2-17 years

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Transportation equipment Other equipment

2-7 years 2-20 years

15. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amounts Buildings Machinery Additions to right-of-use assets (Note) Depreciation charge for right-of-use assets Buildings Machinery		**December 31 **	**December 31 **
	2021 $ 31,206 8,117 $ 39,323 For the Year Ended		2020 $ 19,658 7,349 $ 27,007 December 31
		2021 $ 31,491 $ 16,033 3,088 $ 19,121	2020 $ 12,780 $ 17,236 2,958 $ 20,194

Except for depreciation expenses added and recognized above, the right-of-use asset did not encounter underlying sub-lease or loss in value.

• b. Lease liabilities

underlying sub-lease or loss in value. Lease liabilities
Carrying amounts Current Non-current		December 31
		2021 $ 16,897 $ 10,315	2020 $ 16,897 $ 10,315

Ranges of discount rates for lease liabilities were as follows:

Buildings Machinery	December 31
	2021 2020 0.9% 0.9% 0.9%～1% 0.9%～1%

• c. Other lease information

Expenses relating to short-term leases Expenses relating to low-value assets leases Total cash outflow for leases	For the Year Ended	For the Year Ended	December 31
		2021 $ 3,812 $ 208 $ 23,401	2020 $ 2,268 $ 218 $ 22,923

The Company leases certain assets which qualify as short-term leases and low-value asset leases. The

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Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

16. 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, 2021 Carrying amounts at December 31, 2020 Cost Balance at January 1, 2021 Disposals Reclassification to 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 $ 658,128 13,708 ) 404,481) $ 239,939 $ 61,135 - - $ 61,135 $ 178,804 Land $ 239,939 210 491,945 $ 732,094 $ 61,135 - $ 61,135 $ 670,959	( ( ( (	Buildings $ 135,894 7,439 ) ( 11,853) ( $ 116,602 $ 114,190 647 1,362 ) ( 12,097) ( $ 101,378 $ 15,224 Buildings $ 116,602 $ 116,602 $ 101,378 567 $ 101,945 $ 14,657	Total $ 794,022 21,147 ) 416,334) $ 356,541 $ 175,325 647 1,362 ) 12,097) $ 162,513 $ 194,028 (Continued) Total $ 356,541 210 491,945 $ 848,696 $ 162,513 567 $ 163,080 $ 685,616

(Concluded)

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As of December 31, 2021 and 2020, the Company has not yet completed the property registration of the land amounting to $95,548 thousand and $95,338 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 61 years of useful lives.

The fair values of the investment properties of the company as at December 31, 2021 and 2020 were $1,564,230 thousand and $1,478,067 thousand respectively. The fair values were determined by the independent appraisal company on each balance sheet date in the past three years with reference to similar real estate The fair value of the transaction price is based on market evidence, or the company's management refers to the actual transaction price in nearby areas.

The maturity analysis of lease payments receivable under operating leases of investment properties at December 31, 2021 and 2020 was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 onwards	December 31	December 31
	2021 $ 13,64 5 5 10,25 4 4 8,80 1 4 6,62 8 5 6,68 9 6 16,923 4	2020 $ 14,99 7,02 50 12 3
		$ 22,68

17. OTHER INTANGIBLE ASSETS

		Patents	Patents	Licenses and Franchises	Licenses and Franchises	Trademarks	Trademarks	Computer Software	Computer Software
										Total
Cost
Balance at January 1, 2020		$ 7,777		$ 5,000		$ 20		$ 1,839		$ 14,636
Additions		173		-		-		1,497		1,670
Balance at December 31, 2020		$ 7,950		$ 5,000		$ 20		$ 3,336		$ 16,306
Accumulated amortization
Balance at January 1, 2020		$ 3,719		$ 2,632		$ 7		$ 826		$ 7,184
Amortization expense		588		237		2		684		1,511
Balance at December 31, 2020		$ 4,307		$ 2,869		$ 9		$ 1,510		$ 8,695
Carrying amounts at December 31, 2020		$ 3,643		$ 2,131		$ 11		$ 1,826		$ 7,611
Cost
Balance at January 1, 2021		$ 7,950		$ 5,000		$ 20		$ 1,839		$ 14,636
Additions		208		773		-		2,462		3,443

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Disposals			(	11)					(	11)
Balance at December 31, 2021		$ 8,158		$ 5,762		$ 20		$ 5,798		$ 19,738
Accumulated amortization
Balance at January 1, 2021		$ 4,307		$ 2,869		$ 9		$ 1,510		$ 8,695
Amortization expense		563		999		2		1,428		2,992
Balance at December 31, 2021		$ 4,870		$ 3,868		$ 11		$ 2,938		$ 11,687
Carrying amounts at December 31, 2021		$ 3,288		$ 1,894		$ 9		$ 2,860		$ 8,051

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

Patents	19 years
Licenses and franchises	10 years
Trademarks	10 years
Computer Software	3 years

18. BORROWINGS

• a. Short-term borrowings

Unsecured borrowings Line of credit borrowings

	**December 31 **	**December 31 **
	2021 $ 1,780,000	2020 $ 1,285,000

The range of interest rates was 0.82% - 0.85% and 0.85% - 0.9% per annum as of December 31, 2021 and 2020.

• b. Short-term bills payable

Commercial papers Less: Unamortized discount on bills payable		**December 31 **	**December 31 **
	8	2021 $ 1,060,000 70 6 $ 1,059,292	2020 $ 1,040,000 71 $ 1,039,284

The Company did not provide any collateral over these balance.

Outstanding short-term bills payable as follows:

			Discount
Promissory Institutions	Nominal Amount		Amount	Carrying Value	Interest Rate
December 31, 2021
Taiwan Finance Co., Ltd.	$ 190,000	$	88	$ 189,912	0.848%

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Ta Ching Bills Finance Co., Ltd. Taiwan Cooperative Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd. December 31, 2020 Taiwan Finance Co., Ltd. Ta Ching Bills Finance Co., Ltd. Taiwan Cooperative Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd.	300,000 270,000 300,000 $ 1,060,000 $ 240,000 200,000 300,000 300,000 $ 1,040,000	91 370 159 $ 708 $ 158 156 197 205 $ 716	299,909 0.848% 269,630 0.848% 299,841 0.808% $ 1,059,292 $ 239,842 0.858% 199,844 0.888% 299,803 0.858% 299,795 0.888% $ 1,039,284

19. 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 Company 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.

20. OTHER PAYABLES AND OTHER LIABILITIES

Current Other payable Payable for salaries or bonus Payable for freight Payable for remuneration to directors Payable for remuneration to employees Payable for promotion service fee Payable for equipment Payable for taxes Payable for annual leave Payable for utility bills Others Other liabilities Temporary receipts Others		**December 31 **	**December 31 **
		2021 $ 89,241 39,561 25,157 20,860 20,860 13,912 10,375 7,609 5,495 25,757 $ 258,827 $ 18,490 100 $ 18,590	2020 $ 84,809 30,878 22,946 22,946 24,697 21,021 16,780 7,609 5,786 30,737 $ 268,209 $ 18,586 96 $ 18,682

21. RETIREMENT BENEFIT PLANS

• a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’

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individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plan adopted by the Company 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 Company 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 Company 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 Company 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 Company has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability		December 31	December 31
	( ))	2021 $ 223,889 186,555 ( )) $ 37,334	2020 $ 249,305 183,146 $ 66,159

Movements in net defined benefit liability were as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2020 $ 246,885 ($ 163,162) Current service cost 4,083 - Net interest expense (income) 1,975 ( 1,330) Recognized in profit or loss $ 6,058 ($ 1,330) Return on plan assets (excluding amounts included in net interest) - ( 5,695 ) ( Actuarial loss - changes in demographic assumptions 3,927 - Actuarial loss - changes in financial assumptions 19,634 - Actuarial gain - experience adjustments ( 10,154) - ( Recognized in other comprehensive income 13,407 ( 5,695) Contributions from the employer - ( 30,004 ) ( Benefits paid ( 17,045) 17,045 Balance at December 31, 2020 249,305 ( 183,146)

Net Defined Benefit Liability $ 83,723 4,083 645 $ 4,728 5,695 ) 3,927 19,634 10,154) 7,712 30,004 ) - 66,159

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Current service cost Net interest expense (income) Recognized in profit or loss Return on plan assets (excluding amounts included in net interest) Actuarial loss - changes in demographic assumptions Actuarial loss - changes in financial assumptions ( Actuarial gain - experience adjustments ( Recognized in other comprehensive income Contributions from the employer Benefits paid ( Balance at December 31, 2021	3,590 873 ( $ 4,463 ( - ( 11,422 15,462 ) 3,379) (7,419) ( - ( 22,460) $ 223,889 (	- 652) $ 652) 2,629 ) ( - - ( - ( 2,629) 22,588) ( 22,460 $ 186,555)	3,590 221 $ 3,811 2,629 ) 11,422 15,462 ) 3,379) (10,048) 22,588 ) - $ 37,334

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	For the Year Ended	December 31
	7	2021 $ 2,281 612 791 12 7 $ 3,811	2020 $ 2,822 757 992 15
			$ 4,728

Through the defined benefit plans under the Labor Standards Law, the Company 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	**December 31 **
	2021 2020 0.75% 0.35%

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4% 4%

Expected rate of salary increase

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 ($ 9,546 ) ( $ 10,172 $ 9,575 ($ 9,090 ) (		2020 $ 10,745) $ 11,482 $ 10,761 $ 10,191)

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 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 $ 6,000 8 years	2020 $ 6,000 8years

22. EQUITY

• a. Share capital

Number of shares authorized (thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		**December 31 **	**December 31 **
		2021 653,609 $ 6,536,092 653,609 $ 6,536,092	2020 653,609 $ 6,536,092 653,609 $ 6,536,092

b. Capital surplus

**December **	**31 **
2021		2020

May be used to offset a deficit, distributed as cash

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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 capital surplus of associates Overdue dividends not collected by shareholders 0	$ 21,606 945 21,920 22,479 $ 66,95 2	$ 21,606 418 21,315 22,483 $ 65,82

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 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 24-g.

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 June 28, 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:

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	Appropriation	Appropriation	Dividends Per
	of	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

Special reserves
First-time adoption IFRSs		**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.

• e. Other equity items

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

Balance at January 1 Share of exchange difference of associates accounted for using the equity method Balance at December 31	**For the year Ended **	**For the year Ended **	**December 31 **
		2021 $ (892,298) (53,545) $ (945,843)	2020 $ (1,006,436) 114,138 $ (892,298)

• 2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized for the year Unrealized gain (loss) - equity instruments Share from associates accounted for using the equity method Other comprehensive income The cumulative profit or loss arising from the disposals of equity instruments is transferred to retained earnings. Balance at December 31	**For the year Ended **	**For the year Ended **	**December 31 **
		2021 $ 1,396,993 199,183 42,696 241,879 $ 1,638,872	2020 $ 1,342,691 (28,404) (1,532) (29,936) 84,238 $ 1,396,993

• 3) Remeasurement of defined benefit plans

For the Year Ended December 31
2021 2020

• 202 -

	Balance at January 1		$	51,052	$	56,069
	Changes in tax rate
	Remeasurement of defined benefit plans			10,048		(7,712)
	Remeasurement on defined benefit	plans related
	income tax			335		1,542
	Share of remeasurement of defined	benefit	plans of
	associates accounted for using the equity		method	8,285		1,186
	Balance at December 31		$	69,720	$	51,052
4)	Other equity items
			For the Year Ended December 31
			2021		2020
	Balance at January 1	( $	17,217 )	$	-
	Share of associates accounted		-	(	17,217	)
	for using the equity method
	(Note)
	Balance at December 31	($	17,217)	($	17,217	)

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

subsidiaries.

23. REVENUE

Revenue from contracts with customers Revenue from sale of goods a. Disaggregation of revenue Concrete Cement Gypsum Board panels Other b. Contract balances Accounts receivables (Including related parties) Contract assets - current Sale of goods Less: Allowance for impairment		For the Year Ended December 31 2021 2020 $ 4,829,439 $ 4,495,516 For the Year Ended December 31 2021 2020 $ 3,338,771 $ 3,057,455 677,812 685,331 787,072 742,434 22,784 10,296 $ 4,826,439 $ 4,495,516 December 31 January 1 2021 2020 2020 $1,432,859 $1,210,662 $1,101,316 $ 3,181 $ 6,973 $ 4,381 636 1,395 876	For the Year Ended	For the Year Ended	For the Year Ended	December 31
			2021 $ 4,829,439 For the Year Ended			2020 $ 4,495,516 December 31
						2020 $ 3,057,455 685,331 742,434 10,296 $ 4,495,516 January 1
		2021 $1,432,859 $ 3,181 636			2020 $1,101,316 $ 4,381 876

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loss Contract assets from related parties Sale of goods Less: Allowance for impairment loss Contract liabilities - current Sale of goods	2,545 5,546 1,109 4,437 $ 6,982 $ 1,224	5,578 5,285 1,057 4,228 $ 9,806 $ 565	3,505 10,933 2,187 8,746 $ 12,251 $ 4,976

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

Expected credit loss rate Gross carrying amount of retention receivable Allowance for impairment loss (Lifetime ECLs)		December 31	December 31
	7 ( )) 2	2021 20% $ 8,72 8 1,745 ( 2) $ 6,98 6	2020 20% $ 12,25 2,45
			$ 9,80

24. PROFIT BEFORE INCOME TAX

• a. Interest income

Bank deposits Related parties loans	For the Year Ended	For the Year Ended	December 31
		2021 $ 63 78 $ 141	2020 $ 182 91
			$ 273

• b. Other income

Dividend income Rental income - investment properties (note 15) Remuneration of directors Others	For the Year Ended	For the Year Ended	December 31
		2021 $ 142,112 16,566 9,027 10,088 $ 177,733	2020 $ 137,256 16,568 9,479 15,588
			$ 178,891

• c. Other gains and losses

For the Year Ended December 31

• 204 -

			2021			2020
Net foreign exchange gains and losses		( $	488 )		( $	142 )
Gain (loss) on disposal of property, plant and equipment		(	17 )			328
Disposal of investment property interests						8,579
Disposal of benefits of intangible assets			2,989
interest in financial assets
Mandatory financial assets at fair value through profit or
loss			491
Asset impairment loss
		(	6,286
development and design expenditure	) ))				(	103,012)
		(	6,233		(	4,680
Others	)))			)))
		($	9,544		($	98,927
	))			))

• d. Interest expense

Interest on loans Interest on lease liabilities	For the Year Ended	For the Year Ended	December 31
		2021 $ 20,690 249 $ 20,939	2020 $ 22,748 296 $ 23,044

e. 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	For the Year Ended	For the Year Ended	December 31
		2021 $ 95,075 19,121 567 2,992 $ 117,755 $ 92,869 21,327 567 $ 114,763 $ 204 2,788 $ 2,992	2020 $ 72,370 20,194 647 1,511 $ 94,722 $ 72,112 20,452 647 $ 93,211 1,511 $ 1,511

f. Employee benefits expense

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Short-term benefits Salaries Labor and health insurance Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 20)	For the Year Ended	For the Year Ended	December 31
		2021 $ 371,346 35,254 38,552 445,152 14,269 3,811 18,080 $ 463,232	2020 $ 357,150 32,471 41,856
			431,477
			12,762 4,728
			17,490
			$ 448,967

(Continued)

An analysis of employee benefits expense - by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2021 $ 293,478 169,754 $ 463,232	2020 $ 281,652 167,315
			$ 448,967

(Concluded)

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 23, 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 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 financial statements for the year ended December 31, 2020 and 2019.

• 206 -

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.

25. 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
	2021 2020 $ 120,704 $ 46,326 7,953 16,152 ( 4,200 )) ( 23,602 )) 124,457 38,876 6,673 ( 4,739 ) )) ( 18,107 ))) - )) ( 11,434 ))) ( 4,739 ))) $ 113,02 3 $ 34,13 7	2020 $ 46,326 16,152 23,602
		38,876

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

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Realized investment loss Tax-exempt income Temporary difference Land value increment tax Income tax on unappropriated earnings Adjustments for prior years’ tax	**For the Year Ended **	**For the Year Ended **	**December 31 **
	( ( (	2021 $ 1,201,101 $ 240,220 84,628 ) ( 3 - ( 28,704) ( 489 - 7,953 22,307) ( $ 113,023	2020 $ 1,281,389
			$ 256,278 150,86 ) 47,628) 28,409) 12,002 207 16,152 23,602) $ 34,137

b. Income tax recognized in other comprehensive income

	**For the Year Ended December 31 **
	2021 2020

Deferred tax

• 207 -

$ 335 $ 1,542

In respect of the current year

Remeasurement of defined benefit plans

c. Current tax liabilities

Income tax payable	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 107,052	2020 $ 46,077

• 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

Opening Balance Deferred Tax Assets Temporary differences Payment received in advance $ 400 Unrealized foreign exchange loss 4 Unrealized payable promotion expenses 4,940 Defined benefit obligation - $ 5,344 Deferred Tax Liabilities Temporary differences Land value increment tax $ 1,082,113 Defined benefit obligation 7,219 Cash surrender value of life insurance 76 $ 1,089,408 For the year ended December 31, 2020 Opening Balance Deferred Tax Assets Payment received in advance Unrealized foreign exchange loss $ 544 Unrealized for promotion service 61 Payment received in advance -

Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance ( $ 223) $ - $ 177 94 - 98 ( 2,864) - 2,076 14,351 - 14,351 $ 11,358 $ - $ 16,702 $ - $ - $ 1,082,113 - ( 335) 6,884 ( 76) - - ($ 76) ($ 335) $ 1,088,997 Recognized in Profit or Loss Recognized in Other Comprehensive Income Closing Balance ( $ 144) $ - $ 400 ( 57) - 4 4,940 - 4,940

• 208 -

Deferred Tax Liabilities Temporary differences Land value increment tax Defined benefit obligation Cash surrender value of life insurance	$ 605 $ 1,082,113 8,761 76 $ 1,090,950	$ 4,739 $ - - ( - $ - (	$ - $ - 1,542) - $ 1,542)	$ 5,344 $ 1,082,113 7,219 76 $ 1,089,408

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

Deductible temporary differences Allowance for impaired inventories Net defined benefit obligation Impairment losses on assets		**December 31 **	**December 31 **
		2021 $ 34,027 - 281,199 $ 315,226	2020 $ 125,979 17,115 188,495 $ 331,589

• g. Income tax examinations

The tax returns of the Corporation through 2019 have been assessed by the tax authorities.

26. 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

Net Profit for the Year
Profit for the year	For the Year Ended December 31
		2021 $ 1,088,078	2020 $ 1,247,252

Weighted average number of ordinary shares outstanding (in thousand shares):

• 209 -

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 Company offered to settle compensation paid to employees in cash or shares, the Company 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.

27. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

I From June to August 2021 and in June 2021, 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, refer to note 28.

28. CASH FLOWS INFORMATION

Cash used in obtaining property, plant and equipment by the Company 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 **
		2021 2020 $ 802,090 $ 162,124 7,109 ( 20,969) ( 617,665) 11,161 $ 191,534 $ 152,316

29. CAPITAL MANAGEMENT

The Company requires significant amounts of capital to build and expand its production facilities and equipment. The Company 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.

30. FINANCIAL INSTRUMENTS

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

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The Company 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 financial statements approximate their fair value.

• 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 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares Unlisted shares December 31, 2020 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Listed shares Unlisted shares	Level 1 $ 6,866 $ 1,851,633 - $ 1,851,633 Level 1 $ 1,851,633 - $ 1,851,633	Level 2 $ - $ - - $ - Level 2 $ - - $ -	Level 3 $ - $ - 1,419,292 $ 1,419,292 Level 3 $ - 1,419,292 $ 1,419,292	Total $ 6,866
				$ 1,851,633 1,419,292
				$ 3,270,925
				Total $ 1,851,633 1,419,292
				$ 3,270,925

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

Financial assets at fair value through other comprehensive income.

Balance at January 1	**For the Year Ended December 31 **
	2021 2020 $ 1,419,292 $ 1,349,156

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Recognized in other comprehensive income (unrealized valuation gain or loss on financial assets at fair value through other comprehensive income) 19,594 91,175 Share capital returned for liquidation - ( 21,039) Balance at December 31 $ 1,438,886 $ 1,419,292

• 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-yearlock-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 BlackScholes 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 price of comparable company, and the value of the securities is estimated by comparing, analyzing and adjusting.

• c. Categories of financial instruments

Financial assets Measured at fair value through profit or loss – mandatory measured at fair value through profit or loss Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities at amortized cost (2)	**December 31 **
	2021 2020 $ 6,866 $ - 1,648,867 1,351,698 3,791,146 3,270,925 3,728,810 3,124,797

• 1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, contract assets (including related parties), notes and accounts receivable (including related parties), other receivables, and financial assets at amortized cost (current and non-current).

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• 2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, short-term bills payable, notes and accounts payable (including related parties), other payables and deposits received.

• d. Financial Risk Management Objectives and Policies

The Company’s major financial instruments include accounts receivable, accounts payables and shortterm loans. The Company’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 Company 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 Company’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 Company 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 Company’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
	$ 4,774 $ 15,262 1,098,809 1,066,496 92,773 97,619 1,780,000 1,285,000

b) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities and mutual funds. The Company manages this exposure by maintaining a portfolio of investments with different risks. The Company’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 Company 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.

If equity prices of domestic listed equity securities (excluding private placement), which was hold by the Group calculated by $ 2,081,210 thousand and $ 1,851,633 thousand, had been 1%

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higher/lower, the pre-tax other comprehensive income for the year ended December 31, 2021 and 2020 would have increased/decreased by $ 20,812 thousand and $ 18,516 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 Company 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 Company.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of counterparties to discharge an obligation and financial guarantees provided by the Company, could arise from:

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets; and

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

Part of the concrete customers of the Company is 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 Company 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 10.

The Company has no significant concentration of credit risk.

As of 31 December 2021 and 2020, the maximum exposure of the Company for engaging in endorsement/guarantee was NT$100,000 thousand and NT$282,000 thousand, respectively.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’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 Company’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 Company 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 nonderivative 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

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the interest rate curve at the end of the reporting period. December 31, 2021

On Demand or Less than 3 Month Non-derivative financial liabilities Non-interest bearing $ 880,691 Lease liabilities 3,884 Variable interest rate liabilities 1,781,972 Fixed interest rate liabilities 1,060,000 Guaranteed liabilities 100,000 $3,826,547 December 31, 2020 On Demand or Less than 3 Month Non-derivative financial liabilities Non-interest bearing $ 792,081 Lease liabilities 5,195 Variable interest rate liabilities 986,601 Fixed interest rate liabilities 1,040,000 Guaranteed liabilities 282,000 $3,105,877	3 Months to 1 Year 1 $ - 9,849 - - - $ 9,849 3 Months to 1 Year 1 $ - 11,858 300,503 - - $ 312,361	Year to 5 Year $ 8,827 26,455 - - - $ 35,282 Year to 5 Year $ 8,432 10,401 - - - $ 18,833

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 Company that loan is a resource of liquidity. As of December 31, 2021 and 2020, the Company has loan commitments $ 1,779,559 thousand, and $ 1,718,439 thousand, respectively.

31. TRANSACTIONS WITH RELATED PARTIES

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

a. Name and relationship of related party

Related Party Name

Relationships of the Company

CHC Resources Corp. The key management of the Company serves as a member of its board directors

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Universal Construction Corp. The key management of the Company serves as a member of its board directors Sheng yuan Investment Corp. The key management of the Company Pan Asia Corporation Other related parties Tainan Concrete Industrial Corp. Associates Chiayi Concrete Industrial Corp subsidiary corporation Universal Concrete Industrial Corp subsidiary corporation Kaohsiung Harbor Transport Company. subsidiary corporation Uneo Incorporated subsidiary corporation Universal Investment Corp subsidiary corporation

• b. Sales of goods

Account Items Sales revenue	Related Parties Category The key management of the Company serves as a member its board of directors Other related parties Subsidiaries	For the Year Ended December 31 2021 2020 $ 62,364 $ 65,595 52,864 84,737 22,784 10,296 $ 138,012 $ 160,628	For the Year Ended December 31 2021 2020 $ 62,364 $ 65,595 52,864 84,737 22,784 10,296 $ 138,012 $ 160,628	For the Year Ended December 31 2021 2020 $ 62,364 $ 65,595 52,864 84,737 22,784 10,296 $ 138,012 $ 160,628
				$ 65,595 84,737 10,296 $ 160,628

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

• c. Purchase of goods

Related Parties Category The Company is the key management of the company	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 217,957	2020 $ 221,766

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

• d. Contract assets

Related Party Category / Name The key management of the Company serves as a member its board of directors Pan Asia Corp. Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2021 $ 5,546 1,109	2020 $ 5,285 1,057

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$ 4,437 $

4,228

e. Receivables from related parties (Excluding contract assets)

Account Items Accounts receivable from related parties	Related Parties Category / Name		December 31 2021 2020 $ 26,432 $ 45,681 5,309 5,172 5,013 1,458 12 3 $ 36,742 $ 52,308	December 31 2021 2020 $ 26,432 $ 45,681 5,309 5,172 5,013 1,458 12 3 $ 36,742 $ 52,308	December 31 2021 2020 $ 26,432 $ 45,681 5,309 5,172 5,013 1,458 12 3 $ 36,742 $ 52,308
	Related parties The key management of the Company serves as a member its board of directors Subsidiaries Less: Allowance for impairment loss				$ 45,681 5,172 1,458 3 $ 52,308

The outstanding receivables from related parties are unsecured.

f. Payables to related parties

Account Items Related Parties Category Notes payable - related parties The key management of the Company serves as a member of its board of directors Subsidiaries Accounts payable -related parties Subsidiaries		**December 31 **	**December 31 **
		2021 $ 26,611 13,918 $ 40,529 $ 19,203	2020 $ 39,455 13,207 $ 52,662 $ 16,041

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

• g. Lease arrangements - Company is lessee

The lease of the concrete plant leased by the Company from Associates expires in August 2021 and is renewed until August 2026. The concrete plant is for business use.

For the Year Ended December 31

Related Parties Category Acquisitions of Right - of - use assets Associates Tainan Concrete Industrial Corp.

	2021 $ 25,785	2020 $ -

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Line Item Related Party Category Lease liabilities Associates- Tainan Concrete Industrial Corp. Subsidiaries Line Item Related Party Category Interest expense Associates- Tainan Concrete Industrial Corp. Subsidiaries		**December 31 **	**December 31 **	**December 31 **
		2021 2020 $ 25,785 $ 3,341 717 1,165 $ 26,502 $ 4,596 For the Year Ended December 31
			2021 $ 88 8 $ 96	2020 $ 52 5 $ 57

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

• h. Lease arrangements - Company is lessor

The Company leased its office building, plant, machinery and equipment 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:

Category of the related The Company holding the position as chief management of another company Another company holding the position as chief management of the Company Subsidiary corporation Total lease revenue is summarized as follows: Related Party Category / Name The Company holding the position as chief management of another company Another company holding the position as chief management of the Company Subsidiary corporation		December 31	December 31
	2021 2020 $ 3,207 $ 8,705 23 46 144 540 $ 3,374 $ 9,291 **For the Year Ended December 31 **
		2021 $ 5,498 23 396 $ 5,917	2020 $ 5,498 23 396 $ 5,917

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• i. Loan to related parties

Line Item Other receivables Universal Concrete Industrial Corp Universal Investment Corp Line Item Interest income Uneo Inc. Universal Concrete Industrial Corp		**December 31 **	**December 31 **
	2021 2020 $ 20,000 $ - $ 85,000 $ - **For the Year Ended December 31 **
		2021 $ - $ 78	2020 $ 91 $ -

The Company provided an insecure short-term loan to its subsidiary; interests accrued at 1%

and 1.1% based on the actual utilization amount during 2021 and 2020, and the settlement shall

be made in a lump-sum upon expiry.

The loan to the subsidiary Universal Concrete is secured by collateral land, and to the subsidiary Uneo Inc. is an unsecured loan.

• j. Endorsement/guarantee

Endorsement/guarantee to others

The endorsement/guarantee amount provided by the Company for bank facilities of associates is as follows:

Category/name of associates Subsidiary Universal Concrete Industrial Corp Universal Investment Corp Uneo Incorporated		**December 31 **	**December 31 **
	$	2021 $ 120,000 400,000 50,000 570,000	2020 $ 120,000 250,000 50,000 $ 420,000

Endorsement/guarantee acquired

The endorsement/guarantee amount provided by subsidiaries for the Company to undertake constructions according to contractual requirements is as follows:

Category/name of associates Subsidiary Kaohsiung Wharf Transportation Universal Investment		**December 31 **	**December 31 **
		2021 $ 319,928 279,816 $ 599,744	2020 $ 273,468 107,784 $ 381,252

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k. Other transactions with related parties

1) Freight expense

1) Freight expense
Line item Cost of sales -freight expenses Cost of marketing - freight expenses	Category/name of associates Subsidiary Kaohsiung Wharf Transportation Subsidiaries	For the Year Ended December 31 2021 2020 $ 217,512 $ 207,687 $ 14,360 $ 12,038
				$ 207,687 $ 12,038

Regarding the freight transactions between the Company and its related parties, the prices are established according to the prices agreed by both parties, equivalent to that of the general suppliers.

The Company’s payment term for freight to related parties is approximately 45 to 60 days, equivalent to that of the general suppliers.

2) Management service income

Category/name of associates Subsidiary	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2021 $ 15,042	2020 $ 13,035

The Company receives management service income from subsidiaries for employee dispatch and transfer, which is accounted for as a deduction item of salary expenses.

• l. 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 $ 33,975 316 $ 34,291	2020 $ 32,698 362 $ 33,060

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

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32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

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

Pledge deposits Current Non-current		**December 31 **	**December 31 **
		2021 $ 67 4,707 $ 4,774	2020 $ 67 10,488 $ 10,555

33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company as of December 31, 2021 and 2020 were as follows:

• a. Unrecognized commitments are as follows:

Unrecognized commitments are as follows:
Acquisition of property, plant and equipment		**December 31 **
		2021 $ 82,593	2020 $ 104,499

• 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 bond, 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 amounting to $26,756 thousand and $ 6,561 thousand.

• d. The Company entered into a contract with Chi-ying Inc. on the manufacturing and installation equipment and request a plan of change in accordance with the contract. Chi-ying Inc. contended that it has complete the manufacturing of the product and demand the payment of NTD 5.967Million, VAT included, and subsequently reduce to NTD 5.12 Million. Chi-Ying has brought a suit against the Company under the review of Chiao-Tou District Court. It is the assessment of the Company that the result of the legal proceeding is yet to be estimated, therefore no contingent liability is appropriated.

• e. The Company 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 Company jointly liable for the loss of 5.681 million. The case is now under trial at Feng-Shan Summary Court of Kaohsiung District Court. It is the assessment of the Company that the possible outcome of the legal proceeding is yet to be estimated, therefore no contingent liability is appropriated.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Corporation 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

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Foreign Carrying Currencies Amount (In Thousand) Exchange Rate (In Thousand)

Financial assets

• Monetary items USD RMB EUR

$ 285 27.68 $ 7,871 902 4.344 3,918 136 31.32 4,244

December 31, 2020

Foreign Carrying Currencies Amount (In Thousand) Exchange Rate (In Thousand)

Financial assets

• Monetary items USD RMB

• $ 57 28.48 $ 1,628 1,147 4.377 5,019

The significant realized and unrealized foreign exchange gains (losses) were as follows:

Functional Currencies USD RMB JPY HKD EUR	For the Year Ended December 31, 2021 Exchange Rate Net Foreign Exchange Loss 27.68(USD：NTD) ( $ 39 ) 4.344(RMB：NTD) ( 53 ) 0.2405(JPY：NTD) ( 181 ) 3.549(HKD：NTD) ( 4 ) 31.32(EUR：NTD) ( 211) ($ 488)	For the Year Ended December 31, 2020
		Exchange Rate Net Foreign Exchange Gain 29.549(USD：NTD) ( $ 89 ) 4.282(RMB：NTD) 43 0.2769(JPY：NTD) 19 3.809(HKD：NTD) ( 7 ) 33.71(EUR：NTD) ( 108) ($ 142)

35. 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. (N/A)

• 5) Acquisition of individual real estate at cost of at least NT$ 300 million or 20% of the paid-in capital. (N/A)

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• 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 4)

• 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)

• b. Related information on investees. (Table 5)

• 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)

  • 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 6)

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TABLE 1

UNIVERSAL CEMENT CORPORATION

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.

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TABLE 2

UNIVERSAL CEMENT CORPORATION

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.

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TABLE 3

UNIVERSAL CEMENT CORPORATION

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

• 226 -

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 a member of its board of directors. -	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

• 227 -

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

• 228 -

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.

• 229 -

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 and cement material 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 and cement material 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 - - - - -

• 230 -

TABLE 7

UNIVERSAL CEMENT CORPORATION AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS 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 nonphysical 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.

• 231 -

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of Cash Statement of Financial Assets at FVTPL – Current Statement of Financial assets at FVTOCI - Current Statement of Note Receivables Statement of Account Receivables Statement of Inventories Statement of Financial Assets at FVOCI– Non-current Statement of Changes in Investments accounted for using Equity Method Statement of Changes in Property, Plant and equipment Statement of Changes in Accumulated Depreciation of Property, Plant and Equipment Statement of Changes in Right-of-use Assets Statement of Changes in Accumulated Depreciation of Right-of- use Assets Statement of Changes in Investment Properties Statement of Changes in Accumulated Depreciation of Investment Properties Statement of Changes in Intangible Assets Statement of Deferred Income Tax Assets Statement of Short-term Borrowings Statement of Short-term Bills Payable Statement of Accounts Payable Statement of Other Payables Statement of Other Current Liabilities Statement of Lease Liabilities Statement of Deferred Income Tax Liabilities Major Accounting Items in Profit or Loss Statement of Net Revenue Statement of Operating Costs Statement of Operating Expenses Function Summary for Employee’s Benefit, Depreciation, and Amortization Expenses Incurred during the Year

No./Ref.

Schedule 1 Schedule 2 Schedule 3 Schedule 5 Schedule 5 Schedule 6 Schedule 7 Schedule 8 Note 14 Note 14 Schedule 9 Schedule 9 Note 16 Note 16 Note 17 Note 25 Schedule 10 Note 18 Schedule 11 Note 20 Note 20 Schedule 12 Note 25 Schedule 13 Schedule 14 Schedule 15 Schedule 16

• 232 -

SCHEDULE 1

Universal Cement Corporation

STATEMENT OF CASH DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars , Unless Specified Otherwise)

Item Cash on hand Bank deposits Checking accounts Demand deposits Foreign currency deposits (Note)	Amount
	$ 282 11,814 75,834 16,939
	$ 104,869

Note: Including US$ 284,579.23, € 135,509.38, RMB 901,971.86, HK$ 189,506.33 and JPY 950,954 (US $1=NT$27.68, EUR $1=NT$31.32, RMB 1=NT$4.344, HKD $1=NT$3.549 and JPY 1=NT$0.2405)

• 233 -

SCHEDULE 2

Universal Cement Corporation

STATEMENTS OF FINANCIAL ASSETS AT FVTPL – CURRENT

DECEMBER 31, 2021

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

Shares of listed domestic companies Creative Sensor Inc.	Number of shares 273,000		Amount $ 6,866	Acquisitio n costs $ 7,785	Fair Value	Fair Value	(Note) Total $ 6,866	Guarantee provided orpledge
					Unit price (NT$) $ 25.15
								None

Note: Please refer to Note 30.

• 234 -

SCHEDULE 3

Universal Cement Corporation

STATEMENTS OF FINANCIAL ASSETS AT FVTOCI – CURRENT

DECEMBER 31, 2021

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

Current Shares of listed domestic companies Prince Housing & Development Corp. CTBC Financial Holding Co., Ltd. Asia Pacific Telecom Co., Ltd. CHC Resources Co., Ltd	Number of shares 40,621,948 28,441,983 3,277,157 17,020,254	Amount $ 544,334 738,069 26,938 771,869 $ 2,081,210	Acquisitio n costs $ 601,561 455,560 32,772 108,500 $ 1,198,393	Fair Value(Note) Unit price (NT$) Total $ 13.40 $ 544,334 25.95 738,069 8.22 26,938 45.35 771,869 $ 2,081,210	Guarante e provided orpledge
				Unit price (NT$) $ 13.40 25.95 8.22 45.35
					None None None None

Note: Please refer to Note 30.

• 235 -

SCHEDULE 4

Universal Cement Corporation

STATEMENT OF NOTES RECEIVABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Name Yung Ching Construction Co., Ltd. Kun Yi Building Materials Co., Ltd. Others (Note)	Amount
	$ 37,256 21,263 336,757 $ 395,276

Note: The balance of each company is less than 5% of the balance under this item.

• 236 -

SCHEDULE 5

Universal Cement Corporation

STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Name Non-related party Futsu Construction Co., Ltd. Kedge Construction Co., Ltd. Hung Hsin Building Materials Co., Ltd. Others (Note) Less: loss allowance Related party Pan Asia (Engineers & Constructors) Corporation Others (Note) Less: loss allowance		Amount
		$ 126,294 49,305 47,642 780,878 1,004,119 3,278 $ 1,008,841 $ 26,432 10,322 36,754 12 $ 36,742

Note: The balance of each company is less than 5% of the balance under this item.

• 237 -

SCHEDULE 6

Universal Cement Corporation

STATEMENT OF INVENTORIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Finished goods Work in progress Raw materials		Amount	Amount	Amount
		Costs $ 81,421 9,872 175,158 $ 266,451	Net realizable value
				$ 96,793 9,872 177,000 $ 283,665

Note: Please refer to Note 4 for the basis of net realizable value.

• 238 -

SCHEDULE 7

Universal Cement Corporation

STATEMENT OF FINANCIAL ASSETS AT FVOCI-NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Name Privately offered shares of listed companies Creative Sensor Inc. Shares of unlisted companies Universal Venture Capital Co., Ltd CTBC Investments Corp. Universal Cement Development Co., Ltd. Grand Bills Finance Co., Ltd. Kaohsiung Rapid Transit Corp.	Openingbalance Number of shares Amount - $ - 1,400,000 10,040 3,303,325 126,197 24,864,000 532,090 43,999,488 739,191 1,286,063 11,774 $ 1, 419,292	Increase(decrease)duringtheyear Number of shares Amount 13,000,000 $ 30 5,370 - - - - - - - - - - $ 30 5,370	Unrealized gain or loss on financial assets ( $ 34,320 ) 1,373 13,022 ( 18,897 ) 25,520 ( 1,424) ($ 14,726)	Closing	balance Fair value $ 27 1,050 11,413 139,219 513,193 764,711 10,350 $ 1, 709,936	Guarantee provided orpledge
	Number of shares	Number of shares 13,000,000 - - - - -		Number of shares 13,000,000 1,400,000 3,303,325 24,864,000 43,999,488 1,286,063
	- 1,400,000 3,303,325 24,864,000 43,999,488 1,286,063		( ( ( (			None None None None None None

• 239 -

SCHEDULE 8

Universal Cement Corporation

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars)

Investment in subsidiary Huanchung Cement International Corporation Universal Investment Corporation Universal Concrete Industrial Corporation Kaohsiung Harbor Transport Corporation Chiayi Concrete Industrial Corporation Uneo Incorporated Li Yong Development Corporation Investment in associate Lioho Machine Works Co., Ltd. Tainan Concrete Industrial Corporation	Opening	balance Amount $ 105,232 315,031 106,396 98,044 40,737 45,389 20,000 730,829 10,023,459 53,790 10,077,249 $10,808,078	Number of shares - 42,800,000 123,865 - - - - - 120,000		Amount $ 5,109) 400,000 1,490 3,635) - - - 392,746 537,489) 25,969 511,520) $ 118,774)	Gain (loss) on investments $ 12,314 9,170 29,331 2,950 ( 118) ( 2,053) ( 434) 51,160 370,306 2,594 372,900 $ 424,060		Undistributed earnings $ - - - - - - - - - - - $ -	Capital reserve $ - - 527 - - - - 527 605 - 605 $ 1,132	Actuarial gains (loss) from defined benefit plans ( $ 155) - 15 131 - - - ( 9) 8,294 - 8,294 $ 8,285	Cumulative translation adjustments $ - - - - - - - - ( 53,545) - ( 53,545) ($ 53,545)	Unrealized gain (loss) on financial products $ - 44,106 - - - - - 44,106 ( 821) ( 589) ( 1,410) $ 42,696		Closingbalance		Amount $ 112,282 768,307 137,759 97,490 40,619 43,336 19,566 1,219,359 9,810,809 81,764 9,892,573 $ 11,111,932	Market price or net equity $ 112,282 768,307 137,759 97,490 40,619 43,336 19,566 1,219,359 9,810,809 81,764 9,892,573 $ 11,111,932	Guarantee provided or pledge None None None None None None None None None	Note
	Number of shares 6,999,333 32,200,000 7,567,546 7,560,000 2,252,378 6,000,000 2,000,000 89,581,468 1,145,000												Number of shares 6,999,333 75,000,000 7,691,411 7,560,000 2,252,378 6,000,000 2,000,000 89,581,468 1,265,000	Shareholding (%) 69.99 100 58.12 100 86.63 100 100 29.86 42.17
				( ( ( ( (		( ( (				( (	( ( (	( ( (							Note 1 Note 2 Note 3 Note 1 Note 1 Note 4

Note 1: The decrease amount during the year was cash dividends received.

Note 2: Number of shares increased during the year was the investee company’s capital increase transferred from earnings amounted to 2,800,000 shares and by cash amounted to 40,000,000 shares. The increase amount during the year was the investee company’s capital increase by cash amounted to NT$400,000 thousand.

Note 3: The increase amount during the year was the acquisition of minority equity, and a capital reserve of NT$527 thousand was recognized.

Note 4: Number of shares increased during the year was the acquisition of 120,000 shares. The increase amount during the year was the acquisition of shares of NT$27,000 thousand minus cash dividends received NT$1,030 thousand.

• 240 -

SCHEDULE 9

Universal Cement Corporation

STATEMENT OF CHANGE IN RIGHT-OF-USE ASSETS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Costs Balance at January 1, 2021 Increase during the year Decrease during the year Remeasurement Balance at December 31, 2021 Cumulative depreciation Balance at January 1, 2021 Decrease during the year Depreciation expenses Balance at December 31, 2021 Carrying amount at December 31,2021		Building $ 52,736 27,585 30,464 ) 4) $ 49,853 $ 33,078 30,464 ) 16,033 $ 18,647 $ 31,206	Transportation Equipment $ 10,395 3,906 ( 1,372 ) ( 50) $ 12,879 $ 3,046 ( 1,372 ) 3,088 $ 4,762 $ 8,117		Total
	( ( (		( ( (	( ( (	$ 63,131 31,491 31,836 ) 54) $ 62,732 $ 36,124 31,836 ) 19,121 $ 23,409 $ 39,323

• 241 -

SCHEDULE 10

Universal Cement Corporation

STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Credit borrowings First Commercial Bank Cathay United Bank Bank of Taiwan Hua Nan Commercial Bank Yuanta Leasing Co., Ltd. Taishin International Bank	Contract period (Note 2) Rate per annum(%) December 24, 2021~ January 21, 2022 0.82 September 30, 2021~ March 29, 2022 0.82 December 2, 2021~ March 2, 2022 0.84 December 8, 2021~ March 8, 2022 0.85 November 19, 2021~ February 17, 2022 0.82 December 30, 2021~ January 27, 2022 0.83		Closing balance Financing limit(Note 1) $ 380,000 $ 500,000 200,000 200,000 300,000 500,000 300,000 300,000 300,000 300,000 300,000 300,000 $ 1,780,000	Pledge or guarantee
				NONE NONE NONE NONE NONE NONE

Note 1: The financing limit of Hua Nan Commercial Bank is a limit shared by short-term and mid-term borrowings. Note 2: Refers to the period of utilization.

• 242 -

SCHEDULE 11

Universal Cement Corporation

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Name of the supplier Non-related party Taiwan Cement Corp. Shiny Gravel Corp. Gaotai Gravel Corp. Fu Cheng Development Corp. Others (Note) Related party China Hi-Ment Co., Ltd Kaohsiung Wharf Transportation		Amount
		$ 181,430 59,521 50,787 31,534 258,063 $ 581,335 $ 26,611 13,918 $ 40,529

Note: The balance of each company is less than 5% of the balance under this item.

• 243 -

SCHEDULE 12

Universal Cement Corporation

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Building Building Building Building Transportation equipment Transportation equipment Transportation equipment Transportation equipment Transportation equipment Transportation equipment	Description Central Office Southern Office Tainan Concrete Plant Fengshan Concrete Plant Service car for Tainan Office Service car for headquarters Service car for headquarters Service car for headquarters Service car for headquarters Service car for Dahu Gypsum Board Plant	Leaseperiod April 1, 2020~ March 31, 2025 August 1, 2020~ July 31, 2023 September 1, 2021~ August 31, 2026 September 1, 2015~ August 31, 2022 June 29, 2020~ June 28, 2024 December 31, 2019~ December 31, 2022 February 3, 2020~ February 3, 2024 October 12, 2020~ September 12, 2024 August 26, 2021~ August 26, 2025 December 30, 2020~ November 30, 2025	Discount rate (%) 0.9 0.9 0.9 0.9 1.0 1.0 1.0 0.9 0.9 0.9		Closing balances
					$ 1,258 717 25,786 3,598 1,273 1,217 1,150 1,334 2,187 997 $ 39,517

• 244 -

SCHEDULE 13

Universal Cement Corporation

STATEMENT OF NET REVENUES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Cement Concrete Gypsum board Others Less: sales return and discounts	Quantity 273,026.15 tons 1,546,268 cubic meters 14,831,622.71 square meters		Amount
			$ 685,059 3,340,838 827,443 22,839 4,876,179 49,740 $ 4,826,439

• 245 -

SCHEDULE 14

Universal Cement Corporation

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Item Raw materials at the beginning of the year Add: Incoming materials during the year Gain from raw material physical counts Less: Raw materials at the end of the year Others Direct raw materials used Direct labor Manufacturing expenses Manufacturing costs Add: Work in progress at the beginning of the year Incoming materials during the year Less: Work in progress at the end of the year Others Cost of finished goods Add: Finished goods at the beginning of the year Excise tax Purchase of finished goods Others Less: Finished goods at the end of the year Cost of sales Add: Unamortized fixed manufacturing expenses Less: Revenue from sale of scraps Gain from raw material physical counts Operating costs		Amount
		$ 164,970 2,256,112 3,110 175,158 17,544 2,231,490 98,446 797,292 3,127,228 10,184 596,436 9,872 21,981 3,701,995 72,136 119,665 10,346 43,199 81,421 3,865,920 2,483 1,458 3,110 $ 3,863,835

• 246 -

SCHEDULE 15

Universal Cement Corporation

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021 (In Thousands of New Taiwan Dollars)

Salaries and wages, bonus, and employee’s remuneration Freight Commission expenses Contracted research expenses Depreciation Taxation Expected credit gain reversed Test fee Others (Note)		Selling and marketing expenses General and administrativ e expense $ 32,800 $ 77,261 34,866 - 5,148 - - - 904 19,666 42 17,713 - - - - 16,588 53,202 $ 90,348 $ 167,842		R&D expenses Expected credit loss (gain) $ 33,437 $ - 2 - - - 4,359 - 757 - 28 - - ( 1,954) 22,450 - 15,685 - $ 76,718 ($ 1954)	Total
					$ 143,498 34,868 5,148 4,359 21,327 17,783 ( 1,954) 22,450 85,475 $ 332,954

Note: The balance of each company is less than 5% of the balance under this item.

• 247 -

SCHEDULE 16

Universal Cement Corporation

STATEMENT FOR FUNCTION SUMMARY FOR EMPLOYEE’S BENEFIT, DEPRECIATION, AND AMORTIZATION EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Item Employee’s benefit Salaries Labor and health insurance premium Pension Director’s remuneration Others Depreciation Amortization	FOR THE YEARS ENDED DECEMBER31, 2021	FOR THE YEARS ENDED DECEMBER31, 2021	FOR THE YEARS ENDED DECEMBER31, 2021		$ 371,346 35,254 18,080 25,596 12,956 $ 463,232 $ 114,763 $ 2,992	FOR THE YEARS ENDED DECEMBER31, 2020	FOR THE YEARS ENDED DECEMBER31, 2020	FOR THE YEARS ENDED DECEMBER31, 2020
	Operatingcosts $ 253,444 23,936 11,891 - 4,207 $ 293,478 $ 92,869 $ 204	Operatingexpenses $ 117,902 11,318 6,189 25,596 8,749 $ 169,754 $ 21,327 $ 2,788	Non-operating income and expenses $ - - - - - $ - $ 567 $ -	Total		Operatingcosts $ 244,161 20,310 11,143 - 6,038 $ 281,652 $ 72,112 $ -	Operatingexpenses $ 112,989 12,161 6,347 28,333 7,485 $ 167,315 $ 20,452 $ 1,511	Non-operating income and expenses $ - - - - - $ - $ 647 $ -	Total
										$ 357,150 32,471 17,490 28,333 13,523 $ 448,967 $ 93,211 $ 1,511

Note:

1. Number of employees for the current year and the previous year was 445 and 424, respectively, in which there were both 4 directors who are not concurrently employees.

2. Companies whose shares are listed and traded on TWSE or TPEx shall disclose the following information:

3. (1) Average employee’s benefit expenses for the year amounted to NT$992 thousand (“total employee’s benefit expenses for the year – total director’s remuneration”/“number of employees for the year – number of directors who are not concurrently employees”). Average employee’s benefit expenses for the previous year amounted to NT$1,002 thousand (“total employee’s benefit expenses for the previous year – total director’s remuneration”/“number of employees for the previous year – number of directors who are not concurrently employees”).

4. (2) Average employee’s salary expenses for the year amounted to NT$842 thousand (total salary expenses for the year/“number of employees for the year – number of directors who are not concurrently employees”). Average employee’s salary expenses for the previous year amounted to NT$850 thousand (total salary expenses for the previous year/“number of employees for the previous year – number of directors who are not concurrently employees”).

5. (3) Average adjustments and changes in employee’s salary expenses achieved 0.9% (“average employee’s salary expenses for the year - average employee’s salary expenses for the previous year”/average employee’s salary expenses for the previous year). 3. The Company has established its Audit Committee, and the Company has no supervisor.

6. Salary and remuneration policy:

7. (1) Remuneration shall be provided for directors of the Company in executing the Company’s businesses, and the amount shall be subject to its participation in the Company’s operations and the value of its contribution. According to the requirements under Article 29 of the Company’s articles of association, the remuneration for the Company’s chairman, vice-chairman, and directors regarding the execution of their duties shall be determined by the board of directors based on the standards within the industry, taking into account its contribution, performance and the future risks of the Company. Furthermore, according to Article 33, where the Company recorded a profit during the year, the board of directors may resolve to allocate no more than 3% of the abovementioned profit as director’s remuneration, which may only be distributed in cash.

8. (2) General manager, vice general manager, assistant managers, and other management of the Company execute the Company’s operations according to the orders from the board of directors; their remuneration shall be subject to the requirements of Article 31 of the Company’s articles of association and Article 29 of the Company Act. The standards or the management’s remuneration shall be determined based on its personal performance and its contribution to the overall operations of the Company, with reference to the payment standards in the market.

9. (3) For directors and management listed in paragraphs (1) and (2) above, their salary and remuneration policy, system, standard, and structure shall be subject to the requirements under the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange, and submitted to the Remuneration Committee for review and discussion.

10. (4) The employee’s remuneration policy is determined based on personal competency, contribution to the Company, performance, market value of the post, taking into account the future operating risks of the Company, which shall be positively correlated to the operating performance. Where the Company recorded a profit for the year, the Company shall allocate no less than 1% as the employee’s remuneration according to the requirements under the Articles of Association. The overall remuneration package for employees primarily includes the fixed basic salaries, bonuses, and benefits. Regarding the payment standards, fixed basic salaries are approved and paid in accordance with the market trend of the post held by employees, bonuses are distributed based on the achievement of the employee’s and the department’s objectives and the Company’s operating performance, while benefits are designed for employees according to the requirements under the laws and regulations, with equal considerations given to the demands of employees.

11. 248 -

12. 6.6 The company and its subsidiaries Disclosure to make if the company and its affiliates have experienced financial difficulties in recent fiscal year till the publication date: None.

13. 249 -

VII. Review of Financial Conditions, Financial

Performance, and Risk Management

7.1 Analysis of Financial Status

Unit: NT$ thousands

			Unit: NT$ thousands	Unit: NT$ thousands
Year Item	2021	2020	Difference
			Amount	%
Current Assets	5,004,661	4,391,640	613,021	14
Property, plant and equipment	6,890,696	6,680,071	210,625	3
Intangible assets	8,404	8,075	329	4
Other Assets	13,193,061	13,023,150	169,911	1
Total Assets	25,096,822	24,102,936	993,886	4
Current Liabilities	4,245,043	3,795,424	449,619	12
Long-term Liabilities	1,467,303	1,522,159	-54,856	(4)
Total Liabilities	5,712,346	5,317,583	394,763	7
Paid-in capital	6,536,092	6,536,092	0	0
Capital surplus	66,950	65,822	1,128	2
Retained Earnings	11,884,891	11,515,783	369,108	3
Other equity	745,532	538,530	207,002	38
Equity attributed to owners of the parent company	19,233,465	18,656,227	577,238	3
Non-control equity	151,011	129,126	21,885	17
Total Stockholders' Equity	19,384,476	18,785,353	599,123	3
Analysis of changes in financial ratios: (1) Other equity: Mainly due to Unrealized gain on financial assets at FVTOCI increased.

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7.2 Analysis of Financial Performance

Unit: NT$ thousands

Year Item	2021	2020	Difference	%
Operating Revenue	6,079,107	5,426,217	652,890	12
Cost of Sales	4,947,290	4,519,186	428,104	9
Gross Profit	1,131,817	907,031	224,786	25
Operating Expenses	421,615	413,889	7,726	2
Profit from operations	710,202	493,142	217,060	44
Non-operating Income and expenses	530,060	804,372	(274,312)	(34)
Income Before Tax	1,240,262	1,297,514	(57,252)	(4)
Income tax expenses	126,036	37,719	88,317	234
Net profit	1,114,226	1,259,795	(145,569)	(12)
Other comprehensive income	206,946	79,230	127,716	161
Total comprehensive income for the year	1,321,172	1,339,025	(17,853)	(1)
Net profit attributable to owners of the company	1,088,078	1,247,252	(159,174)	(13)
Net profit attributable to non- controllinginterests	26,148	12,543	13,605	108
Total comprehensive income attributable to owners of the company	1,295,080	1,326,470	(31,390)	(2)
Total comprehensive income attributable to non-controlling interests	26,092	12,555	13,537	108
Earnings per share	1.66	1.91	-0.25	(13)
Analysis of Financial Performance： (1) Gross Profit, Profit from operations and total comprehensive income: Mainly due to the increase in operating revenue. (2) Non-operating Income and expenses: Mainly due to the decrease in the recognition of share of profit or loss of associates. (3) Income tax expenses: Mainly due to the recognition of realized investment losses during 2020Y. (4) Other comprehensive income：Mainly due to the recognition of Unrealized gain on financial assets at FVTOCI.

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7.3 Analysis of Cash Flow

7.3.1 Cash Flow Analysis for the Current Year

Cash and Cash Equivalents, Beginning of Year	Net Cash Flow from Operating Activities	Cash Outflow	Cash Surplus (Deficit)	Leverage of Cash Deficit	Leverage of Cash Deficit
				Investment Plans	Financing Plans
$ 294,665	1,382,211	1,384,844	292,032	-	-
Analysis of change in cash flow in the current year: 1. Operating activities：Mainly because of the profit from business operations. 2. Investing activities：Mainly because of purchasing Financial assets at fair value through other comprehensive income - non-current and property, plant and equipment. 3. Financingactivities：Mainlybecause of dividend distribution bycash.

7.3.2 Remedy for Cash Deficit and Liquidity Analysis

Year Item	2021	2020	Variance (%)
Cash Flow Ratio(%)	32.56	26.72	22
Cash Flow AdequacyRatio(%)	93.99	77.47	21
Cash Reinvestment Ratio(%)	3.01	1.26	139
Increase in cash flow ratio and cash reinvestment ratio: Mainly because of the increase in the inflow of net cash from the operatingactivities.

7.3.3 Cash Flow Analysis for the Coming Year

Estimated Cash and Cash Equivalents, Beginning of Year (1)	Estimated Net Cash Flow from Operating Activities (2)	Estimated Cash Outflow (Inflow) (3)	Cash Surplus (Deficit) (1)+(2)-(3)	Leverage of Cash Surplus (Deficit) Investment Plans Financing Plans	Leverage of Cash Surplus (Deficit) Investment Plans Financing Plans
					Financing Plans
$ 292,032	861,727	775,514	378,245	-	-
1. Operating activities：Mainly because of the profit from business operations. 2. Investing activities：Mainly because of purchasing property, plant and equipment. 3. Financingactivities：Mainlybecause of dividend distribution bycash.

7.4 The effect upon financial operations of any major capital expenditures during the most recent fiscal year

Establishment on the production line in Lu-zhu Gypsum Board Plant and expansion of production system in Da-hu RMC plant has very limited impact on the financial operation of the Company to the extent that it can be fairly omitted.

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• 7.5 Investment Policy in the Last Year, Main Causes for Profits or Losses, Improvement Plans and Investment Plans for the Coming Year

Investment analysis

Unit: NT$ thousands

Remarks Item	Amount (Note 1)	Policies	Causes for Profits or Losses	Improvement Plans
Lio-ho Machine Works Ltd.	9,810,902	Expansion of investment in industry other than the company	The share of profits of the associate was 370,306 thousand, and the cash dividends was 537,499 thousand in 2021.	-
Grand Bills Finance Co., Ltd.	764,711	Expansion of investment in industry other than the company	The cash dividends was 39,600 thousand in 2021.	-
Universal Cement Development Co., Ltd.	513,193	Expansion of investment in industry other than the company	The cash dividends was 12,432 thousand in 2021.	-
Creative Sensor Inc.	465,566	Expansion of investment in industry other than the company	Net loss of the financial assets at fair value through profit or loss was 919 thousand, and the cash dividends was 1,307 thousand in 2021.	-
CTBC Financial Holding Co., Ltd.	738,069	Expansion of investment in industry other than the company	The unrealized gain of the financial assets at fair value through other comprehensive income was 177,762 thousand, and the cash dividends was 29,864 thousand in 2021.	-
CHC Resources Co., Ltd.	771,869	Expansion of investment in industry other than the company	The unrealized loss of the financial assets at fair value through other comprehensive income was 35,743 thousand, and the cash dividends was 34,041 thousand in 2021.	-
Prince Housing & Development Corp.	1,012,382	Expansion of investment in industry other than the company	The unrealized gain of the financial assets at fair value through other comprehensive income was 144,415 thousand, and the cash dividends was 30,220 thousand in 2021.	-

Note 1: As of December 31,2021, the investment amount exceeded 5% of the paid-in capital.

Investment Plans for the Coming Year: NA.

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7.6 Risk Assessment: Following aspects for most recent fiscal year till the publication date has been assessed and evaluated.

• 7.6.1 The effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future.

1. Fluctuation of interest rate: Impact due to fluctuation of interest rate is extremely limited. Measures to be taken in the future: Will adjust portfolio according to future demand for funds.

2. Fluctuation of exchange rate: Impact due to fluctuation of exchange rate is extremely limited. Measures to be taken in the future: The company shall keep close look on the impact of fluctuation of exchange rate on the company.

3. Inflation rate: Impact due to inflation is extremely limited.

  - Measures to be taken in the future: The company shall keep close look on the impact of fluctuation of inflation on the company.

• 7.6.2 The company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future.

  • The company and its subsidiaries have not engaged in transactions involving high risk, high leveraged and derivative products.

  • The only loaning of funds made by the company was made to the subsidiaries as the operation capital and has been approved and processed according to “Regulations Governing Loaning of Funds” of the company. The highest balance in the year reported is NTD 1,200 Million; whereas the balance by the end of the year remains the same and the actual credit utilized is NTD 105 Million.

  • The company has endorsed to other companies pursuant to “Regulations Governing Making of Endorsements/Guarantees” of the company in year of 2021. The highest credit the company endorsed/guaranteed is NTD 570 Million; whereas the actual credit utilized amounted to NTD 100 Million.

• 7.6.3 Research and development work to be carried out in the future, and further expenditures expected for research and development work.

The company will continue its research on structure of gypsum board wall

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to maximize the strength of gypsum board. The company also dedicates to development of various types fire protection wall and structural steel fire protection system and ensure our leadership in the supply of fire-proof building material. Development of enables the application of our product to extend outdoor and add more options for architecture. In repose to modern need of sound insulation, the company has also developed sound insulation gypsum board wall with high performance. The company will further develope hard gypsum board and high performance gypsum board designed for light gauge steel framing structure.

• 7.6.4 Effect on the company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response.

• The company has revised relevant internal regulations and system by incorporating various guidelines published by Financial Supervisory Commission.

Measures to be taken to respond: The company will continue its evaluation of the impact on financial status and performance among various fiscal period and adjust accordingly.

• 7.6.5 Effect on the company's financial operations of developments in science and technology (including Cybersecurity risk) as well as industrial change, and measures to be taken in response.

• The main product of the company is building material mainly used by construction. The industry of building material is matured and hence the change of technology does not impose adverse impact on the company. Measures to be taken to respond: The company will increase its effort on the research and development of technology of building material and hope this will contribute to the evolvement to the product of the company.

• 7.6.6 Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response. The company has always maintained a positive corporate image. Measures to be taken: The company will increase its contribution by fulfilling its corporate social responsibility and enhance its capability to respond to public crisis.

• 7.6.7 Expected benefits and possible risks associated with any merger

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and acquisitions, and mitigation measures being or to be taken. No transaction of merger was participated by the company in 2021.

Measures taken to respond: To increase awareness on the regulations governing mergers and acquisitions and the cost-and-benefits analysis thereof for possible needs in the future.

• 7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken.

• Completion of establishment of production line in Luzhugypsum board plant, Kao-Hsiung.

• Anticipated benefit. The production capacity of Hai-fu plant has approaching its limit. With the trend of increasing application of green building material by contractors, significant growth of demand for gypsum board is expected soon. New addition of production line in Luzhugypsum board plant will pave way for further breakthrough of building material business.

• 7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken. In addition to slightly higher portion of purchasing from Taiwan Cement Corporation, the procurement from other sources remains low and mostly belongs to raw material needed for the production. This has remain for years and should be considered to be reasonable. No concentration of sales on particular account is identified. Therefore, no risk due to concentration of sales and purchases is considered.

• Measures to be taken to respond. Diversified the source of procurement and targets of sales to avoid risk due to concentration.

• 7.6.10 Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken.

• The directors and major shareholders have not transferred share in significantly large in scale and this helps maintain the stability of the operation of the company.

Measures to be taken to respond. To continue collection of information.

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• 7.6.11 Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken.

• The holding of major shareholders of the company remained stable and no material change or risk to the company is considered.

• Measures to be taken to respond. To continue collection of information.

• 7.6.12 Litigious and non-litigious matters. List major litigious, nonlitigious or administrative disputes that: (1) involve the company and/or any company director, any company supervisor, the general manager, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the company; and (2) have been concluded by means of a final and unappealable judgment, or are still under litigation. Where such a dispute could materially affect shareholders' equity or the prices of the company's securities, the annual report shall disclose the facts of the dispute, amount of money at stake in the dispute, the date of litigation commencement, the main parties to the dispute, and the status of the dispute as of the date of publication of the annual report. None.

• 7.6.13 Other important risks, and mitigation measures being or to be taken. None.

7.7 Other Important Matters: None.

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VIII. Special items to be included

8.1 Information related to the Company's affiliates

8.1.1 Consolidated Business Reports Covering Affiliated Enterprises

1.Organization Chart for the Company and its affiliated enterprises. (2021.12.31)

==> picture [94 x 57] intentionally omitted <==

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

Universal Cement
Corporation
----- End of picture text -----

==> picture [625 x 210] intentionally omitted <==

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

86.63% 100.00% 69.99% 58.12% 100.00% 100.00% 100.00%
UCC
Investment
Inc.
Kao-hsiung Pier UNEO
UNEO Inc.
Transportation Inc. Development Inc.
0.01% 0.01% 0.87%
Chia-Yi Ready-
Huan-Chung Universal Ready-
mixed Concrete
mixed Concrete
Industry Inc. Int’l Inc.
Industry Inc.
----- End of picture text -----

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2. Profile of Affiliated Enterprises

2. Profile of Affiliated Enterprises	2. Profile of Affiliated Enterprises	2. Profile of Affiliated Enterprises	2. Profile of Affiliated Enterprises	2. Profile of Affiliated Enterprises
Dec. 31, 2021 Unit:‘000 NTD
Name of Enterprise	Date of Establishment	Address	Paid-in Capital	Main item of Operation or Manufacturing.
Chia-Yi Ready- mixed Concrete IndustryInc.	1982.09.14	2 Zhong-xing Rd., Jia-tai Industrial Zone, Tai-bao City, Chia-Yi County	26,000	Production and sales of Ready-mixed Concrete.
UCC Investment Inc.	1989.11.20	10F., 125 Nan-king E. Rd., Sec. 2, Taipei City	750,000	General Investment
Huan-Chung International Inc.	1991.01.28	10F., 125 Nan-king E. Rd., Sec. 2, Taipei City	100,000	Sales, import and export of cement, cement clinker, fuel,and cementproducts.
Kao-Hsiung Pier Transportation Inc.	1967.03.31	95-3 Gang-shan, Gang-shan borough, Ah-lien Dist., Kao-hsiung City.	75,600	Transportation by truck
Uneo Inc.	2013.01.11	10F., 125 Nan-king E. Rd., Sec. 2, Taipei City	60,000	Sales of electronic parts
Universal Ready- mixed Concrete IndustryInc.	1975.11.28	665 Zhong-shan Rd., Sec. 1, Wu-ri Dist., Tai-chung City	132,329	Production and sales of Ready-mixed Concrete.
LI YONG Development Co., Ltd.	2020.12.17	10F., 125 Nan-king E. Rd., Sec. 2, Taipei City	20,000	Investment and Development of Real Estate

3. Main Business of Affiliated Enterprises: Please refer to table above.

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4. Profile of Directors, Supervisors and General Manager of Affiliated Enterprises.

Dec. 31, 2021

		Dec.	31,2021	31,2021
Name of Enterprises	Position (Note1)	Name and Representative	Share held
			Number of Share	Ratio of Holding
Chia-Yi Ready- mixed Concrete IndustryInc.	Chairman Director Director Supervisor	Universal Cement Corporation, Represented by：Yang, Tsung-Jen Universal Cement Corporation, Represented by：Chou, Shih-Kuei Universal Cement Corporation, Represented by：Wang, Jau-Ching UCC Investment Inc.,Represented by：Yan,Shan-Hsiung	2,252,378 2,252,378 2,252,378 361	86.63% 86.63% 86.63% 0.01%
UCC Investment Inc.	Chairman Director Director Supervisor General Manager	Universal Cement Corporation, Represented by：Hou, Bo-Yi Universal Cement Corporation, Represented by：Hou, Chih-Sheng Universal Cement Corporation, Represented by：Hou, Chih-Yuan Universal Cement Corporation, Represented by：Yang, Tsung-Jen Hou, Bo-Yi	75,000,000 75,000,000 75,000,000 75,000,000 ─	100.00% 100.00% 100.00% 100.00% ─
Huan-Chung International Inc.	Chairman Director Director Director Director Supervisor General Manager	Universal Cement Corporation, Represented by：Hou, Bo-Yi Universal Cement Corporation, Represented by：Hou, Chih-Yuan Universal Cement Corporation, Represented by：James Chan Taiheiyo Cement Corporation, Represented by: Yasuhiro Kawaragi Taiheiyo Cement Corporation, Represented by: Hidekatsu Maekawa UCC Investment Inc., Represented by：Hou, Chih-Sheng Hou, Chih-Yuan	6,999,333 6,999,333 6,999,333 3,000,000 3,000,000 667 ─	69.99% 69.99% 69.99% 30.00% 30.00% 0.01% ─
Kao-hsiung Pier Transportation Inc.	Chairman Director Director Supervisor General Manager	Universal Cement Corporation, Represented by：Wang, Jau-Ching Universal Cement Corporation, Represented by：Hou, Chih-Sheng Universal Cement Corporation, Represented by：Hou, Chih-Yuan Universal Cement Corporation, Represented by：Yan, Shan-Hsiung Wang, Jau-Ching	7,560,000 7,560,000 7,560,000 7,560,000 ─	100.00% 100.00% 100.00% 100.00% ─
Universal Ready-mixed Concrete Industry Inc.	Chairman Director Director Director Director Director Director Executive Director Executive Director Supervisor Supervisor Supervisor General Manager	Universal Cement Corporation, Represented by：Chou, Shih-Kuei Universal Cement Corporation, Represented by：Hou, Bo-Yi Universal Cement Corporation, Represented by：Hou, Chih-Sheng Universal Cement Corporation, Represented by：Yang, Tsung-Jen Universal Cement Corporation, Represented by：Peter Chang Su, Chun-Chen Wu, Wei-Hsiung Universal Cement Corporation, Represented by：Hou, Chih-Yuan Wu, Rui-Sheng UCC Investment Inc., Represented by：Kao, Tsung-yao Chang, Yu-Zong Chan, Shu-hua Chang, Kui-Goan	7,691,411 7,691,411 7,691,411 7,691,411 7,691,411 145,398 119,862 7,691,411 496,231 115,494 27,510 165,421 ─	58.12% 58.12% 58.12% 58.12% 58.12% 1.10% 0.91% 58.12% 3.75% 0.87% 0.21% 1.25% ─
Uneo Inc.	Chairman Director Director Supervisor	Universal Cement Corporation, Represented by：Hou, Bo-Yi Universal Cement Corporation, Represented by：Hou, Chih-Sheng Universal Cement Corporation, Represented by：Hou, Chih-Yuan Universal Cement Corporation, Represented by：Wu, Chu-ting.	6,000,000 6,000,000 6,000,000 6,000,000	100.00% 100.00% 100.00% 100.00%
LI YONG Development Co., Ltd.	Chairman Director Director Supervisor	Universal Cement Corporation, Represented by：Hou, Chih-Sheng Universal Cement Corporation, Represented by：Hou, Chih-Yuan Universal Cement Corporation, Represented by：Chang, Pei-De UniversalCement Corporation,Represented by：Yang,Rong-Fen	2,000,000 2,000,000 2,000,000 2,000,000	100.00% 100.00% 100.00% 100.00%

Note 1: For affiliated companies registered abroad, equivalent position is listed. Note 2: For affiliated companies established as incorporation limited company, holding ratio is listed. Note 3: The information is updated till the publication date.

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2021.12.31

5. Operating Condition and Financial Results of Affiliated Companies

(In thousands of New Taiwan Dollars, except earnings per share)

Company Name	Capital	Total assets	Total liabiliti es	Net value	Net Sales	Operating Income (Loss)	Income (Loss) After Tax	Earnings (Loss) Per Share After Tax
Chia-Yi Ready-mixed Concrete IndustryInc.	26,000	58,040	11,159	46,881	-	(1,793)	(136)	(0.05)
UCC Investment Inc.	750,000	1,003,474	235,165	768,309	-	(2,859)	9,170	0.12
Huan-Chung International Inc.	100,000	351,033	190,630	160,403	709,427	24,241	17,591	1.76
Kao-Hsiung Pier Transportation Inc.	75,600	137,738	40,250	97,488	238,526	1,787	2,950	0.39
Uneo Inc.	60,000	52,228	8,892	43,336	35,475	(2,007)	(2,053)	(0.34)
Universal Ready- mixed Concrete IndustryInc.	132,329	604,045	368,427	235,618	626,276	59,907	50,220	3.80
LI YONG Development Co.,Ltd.	20,000	19,606	40	19,566	-	(436)	(434)	(0.22)

Note: The table is prepared in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises”.

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8.1.2 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

By

BO YI HOU

Chairman

March 28, 2022

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8.1.3 Relationship Report: N.A.

8.2 Private Placement Securities in the previous year and by the date of

report publication: None

8.3 The Shares in the company Held or Disposed of by Subsidiaries

in the previous year and by the date of report publication: None

8.4 Other required supplementary notes:

Universal Cement Corporation Intellectual Property Management Plan

In order to ensure the research and develop ability, motivate innovative energy, extend advantage of competition, raise profitability of business, achieve operation target and ensure sustainable operation, the company has continuously implemented management of intellectual property.

8.4.1 Protective Measure

8.4.1.1 Patent

1. Patent Review: Individual Review by Cases. Each application of patent will be reviewed internally before submitting for official review. The scope of internal review includes patent search of previous cases, review of patentability, preliminary examination, and final examination of patent to effectively ensure the quality of our patents.

2. Routine Patent Sharing: Encouraging patent developers to share ideas among peers to enhance sharpness on the perception of patentability.

3. Routine Review on Maintenance: Examine internally the utilization of patent awarded and its relevance to the product to evaluate the necessity for further maintenance of the patent.

4. Seminar on the core concepts of Patent: To enrich the knowledge of patent developers on patent regulations and cultivate their respect for patents and awareness of legal boundaries during the development of patent.

8.4.1.2 Trademark

1. The earliest application of Trademark of the company can be traced back to as early as 1962. After our careful efforts over the decades, the deployment is nearly comprehensive.

2. Routine Review on Maintenance: Examine internally the utilization of

trademark registered to evaluate the necessity for further maintenance of the

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trademark.

8.1.4.3 Protection of Trade Secretes

1. Access Control System: All employees are issued personal access badge and granted with difference levels of clearance to access to various areas of the company according to the need of respective positions. All visitors shall acquire clearance to access to limited area of the premises and be accompanied by employees of the company at all times.

2. Management of Information Security: All computer systems shall only be accessed with employees’ personal account and passwords with the later is required to change periodically.

3. Advertisement of Information Security: Ensure all personnel’s understanding of trade secret and to effectively establish the awareness of knowledge of relevant law.

8.4.2 Implementation

The company will report regularly the matters pertaining to Intellectual property to the Board of Directors.

Implementation of “Universal Cement Corporation Guidelines on Management of Intellectual Property” in 2012

Implementation of “Universal Cement Corporation Guidelines on Award for Application of Patent” in 2012

IX. Events with material impacts on equity or stock price as specified in sub-section 2, section 3, Article 36 of the Securities and Exchange Act in the previous year and by the date of report publication: None.

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