Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

Cayman Engley Annual Report 2020

Sep 7, 2021

51989_rns_2021-09-07_0c24d638-efd7-4b91-8766-4d0f45d37156.pdf

Annual Report

Open in viewer

Opens in your device viewer

Stock Code: 2239

==> picture [152 x 67] intentionally omitted <==

Cayman Engley Industrial Co., Ltd.

2020 Annual Report

Printed on May 07, 2021

This annual report is available athttp://mops.twse.com.tw Company Websites: http://www.engley.com

1. Spokesperson and acting spokesperson (names, titles and contact information): Spokesperson Name: Yang, Cheng-Feng Title: Executive Assistant to Chairman and CFO Mobile: 0966-012239 E-mail: [email protected] Acting Spokesperson Name: Pai, Ping-Yen Title: Deputy Manager Tel: (04)7284956 E-mail: [email protected]

2. Responsible person for litigation and non-litigation (name, title and contact

information):

Name: Tsai, Chi-Chung Title: Director Tel: (04)7515511 E-mail: [email protected] 3. Contact information of the head office, branch offices and factories 3.1 Head office Name: Cayman Engley Industrial Co., Ltd. Address: The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands Website: http://www.engley.com Tel: (886)-04-7284956 3.2. Subsidiaries and branch offices Subsidiary: Engley Industrial Co., Ltd. Address: 8F., No. 349, Sec. 2, Zhongshan Rd., Changhua City, Changhua County Website ： http://www.engley.com Tel: (886)-04-7284956 Subsidiary: Changchun Engley Automobile Industry Co., Ltd.

Address:No.2379, Zhuoyue Street, Hi-Tech Zone, Changchun, Jilin Website: http://www.engley.com Tel: (86)-431-85825866 Subsidiary: Changchun Engley Auto Parts Co., Ltd. Address:No.567,Yumin Road,Economic Development Area, Changchun, Jilin Website: http://www.engley.com Tel: (86)-431-85022771 Subsidiary: Chengdu Engley Auto Parts Co., Ltd.

Address: No.268,South 4[th] Road, Economic and Technological Development Zone, Chengdu, Sichuan Website: http://www.engley.com Tel: (86)-28-65080999 Branch office: Chengdu Engley Auto Parts Co., Ltd. Baoji Branch Address: No.68, Gaoxin 31[st] Road, High-Tech Development Zone, Baoji City, Shaanxi Website: http://www.engley.com Tel: (86)-28-65080999 Subsidiary: Yizheng Engley Auto Part Co., Ltd.

Address: No.31, Lianzhong Road, Automobile Industrial Park,Yizheng, Jiangsu Website: http://www.engley.com Tel: (86)-514-89187777 Subsidiary:Liaoning Engley Auto Part Co., Ltd. Address: Yilu Industrial Park, Xintaizi Town, Tieling County, Tieling, Liaoning Website: http://www.engley.com Tel: (86)-24-78756475 Subsidiary: Foshan Engley Auto Part Co., Ltd.

Address: No.15-1, Dongyang 3[rd] Road, Huanan Hardware Industry Base, Danzao Town, Nanhai Area, Foshan, Guangdong Website: http://www.engley.com Tel: (86)-757-81092779 Subsidiary: Tianjin Engley Manufacturing Co., Ltd.

Address: No.21 Baokang Rd, Baodi Economic Development Zone, Tianjin Website: http://www.engley.com Tel: (86)-22-59281019 Subsidiary: Changchun Lightweight Technology Co., Ltd. Address: No. 699, Shunda Road, Hi-Tech Zone, Changchun, Jilin Website: http://www.engley.com Tel: (86)-431-81055836 Subsidiary: Changsha Engley Auto Part Co., Ltd.

Address: No 9, Qingyuan Road, Langli Industrial Park, Changsha County, Changsha, Hunan Website: http://www.engley.com Tel: (86)-731-86809663 Subsidiary: Suzhou Engley Auto Part Co., Ltd.

Address: No.32, Taizhong Road, Yuewang yuezhen Village, Shaxi Town, Taicang City, Suzhou, Jiangsu Website: http://www.engley.com Tel: (86)-512-53307777 Branch office: Suzhou Engley Auto Part Co., Ltd. Ningbo Branch Address: No.290, Zhenbei Road, Simen Town, Yuyao, Zhejiang Website: http://www.engley.com Tel: (86)-574-22228935 Branch office: Suzhou Engley Auto Part Co., Ltd. Zhengzhou Branch Address: Beijingyi Road West, Wanhong Road, Automobile Industrial Park, Zhongmu County, Zhengzhou, Henan Website: http://www.engley.com Tel: (86)-512-53307777 Subsidiary: Tsingtao Engley Auto Part Co., Ltd.

Address: North of Dazhong 1[st] Road and West of Yingliu Road, New Automobile Industrial City, Qingdao, Shandong Website: http://www.engley.com Tel: (86)-532-85052015 Subsidiary: Linde+Engley (Changchun) Auto Parts Co., Ltd. Address: No.888, Jinghe Street, Economic Development Area, Gongzhuling, Jilin Website: http://www.engley.com Tel: (86)-434-8890900 Subsidiary: Linde+Engley (Tianjin) Auto Parts Co., Ltd.

Address: No.34 Baokang Rd, Baodi Energy Conservation and Environmental Protection Industrial Area, Tianjin Website: http://www.engley.com Tel: (86)-22-59952511 Branch office: Linde+Engley (Tianjin) Auto Parts Co., Ltd. Chongqing Branch Address: No.18, Jinsuo Avenue, Huixing Street, Chibei District ,Chongqing Website: http://www.engley.com Tel: (86)-22-59952511 Subsidiary: Ningbo Maoxiang Material Co., Ltd. (China) Address: No.609, Xiayingbei Road, Yinzhou District, Ningbo, Zhejiang Website: http://www.engley.com Tel: (86)-576-80270890 Branch office: Ningbo Maoxiang Material Co., Ltd. Xiaoshan Branch Address: A4 East-No.3, 1[st] and 2[nd] Nong Factories, Hi-Tech Industrial Park, Linjiang, Xiaoshan, Zhejiang Website: http://www.engley.com Tel: (86)-576-80270890 Subsidiary: Taizhou Maoqi Metal Co., Ltd. (China) Address: No. 2298, Juying Road, East Section of Pengbei Avenue, Luqiao District,Taizhou, Zhejiang Website: http://www.engley.com Tel: (86)-576-80270899 Subsidiary: Engley Holding (Samoa) Limited Address: Portcullis Chambers, P.O. Box 1225, Apia , Samoa, P.O. Box 1225, Apia , Samoa.

Website: http://www.engley.com Tel: (886)-04-7284956 Subsidiary: Engley Precision Industry B.V. Address: Herikerbergweg 238, 1101CM Amsterdam, the Netherlands. Website: http://www.engley.com Tel: (886)-04-7284956 Subsidiary: Kranendonk Beheersmaatschappij B.V. Address: Biezenwei 14 P.O. Box 6147, NL-4000 HC Tiel, the Netherlands. Website: http://www.kranendonk.com Tel: (31)-344-623944 Subsidiary: Ningbo Engley Automobile Industry Co.,Ltd Address: No.209, Xingci 1[st] Road, New Area, Hangzhou Wan, Ningbo, Zhejiang Website: http://www.engley.com Tel: (86)-0574-82355500 Subsidiary:Wiser Decision Holding Company Limited Address: 8F., No. 349, Sec. 2, Zhongshan Rd., Changhua City, Changhua County Website:http://www.engley.com Tel: (886)-04-7284956

4. Stock Transfer Agency (Name, Address, Website and Telephone number): Name:Departmet of Transfer Agency Service, Website: www.sinotrade.com.tw SinoPac Securities Corporation Address: 3F, No.17, Bo'ai Road, Taipei City Tel: (02)2381-6288

Website: www.sinotrade.com.tw

5. Contact Information of the certified public accountant (CPA) for the latest financial

report

Website: www.pwc.com.tw

Name ： LIU, MEI-LAN YANG, MING-CHIN Firm: PricewaterhouseCoopers Taiwan Tel: (04)2704-9168 Address: 12F, No.402, Shizheng Road, Xitun District, Taichung City

6. Name of the stock exchange where company’s listed overseas securities are traded

and the access to information on such listed overseas securities: N/A.

7. Board members

Title Name Nationality/Place
of Registration		 Experience and
Education
Chairman Honghan Industrial
Co.,Ltd.		 Samoa Chairman, Changchun
Engley Automobile Industry
Co., Ltd.
Ta Hwa University of
Science and Technology
Representative:
Lin,Chi-Pin		 R.O.C
Director BroadLight
ConsultantsLtd.		 Samoa Deputy General Manager,
Changchun Engley
Automobile Industry Co.,
Ltd.
Food Engineering, Da Yeh
University
Representative:
Lin, Chun-Pang		 R.O.C
Director Top-Gain
EnterprisesLtd.		 Samoa Ta Hwa University of
Science and Technology
Director, Suzhou Engley
Auto Part Co., Ltd.
Representative:
Chen, Jung-Juan		 R.O.C
Director Tsai, Meng-Han R.O.C Master of Laws, University
of Southern California
SKB Law Firm
Supervisor of Zhan Yuan
Investment Co.,Ltd.
Independent
Director		 Yeh, Chih-Ming R.O.C PHD, University of Chinese
Academy of Sciences
Director,CVC Technologies,
Inc.
Independent
Director		 Liou, Cheng-Hwai R.O.C Doctor of Business
Administration, National
Taipei University
Independent Director,
HOTA INDUSTRIAL MFG.
CO.,LTD.
Independent
Director		 Hsu, Ching-Tao R.O.C Bachelor of Accounting,
Feng Chia University
Independent Director,
EXCEL CELL
ELECTRONIC CO.,LTD.

8. Company Website: http://www.engley.com

Table of Contents

Page

I. LETTER TO SHAREHOLDERS ................................................................................ 1 LETTER TO SHAREHOLDERS ................................................................................ 1 LETTER TO SHAREHOLDERS ................................................................................ 1
II. COMPANY PROFILE ............................................................................................... 4
A. DATE OF INCORPORATION AND AN INTRODUCTION TO THE COMPANY AND
BUSINESS GROUP......................................................................................................... 4
B. ABRIEF HISTORY OF THECOMPANY AND THEGROUP................................................ 4
C. STRUCTURE OF THEGROUP........................................................................................ 7
II. CORPORATE GOVERNANCE REPORT ................................................................ 9
A. ORGANIZATIONALSYSTEM........................................................................................ 9
B. INFORMATION
ON
THE
COMPANY'S
DIRECTORS,
SUPERVISORS,
GENERAL
MANAGER,
DEPUTY
GENERAL
MANAGERS,
DEPUTY
ASSISTANT
GENERAL
MANAGERS,AND THE SUPERVISORS OF ALL THE COMPANY'S DIVISIONS AND
BRANCH UNITS.......................................................................................................... 10
1. Directors .......................................................................................................... 10
2. Information of general manager, deputy general manager, associate manager,
managers of departments and branches ........................................................... 15
C. REMUNERATION PAID DURING THE MOST RECENT FISCAL YEAR TO DIRECTORS,
SUPERVISORS,GENERAL MANAGER AND DEPUTY GENERAL MANAGER..................... 16
D. CORPORATEGOVERNANCEIMPLEMENTATION......................................................... 19
1. Board of Directors Meeting Status .................................................................. 19
2. Implementation of board evaluation................................................................ 24
3. Audit Committee Status or Supervisors’ attendance the state of participation
at board meetings............................................................................................. 24
4. The implementation of corporate governance, and its non-implementation of
the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed
Companies”, and the reason for such non-implementation ............................. 28
5. If the company has a Remuneration Committee in place, members, duties,
and operation of the Remuneration Committee shall be disclosed. ................ 35
6. The state of the company's performance of corporate social responsibilities:
systems and measures that the company has adopted with respect to
environmental protection, community participation, contribution to society,
service to society, social and public interests, consumer rights and interests,
human rights, safety and health, and other corporate social responsibilities
and activities, and the state of implementation ............................................... 39
7. The state of the company’s performance in the area of good faith ................. 42
8. If the company has adopted corporate governance best practice principles or
related bylaws, the access of relevant information should be disclosed to the
public: .............................................................................................................. 44
9. Other important information to facilitate better understanding of the
company’s implementation of corporate governance can be disclosed: None 44
10. Internal control system execution status ......................................................... 45
11. For the most recent fiscal year or during the current fiscal year up to the date
of publication of the annual report, any sanctions imposed in accordance
with applicable laws upon the Company or its internal staff, any sanctions
imposed by the Company upon its internal staff for violations of internal
control system provisions, principal deficiencies, and the state of any efforts
to make improvements need to be disclosed: None ........................................ 46
12. For the most recent fiscal year or during the current fiscal year up to the date
of publication of the annual report, major resolutions of shareholders’
meetings and board meetings are as follows: .................................................. 46
13. Any Director or Supervisor had a Recorded or Otherwise Written Dissenting
Opinion on Major Resolutions made by the Board of Directors in the Most
Recent Year and as of the Date of Publication of the Annual Report ............. 48
14. Resignation or Dismissal of Chairman, General Manager, and heads of
Accounting, Finance, Internal Audit and R&D in the Most Recent Year and
as of the Date of Publication of the Annual Report ........................................ 48
E. ACCOUNTANTFEES.................................................................................................. 48
F. INFORMATION ONREPLACEMENT OFCPAS.............................................................. 48
G. THECOMPANY’SCHAIRMAN, GENERALMANAGER, MANAGERS INCHARGE OF
ITSFINANCE ANDACCOUNTINGOPERATIONS DID NOT HOLD ANY POSITIONS
WITHIN THECOMPANY’SINDEPENDENTAUDITFIRM ORITSAFFILIATES IN THE
PASTYEAR............................................................................................................... 48
H. ANY TRANSFER OF EQUITY INTERESTS AND/OR PLEDGE OF OR CHANGE IN EQUITY
INTERESTS(DURING THE MOST RECENT FISCAL YEAR OR DURING THE CURRENT
FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THE ANNUAL REPORT)BY A
DIRECTOR,SUPERVISOR,MANAGERIAL OFFICER,OR SHAREHOLDER WITH A STAKE
OF MORE THAN10PERCENT DURING THE MOST RECENT FISCAL YEAR OR DURING
THE CURRENT FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THE ANNUAL
REPORT. WHERE THE COUNTERPARTY IN ANY SUCH TRANSFER OR PLEDGE OF
EQUITY INTERESTS IS A RELATED PARTY,DISCLOSE THE COUNTERPARTY'S NAME,
ITS RELATIONSHIP BETWEEN THAT PARTY AND THE COMPANY AS WELL AS THE
COMPANY'S DIRECTORS,SUPERVISORS,AND TEN-PERCENT SHAREHOLDERS,AND
THE NUMBER OF SHARES TRANSFERRED OR PLEDGED............................................... 48
I. INFORMATION ABOUT ANY ONE OF THE TOP10SHAREHOLDERS WHO IS THE
INTERESTED PARTY TO,OR HAS MARRIAGE RELATIONSHIP WITH AND IS A
RELATIVE WITHIN THE SECOND DEGREE OF KINSHIP OF ANOTHER............................. 49
J. THE SHARES OF THE SAME RE-INVESTED ENTERPRISE HELD RESPECTIVELY BY THE
COMPANY,ITSDIRECTORS ANDSUPERVISORS,MANAGERS,AND ANY COMPANIES
CONTROLLED DIRECTLY OR INDIRECTLY BY THECOMPANY,AND THE COMBINED
PERCENTAGE OF SHARES HELD BY SUCH ENTITIES AND PERSONS.............................. 51
IV CAPITAL RAISING ................................................................................................... 53
A. CAPITAL ANDSHARES.............................................................................................. 53
1.
Source of Capital ............................................................................................. 53
2.
Composition of Shareholders .......................................................................... 53
3.
Distribution Profile of Share Ownership ......................................................... 54
4.
Major Shareholders ......................................................................................... 54
5.
Market Price, Net Worth, Earnings and Dividends Per Share and related
information in the past two years .................................................................... 55
6.
Company's dividend policy and it implementation ......................................... 55
7.
Impact to Business Performance and EPS Resulting from Bonus Shares
Distribution resolved by the Shareholders’ Meeting ....................................... 56
8.
Bonuses to employees, Directors, and Supervisors 
 .................................... 56
9.
Repurchase of Common Stock ........................................................................ 57
B. CORPORATEBONDS.................................................................................................. 57
C. PREFERREDSHARES................................................................................................. 59
D. OVERSEASDEPOSITARYRECEIPTS........................................................................... 59
E. EMPLOYEESTOCKOPTIONS..................................................................................... 59
F. EMPLOYEERESTRICTEDSTOCK............................................................................... 59
G. NEWSHAREISSUANCE INCONNECTION WITHMERGERS ANDACQUISITIONS.......... 59
H. IMPLEMENTATION PLAN OF FUNDING....................................................................... 59
V OVERVIEW OF BUSINESS OPERATION ............................................................ 60
A. BUSINESSACTIVITIES............................................................................................... 60
B. MARKET AND THEOVERVIEW OFPRODUCTION ANDSALES..................................... 69
C. THENUMBER OFEMPLOYEES IN THEMOSTRECENTTWOYEARS ANDAS OF THE
DATE OFPUBLICATION OF THEANNUALREPORT..................................................... 75
D. ENVIRONMENTALPROTECTIONEXPENSES............................................................... 75
E. LABORRELATION..................................................................................................... 75
F. IMPORTANTCONTRACTS.......................................................................................... 77
**VI. ** OVERVIEW OF COMPANY FINANCIAL STATUS ............................................ 78
A. THECONSOLIDATEDFINANCIALSTATEMENTS ANDINFORMATION FOR THE
RECENTFIVEFISCALYEAR,WHICH INCLUDESCPAS’NAMES WITH AUDIT
OPINIONS.................................................................................................................. 78
B. FINANCIALANALYSES FOR THEPASTFIVEFISCALYEARS...................................... 80
C. AUDITCOMMITTEE’SREVIEWREPORT FOR THEMOSTRECENTFINANCIAL
STATEMENTS............................................................................................................ 82
D. THE FINANCIAL STATEMENTS IN THE MOST RECENT FISCAL YEAR,INCLUDING AN
AUDITOR'S REPORT PREPARED BYCPAS,AND2-YEAR COMPARATIVE BALANCE
SHEET,STATEMENT OF COMPREHENSIVE INCOME,STATEMENT OF CHANGES IN
EQUITY,CASH FLOW CHART,AND ANY RELATED FOOTNOTES OR ATTACHED
APPENDICES.............................................................................................................. 83
E. STANDALONE FINANCIAL STATEMENTS IN THE MOST RECENT FISCAL YEAR,
CERTIFIED BY ACPA ................................................................................................ 83
F. IF THE COMPANY OR ITS AFFILIATES HAVE EXPERIENCED FINANCIAL DIFFICULTIES
IN THE MOST RECENT FISCAL YEAR AND AS OF THE DATE OF PUBLICATION OF THE
ANNUAL REPORT,THE ANNUAL REPORT SHALL EXPLAIN HOW SUCH DIFFICULTIES
AFFECT THE COMPANY'S FINANCIAL SITUATION........................................................ 83
VII REVIEW AND ANALYSIS OF THE COMPANY’S FINANCIAL STATUS,
FINANCIAL PERFORMANCE, AND RISK MANAGEMENT ........................... 84
A. FINANCIALSTATUS.................................................................................................. 84
B. FINANCIALPERFORMANCE....................................................................................... 84
C. CASHFLOW.............................................................................................................. 85
D. THE IMPACT OF MAJOR CAPITAL EXPENDITURES IN THE MOST RECENT YEAR ON
FINANCIAL STATUS................................................................................................... 85
E. REINVESTMENTPOLICY IN THEMOSTRECENTYEAR, REINVESTMENTRESULTS
WITHREASONS ANDIMPROVEMENTPLANS,ANDINVESTMENTPLAN FOR THE
UPCOMINGYEAR...................................................................................................... 85
F. RISKMANAGEMENT................................................................................................. 88
VIII SPECIAL DISCLOSURE ........................................................................................... 97
A. INFORMATIONRELATED TO THECOMPANY’SAFFILIATES....................................... 97
B. TRANSACTION ABOUT THE COMPANY’S PRIVATE PLACEMENT OF SECURITIES
DURING THE MOST RECENT FISCAL YEAR OR DURING THE CURRENT FISCAL YEAR
UP TO THE DATE OF PUBLICATION OF THE ANNUAL REPORT.................................... 106
C. HOLDING OR DISPOSAL OF SHARES IN THE COMPANY BY THE COMPANY'S
SUBSIDIARIES DURING THE MOST RECENT FISCAL YEAR OR DURING THE CURRENT
FISCAL YEAR UP TO THE DATE OF PUBLICATION OF THE ANNUAL REPORT............... 106
D. OTHER MATTERS THAT REQUIRE ADDITIONAL DESCRIPTION................................... 107
IX ANY MATTERS LISTED IN SUBPARAGRAPH 2, PARAGRAPH 3,
ARTICLE 36 OF THE SECURITIES AND EXCHANGE ACT, WHICH
MIGHT MATERIALLY AFFECT SHAREHOLDERS' EQUITY OR THE
PRICE OF THE COMPANY'S SECURITIES, HAS OCCURRED IN THE

MOST RECENT FISCAL YEAR AND AS OF THE DATE OF PUBLICATION OF THE ANNUAL REPORT, SUCH SITUATIONS .............. 114 APPENDIX ： CONSOLIDATED FINANCIAL STATEMENTS IN THE MOST RECENT YEAR ........................................................................................................ 115

I. Letter to Shareholders

Dear Shareholders,

Thank you for taking your time to participate in the 2021 annual shareholders meeting of theCayman Engley Industrial Co., Ltd.. I am pleased to report the operating performance and future development plan in 2020.

A. 2020 Business Results

Due to the outbreak of novel coronavirus epidemic, the sales volume of automobiles fell sharply in China's market in February, 2020. With epidemic coming under control, the production lines of enterprises have been almost recovered, the logistics are in normal operations, and the demands of end consumers have been released. Plus the strong support of national policies in China, the automotive market is expected to be fully recovered in the second half of this year. The sales volume of passenger cars in China in 2020was 20,178,000 units, which was decreased by 6% if compared with that of 2019. The Company has successfully undertaken the new energy vehicle projects of Volvo and FAW Volkswagen in recent years. In the future, it will continue to actively expand cooperation with other joint venture brands such as Geely Automobile, Great Wall Motors, etc., and theChina’s self-owned brands. The following presentsfinancial revenue and expenditure and profitability in 2020, and the Company’s strategies for future development. 1. Analysis of financial revenue and expenditure and profitability

Unit: NT$1,000; % Unit: NT$1,000; %
Year
Item		 2019 2020 Increase
(decrease) of %
Financial
Analysis		 Operating Revenue 22,239,873 21,644,152 (2.68)
Operating Margin 3,744,203 3,456,702 (7.68)
Net Profit After Tax 644,193 480,621 (25.39)
Profitability Return on assets (%) 3.96 3.29 (16.92)
Return on equity (%) 7.31 6.22 (14.91)
Of paid-in
capital ratio
(%)		 Operating
profit		 121.48 107.54 (11.48)
Pre-tax net
profit		 96.01 84.63 (11.85)
Net profit rate (%) 4.35 3.81 (12.41)
Earnings per share (NT$) 5.46 4.07 (25.46)
Diluted EPS (after tax)
(NT$)		 5.32 4.03 (24.25)

Note: The consolidated financial statement signed and audited by CPAs, is prepared in accordance with the International Financial Reporting Standards.

- 1 -

2. Research and development

Along withlightweight trends in the automotive industry, the Company continues to improve the manufacturing processes of high-strength steel by use of rolling technologyand heat treatment, and aluminum alloy products. The Company also engages itself in development of auto parts made out of new composite materials.

The Company keeps increasing the level of automation, improvingback-end automated detection technology, ensuring metalwork accuracy and a higher product yield. In response to customers’ requests, the Company endeavors to develop modular products to produce better quality products and provide better services.

B. Overview of the 2021 Business Plan

1. Operating Principle

The Group launched a tactical plan to arrange production bases few years ago. Up to now, the Company has set up production bases in Changchun, Chengdu, Tianjin, Foshan, Suzhou, Changsha, Yizheng, Qingdao,andNingbo, and established production network in South China, Centrla China, North China, East China and North East China to reduce delivery distance from suppliers to automakers, and speed up response time requested by automakers. Through modernized management, the Group has brought together upstream and downstream resources, and introduced advanced automated equipment to build strong capabilities for production of quality car parts and pursue the goal of environment protection. With top quality detection devices, the Company commits itself to ensure consistent quality and meet the objectives of standardized, modularized and eco-friendly and lightweight products. Following the development path of automakers, the Company aims to satisfy diverse needs of all customers. The Group will explore new areas of research and development and make the best efforts to develop electric appliances and electric cars in order to further diversity our products.

  1. Sales projection with its calculation basis and important production and marketing policies

The Company sets annual sales targets based on the overall industry environment, customers’ needs of products and capacity, supply and demand in the market and competitive conditions. In addition to identifying potential customers, the Company actively prepares itself to enter into the electric-vehicle market in alignment with it business plans and offer products with high added value for the upcoming new era of green vehicle.

C. Strategies for Future Development

  1. Plans for capacity expansion

The plants in Changchun, Tianjin and Suzhou have undergone a series of renovations with more assembly lines to fulfill anticipated demand of new energy vehicles in the future. The company will improve products' added value by including craftsmanship but not limited to aluminum rinse and electroplating process.

  1. Overview of research and development

Along with lightweight trends in the automotive industry, the Company continues to improve the manufacturing processes of high-strength steel by use of rolling technology and heat treatment, and aluminum alloy products. The Company also engages itself in development of auto parts made out of new composite materials. The Company keeps increasing the level of automation, improving back-end automated detection technology, ensuring metalwork accuracy and a higher product yield. In response to customers’ requests, the Company

- 2 -

endeavors to develop modular products to produce better quality products and provide better services.

  1. Development of business

The Company will continue to follow automakers’ steps. In addition to maintaining current customer relationships, the Company will comply with car purchase restrictions in main cities and relevant government policies of subsidizing electric vehicles. Furthermore, the Company actively prepares itself to enter into the electric-vehicle market and expand new product categories to get an early win in the electric-vehicle market. Up to now, the contracts with Volvo and FAW-Volkswagen for new energy vehicles projects have injected new momentum into the Company’s business operation. In the future, the Company will continue to seek opportunities to cooperate with other automakers, such as the BAIC Group and supply aluminum parts and plastic products for new energy cars.

D. Impact of external competitive environment, regulatory environment and overall business environment

As a result of emission reduction policies, the compound annual growth rate in the global electric-vehicle market may remain 32% or even higher.The 19[th] National Congress also considered new energy vehicles as a strategic industry. Due to restrictions on battery weight and operating range of new energy vehicles, they are more sensitive to the weight of car body. Thus automakers have even stronger demand for lightweight auto parts. Nowadaysdevelopment of new energy vehicles has been the highlight in the automotive industry and a strategic direction supported by Chinese government. On the basis of good relationships with current customers, the Company will continue to attract new customers, develop application of new products and serve customers in a professional and timely way. By doing so, the Company can guarantee its profit and create shareholder value.

Chairman: Lin, Chi-Pin General Manager: Lin, Chi-Pin Accounting Supervisor: Yang, Cheng-Feng

- 3 -

II. Company Profile

A. Date of incorporation and an introduction to the company and business group

CAYMAN ENGLEY INDUSTRIAL CO., LTD. (hereinafter referred to as the “Company”) was established in the Cayman Islands on 16 January 2015 with its shares issued at par valueof NTD$ 10 per stock. In the same year CEIC acquired 100% of the shares ofChangchun Engley Automobile Industry Co., Ltd. through a stock swap. In December 2015, CEIC was approved to be listed by the Taiwan Stock Exchange Corporation, and it shares were officially listed on January 27 2016. Until the date of printing the annual report, CEIC had more than a decade’s experience in manufacturing auto parts, with business areas operating in eight provinces and cities, including Jilin, Liaoning, Tianjin, Jiangsu, Zhejiang, Sichuan, Hunan, Shandong, Guangxi, Shaanxi, Henan and Guangdong.

The Company and its subsidiaries are hereinafter collectively referred to as the “Group”. These subsidiaries includeCayman Engley Industrial Co., Ltd. (Taiwan Engley), Changchun Engley Automobile Industry Co., Ltd. (Engley Industry), Changchun Engley Auto Parts Co., Ltd. (Engley Parts), Suzhou Engley Auto Part Co., Ltd. (Suzhou Engley), Chengdu Engley Auto part Co., Ltd. (Chengdu Engley), Yizheng Engley Auto Part Co., Ltd. (Yizheng Engley), Liaoning Engley Auto Part Co., Ltd. (Liaoning Engley), Foshan Engley Auto Part Co., Ltd. (Foshan Engley), Tianjin Engley Manufacturing Co., Ltd.(Tianjin Engley), Changchun Lightweight Technology Co., Ltd. (Lightweight), Changsha Engley Auto Part Co., Ltd. (Changsha Engley), Tsingtao Engley Auto Part Co., Ltd. (Tsingtao Engley), Linde+Engley (Changchun) Auto Parts Co., Ltd. (Linde Changchun), Linde+Engley (Tianjin) Auto Parts Co., Ltd. (Linde Tianjin), Ningbo Maoxiang Material Co., Ltd. (Ningbo Maoxiang) , Taizhou Maoqi Metal Co., Ltd. (Taizhou Maoqi), Ningbo Engley Automobile Industry Co.,Ltd (Ningbo Engley),Engley Holding (Samoa) Limited (Samoa Engley), Engley Precision Industry B.V (the Netherlands Engley),Kranendonk Beheersmaatschappij B.V. (Company K) and Wiser Decision Holding Company Limited(Company W).

The primary product line of the Group involves metal auto parts, non-metal auto parts, modules and others. Withsophisticatedmanufacturing skills and outstanding capabilities of product development, the Group has been supplying exceptional quality products for OEM plants in China, includingBenz, Audi, VW, GM Auto, Jaguar, Land Rover, BMW and Volvo.

B. A brief history of the Company and the Group

Year Milestone
1991 Founded as a seatbeltmanufacturer in Harbin
2001 Founded Engley Parts. The Harbin factory moved to Changchun and its
primary products were automotive parts
2003 Expanded the product range into components made by long fiberglass
hot-pressing
2004 Successfullylaunched thefirst GMTunderbody shieldinChina
2005 Successfully launched the first LFT-D under body shield, LFT-G front end
and GMT front endinChina.
2006 1. Founded ChangchunChengtai Auto Parts Co., Ltd. in December (currently
renamed to Engley Industry ).
2. Successfullylaunched thefirstmetalcockpit carrier
2008 1. As the first firm, who localized rolling door sills and metal in-mould front
end, it also designed and launched an AI module of front end jointly with
Shenyang Jinbei
2. Founded SuzhouEngleyin February
2009 1. Engagementinthe process of localizingOEMplantsinChina or

- 4 -

Year Milestone
independent R&D activities in relation tohot-pressing products, for
example non-metal front end, underbody shield, battery tray, spare wheel
pan, door module and so on
2. In September an joint venture agreement was made with ALCAN (a
member of Fortune Global 500) to establish Jialu Engley Automotive
Structure Co., Ltd. (the predecessor of Constellium Engley Automotive
Structures Co., Ltd.)
3. Founded Chengdu Engley in November
2010 The first firm SYMALITElocalized lightweight material under body shield
and aluminumalloymetalcockpit carrier
2011 1. Founded Yizheng Engley in May
2. Founded Liaoning Engley in August
3. An joint venture agreement was made with world-famous German supplier
of rolling parts Linde+Wiemann GmbH KG(Linde Wiemann)
4.Built anew product designteam
2012 1. Founded Foshan Engley in April
2. Founded Tianjin Engley in September
3. With German Linde+Wiemann GmbH KG (Linde Wiemann) jointly
established Linde+Engley (Changchun) Auto Parts Co. Ltd.in September,
of whichChangsha Engley held 51% of shares in order to expand
high-strength steel plate rolling and laser welding business
2013 1. Established Linde+Engley (Tianjin) Auto Parts Co. Ltd., jointly with
German Linde+Wiemann GmbH KG (Linde Wiemann) in February
2. Founded Lightweight in September
3. Gained strategic investment from German Linde+Wiemann GmbH KG
(Linde Wiemann) and Far East Horizon Ltd. (ticker number:3360.HK,
currently investing in the Group through Hong Ying Investment
Development Ltd.)
4. The Board of Directors approved a joint venture with China Steel
Corporation, Changyee Steel Co. Ltd.,KS TERMINALS Co., Ltd., to
establishHonley Auto. Parts Co.,Ltd., of which the Group held 40% of
shares.
2014 1. Founded Changsha Engley in May
2. Jointly establishedHonleyAuto.Parts Co.,Ltd.inOctober.
2015 1. Founded Changchun Engley (its full name: Cayman Engley Industrial Co.,
Ltd.) in the Cayman Islands in January, which was intended to be listed in
Taiwan.
2. An new supply agreement for new items was made with Volvo in April
3. Approved to be publicly traded on the TPEx
in August, and completed
public listing on the TPEx on September 15
4. Approved to be listed on the Taiwan Stock Exchange by the Board of
Directors of TWSE in December
2016 1. Completed public listing on the TWSE on January 27
2. Founded Tsingtao Engley in April
3. Founded Engley Automobile Industry Co., Ltd (Taiwan) in September
4. Founded Samoa Engley in October
5. Acquired NingboMaoxiang andTaizhouMaoqi in December
2017 1. Founded the Netherlands Engley in January
2. Jointly acquiredKranendonk BeheersmaaschappijB.V.in February

- 5 -

Year Milestone
3.Investedin Zhejiang Sansein March
2019 1. Founded the Ningbo Engley Automobile Industry Co.,Ltd in January
2.Founded the Wiser Decision Holding CompanyLimitedin May
2021 EngleyIndustry public listingon the Shanghai Stock Exchange in April

In the most recent fiscal year as well as the current fiscal year up to the date of publication of the annual report, any events affecting significantly shareholders’ equity should be disclosed, includingbut not limited to merger and acquisition activities; strategic investments in affiliated enterprises; corporate reorganization; transfer or exchange of a majoritystake by directors, supervisors, or shareholders with more than 10% of shares; any change of ownership, and any material changes of operational methods and business types: None

- 6 -

C. Structure of the Group

The Group’s structure (as of March 31 2021)

==> picture [520 x 226] intentionally omitted <==

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

Cayman Engley Industrial. Co.,Ltd
100% 96.57% 80%
Engley Automobile Engley Holding（Samoa）
Changchun Engley Automobile Industry Co., Ltd (China)
Industry Co., Ltd. (Taiwan) Limited
( 中 )
60.5%
Engley Precision Industry
39.5% B.V.(the Netherlands)
75%
Kranendonk
25%
Beheersmaatschappij
B.V.(the Netherlands)
----- End of picture text -----

- 7 -

Cayman Engley Industrial. Co.,Ltd

96.57%

==> picture [733 x 361] intentionally omitted <==

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

Changchun Engley Automobile Industry Co., Ltd (China)
( 中 )
100% 100% 100% 100% 100% 100% 100% 51% 54% 54% 20% 23% 40% 100%
Wiser Decision Holding
Company Limited (Samoa)
100%
46% 100% 20% 81%
90% 98.6% 99.5%
100%
CECK Holdings
Co.,Limited (Hong Kong)
55% 100% 16.06%
10% 1.4% 0.5%
(Co., Ltd. (China) (Taiwan)
Co.,Ltd. (China)
Co., Ltd. (China
Parts Co., Ltd. (China) Changchun Engley Auto Industry Co.,Ltd (China) Ningbo Engley Automobile Co., Ltd. (China) Liaoning Engley Auto Part Parts Co., Ltd.(China) Changchun Engley Auto (China)Technology Co., Ltd. Changchun Lightweight China) Tsingtao Engley Auto Part Chengdu Engley Auto part Co., Ltd. (China) Ningbo Maoxiang Material Parts Co., Ltd. (China) Linde+Engley (Tianjin) Auto Auto Parts Co., Ltd. (China) Linde+Engley (Changchun) ) Chengdu Youli Auto part Jilin Jinli Auto part Co., Ltd. Honley Auto. Parts Co.,Ltd Limited
Chi Rui (Cayman) Holding
(China) Ltd. (China)
Co., Ltd. (China) Suzhou Engley Auto Part Co., Ltd. (China) Yizheng Engley Auto Part Ltd. (China) Foshan Engley Auto Part Co., Manufacturing Co., Ltd. Tianjin Engley Taizhou Maoqi Metal Co., Technology Co., Ltd (China) Zhejiang Sanse Mold
Automotive Structures Co., Ltd. Co., Ltd. (China
Constellium Engley (Changchun) )
Parts Co.,Ltd. (China)
(China) Chongqing HC&C Auto Parts Changchun CECK Auto.
----- End of picture text -----

- 8 -

II. Corporate Governance Report

A. Organizational System

1. Organizational chart

==> picture [443 x 246] intentionally omitted <==

2. Department functions

2. Department functions
Department Functions
The Board of Directors Determining operational plans and strategic orientation for the Company’s
business operationand organizational management.
Audit Committee Reviewing the Group’s business statuses and financial conditions, fair
presentation of financial statements and effective implementation of internal
controlsystems.
Remuneration Committee Setting and periodically reviewing policies, systems, criteria and programs on
evaluation ofits directors’ and managers’ performances, as well as regularly
evaluating and determining theircompensation.
Audit Department Establishing every auditing function for the Group; evaluation and execution
of internal control regimes within the Group as well as supervising its
execution, and submission of recommendations for improvements as well as
follow-up on progress.
General Manager ExecutingDirectors’ resolutions and manage business related matters.
Operation Management
Department		 Analysis of all companies’ business activities within the Group with
recommendations, handling matters assigned by the General Manager, and
organizing board meetings and shareholders’ meetings as well as facilitate
such meetings.
Finance Department Responsible for relevant accounting matters, developing and executing
accounting policiesand supervisingfinancialconditions ofallsubsidiaries.
Sales Department I Planning business strategies and future orientation on customer service and
market development
SalesDepartment II Other than customers of the Sales I Department, assisting development of
othercustomers’OEMbusiness and customerservice.
Procurement Department Procuring materials and equipment required for manufacturing and
production and coordinateprocurement strategies with marketpricesㄡ
HR&Administraion
Department		 Responsible for administrative matters in relation to human resource
management.

- 9 -

  • B. Information on the company's directors, supervisors, general manager, deputy general managers, deputy assistant general managers, and the supervisors of all the company's divisions and branch units

1. Directors

  • (1) Name, education (experience), current shareholding and positions of each board director

As of 19 April 2021 Unit: 1,000 shares

Title Nationalit
y or Place
of
Registrati
on		 Name Gende
r		 Date
Elected		 Term Date First
Elected
Shareholding
When Elected
Shareholding
When Elected		 Current
Shareholding		 Current
Shareholding		 Spouse&Minor
Shareholding		 Spouse&Minor
Shareholding		 Shareholding in
the name of
others		 Shareholding in
the name of
others		 Experience (Education) Current Positions at the Company and Other Companies Executives, Directors or
Supervisors who are spouses or
within two degrees of kinship		 Executives, Directors or
Supervisors who are spouses or
within two degrees of kinship		 Executives, Directors or
Supervisors who are spouses or
within two degrees of kinship
Shares % Shares % Shares % Shares % Title Name Relation
Chair
man		 Samoa Honghan
Industrial Co.,
Ltd.		 ─ 2018.0
5.29		 3 2015.06.1
5		 26,100 23.72% 26,100 22.12% ─ ─ ─ ─ Ta Hwa University of
Science and Technology		 1.Chairman, Changchun Engley Automobile Industry Co., Ltd.
2.Chairman, Changchun Engley Auto Parts Co., Ltd.
3.Exectuive Director, Foshan Engley Auto Part Co., Ltd.
4.Executive Director, Tianjin Engley Manufacturing Co., Ltd.
5.Vice Chairman, Constellium Engley (Changchun) Automotive
Structures Co., Ltd.
6.Chairman, Changchun CECK Auto. Parts Co.,Ltd.
7.Executive Director&General Manager, Changchun Hongyun Cloud
Computing Technology
8.Chairman, Linde+Engley (Tianjin) Auto Parts Co., Ltd.
9.Director, Honghan Industrial Co., Ltd.、Bright Success Inc.、
BroadLight Consultants Ltd.、Top-Gain Enterprises Ltd.、Able Well
International Limited、Able Gain Investment Limited、Double Luck
Investment Limited、Superb Goal Ventures Limited、Jade Profit
Company Limited、Wise Faith Holding Limited、Ever Honest
Consultant Ltd.、HongHan Autoparts Co.,Limited




Director
Representati
ve		 Chen,
Jung-Juan		 Spouse
R.O.C Representative:
Lin, Chi-Pin		 Male 1,000 1% 1,000 0.85% ─ ─ 53,675 45.48
%
Direct
or		 Samoa BroadLight
Consultants
Ltd.		 ─ 2018.0
5.29		 3 2015.06.1
5		 10,000 10% 10,000 8.47% ─ ─ ─ ─ Food Engineering, Da Yeh
University		 Deputy General Manager, Changchun Engley Automobile Industry Co.,
Ltd.
─		 ─ ─
R.O.C
 Representative:
Lin,
Chun-Pang		 Male ─ ─ 10,000 0.01% ─ ─ ─ ─
Direct
or		 Samoa Top-Gain
Enterprises
Ltd.		 ─ 2018.0
5.29		 3 2018.05.2
9		 10,000 10% 10,000 8.47% ─ ─ ─ ─ Ta Hwa University of
Science and Technology		 1.Director, Suzhou Engley Auto Part Co., Ltd.
2.Changchun Hongyun Cloud Computing Technology		 Director
Represent
ative		 Lin, Chi-Pin Spouse
R.O.C
 Representative:
Chen,
Jung-Juan		 Female ─ ─ ─ ─ ─ ─ ─ ─
Direct
or		 R.O.C Tsai,
Meng-Han		 2018.0
5.29		 3 2018.05.2
9		 ─ ─ ─ ─ ─ ─ ─ ─ Master of Laws, University of
Southern California
1.Master of Laws, University of Southern California
2.Supervisor of Zhan Yuan Investment Co., Ltd.		 ─ ─ ─

- 10 -

Indepe
ndent
Direct
or		 R.O.C Liou,
Cheng-Hwai		 Male 2018.
05.29		 3 2015.
06.15		 ─ ─ ─ ─ ─ ─ ─ ─ 1.Doctor of Business
Administration, National
Taipei University
2.Master of Industrial
Development (major in
Finance), National Cheng
Kung University
3.National Taichung
University of Science and
Technology (Institute of
Technology, Business
College):Director of
General Affairs; Chair of
the Department of
International Trade; Chair
of the Department of
Accounting; Convener of
Business Management
Development Committee;
Professor, Department of
Accounting and
Information Systems
4.Mediator, the Arbitration
Association
5.Director of the Taiwan
Accounting Association
(9th and 10th )
6.Commissioner, Cable TV
Advisory Committee
8. Associate Professor (part
time), Department of
Industrial Engineering,
National Tsing Hua
University
9.Drafter&Grader,
Ministry of Examination
10.Professor (part time),
Department of
Accounting, National
Chung Hsing University
11.Professor (part time),
Department of
Information Management,
National Chang Hua
University
12.Supervisor, Academy of
Taiwan Information
Systems Research
(ATISR)		 Independent Director,HOTA INDUSTRIAL MFG. CO., LTD. ─ ─ ─

- 11 -

Indepe
ndent
Direct
or		 R.O.C Yeh,
Chih-Ming		 Male 2018.
05.29		 3 2015.
06.15		 ─ ─ ─ ─ ─ ─ ─ ─ 1.PHD, University of
Chinese Academy of
Sciences
2.Master of Business
Management, Da Yeh
University
3.Lecturer, the Industrial
Technology Research
Institute
4.General Manager, HongYi
Industrial Co., Ltd.
5.Deputy General Manager,
PRET Industrial Co.,Ltd.
6.General Manager, Jinbi
Technology Co.,Ltd.
7.Associate Professor (part
time), Minnan Normal
University
8.Associate Professor (part
time), Yang-En
University
9. Lecturer (part time) Feng
Chia University
10. Lecturer (part time),
LingTungUniversity		 1. Director,TD Hi Tech Energy Inc.
2. Director, CVC Technologies, Inc.		 ─ ─ ─
Indepe
ndent
Direct
or		 R.O.C Hsu,
Ching-Tao		 Male 2018.
05.29		 3 2015.
06.15		 ─ ─ ─ ─ ─ ─ ─ ─ 1.Bachelor of Accounting,
Feng Chia University
2.Manager, Capital Market
Division President
Securities Corp.		 1.Independent Director, EXCEL CELL ELECTRONIC CO., LTD.
2.Independent Director, MAX ECHO TECHNOLOGY CORP.		 ─ ─ ─

Note: If the general manager or the equivalent (top management) and the chairman are the same person or spouses or the relative within the first degree of kinship, it shall disclosure the related information such as the cause, rationality, necessity and measures taken (such as adding seats of independent directors, or requiring more than half of the directors not working as the employee or managers concurrently).

The general manager are the chairman of the company are the same person, which mainly aims to meet the business expansion needs. However, the company sets up the key positions and the plans for development and succession. We firstly conducts position evaluation to determine the key positions, based on which the bank of talents for the key positions are established, and the candidates for directors and key positions areselected. The company sets up three independent directors, and more than half of directors are not employees or managers.

- 12 -

(2) Supervisor

N/A. The Company has established the Audit Committee.

(3) Major shareholders of institutional shareholders

Major shareholders of institutional shareholders

As of March 31 2021 As of March 31 2021
Name of InstitutionalShareholders MajorShareholders %
Honghan Industrial Co.,Ltd. Lin,Chi-Pin 95.93%
BroadLight Consultants Ltd. Wise Faith HoldingLimited 100%
Top-Gain Enterprises Ltd. Wise Faith HoldingLimited 100%

Major shareholders of the Company’s major institutional shareholders

As of March 31 2021 As of March 31 2021
Name of Institutional Shareholders Major Shareholders %例
Wise Faith Holding Limited Lin, Chi-Pin 100%
  • (4) Professional qualifications and independence analysis of directors and supervisors
Criteria
Name
(Note 1)		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Number of Other Public
Companies Concurrently
Serving as an Independent
Director
An Instructor or
Higher Position
in a Department
of Commerce,
Law, Finance,
Accounting, or
Other Academic
Department
Related to the
Business Needs
of the Company
in a Public or
Private Junior
College, College
or University
A Judge, Public
Prosecutor,
Attorney,
Certified Public
Accountant, or
Other
Professional or
Technical
Specialists Who
Has Passed a
National
Examination
and Been
Awarded
a Certificate in a
Profession
Necessary for
the Business of
the Company		 Have Work
Experience in
the Areas of
Commerce,
Law, Finance,
or Accounting,
or Otherwise
Necessary for
the Business
of the
Company
1		 2 3 4 5 6 7 8 9 10 11 12
Lin, Chi-Pin
(Representative,
Honghan
Industrial
Co.,Ltd.)		 － － － － － － － － － － － － －
Lin, Chun-Pang
(Representative,
BroadLight
Consultants Ltd.)		 － － － － － － － － － － － －
Chen, Jung-Juan
(Representative,
Top-Gain
Enterprises Ltd.)		 － － － － － － － － － － － － －
Tsai, Meng-Han － －
Liou, Cheng-Hwai
1

- 13 -

Criteria
Name
(Note 1)		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Meet One of the Following
Professional Qualification
Requirements, Together with at
Least Five Years Work
Experience		 Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Independence Attribute (Note 2) Number of Other Public
Companies Concurrently
Serving as an Independent
Director
An Instructor or
Higher Position
in a Department
of Commerce,
Law, Finance,
Accounting, or
Other Academic
Department
Related to the
Business Needs
of the Company
in a Public or
Private Junior
College, College
or University
A Judge, Public
Prosecutor,
Attorney,
Certified Public
Accountant, or
Other
Professional or
Technical
Specialists Who
Has Passed a
National
Examination
and Been
Awarded
a Certificate in a
Profession
Necessary for
the Business of
the Company		 Have Work
Experience in
the Areas of
Commerce,
Law, Finance,
or Accounting,
or Otherwise
Necessary for
the Business
of the
Company
1		 2 3 4 5 6 7 8 9 10 11 12
Hsu, Ching-Tao － － 2
Yeh, Chih-Ming －

  • Note 1: The Directors and Supervisors comply with the following conditions from two years before being elected and appointed, and during the term of office, please tick the appropriate corresponding boxes.

  • Note 2:On 15 June 2015, the Shareholders’ Meeting of the Company resolved to establish the Audit Committee. Therefore, the supervisory system is not applicable.

  • （1）Not an employees of this Company or its affiliates;

  • （2）Not a Director or Supervisor of the Company or its affiliates. (However, this does not apply, in cases where the person is an Independent Director of the company or its parent company, subsidiary are set up according to this Act or local country ordinances);

  • （3）Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of outstanding shares of the Company or ranking in the top ten in holdings;

  • （4）Managers excluded ones listed in (1), or relatives of the spouses listed in (2), (3), relatives within the second class, or direct blood relatives within the third class.

  • （5）Directors, supervisors, or supervisors of corporate shareholders who do not directly hold more than 5% of the total issued shares of the company, hold the top five shares, or designate a representative as the company’s directors or supervisors in accordance with Article 27, Item 1 or Item 2 of the Company Law Employed persons (except for those who concurrently serve as independent directors established by the company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with this law or local laws and regulations).

  • （6）.Directors, supervisors or employee of other company that have no connection with the seats of directors of the Company or are in possession of a majority of the voting shares and controlled by the same person (except for the company, or its parent company, subsidiary or subsidiary belonging to the same parent company, with which independent directors are positioned concurrently in between pursuant to this Act or local national law).

  • （7）Directors (directors), supervisors (supervisors) or employees of other companies or institutions that are not the chairman, general manager or titled as equivalent positions of the company or the spouse in the same situation as above (except for the company, or its parent company, subsidiary or subsidiary belonging to the same parent company, with which independent directors are positioned concurrently in between pursuant to this Act or local national law).

  • （8）Not a director, supervisor, manager or a shareholder holding five percent or more of the shares of a company or institution that has a business or financial relationship with the Company;

  • （9）Not a professional individual nor an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution, or a spouse thereof, who, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, provided that this restriction does not apply to any member of the Remuneration Committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Remuneration Committees of Companies whose Stock is Listed on the TWSE or Traded on the GTSM”;

  • （10） Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company;

  • （11） Not been a person of any conditions defined in Article 30 of the Company Law, and

  • （ 12 ） Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

- 14 -

2. Information of general manager, deputy general manager, associate manager, managers of departments and branches

As of 18 April 2021 Unit: 1,000 shares

Title Nation
ality		 Name Gender Inaugurat
ion
date		 Shareholding Shareholding Spouse&Minor
Shareholding		 Spouse&Minor
Shareholding		 Shareholding in the
name of others		 Shareholding in the
name of others		 Experience (Education) Current Positions at Other Companies Managers who are spouses or within
two degrees of kinship		 Managers who are spouses or within
two degrees of kinship		 Managers who are spouses or within
two degrees of kinship		 Employee
Stock Options
Granted to
Managers
Shares % Shares % Shares % Title Name Relation
General
Manager		 R.O.C Lin,
Chi-Pin		 Male 2015.
06.01		 1,000 0.85% ─
─		 53,675
45.48%		 Ta Hwa University of Science
and Technology		 1.Chairman, Changchun Engley Automobile Industry Co., Ltd.
2.Chairman, Changchun Engley Auto Parts Co., Ltd.
3.Exectuive Director, Foshan Engley Auto Part Co., Ltd.
4.Executive Director, Tianjin Engley Manufacturing Co., Ltd.
5.Vice Chairman, Constellium Engley (Changchun) Automotive Structures Co.,
Ltd.
6.Chairman, Changchun CECK Auto. Parts Co.,Ltd.
7.Executive Director&General Manager, Changchun Hongyun Cloud Computing
Technology
8.Chairman, Linde+Engley (Tianjin) Auto Parts Co., Ltd.
9.Director, Honghan Industrial Co., Ltd.、Bright Success Inc.、BroadLight
Consultants Ltd.、Top-Gain Enterprises Ltd.、Able Well International Limited、
Able Gain Investment Limited、Double Luck Investment Limited、Superb Goal
Ventures Limited、Jade Profit Company Limited、Wise Faith Holding Limited、
Ever Honest Consultant Ltd.、HongHan Autoparts Co., Limited
Director
Representative		 Chen,
Jung-Juan		 Spouse Director
Representative
Chief
Financial
Officer		 R.O.C Yang,
Cheng-F
eng		 Male 2015.
06.01		 ─ ─ ─
─		 ─
─		 1.Master of Accounting,
Soochow University
2.Manager, Deloitte Taiwan
3.CFO, Boshuo Precision
Hardware Manufacturing Co.,
Ltd.
4.General Manager/Consultant,
Nan Tsan Co., Ltd.
5.Executive Assistant to
Chairman/CFO, Belta Garment
TradingCo.,Ltd.		 1.Executive Assistant to Chairman/CFO, Changchun Engley Automobile Industry
Co., Ltd.
2.Supervisor, Ningbo Maoxiang Material Co., Ltd.
3. Supervisor, Taizhou Maoqi Metal Co., Ltd.
4.Supervisor,Yizheng Engley Auto Part Co., Ltd.
5. Supervisor, Liaoning Engley Auto Part Co., Ltd.
─
─		 ─ ─

Note: If the general manager or the equivalent (top management) and the chairman are the same person or spouses or the relative within the first degree of kinship, it shall disclosure the related information such as the cause, rationality, necessity and measures taken (such as adding seats of independent directors, or requiring more than half of the directors not working as the employee or managers concurrently).

The general manager are the chairman of the company are the same person, which mainly aims to meet the business expansion needs. However, the company sets up the key positions and the plans for development and succession. We firstly conducts position evaluation to determine the key positions, based on which the bank of talents for the key positions are established, and the candidates for directors and key positions areselected. The company sets up three independent directors, and more than half of directors are not employees or managers.

- 15 -

C. Remuneration paid during the most recent fiscal year to directors, supervisors, general manager and deputy general manager

  1. Remuneration paid to Directors (including Independent Directors)

Unit: NT$ 1,000/1,000 shares

Title Name R R emuneration p aid to Directo rs rs Ratio
o
Remunerati
(A+B+C+D
Income (%)		 f
Total
on
) to Net
 Remuneration paid to Directors who are als Remuneration paid to Directors who are als Remuneration paid to Directors who are als Remuneration paid to Directors who are als o employees o employees Ratio

Remunerat
(A+B+C+
Net Incom		 of
Total
ion
D+E+F) to
e (%)		 Compensati
on paid to
directors
from an
invested
company
other than
the
company’s
subsidiary
Base Com
(		 pensation
A)		 Severan
Pension		 ce Pay and
s (B)		 Dire
Compe
(		 ctors
nsation
C)		 Allow ance (D) Salary, Bo
Allowa		 nuses and
nces (E)		 Se
and		 verance Pay
Pensions (F)		 Em ployees’ Profit Shari ngBonus(G)
The Company All com
in the
consolid
financia		 panies
ated
l report		 Employ
Options
employ		 ee Stock
granted to
ees		 Employ
Restrict
Granted		 ee
ed Stock
The
Compan
y		 All
compani
es in the
consolid
ated
financial
report		 The
Com
pany		 All
compani
es in the
consolid
ated
financial
report		 The
Compan
y		 All
compani
es in the
consolid
ated
financial
report		 The
Com
pany		 All
compani
es in the
consolid
ated
financial
report		 The
Compan
y		 All
compani
es in the
consolid
ated
financial
report		 The
Company		 All
companies
in the
consolidate
d financial
report		 The
Com
pany		 All
companies
in the
consolidate
d financial
report		 Cash Stock Cash Stock The
Com
pany		 All
companies
in the
consolidate
d financial
report		 The
Com
pany		 All
compani
es in the
consolid
ated
financial
report		 The
Compa
ny		 All
compani
es in the
consolid
ated
financial
report
Chairman Lin,
Chi-Pin
(Representa
tive,
Honghan
Industrial
Co.,Ltd.)		 ─ ─ ─ ─ 6,700 6,700 ─ ─ 1.39% 1.39% ─ 4,564
 ─ ─ ─ ─ 308
─		 ─ ─ ─ ─ 1.39% 2.41% None
Director Lin,
Chun-Pang
(Representa
tive,
BroadLight
Consultants
Ltd.)
Director Chen,
Jung-Juan
(Representa
tive,
Top-Gain
Enterprises
Ltd.)
Director Tsai,
Meng-Han
Independen
t Director		 Liou,
Cheng-Hwa
i		 1,260 1,260 ─ ─ ─ ─ 81 81 0.28% 0.28% ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ ─ 0.28% 0.28% None
Independen
t Director		 Hsu,
Ching-Tao
Independen
t Director		 Yeh,
Chih-Ming
  1. Specify payment policy, system, standard and structure for remuneration to independent director and specify the interconnection with the amount paid pursuant to factors including but not limited to duty, risk, time spent:

The Company sets 3 independent directors and the Remuneration Committee and Audit Committee also are constituted by all independent directors, where remuneration is subject to the "Payment Measures for Remuneration to Directors, Supervisors and Functional Members". The Company pays remuneration to independent directors regularly every month and independent director will not be included in the disposition of earnings.

  1. In addition to above list, remuneration received for service provision to all companies in the Financial Statement by our directors in the latest fiscal year:

None.

- 16 -

Range of Remunerations

Range of Remunerations Range of Remunerations
Range of remunerations paid
to Directors		 Name of Directors
Total Remuneration (A+B+C+D) Total Remuneration (A+B+C+D+E+F+G)
The Company All companies in the consolidated
financial report		 The Company All companies in the consolidated
financial report
Under NT$ 1,000,000 Liou, Cheng-Hwai,Hsu,
Ching-Tao,Yeh, Chih-Ming,Tsai,
Meng-Han,Lin, Chun-Pang		 Liou, Cheng-Hwai,Hsu,
Ching-Tao,Yeh, Chih-Ming,Tsai,
Meng-Han,Lin, Chun-Pang		 Liou, Cheng-Hwai,Hsu, Ching-Tao,
Yeh, Chih-Ming, Tsai, Meng-Han,
Lin, Chun-Pang
Liou, Cheng-Hwai,Hsu, Ching-Tao,
Yeh, Chih-Ming, Tsai, Meng-Han
NT$1,000,000 (included)～
NT$2,000,000 (excluded)		 Lin, Chi-Pin Lin, Chi-Pin Lin, Chi-Pin －
NT$2,000,000 (included)～
NT$ 3,500,000 (excluded)		 － － － Lin, Chun-Pang
NT$3,500,000 (included)～
NT$ 5,000,000 (excluded)		 Chen, Jung-Juan Chen, Jung-Juan Chen, Jung-Juan Chen, Jung-Juan
NT$5,000,000 (included)～
NT$10,000,000 (excluded)		 － － － Lin, Chi-Pin,
NT$10,000,000 (included)～
NT$15,000,000(excluded)		 － － － －
NT$15,000,000 (included)～
NT$30,000,000(excluded)		 － － － －
NT$30,000,000 (included)～
NT$50,000,000(excluded)		 － － － －
NT$50,000,000 (included)～
NT$100,000,000(excluded)		 － － － －
Over NT$100,000,000 － － － －
Total Sevenpersons Sevenpersons Sevenpersons Sevenpersons
  1. Remunerations paid to Supervisors: N/A. The Company has established the Audit Committee.

- 17 -

4. Remuneration paid during the most recent fiscal year general manager and deputy general manager

Unit: NT$1,000/1,000 shares Unit: NT$1,000/1,000 shares Unit: NT$1,000/1,000 shares
Title Name Salary(A) Severance Pay
and Pensions
(B)		 Bonus and
Allowances (C)		 Employees’ Profit Sharing Bonus(D) Ratio of total
compensation
(A+B+C+D) to
net income(%)		 Employee
Stock Options
granted to
employees		 Employee
Restricted Stock
Granted		 Compensati
on paid to
directors
from an
invested
company
other than
the
company’s
subsidiary
The
Comp
any		 All
compan
ies in
the
consoli
dated
financi
al
report		 The
Comp
any		 All
compan
ies in
the
consoli
dated
financi
al
report		 The
Comp
any		 All
compani
es in the
consolid
ated
financia
l report		 The Company All companies in the
consolidated financial
report		 The
Compa
ny		 All
compani
es in the
consolid
ated
financia
l report		 The
Co
mp
any		 All
compani
es in the
consolid
ated
financia
l report		 The
Comp
any		 All
companies
in the
consolidat
ed
financial
report
Cash Stock Cash Stock
General
Manager		 Lin, Chi-Pin 1,594 4,403 ─ ─ ─ ─ 476 ─ 673 ─ 0.43% 1.06% ─ ─ ─ ─ None
CFO Yang,Cheng-Feng

Range of Remunerations

Range of Remunerations Range of Remunerations
Range of remunerations paid to general manager and deputy
general manager		 Name ofgeneral manager and deputy general manager
The Company All companies in the consolidated financial report
Under NT$ 1,000,000 ─ ─
NT$1,000,000 (included)～NT$ 2,000,000 (excluded) ─
NT$2,000,000 (included)～NT$ 3,500,000 (excluded) Yang, Cheng-Feng Lin, Chi-Pin,Yang, Cheng-Feng
NT$3,500,000 (included)～NT$ 5,000,000 (excluded) ─ ─
NT$5,000,000 (included)～NT$10,000,000 (excluded) ─ ─
NT$10,000,000(included)～NT$15,000,000(excluded) ─ ─
NT$15,000,000(included)～NT$30,000,000(excluded) ─ ─
NT$30,000,000(included)NT$50,000,000(excluded) ─ ─
NT$50,000,000 (included)～NT$100,000,000 (excluded) ─ ─
Over NT$100,000,000 ─ ─
Total Two person Two person

- 18 -

  1. Employees’ Profit Sharing Bonus Paid to Management Team
Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000 Unit: NT$1,000
Title Name Stock Cash Total Employees’ Profit
Sharing Bonus Paid to
Management Team as %
of 2020Net Income
General Manager Lin,Chi-Pin ─ 673 673 0.14%
CFO Yang,Cheng-Feng

Note: Prior to the date of printing the annual report, employees’ profit sharing bonus has been decided by the

board meetingtopay in cash, but it will not be paid until the Shareholders’ Meeting approves.

  1. Comparison of the ratio of total remuneration paid to directors, supervisors, general managers and deputy general managers by the Company and all companies in the consolidated financial statement to net income in individual financial statements in 2017 and 2018. Explanation of remuneration policies, standards and packages, the procedure to determine remuneration, and the linkage to operating performance and future risk exposure.

  2. (1) Comparison between the ratio of the total remuneration paid to directors, supervisors, general managers and deputy general managers by the Company and all companies in the consolidated financial statement to net income in individual financial statements in 2017 and 2018

Unit: NT$ 1,000

Unit: NT$ 1,000 Unit: NT$ 1,000 Unit: NT$ 1,000 Unit: NT$ 1,000
Title Ration of the total remuneration paid to directors, supervisors, general managers and deputy
general managers by the Company and all companies in the consolidated financial statement
tonetincomein individual financialstatements
2019 2020
The Company All companies in the
consolidated financial
report		 The Company All companies in the
consolidated
financial report
Directors 0.75% 2.20% 1.67% 2.69%
General Manager
and Deputy
General Manager		 0.27% 0.73% 0.43% 1.06%
  • (2) Remuneration policies, standards and packages, the procedure to determine remuneration, and the linkage to operating performance and future risk exposure.

The Company’s Articles of Incorporation provides that the base compensation for Directors, the general manager and deputy general manager may be determined by reference to industry levels. A determination of remuneration also needs to comply with the procedure set out in the Articles of Incorporation stating – the Board of Directors should propose and submit a draft distribution plan to the Shareholders’ Meeting for its approval. The Company has established a Remuneration Committee, which consists of all Independent Directors. The remuneration policy includes policies, systems, standards and structures in relation to the amount of remuneration paid to Directors and managers.Remuneration, whichis determined by the Remuneration Committee, based on roles, contribution to the Company through engagement in operations and industry levels. The merit-based remuneration policy and the amount of remuneration paid to Directors and managers both will be reviewed regularly.

D. Corporate Governance Implementation

1. Board of Directors Meeting Status

Nine meetings were held in fiscal years 2020. The Directors’ attendance status is as follows:

- 19 -

Title Name Attendance
in Person		 By Proxy Attendance
Rate in
Person (%)		 Note
Chairman Lin,
Chi-Pin
(Representative,
Honghan Industrial Co.,Ltd.)		 8 1 89%
Director Lin, Chun-Pang (Representative,
BroadLight Consultants Ltd.)		 8 1 89%
Director Chen, Jung-Juan (Representative,
Top-Gain Enterprises Ltd.)		 9 0 100%
Director Tsai, Meng-Han 9 0 100%
Independent
Director		 Liou, Cheng-Hwai 9 0 100%
Independent
Director		 Hsu, Ching-Tao 9 0 100%
Independent
Director		 Yeh, Chih-Ming 9 0 100%

Other matters required to be recorded:

  • a. Under the following circumstances, the dates of the Board of Directors’ meetings, terms, proposals and the Independent Directors’’ opinions and the Company’s responses to these opinions need to be recorded:

i. Matters in relation to Securities and Exchange Act §14-3:

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
February 25
2020		 The 16th
Meeting
during the
4thBoard		 Cayman Engley Industrial Co.,
Ltd.(hereinafter referred to as the
Compjany) provided a guarantee to
Kcompany, Netherlands (Kranendonk
BeheersmaatschappijB.V)		 None N/A YES
Proposal of amendments to “Rule of
Procedure ofShareholder’sMeeting”
March 27
2020		 The 17th
Meeting
during the
4thBoard		 Proposal
of
2019
remuneration
distribution for employees, directors,
and supervisors		 None N/A YES
Reviewed
the
proposal
of
the
performance evaluation, remuneration
policies, systems, criteria and structure
for directors, independent directors and
managers
2019manager remunerationchecklist
Report on the performance evaluation of
the directors and the Board reviewed by
theRemunerationCommittee
2019 Operation Report and Final
Accounts
2019ProfitDistribution Plan
The proposal of Statement of Internal
Control
System
during
January
1~December31,2019
Amendments
to
the
”Rules
of
Procedures for the Board of Directors
Meetings”, ”Rules of Procedures for the
Remuneration Committee Meetings”,
“Regulations Governing Procedure for
Board of Directors Meetings” and
“AuditCommittee Charters”
Amendments to the “Procedures for
Ethical Management and Guidelines for
Conduct”, “Corporate Governance Best
Practice Principles”, and “Corporate
Social Responsibility Best Practice
Principles”.

- 20 -

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
Amendments to the “Management of
Financial
Statement
Preparation
Procedures”
Amendments
to
the
“Articles
of
Association”
Approval for the Letter of Commitment
issued by the subsidiary Changchun
Engley Automobile Industry Co., Ltd.
(hereinafter referred to as “Engley
Automobile”)
Approval for the Letter of Commitment
issued by the subsidiary Changchun
Engley Automobile Industry Co., Ltd.
(hereinafter referred to as “Engley
Automobile”)
May 13
2020		 The 18th
Meeting
during the
4thBoard		 Partial
revision
of
“Operational
Procedures for Lending Capital to
Others”		 None N/A YES
Ratification of the guarantee provided
by the Company to Tianjin Engley
Manufacturing Co., Ltd. (hereinafter
referred to as “Tianjin Engley”)
June 19
2020		 The 19th
Meeting
during the
4thBoard		 The Company provided a guarantee to
Tianjin Engley Manufacturing Co., Ltd.
(hereinafter referred to as Tianjin
Engley)		 None N/A YES
The Company provided a guarantee to
Tsingtao Engley Auto Part Co., Ltd.
(hereinafter referred to as Tsingtao
Engley)
The Company provided a guarantee to
Taizhou
Maoqi
Metal
Co.,
Ltd.
(hereinafter referred to as Taizhou
Maoqi)
The Company provided a guarantee to
Linde+Engley (Tianjin) Auto Parts Co.,
Ltd.
(hereinafter
referred
to
as
Linde+Engley (Tianjin))
August 11
2020		 The 20th
Meeting
during the
4thBoard		 Amended the company’s “Handbook
Rules for Shareholders’ Meetings”,
“Code of Agenda for Board Meetings”,
“Code
of
Ethical
Conduct”,
“Organizational
Rules
for
the
Remuneration Committee”, “Rules for
Dutiful Scope of Independent Directors”
and “Board Assessment Measures”		 None N/A YES
Approval of the proposal that the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
（hereinafter referred to as “Engley
Automobile”）presented a Letter of
Commitment
The Company provided a guarantee to
Ningbo Maoxiang Material Co., Ltd.
(hereinafter referred to as Ningbo
Maoxiang)
The Company provided a guarantee to
Taizhou
Maoqi
Metal
Co.,
Ltd.
(hereinafter referred to as Taizhou
Maoqi)
View the disguised financing situation
of the group companies in accordance
with the regulations prescribed by the
competent authority
September
01 2020		 The 21th
Meeting
during the
4thBoard		 Canceled guarantee to
Kranndonk
BeheersmaatschappijB.V.		 None N/A YES
Proposal of lending capitals to the
subsidiary
-
Kranendonk
BeheersmaatschappijB.V.
November The 22th View the Group's disguised financing None N/A YES

- 21 -

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
10 2020 Meeting
during the
4thBoard		 situation of current quarter
November
24 2020		 The 23th
Meeting
during the
4thBoard		 The company's simplified consolidated
financial forecast for the fourth quarter
of 2020		 None N/A YES
December
22 2020		 The 24th
Meeting
during the
4thBoard		 The proposal of 2020 year-end bonus
distribution		 None N/A YES
The
proposal
of
the
adjusted
remuneration paid to managers based on
a monthlybasis in 2021
Proposal of 2021 Annual Budget and
Operation Plan
Proposal of 2021 Annual Internal Audit
Plan
Approal the Company. prenseted a
Letter of Commitment
Reduce
the
important
subsidiary,
Changchun Engley Automobile Industry
Co., Ltd. (hereinafter referred to as
"Changchun Engley Company") with a
total of shares reaching10%
Proposed to increase capital for the
subsidiaryEngleyIndustrial Co.,Ltd.
Proposal of lending capitals to the
subsidiary
-
Kranendonk
BeheersmaatschappijB.V.
The company continues to provide
guarantee to Ningbo Maoxiang Metal
Co., Ltd. (hereinafter referred to as
Ningbo Maoxiang)
Amended
the
company's
"Administrative
Measures
for
Endorsement Guarantee"partially
March 16
2021		 The 25th
Meeting
during the
4th Board		 Proposal
of
2020
remuneration
distribution for employees, directors,
and supervisors		 None N/A YES
Reviewed
the
proposal
of
the
performance evaluation, remuneration
policies, systems, criteria and structure
for directors, independent directors and
managers
2019manager remuneration checklist
Report on the performance evaluation of
the directors and the Board reviewed by
the Remuneration Committee
2020 Operation Report and Final
Accounts
2020 Profit Distribution Plan
The proposal of Statement of Internal
Control
System
during
January
1~December 31,2020
Proposal of amendments to “Rule of
Procedure of Shareholder’s Meeting”
Proposal
of
amendments
to
“The
process ofpreparingfinancial report”
Approval of the proposal that the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
（hereinafter referred to as “Engley
Automobile”）presented a Letter of
Commitment
The Company provided a guarantee to
Linde+Engley (Tianjin) Auto Parts Co.,
Ltd.
(hereinafter
referred
to
as
Linde+Engley (Tianjin))
March 23
2021		 The 26th
Meeting		 The company's simplified consolidated
financial forecast for the firstquarter of		 None N/A YES

- 22 -

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
during the
4th Board		 2021

  • ii. Except for the matters stated above, there were no other written or otherwise recorded resolutions on which an independent director had any dissenting opinion or qualified opinion in 2020.

  • b. In any circumstance where an Director recuses himself/herself from any involvement with the issue in which the Directors’ own interests conflict with those of the Company, names of such Directors, resolutions, reasons of recusal and relevant voting situations need to be recorded

The 25th meeting during the 4rd Board on March 16 2021

  • (i)Proposal: Reviewing policies, systems, criteria and programs on evaluation of the Directors’, Independent Directors’ and managers’ performances, as well as regularly evaluating and determining their compensation.

  • Director with conflicts of interests:Lin, Chi-Pin, Chen, Jung-Juan, Liou, Cheng-HwaiHsu, Ching-Tao, Yeh, Chih-Ming, Lin, Chun-Pang, Tsai, Meng-Han.

Reasons of recusal and relevant voting situations:

Directors Lin Chi Pin and Chen Jung Juan (with the second degree of kinship with Lin Chi Pin) rescued themselves due to the conflict of interests.The remaining directors shall avoidance involved individually, and the withdrawing directors shall not participate in the voting, and the case shall be approved by the unanimous consent of the remaining directors present.

  • (ii)Proposal: The table of remuneration paid to managers in 2020. Director with conflicts of interests: Lin, Chi-Pin, Chen, Jung-Juan. Reasons of recusal and relevant voting situations:

  • Directors Lin Chi Pin (also the general manager), and Chen Jung Juan (with the second degree of kinship with Lin Chi Pin) rescued themselves due to the conflict of interests. The Chairman appointed the independent director Liou Cheng Hwai as the interim chairman. After the chairman consulted all the attending directors (excluding the avoiding directors), this proposal was approved unanimously by remaining directors who were present at the meeting.

- 23 -

2. Implementation of board evaluation

Evaluation
cycle		 Evaluation period Evaluation
scope		 Evaluation
method		 Evaluation
content
Annual 2020/1/1-2020/12/31 Performance
evaluation
of
the
Board,
individual
directors
and
functional
committees		 Internal
self-evaluation
of
the
Board
and
the
self-evaluation
of directors		 Refer to Note 1

Note 1. Evaluation content

Note 1. Evaluation content
Item Evaluation content
Performance evaluation of
the overall Board		 Participation in the operation of the Company, improving the
quality of decisions made by the Board, composition and structure
of the Board, continuing education of directors and internal
control
Performance evaluation of
the individual directors		 Corporate goals and missions learned, responsibilities of directors
learned, participation in the operation of the Company, internal
relationship management and communication, expertise and
continuing educationofdirectors andinternalcontrol
Performance evaluation of
the functional committees		 Participation in the operation of the Company, responsibilities of
the functional committees learned, improving the quality of
decisions made by the functional committees, composition of the
functional committees and appointment of committee members,
andinternalcontrol

  1. Audit Committee Status or Supervisors’ attendance the state of participation at board meetings

  2. (1) The Audit Committee of the Company is composed of 3 independent directors, and its operation mainly aims to supervise the following items:

    • a. The adequacy ofthe Company's financial statements.

    • b. The appointment (termination), independence and performance of CPA.

    • c. Effective implementation of the Company's internal control.

    • d. Regulatory compliance of the Company.

    • e. Control of the Company's existing or potential risks.

  3. (2) Eight meetings held by the Company’s Audit Committee. The Independent Directors’ attendance status is as follows:

Title Name Attendance
in Person		 By Proxy Attendance Rate
in Person (%)		 Note
Independent Director Liou, Cheng-Hwai 8 0 100%
Independent Director Hsu, Ching-Tao 7 1 88%
Independent Director Yeh, Chih-Ming 8 0 100%

  • (3) Other matters are required to be recorded:

  • a. Under the following circumstances, the dates of the Board of Directors’ meeting,

- 24 -

sessions, proposals and the resolutions of the Audit Committee, the Company’s responses to opinions of the Audit Committee need to be recorded:

i. Matters in relation to Securities and Exchange Act §14-5:

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
February 25
2020		 The 15th
Meeting
during the
2thBoard		 Cayman Engley Industrial Co., Ltd.
(hereinafter referred to as the
Compjany) provided a guarantee to
Kcompany, Netherlands
(Kranendonk Beheersmaatschappij
B.V)		 None N/A YES
Proposal of amendments to “Rule of
Procedure of Shareholder’s Meeting”
March 27
2020		 The 16th
Meeting
during the
2thBoard		 2019 Operation Report and Final
Accounts		 None N/A YES
2019Profit Distribution Plan
The proposal of Statement of Internal
Control
System
during
January
1~December31,2018
Amendments to the ”Rules of
Procedures
for
the
Board
of
Directors
Meetings”,
”Rules
of
Procedures for the Remuneration
Committee Meetings”, “Regulations
Governing Procedure for Board of
Directors Meetings” and “Audit
Committee Charters”
Amendments to the “Procedures for
Ethical Management and Guidelines
for
Conduct”,
“Corporate
Governance
Best
Practice
Principles”, and “Corporate Social
Responsibility
Best
Practice
Principles”.
Amendments to the “Management of
Financial
Statement
Preparation
Procedures”
Amendments to the “Articles of
Association”
Approval
for
the
Letter
of
Commitment
issued
by
the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
(hereinafter referred to as “Engley
Automobile”)
Approval
for
the
Letter
of
Commitment
issued
by
the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
(hereinafter referred to as “Engley
Automobile”)
May 13
2020		 The 17th
Meeting
during the
2thBoard		 Partial
revision
of
“Operational
Procedures for Lending Capital to
Others”		 None N/A YES
Ratification
of
the
guarantee
provided by the Company to Tianjin
Engley Manufacturing Co., Ltd.
(hereinafter referred to as “Tianjin
Engley”)
June 19
2020		 The 18th
Meeting
during the
2thBoard		 The Company provided a guarantee
to Tianjin Engley Manufacturing
Co., Ltd. (hereinafter referred to as
Tianjin Engley)		 None N/A YES
The Company provided a guarantee
to Tsingtao Engley Auto Part Co.,
Ltd. (hereinafter referred to as
Tsingtao Engley)
The Company provided a guarantee
to Taizhou Maoqi Metal Co., Ltd.
(hereinafter referred to as Taizhou

- 25 -

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
Maoqi)
The Company provided a guarantee
to Linde+Engley (Tianjin) Auto
Parts Co., Ltd. (hereinafter referred
to as Linde+Engley (Tianjin))
August 11
2020		 The 19th
Meeting
during the
2thBoard		 Amended the company’s “Handbook
Rules for Shareholders’ Meetings”,
“Code
of
Agenda
for
Board
Meetings”,
“Code
of
Ethical
Conduct”, “Organizational Rules for
the
Remuneration
Committee”,
“Rules
for
Dutiful
Scope
of
Independent Directors” and “Board
Assessment Measures”		 None N/A YES
Approval of the proposal that the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
（hereinafter referred to as “Engley
Automobile”）presented a Letter of
Commitment
The Company provided a guarantee
to Ningbo Maoxiang Material Co.,
Ltd. (hereinafter referred to as
Ningbo Maoxiang)
The Company provided a guarantee
to Taizhou Maoqi Metal Co., Ltd.
(hereinafter referred to as Taizhou
Maoqi)
View
the
disguised
financing
situation of the group companies in
accordance with the regulations
prescribed
by
the
competent
authority
September
01 2020		 The 20th
Meeting
during the
2thBoard		 Canceled guarantee to Kranndonk
BeheersmaatschappijB.V.		 None N/A YES
Proposal of lending capitals to the
subsidiary
-
Kranendonk
BeheersmaatschappijB.V.
November
10 2020		 The 21th
Meeting
during the
2thBoard		 View
the
Group's
disguised
financing situation of current quarter		 None N/A YES
November
24 2020		 The 22th
Meeting
during the
2thBoard		 The
company's
simplified
consolidated financial forecast for
the fourth quarter of 2020		 None N/A YES
December
22 2020		 The 23th
Meeting
during the
2thBoard		 The proposal of 2020 year-end bonus
distribution		 None N/A YES
The
proposal
of
the
adjusted
remuneration paid to managers based
on a monthlybasis in 2021
Proposal of 2021 Annual Budget and
Operation Plan
Proposal of 2021 Annual Internal
Audit Plan
Approal the Company. prenseted a
Letter of Commitment
Reduce the important subsidiary,
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
(hereinafter
referred to as "Changchun Engley
Company") with a total of shares
reaching10%
Proposed to increase capital for the
subsidiary Engley Industrial Co.,
Ltd.
Proposal of lending capitals to the
subsidiary
-
Kranendonk
BeheersmaatschappijB.V.
The company continues to provide
guarantee
to
Ningbo
Maoxiang

- 26 -

Meeting
Date		 Session Proposal Independent
Directors’
opinions		 Responses to
Independent
Directors’
opinions		 At least one
Independent
Director Attend in
person
Metal Co., Ltd. (hereinafter referred
to as Ningbo Maoxiang)
Amended
the
company's
"Administrative
Measures
for
Endorsement Guarantee"partially
March 16
2021		 The 24th
Meeting
during the
2thBoard		 Proposal
of
2020
remuneration
distribution for employees, directors,
and supervisors		 None N/A YES
Reviewed
the
proposal
of
the
performance
evaluation,
remuneration
policies,
systems,
criteria and structure for directors,
independent directors and managers
2019
manager
remuneration
checklist
Report
on
the
performance
evaluation of the directors and the
Board reviewed by the Remuneration
Committee
2020 Operation Report and Final
Accounts
2020 Profit Distribution Plan
The proposal of Statement of Internal
Control
System
during
January
1~December 31,2020
Proposal of amendments to “Rule of
Procedure of Shareholder’s Meeting”
Proposal of amendments to “The
process ofpreparingfinancial report”
Approval of the proposal that the
subsidiary
Changchun
Engley
Automobile
Industry
Co.,
Ltd.
（hereinafter referred to as “Engley
Automobile”）presented a Letter of
Commitment
The Company provided a guarantee
to Linde+Engley (Tianjin) Auto
Parts Co., Ltd. (hereinafter referred
to as Linde+Engley (Tianjin))
March 23
2021		 The 25th
Meeting
during the
2thBoard		 The
company's
simplified
consolidated financial forecast for
the first quarter of 2021		 None N/A YES

  • ii. Except for the matters stated above, there were no other resolutions, which were not approved by the Audit Committee but were approved by two thirds or more of all directors in 2018.

  • f. In any circumstance where an Independent Director recuses himself/herself from any involvement with the issue in which the IndependentDirectors’ own interests conflict with those of the Company names of such Directors, resolutions, reasons of recusal and relevant voting situations need to be recorded: No.

  • g. Communications between independent directors and head of internal audit and accountants (which include significant matters related to the Company’s financial and business status, communication methods, and its results, etc.):

The Company’s office of internal audit regularly submits an auditing report to the independent directorsand was present in Board meetings to update the latest auditing results. The independent directors can inspect the Company’s financial and business situation from time to time. As they have questions or advices related to the Company’s operations, they can immediately contact heads of relevant offices to facilitate further communication and improvement. In addition to regular review of financial statements, the independent director can meet with accountants to have discussions where it is necessary.

- 27 -

  1. The implementation of corporate governance, and its non-implementation of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”, and the reason for such non-implementation
ImplementationStatus ImplementationStatus ImplementationStatus Non-implementation
Assessment Item
Yes
No
Explanation		 and Its Reason(s)
1. Does the Company follow





V		 The Company has established the “Corporate
No Significant
the “Corporate Governance Governance Practices”. Difference
Best Practice Principles for
TWSE/TPEx
Listed
Companies” to establish
and disclose its corporate
governance practices?
2.
Shareholding
Structure






















V
V
V
V		 1. The Company has established the “Rules of
Procedure for Shareholders’ Meetings” and
designated staff responsible to handle shareholder
suggestions, concerns or disputes and facilitate
coordination among relevant departments.
2. The Company owns the list of major shareholders
of controlling companies and beneficial owners
of these major shareholders and regularly track
and monitor changes.
3. Every affiliated corporation’s assets and financial
situation has been managed independently and
complied with the Company’s internal control
system to ensure its implementation of risk
management and firewalls.
4. The Company has established “Procedures for
Ethical
Management
and
Guidelines
for
Conduct” to prohibit insiders from taking
advantage of undisclosed information to trade
securities for the purpose of investor protection
and maintenance of business benefits.














No Significant
Difference
No Significant
Difference
No Significant
Difference
No Significant
Difference
&Shareholders’ Rights
(1) Does Company have
Internal
Operation
Procedures for handling
shareholders’
suggestions,
concerns,
disputes and litigation
matters. If yes, has
these procedures been
implemented
accordingly?
(2) Does Company possess
a
list
of
major
shareholders
of
controlling
companies
and beneficial owners
of
these
major
shareholders?
(3) Has the Company built
and executed a risk
management
system
and “firewall” between
the Company and its
affiliates?
(4)
Has
the
Company
established
internal
rules prohibiting insider
trading on undisclosed
information?
3.
Composition
and










V
V
Responsibilities
of
the
Board of Directors
(1)
Has
the
Company		 1. The board of directors of the company passed the
No Significant
established
a		 " Regulations on Evaluation of Board of
Difference
diversification
policy		 Directors" on February 20, 108.The board of
for the composition of directors shall evaluate performance at least once
its Board of Directors a year. Performance evaluation in accordance
and
has
it
been		 with the regulations at the end of year.
implemented
accordingly?

No Significant
(2)
Other
than
the		 2. In addition toRemuneration Committee and Audit


Difference
Remuneration Committee, the Company has not set up any other

Committee
and
the		 functional
committee.
The
Company
may
Audit
Committee,

establish other functional committees depending

- 28 -

ImplementationStatus ImplementationStatus ImplementationStatus Non-implementation
Assessment Item
Yes
No
Explanation		 and Its Reason(s)
which are required by










V
V		 on actual operations and legal requirements.
law, does the Company
plan to set up other
Board committees? 3. The board of directors of the company passed

(3)
Has
the
Company		 the“Rules and procedures for the Board of


No Significant
established Directors’
performance
assessment”.


Difference
methodology
for		 Performance evaluation of the board of directors,

evaluating
the		 members of the board of directors, remuneration

performance
of
its		 committee and audit committee shall be carried

Board of Directors, on out at least once a year. At the end of each year,

an annual basis? the performance evaluation of the current year

shall be conducted in accordance with these
measures.

No Significant
(4)
Does the Company		 4. The Company’s Financial Department annually


Difference
regularly evaluate its evaluates the independence of external auditors

external
auditor’s		 and reports to the Audit Committee and Board of
independence?
Directors. Evaluation Standards of External
Auditor’sIndependence is defined below as Note
1.
4.
Has
the
Company


















V		 For the purpose of developing good practices of
No Significant
established a full- (or part-) corporate governance, the Company has established
Difference
time corporate governance a number of regulations, for example“Corporate
unit or personnel to be in Governance
Practices”,
“Corporate
Ethics










charge
of
corporate		 Principles”, “Procedure of Implementing Corporate
governance
affairs		 Ethics
and
Guidelines
for
Conduct”,“Rules
(including but not limited Governing the Scope of Powers of Independent
to provision of information Directors”, “Corporate Social Responsibility Best
required by directors and Practice Principles” and “Code of Ethical Conduct”.
supervisors for business Corporate governance is developed and promoted by
execution, by laws for the Operation Management Department, which is led
matters relating to board by executive assistant manager, Lin, Shang-Wei.
meetings and shareholders’ The Department is required to report to the Board of
meetings, and information Directors once a year. The major role of the
on corporate registration Department are as follows:
and
amendment		 1. Organizing board meetings and shareholders’
registration, as well as meetings as well as facilitating such meetings.
record minutes of board 2. Planning and adjusting corporate system and
meetings and shareholders organizational structure to promote independence
meetings, etc.)? of Board of Directors and internal control.
3. Seeking Directors’ opinions to plan and draft
meeting agendas and informing all Directors and
Commissioners of meeting at least seven days
before board meetings, meetings of the Audit
Committee and Remuneration Committee. Prior
to such meetings, relevant proposals are also
circulatedamong Directors and Commissioners
and it enables these thosewho are present at
meetings to understand proposals in advance. If
any proposal involves any Director or
Commissioner’s personal interest, he/she may be
required to recuse himself/herself from attending
themeeting.

- 29 -

ImplementationStatus ImplementationStatus ImplementationStatus Non-implementation
Assessment Item
Yes
No
Explanation		 and Its Reason(s)
4. Adopting “Corporate Ethics Principles”and the
“Procedure of Implementing Corporate Ethics









and Guidelines for Conduct” for the purpose
ofcreating an ethical business culture and
preventing
Directors
and
managers
from
engaging in unethical conduct. These relevant
regulations also avoid conflicts of interest and
provide appropriate channels for Directors and
managers to explain their personal interests,
which
may
potentially
conflict
with
the
Company.
5. Constantly improving corporate governance
system and strengthening compliance awareness
and subsidiary governance.
5.
Has
the
Company










V		 The Company has established communication No Significant
established a means of channels for employees and investors, and created a Difference
communicating
with
its		 Stakeholders Section on the Company’s website.
Stakeholders (including but (1) If the Company’s employees need to file
not limited to shareholders, complaints and make suggestions, they can
employees,
customers,		 contact responsible staff through phone calls and
suppliers, etc.) or created a emails.
Stakeholders Section on its (2) The Company communicates with investors
Company website? Does through regular investors conferencesand special
the Company respond to investor conferences.
stakeholders’ questions on
corporate responsibilities?
6.
Has
the
Company


V		 The Company has appointed the “Department of No Significant
appointed a professional Transfer Agency Service, SinoPac Securities Difference
registrar
for
its		 Corporation” to handle matters relating to
Shareholders’Meetings? Shareholders’Meetings.
7.Information Disclosure




















V
V
(1)Has
the
Company		 (1) The Company has established its website to
No Significant
established a corporate
disclose relevant information. As the Company


Difference
website
to
disclose
goes public, its information on financials,
information
regarding		 businesses and corporate governance status is
its financials, business
available on the Market Observation Post
and
corporate		 System.
governance status?
(2) Does the Company use (2)The Company has established the website to
No Significant
other
information
introduce its products and post relevant

Difference
disclosure
channels
information. It has also appointed an employee
(e.g.
maintaining
an
at Operation Management Department to be
English-language
responsible for information collection and
website,
designating		 disclosure. The Company follows applicable
staff
to
handle
regulations to appoint a spokesperson and an
information
collection
acting spokesperson.
and
disclosure,
appointing
spokespersons,
webcasting
investors
conference etc.)?

No Significant
(3)
Has
the
company		 (3) The company currently announces and


Difference
announced and filed its
declares its annual financial report within

annual financial report
three months after the end of the fiscal year in

within two months after


accordance with the law; It will announce and
the end of the fiscal
report the first, second, and third quarter
year?And announce
financial reports and monthly operating

- 30 -

ImplementationStatus ImplementationStatus ImplementationStatus Non-implementation
Assessment Item
Yes
No
Explanation		 and Its Reason(s)
and report the financial




conditions within
the
specified
period.


reports for the first, Relevant departments take into account the
second
and
third		 quality and timeliness of public information,
quarters
and
the		 and try their best to complete the deadline
operating conditions of ahead of schedule as required.
each month before the
specified deadline?
8. Has the Company disclosed















V		 (1) For employees’ rights: the Company hires
No Significant
other
information
to		 employees in accordance with local government
Difference
facilitate a better None requirements, emphasizes employees’ rights,
understanding
of
its		 ensures smooth communication and provides





































corporate
governance		 employees
with
a
healthy
workplace
practices (e.g. including but environment.
not limited to employee (2) For a caring workplace: the Company organizes
rights, employee wellness, well-designed training programs and provides
investor relations, employees with reasonable compensation and
supplier relations, rights of benefit.
stakeholders,
directors’		 (3) For investor relations: the Company ensures
training
records,
the		 smooth
communication
and
information
implementation
of
risk		 exchange for investors and other stakeholders. It
management policies and also respects and protects investor rights.
risk evaluation measures, (4) For supplier relations: the Company maintains a
the
implementation
of		 good
relationship
with
suppliers
through
customer relations policies, reciprocal cooperation and win-win partnership.
and purchasing insurance (5) For stakeholders’ rights: the Company always
for directors)? ensures a smooth communication for stakeholders
and act in good faith to publish information to
public to maintain investor relations and protect
stakeholders’ rights.
(6) For training records of Directors and Supervisors:
The Company’s Directors are equipped with
appropriate
expertise.
The
Company
also
arranged trainings courses for Directors. Training
courses for Directors in 2019 are listed as Note 2.
(7) For risk management policies and risk evaluation
criteria: the Company has established various
internal control systems and related regulations.
In future, the Audit Department will submit
annual audit plan to the Audit Committee and the
Board of Directors based on risk assessment
results. Where the its business operation doesn’t
fully comply with the “Corporate Governance
Best Practice Principles for TWSE/TPEx Listed
Companies”, a summary of non-implementation
and its reasons needs to be submitted to the Board
of Directors for review. Furthermore, in future the
Company will disclosed annual statements of
internal control systems required by the TWSE in
annual reports of the Shareholders’ Meeting after
its related departments completes evaluation of
annual internal control.
(8) For Customer relations policy: the Company has
developed a process of handling customers’
complaints, and maintained a good relationship
and effective communication with customers.
(9) For D&O liability insurance: On October 26
2020,the Company contracted with theFubon

- 31 -

Assessment Item
 ImplementationStatus ImplementationStatus ImplementationStatus Non-implementation
Yes
No
Explanation		 and Its Reason(s)
Insurance for a D&O insurance policy (The term
of this contract: November 24 2020 - November
24 2021).
9. According to results of Corporate Governance Evaluation published by the TWSE Corporate
Governance Center in the most recent year, please clarify any items, which have been improved,
andidentifypriorities and approaches for items to be improved:
Note 3 detailed the items in Corporate Governance Evaluation, which had been determined
unqualified to gain points and how they had been improved.

Note 1: Evaluation Standards of External Auditor’s Independence

unqualified to gain points and how they had been improved.
Note 1: Evaluation Standards of External Auditor’s Independence
Evaluation Item Results Independence
1. Does any external auditor have direct financial interests
ormaterialindirectfinancial interestsinthe Company?		 No Yes
2.Is there any financing activity or guarantee commitment between
the externalauditorand the Company or itsDirectors?		 No Yes
3.In there any close commercial or potential employment
relationship betweenthe externalauditorand the Company?		 No Yes
4.Has any external auditor or any member of the external audit team
currently acted as a Director, manager or any other role, which
may have material impact in the auditing process or its results?
Or did any of them acted as one of such roles in the most recent
two years?		 No Yes
5.Has any external auditor provided non-auditing service to the
Company, which may directly influence auditing process and its
results?		 No Yes
6.Has any external auditor act as a stockbroker for the Company's
stockorothersecurities?		 No Yes
7.Has any external auditor acted as a defender or negotiate to
resolve disputes involving third parties on behalf of the
Company?		 No Yes
8.Is any external audit a relative of the Company’s Director(s),
manager(s) or other person(s) who may have material impact on
auditing?		 No Yes

Note 2: Training courses for Directors in 2020

Title Name Course Hours
Chairman Lin,
Chi-Pin		 Corporate corporate governance practices: listed companies
set up "independent directors" and "audit committees" in
accordance withthelaw-the wayforcompanies torespond		 3
Strategic Thinking and Practical Operation of Enterprise and
Wealth Inheritance		 3
Director Lin, Chun
Pang		 Corporate corporate governance practices: listed companies
set up "independent directors" and "audit committees" in
accordance withthelaw-the wayforcompanies torespond		 3
Strategic Thinking and Practical Operation of Enterprise and
Wealth Inheritance		 3
Director Chen,
Jung-Juan		 Corporate corporate governance practices: listed companies
set up"independent directors"and"audit committees" in		 3

- 32 -

Title Name Course Hours
accordance withthelaw-the wayforcompanies torespond
Strategic Thinking and Practical Operation of Enterprise and
Wealth Inheritance		 3
Director
 Tsai,
Meng-Han		 Corporate corporate governance practices: listed companies
set up "independent directors" and "audit committees" in
accordance withthelaw-the wayforcompanies torespond		 3
Strategic Thinking and Practical Operation of Enterprise and
Wealth Inheritance		 3
Independe
nt Director		 Liou,
Cheng-Hw
ai		 Corporate Rescue Skills 3
2020 Tax Symposium 3
Independe
nt Director		 Hsu,
Ching-Tao		 Corporate corporate governance practices: listed companies
set up "independent directors" and "audit committees" in
accordance withthelaw-the wayforcompanies torespond		 3
Forging orbreaking?How willthe crisis turnaround? 3
Independe
nt Director		 Yeh,
Chih-Min
g		 OTC "Corporate Governance 3.0-Blueprint for Sustainable
Development"SummitForum Agenda		 3
Corporate corporate governance practices: listed companies
set up "independent directors" and "audit committees" in
accordance withthelaw-the wayforcompanies torespond		 3

Note 3 Results of Corporate Governance Evaluation

Indicator Item notqualified togainpoints Improvement To be improved
1. Protecting
Shareholder
Rights and
Interests",
"Treating
Shareholders
Equitably"		 1.2 Did the company record the results of
shareholders’ approval, opposition and
waiver of each proposal in the
proceedings record, and update the
results into the designated internet
information reporting system on the day
whenthe Shareholders' Meetingisheld?		 No The company did not record the
results of shareholders’ approval,
opposition and waiver of each
proposal in the proceedings.
1.4 Did the chairman of the Company attend
the shareholders' meeting personally?		 No The chairman of the Company did
not attend the shareholders' meeting
personally.
1.6Will the Company hold the general
shareholder’s meeting by the end of
May?		 No The Company won’t hold the
general shareholder’s meeting by the
end of May.
2. Enhancing
Board
Composition
and
Operation		 2.14 Apart from the requirements of laws,
has the Company set up other functional
committees composed of no less than 3
members, and with more than half of the
members as the independent directors,
and disclosed the composition,
responsibilities and operations?		 No The Company hasn’t set up other
functional committees except for
those required by laws.
2.21 Has the company appointed any specific
person responsible for corporate
governance and to provide relevant
information on its implementation in
annual reports and on the company's
website?		 No The company hasn’t appointed any
specific person responsible for
corporate governance.
2.22 Has the company formulated risk
management policies and procedures
passed by the board of directors,
disclosed the scope, organizational
structure operatingconditions of risk		 No The company has not formulated
risk management policies or
procedures

- 33 -

Indicator Item notqualified togainpoints Improvement To be improved
management?
2.23Have the rules adopted by the company
for assessing the performance of the
board of directors been passed by the
board, with the express requirement that
an external assessment be carried out at
least once every three years, and has it
furthermore carried out the assessment
within the time limit under its rules, and
disclosed the implementation status and
assessment results on its website or in
its annual report?		 No The Company did not assess the
performance of the board of
directors.
2.27 Has the company formulated an
intellectual property management plan
connected to its operational goals,
disclose its implementation on the
company's website or annual report, and
report to the board of directors at least
once a year?		 No The company has not formulated an
intellectual property management
plan connected to its operational
goals
2.28Does the company have any provisions
for the appointment and removal of
internal auditors, appraisal, salary and
remuneration, which are reported to the
board of directors or signed by the audit
supervisor to the chairman of the board,
and are disclose them on the company's
website?		 No The company has not stipulated the
appointment and dismissal,
evaluation, remuneration of internal
auditors.
2.30 Did at least one of the company's
internal auditors possess a certificate of
qualification as a Certified Internal
Auditor, Certified Information Systems
Auditor, or Certified Public
Accountant?		 No None of the Company’s internal
auditors possessed a certificate of
qualification as a Certified Internal
Auditor, Certified Information
Systems Auditor, or Certified Public
Accountant.
3. Increasing
Information
Transparenc
y		 3.2 Did the company disclose material
information in English and Chinese at the
same time?		 No Internal and external resources,
which are required to prepare the
material information in English,
were not available.
3.4 Did the company file its annual financial
reports within 2 months from the end of
the fiscal year?		 No The Company did not publish it
annual financial report within two
months as of the end of the fiscal
year.
3.6 Did the company website or MOPS
disclose the interim financial reports
(including financial statements and notes
thereof)in English?		 No Internal and external resources
required to prepare interim financial
reports in English were not
available.
3.8 Did the company voluntarily disclose its
financial forecast quarterly, without
having any corrections ordered by the
competent authority or having any
demeritsimposed by theTWSEor TPEx?		 No The Company did not disclose
financial forecast quarterly.
3.13Did the company's annual report
voluntarily disclose the individual
remuneration of directors and
supervisors?		 No The company did not disclose the
individual remuneration of directors
and supervisors
3.18 Did the company establish an English
website comprising information related
to the company’s finances, business, and
corporategovernance?		 No The Company’s website did not fully
disclose information related to the
company’s finances, business, and
corporategovernance.

- 34 -

Indicator Item notqualified togainpoints Improvement To be improved
3.20 Did the company attend or voluntarily
hold investor conferences at least two
times in the year being evaluated, and
were the first and last investor
conferences in the year held at least 3
months apart?		 No In 2018, the Company held the first
investor conference.
3.21Did the company's annual report
voluntarily disclose the individual
remuneration of the general manager and
deputy general managers?		 No The company did not disclose the
individual remuneration of the
general manager and deputy general
managers.
4.Implement
corporate
social
responsibility		 4.2 Did the company set up a full-time
(part-time) unit promoting the business
integrity management, to be responsible
for the formulation and supervising the
implementation of integrity
management policies and prevention
plans, and explain the operation and
implementation of the settled unit on the
company website and annual report, and
report to the board of directors at least
once a year?		 No The company has not set up a
full-time (part-time) unit for the
business integrity management.
4.4 Did the company, following
internationally recognized guidelines,
prepare and publish reports such as its
corporate social responsibility report to
disclose non-financial information of the
company?		 No Internal and external resources,
which are required to prepare social
responsibility report, were not fully
available.
4.5 Did the company obtain a third-party
verification or assurance for reports
disclosing non-financial information of
the company such as its corporate social
responsibilityreport?		 No Internal and external resources,
which are required to prepare social
responsibility report,were not fully
available.
4.11 Did the company disclose the annual
emissions of CO2 or other greenhouse
gases (GHG) for the past 2 years?		 No Internal and external resources,
which are required to disclose the
annual emissions of CO2 or other
greenhouse gases,were not fully
available.
4.12 Did the company set management
policies for energy conservation,
reduction of carbon/greenhouse gas
emissions, or other waste/pollutants?		 No The Company did not set
management policies for energy
conservation, reduction of
carbon/greenhouse gas emissions, or
otherwaste/pollutants.
4.14 Did the company website or annual
report disclose the identity of the
identified stakeholders, issues of
concern, communication channels, and
response methods?		 No The company did not disclose the
identity of the identified
stakeholders, issues of concern,
communication channels and
response methods.
4.17 Did the company disclose on its website
or in its corporate social responsibility
report the supplier management policies
it adopted, and require suppliers to
comply with the relevant provisions
regarding issues such as environmental
protection, public safety, and health, and
specify the status of implementation?		 No The Company did not disclose its
supplier management policies.
  1. If the company has a Remuneration Committee in place, members, duties, and operation of the Remuneration Committee shall be disclosed.

- 35 -

(1)Information on members of the Remuneration Committee

Identity
(Note 1)		 Criteria
Name		 Meet the Following Professional
Qualification Requirements, Together
with at Least Five Years Work
Experience		 Meet the Following Professional
Qualification Requirements, Together
with at Least Five Years Work
Experience		 Meet the Following Professional
Qualification Requirements, Together
with at Least Five Years Work
Experience		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Evaluation Standards
Independence
(Note 2)		 Number of other
Taiwanese public
companies in which any
of such members
concurrently serve as a
Remuneration
Committee Member
 Remark
s
(Note3
）
An Instructor
or Higher
Position in a
Department of
Commerce,
Law, Finance,
Accounting,
An Instructor
or Higher
Position in a
Department of
Commerce,
Law, Finance,
Accounting,		 An Instructor or
Higher Position
in a Department
of Commerce,
Law, Finance,
Accounting,		 1 2 3 4 5 6 7 8 9 10
Independe
nt
Director		 Liou,
Cheng-Hwa
i		 1
Independe
nt
Director		 Hsu,
Ching-Tao		 － － 2
Independe
nt
Director		 Yeh,
Chih-Ming		 － －

  • Note 1: For the item of Identity, fill in the blank with Director, Independent Directors or others.

  • Note 2:Any member, during the two years before being elected or during the term of office, falls within any of the following circumstances, please tick the appropriate corresponding boxes.

  • (1) Not an employee of the Company or any of its affiliates;

  • (2) Not a Director or Supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an Independent Director of the Company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary;

  • (3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranks as one of its top ten shareholders;

  • (4) Not the managers listed in (1), or a spouse, a relative within the second class or a direct blood relative within the third class of the persons listed in (2) and (3).

  • (5) Not directors, supervisors, or employees of corporate shareholders who are directly holding more than 5% of the total issued shares of the company, holding the top five shares, or designating a representative as a director or supervisor of the company in accordance with Article 27, Item 1 or Item 2 of the Company Law (except for the independent directors established by the company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with this law or local laws and regulations).

  • (6) Not a director, supervisor or employee of another company controlled by the same person with the company’s director seats or more than half of voting shares (except for the independent directors established by the company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with this law or local laws and regulations).

  • (7) Not a Director (council’s member), supervisor (supervisor) or employee of other companies or institutions who is the same person or spouse as the chairman, general manager or equivalent positions of the company (except for the independent directors established by the company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with this law or local laws and regulations).

  • (8) Not a director (council’s member), supervisor (supervisor), managers, or shareholders holding 5% or more shares of a specific company or organization that have financial or business dealings with the company (except for a specific company or institution who holds more than 20% of the company’s total issued shares, but not more than 50%, and the independent directors established by the company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with this law or local laws and regulations).

  • (9) Not Professionals who provide auditing services in business, legal affairs, finance, accounting and other related services for the companies or affiliated companies or who have received a cumulative amount of remuneration not exceeding NT$500,000 in the past two years, or business owners, partners, directors (council’s members), supervisors (supervisors), managers and their spouses of the organization. However, it’s not limited to members of the Salary and Compensation Committee, Public Acquisition Review Committee, or M&A Special Committee who perform their duties in accordance with the Securities Exchange Act or the relevant laws and regulations of the Corporate Mergers and Acquisitions Act.

- 36 -

  • Note 3: If any member is the Company’s Director, please explain whether he/she meets the requirements under the Paragraph 5, Article 6 of the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter”.

(2)Remuneration Committee Meeting Status

  • a. There are three members in total in the Company’s Remuneration Committee.

  • b. The term of the Remuneration Committee members: May 29 2018 to May 29 2021. The Remuneration Committee held two meetings in the most recent year.

Title Name Attendance
in Person		 By Proxy Attendance Rate
in Person (%)		 Note
Convener Liou,Cheng-Hwai 3 0 100%
Commissioner Hsu,Ching-Tao 3 0 100%
Commissioner Yeh,Chih-Ming 3 0 100%

  • c. Other matters are required to be recorded:

  • i. If the Board of Directors declines to adopt or modifies a recommendation of the remuneration committee, it is necessary to specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the Remuneration Committee, the circumstances and cause for the difference shall be specified): None.

Meeting Date Session Proposal Independent Directors’
opinions		 Company’s
response to the
remuneration
committee’s opinion
March 27 2020 The 4th
Meeting
during the
2thBoard		 The proposal of remuneration
distributed to the employees and
directors in 2019		 None N/A
Review on the performance
evaluation of directors, independent
directors and managers; and the
proposal of the remuneration
policies, systems, standards and
structures
Check form of remuneration for
managers in 2019
Report on the performance
evaluation of the directors and the
Board reviewed by the Remuneration
Committee
December 22
2020		 The 5th
Meeting
during the
2thBoard		 The proposal of 2020 year-end bonus
distribution		 None N/A
The proposal of the adjusted
remuneration paid to managers based
on a monthlybasis in 2021
March 16 2020 The 6th
Meeting
during the
2thBoard		 The proposal of remuneration
distributed to the employees and
directors in 2021		 None N/A
Review on the performance
evaluation of directors, independent
directors and managers; and the
proposal of the remuneration
policies, systems, standards and
structures
Check form of remuneration for
managers in 2021
Report on the performance
evaluation of the directors and the
Board reviewed by the Remuneration
Committee
  • ii. If a member of the Remuneration Committee had a recorded or otherwise written dissenting opinion or qualified opinion on resolutions made by the Remuneration Committee, it is necessary to specify the date of the meeting, session, content of the motion, all members’ opinions and the response to

- 37 -

members’ opinions: None.

  • iii. Scope of authorization

(1) The Company passed the “Remuneration Committee Charters” in the board meeting held on June 8, 2015. Its responsibilities include fulfilling the responsibilities and powers stipulated in the “Remuneration Committee Charters” by exercising the due care of a good administrator, and submitting the proposals to the Board for discussion.

(2)Stipulate and regularly conduct performance evaluation, remuneration policies, systems, criteria and structure for directors, audit committee members and managers

(3)According to the Company's "Remuneration Committee Charters", the convening of the committee meeting shall specify the reason for convening, notify the committee members seven days in advance, which could be done in an electronic way.

- 38 -

  1. The state of the company's performance of corporate social responsibilities: systems and measures that the company has adopted with respect to environmental protection, community participation, contribution to society, service to society, social and public interests, consumer rights and interests, human rights, safety and health, and other corporate social responsibilities and activities, and the state of implementation
ImplementationStatus Non-implementation of the”
No Corporate Social Responsibility
Assessment Item
Best Practice Principles for
Yes Summary
TWSE/TPEx Listed Companies"
and its reasons
1. Has the Company conducted risk evaluation for the V The Company has established the “Corporate Social
Responsibility Code of Conduct”, to promote the balance of
economic, social and environmental ecology, as well as the
sustainable development.		 No Significant Difference
environmental, social and corporate governance issues
related to the operations of the Company based on the
materiality principle, and formulated related risk
management policies or strategies?
2.Does the Company have a special (concurrent) unit V The Company’s Operation Management Department led by the
convener, Lin, Shang-Wei (General Manager of Changchun
Engley Automobile Industry Co., Ltd.) is responsible for
improving corporate governance. It aims to develop and review
policies, systems or relevant management orientations on
Corporate Social Responsibility and report regularly to the board
of directors.		 No Significant Difference
topromote CSR initiatives, supervised by aBoard-appointed
member of the management team,who reports to the Board?
3.Developing Sustainable Environment (1) The Company has received a number of certifications,
including ISO and OHSAS. For quality management,
occupational health and safety and environment protection.
(2) The Company continues improving resource efficiency and
the reuse of renewable materials.
(3) The Company has already monitored the impacts of climate,
and summed up the waste discharge of each subsidiary.
Moreover, it keeps inspection on oil consumption of the
equipment.
(4)The Company has formulated relevant management
regulations such as air pollutants control procedures, water
resource control procedures, wastewater management
&control procedures and solid waste control procedures.
Moreover, it has passed ISO14001 environmental system
certification, calculated and monitored the energy
conservation and carbon reduction benefits of each
(1) Does the Company establish proper environmental No Significant Difference
management systems based on the characteristics ofits
businesses?
(2) Is the Company committed to improving resource No Significant Difference
efficiency and to the use of renewable materials with low
environmental impact? No Significant Difference
(3) Does the Company evaluate the current and future
potential risks and opportunities brought by the climate
change, and take measure to respond to the climate related
issues? No Significant Difference
(4) Does the company calculate the greenhouse gases (GHG)
emission, water consumption and total weight of wastes
for the past two years, and formulated the strategies for
energy conservation, carbon reduction, GHG emission
reduction, water saving and management of other wastes?

- 39 -

ImplementationStatus Non-implementation of the”
No Corporate Social Responsibility
Assessment Item
Best Practice Principles for
Yes Summary
TWSE/TPEx Listed Companies"
and its reasons
subsidiary .
4.Social issues (1) Given that labor rights are recognized internationally as
human rights, subject to relevant labor laws and regulations
the Company has established management regulations and
systems to protect employees’ vested rights and prevent any
misconduct, which may impair labor rights. The Company
also makes the effort to ensure availability of these applicable
laws and regulations to its employees through public
communication channels. Furthermore, for the purpose of
giving back to society, the Company regularly makes
financial contributions to social welfare organizations,the
“Love Surrounding the First Skin Graft Foundation” and the
“Taiwan Found for Children and Families” for example.
(2) The Company establishes the related management regulations
such as the Payroll & Welfare Management Regulations,
Performance Management Regulations, Staff Development
and Promotion Management Regulations.
(3)The Company from time to time organizes various activities
from benefiting employees’ physical health and mental
wellbeing, including sport day events and hiking activities.
The Company also offers subsidies for marriage, childbirth
and funerals.
(4) The Company providescompetency-based trainings
foremployees and organizes externaltraining courses from
time to time to develop employees’ skills required by their
roles.
(5) The Company provides consumers with effective
communication channels, for example a hotline and website,
to enable consumers to make inquiries through a transparent
and effect procedure of handling consumer complaints.
(6) The Company formulates the suppler management policies

No Significant Difference
No Significant Difference
No Significant Difference
No Significant Difference
No Significant Difference
No Significant Difference
V
(1) Does the Company set policies and procedures in
compliance with regulations and internationally recognized
human rights principles?
V
(2) Does the Company formulate and implement reasonable
policies of staff welfare (including compensation, vacation
V
and other welfares), and reflect the operating performance
or achievement in the compensation of the employees
properly?
(3) Does the Company provide employees with a safe and
V
healthy working environment, with regular safety and
health training?
V
(4) Has the Company established effective career
development training plans?
V
(5) Does the Company follow regulations and international
standards in the customer health, safety, customer privacy,
marketing and labeling of its products and services, and set
polices and appeal procedures for protection of consumer’s
rights and interests?
(6) Does the Company formulate the supplier management

- 40 -

ImplementationStatus Non-implementation of the”
No Corporate Social Responsibility
Assessment Item
Best Practice Principles for
Yes Summary
TWSE/TPEx Listed Companies"
and its reasons
policies and require suppliers to follow relevant norms on and conduct overall evaluation and appraisal for the suppliers.
environmental protection, occupational safety and health,
or labor’s human rights, and disclose the implementation?
5. Did the company refer to the internationally accepted Depending on the actual situation in the future, the company will




The Company currently
committee itself to CSR in
accordance with applicable law
and regulations.The Company
may draft relevant principles
depending on circumstances in
the future.
standards or guidelines for the preparation of reports to
V		 refer to the internationally accepted report preparation standards
prepare corporate social responsibility reports and other or guidelines, prepare corporate social responsibility reports and
reports
that
expose
the
company's
non-financial

other reports that disclose the company's non-financial
information? Has the disclosure report obtained the information, and obtain confirmation or guarantee opinions from
assurance or assurance opinion of the third-party third-party verification units.
verification unit?
6. If the company has established its CSR best practice principles according to the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed
Companies”, please describe the operational status and differences: The Company has established the Corporate Social Responsibility Best Practice Principles”according to
the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies”. There is no significant difference between the Principles and the
implementation of the Principles.
7. Other important information to facilitate better understanding of the company’s implementation of CSR: The Company has applicable management regulations on
employee benefits and suppliers’ relationship in place. In terms of employee benefits, the Company set up an Employee Benefits Committee. The Company also has
effective communication channels with banks,creditors,clients and suppliers.
8.Other information regarding“CorporateResponsibilityReport ”which is verified bycertifyingbodies: None

- 41 -

7. The state of the company’s performance in the area of good faith

Assessment Item Implementation Status Implementation Status Implementation Status Non-implementation of the
“Ethical Corporate
Management Best Practice
Principles for TWSE/TPEx
listed Companies”
Yes No Summary
1. Establishment of Corporate Ethics Principles and Implementation Programs
(1)Does the Company have its regulations and publicly available documents
addressing its corporate ethics principles and programs, and the
commitment regarding implementation of such programs from the Board
of Directors and the management team?		 V
V
V		 (1) The Company has established the “Corporate Ethics Principles”
and the “Procedure of Implementing Corporate Ethics and
Guidelines for Conduct” (hereinafter collectively referred to as
“Code of Ethics”). The Company’s staff and members of Board
of Directors shall believe in the Code of Ethics and put it into
practice, and then ensure strict compliance in respect of
internal management and external commercial activities.
(2) The Company’s staff and members of Board of Directors fully
comply with the Code of Ethics. In doing so, it is not necessary
to establish relevant programs, which aim to prevent unethical
conduct, and covered the preventive measures for each of the
acts in paragraph 2 of Article 7 of the "Code of Integrity
Management of Listed OTC Companies"
(3)It is not necessary to establish relevant programs, which aim to
prevent unethical conduct. The Code of Ethics sets forth
anti-bribery, corruption and illegal political contributions.

No Significant Difference
No Significant Difference
No Significant Difference
(2) If the company has established a risk assessment mechanism for
dishonest conducts, regularly analyzed and evaluated business activities
with higher risk of dishonest conduct in the business scope, and
formulated a plan to prevent dishonest conduct according to the
mechanism, and at least covered the preventive measures for each of the
acts in paragraph 2 of Article 7 of the "Code of Integrity Management of
Listed OTC Companies" ?
(3) Does the company establish appropriate preventive measures for the
business activities prescribed in Paragraph 2, Article 7 of the “Ethical
Corporate Management Best Practice Principles for TWSE/TPEx Listed
Companies” or any other such activities associated with high risk of
unethical conduct, and regularly review the plan before the amendment?
2. Ethic Management Practice V (1) Adopting “Corporate Ethics Principles” and the “Procedure of
Implementing Corporate Ethics and Guidelines for Conduct”
for the purpose of creating an ethical businessculture and
preventing Directors and managers from engaging in unethical
conduct. These relevant regulations also avoid conflicts of
interest and provide appropriate channels for Directors and
managers to explain their personal interests, which may
potentially conflict with the Company. Furthermore, the
Company’s relevant staff is prohibited from entering into
contract with any unethical supplier, client or entities having
business relationship with the Company. Once any unethical
conduct is found by the Company, the business relation with
such abusiness partner or counterpart involving in the unethical
conduct should be terminated. To follow the Code of Ethics,		 No Significant Difference
(1) Does the company assess the ethics records of whom it has business
relationship with and include business conduct and ethics related clauses
in the business contracts?

- 42 -

Assessment Item Implementation Status Implementation Status Implementation Status Non-implementation of the
“Ethical Corporate
Management Best Practice
Principles for TWSE/TPEx
listed Companies”
Yes No Summary
V
V
V
V		 the business partner or counterpart will be placed on a blacklist.
(2) The Company appointed the Audit Department as the
responsible unit, which is in charge of revising, enforcing,
interpreting the Procedure and Guidelines for Conduct, and
registry of consultation and reporting. The Audit Department
shall regularly report its work on monitoring of corporate ethics
management to the Board of Directors.
(3) The Company has built an effective accounting system, internal
control system and auditing system. These systems are required
to be reviewed and revised to meet updated legal requirements
and practical needs. The Company also conducts regular
internal audit to ensure effectiveness of such systems and their
implementation and then achieve the goal of corporate
governance, risk management and ethics in operations.
(4) For activities with high risk of unethical conduct, the Company
has built an effective accounting system, internal control
system and auditing system.These systems are required to be
reviewed and revised from time to time to ensure effectiveness
of such systems and their implementation. In addition, internal
auditors conduct regular auditing activities to assess
compliance performance and submit auditing reports to the
Board of Directors.
(5) The Company organized meetings in relation to ethical
corporate where it is appropriate.


No Significant Difference
No Significant Difference
No Significant Difference
No Significant Difference
(2) Does the company set up a dedicated (part-time) unit under the board of
directors to promote corporate integrity management, and regularly (at
least once a year) report to the board of directors on its integrity
management policies and plans for preventing dishonest conducts and
monitoring implementation?
(3) Does the company establish policies to prevent conflict of interests,
provide appropriate communication and complaint channels and
implement such policies properly?
(4) Does the company establish an effective accounting system and internal
control system for the implementation of honest operation, and the internal
audit unit draw up relevant audit plans based on the assessment results of
the dishonest conducts risks, and according to the compliance status of the
plan to audit and prevent dishonest conducts, or entrust an CPA to perform
the audit?
(5) Does the company provide internal and external ethical conduct training
programs on a regular basis?
3. Implementation of Complaint Procedures
V
V
V		 (1)The Company provides an effective channel to receive and
respond to employees’ complaints by the specified department
and staff. Complainants’ identity information and substance of
complaints are required to be kept confidential.
(2) The Company’s responsible person will look into complaints
and then report the assessment to his/her direct supervisor. The
confidentiality will be maintained thoroughly in the process.
(3)To protect complaints, the confidentiality will be maintained
thoroughlyin theprocess.		 No Significant Difference
No Significant Difference
No Significant Difference
(1)Does the company establish specific complaint and reward procedures, set
up conveniently accessible complaint channels, and designate responsible
individuals to handle the complaint received?
(2)Does the company establish standard operation procedures for investigating
the complaints received and ensuring such complaints are handled in a
confidential manner?
(3)Does the company adopt proper measures to prevent a complainant from
retaliation for his/her linga complaint?
4. Information Disclosure V The Company has set up its website. In the future, the Company
will improve its website depending on its needs and disclose
ethics-related information on the website.

No Significant Difference
Does the company disclose its corporate ethics principles as well as
information on implementation of such principles on its website and Market
Observation Post System(“MOPS”)?
5.If the companyhas established its “Corporate Ethics Principles” accordingto the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx listed Companies”, please describe

- 43 -

Assessment Item Implementation Status Implementation Status Implementation Status Non-implementation of the
“Ethical Corporate
Management Best Practice
Principles for TWSE/TPEx
listed Companies”
Yes No Summary
the operational status and differences:
The Board meeting on June 8 2015 approved the “Procedure of Implementing Corporate Ethics and Guidelines for Conduct” and submitted to the Shareholders’ meeting on June 15 2015 for
further implementation and compliance of the Principles.
6. Other important information to facilitate better understanding of business ethics (e.g., review and revise the “Corporate Ethics Principles”):
During the course of trade and business with other firms, on the basis Company’s core value - “compliance of corporate ethics principles”, it will promote the Company’s principles to the
relevant firms and enhance employees’ awareness.
  1. If the company has adopted corporate governance best practice principles or related bylaws, the access of relevant information should be disclosed to the public:

The Company has established a number of regulations, for example“Corporate Governance Practices”, “Corporate Social Responsibility Best Practice Principles”, “Rules Governing the Scope of Powers of Independent Directors”, “Corporate Ethics Principles”, “Procedure of Implementing Corporate Ethics and Guidelines for Conduct”, “Rules of Procedure for Shareholders Meetings”, “Rules of Procedure for Meetings of the Board of Directors”, “Organization Regulations of the Audit Committee” and “Election Regulations of Directors”. The Company has carried out these regulations relating to corporate governance based on spirit of corporate governance. When the Company goes public, its information on corporate governance status is available on it official website. The Company’s website: www.engley.com.

  1. Other important information to facilitate better understanding of the company’s implementation of corporate governance can be disclosed: None

- 44 -

  1. Internal control system execution status

開曼英利工業股份有限公司 內部控制制度聲明書

日期：110年03月16日

本公司民國 109 年度之內部控制制度，依據自行評估的結果，謹聲明如下：

  • 一、本公司確知建立、實施和維護內部控制制度係本公司董事會及經理人之責任，本公司業已建立 此一制度。其目的係在對營運之效果及效率(含獲利、績效及保障資產安全等）、報導具可靠性、 及時性、透明性及符合相關規範暨相關法令規章之遵循等目標的達成，提供合理的確保。

  • 二、內部控制制度有其先天限制，不論設計如何完善，有效之內部控制制度亦僅能對上述三項目標 之達成提供合理的確保；而且，由於環境、情況之改變，內部控制制度之有效性可能隨之改變。 惟本公司之內部控制制度設有自我監督之機制，缺失一經辨認，本公司即採取更正之行動。

  • 三、本公司係依據「公開發行公司建立內部控制制度處理準則」（以下簡稱「處理準則」）規定之內 部控制制度有效性之判斷項目，判斷內部控制制度之設計及執行是否有效。該「處理準則」所 採用之內部控制制度判斷項目，係為依管理控制之過程，將內部控制制度劃分為五個組成要素： 1.控制環境，2.風險評估，3.控制作業，4.資訊與溝通，及5.監督作業。每個組成要素又包括 若干項目。前述項目請參見「處理準則」之規定。

  • 四、本公司業已採用上述內部控制制度判斷項目，評估內部控制制度之設計及執行的有效性。

  • 五、本公司基於前項評估結果，認為本公司於民國109年12月31日的內部控制制度﹙含對子公司之監 督與管理﹚，包括瞭解營運之效果及效率目標達成之程度、報導係屬可靠、及時、透明及符合相 關規範暨相關法令規章之遵循有關的內部控制制度等之設計及執行係屬有效，其能合理確保上 述目標之達成。

  • 六、本聲明書將成為本公司年報及公開說明書之主要內容，並對外公開。上述公開之內容如有虛偽、 隱匿等不法情事，將涉及證券交易法第二十條、第三十二條、第一百七十一條及第一百七十四 條等之法律責任。

  • 七、本聲明書業經本公司民國110年03月16日董事會通過，出席董事7人中，有0人持反對意見，餘均 同意本聲明書之內容，併此聲明。

開曼英利工業股份有限公司

董事長：簽章

總經理：簽章

- 45 -

  1. For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, any sanctions imposed in accordance with applicable laws upon the Company or its internal staff, any sanctions imposed by the Company upon its internal staff for violations of internal control system provisions, principal deficiencies, and the state of any efforts to make improvements need to be disclosed: None

  2. For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, major resolutions of shareholders’ meetings and board meetings are as follows:

(1) Shareholders’ Meeting

ows:
Shareholders’ Meeting
The Date of the
Shareholders’ Meeting		 Major Resolutions
Annual Shareholders’
Meeting on June 19 2020		 1.
The 2019 Business Report and Financial Statements.
2.
The Proposed Profit Distribution for 2019.
3.
TheAmendments to theArticles of Incorporation.
4.
The Amendments to the CAYMAN ENGLEY INDUSTRIAL CO.,
LTD.PROCEDURAL RULES OFGENERAL MEETINGS

  • 2020 Annual Shareholders’ Meeting approved the following resolutions:

  • a. The 2019Business Report and Financial Statements:

Resolution: Approved.

  • b. The Proposed Profit Distribution for 2019:

Resolution: Approved.

  • c. The Amendments to the Articles of Incorporation:

Resolution: The Articles of Incorporation was approved by General Registy of the Cayman Islands Government on July1st, 2020. The revised version is available on the Company’s website and applied to business operations.

  • d. The Amendments to the CAYMAN ENGLEY INDUSTRIAL CO., LTD. PROCEDURAL RULES OF GENERAL MEETINGS

Resolution: Approved.

  • (1) Board Meetings
Board Meetings
Meeting Date Session Proposal
February 25 2020 The 15th
Meeting
during the
4thBoard		 Cayman Engley Industrial Co., Ltd. (hereinafter referred to as the Compjany) provided a
guarantee toKcompany, Netherlands (Kranendonk BeheersmaatschappijB.V)
Proposal of amendments to “Rule of Procedure of Shareholder’s Meeting”
March 27 2020 The 17th
Meeting
during the
4thBoard		 Proposalof 2019remunerationdistribution foremployees, directors, and supervisors
Reviewed the proposal of the performance evaluation, remuneration policies, systems,
criteria and structurefordirectors,independent directors andmanagers
2019manager remunerationchecklist
Report on the performance evaluation of the directors and the Board reviewed by the
RemunerationCommittee
2019 Operation Report and Final Accounts
2019ProfitDistribution Plan
The proposal of Statement of Internal Control System during January 1~December 31,
2019
Amendments to the ”Rules of Procedures for the Board of Directors Meetings”, ”Rules
of Procedures for the Remuneration Committee Meetings”, “Regulations Governing
Procedurefor Board of DirectorsMeetings”and“Audit Committee Charters”
Amendments to the “Procedures for Ethical Management and Guidelines for Conduct”,
“Corporate Governance Best Practice Principles”, and “Corporate Social Responsibility
BestPracticePrinciples”.
Amendmentstothe“Managementof FinancialStatement Preparation Procedures”
Amendments to the“Articles of Association”

- 46 -

Meeting Date Session Proposal
Approval for the Letter of Commitment issued by the subsidiary Changchun Engley
AutomobileIndustry Co.,Ltd. (hereinafter referred to as“EngleyAutomobile”)
Approval for the Letter of Commitment issued by the subsidiary Changchun Engley
Automobile Industry Co.,Ltd. (hereinafter referredtoas“EngleyAutomobile”)
May 13 2020 The 18th
Meeting
during the
4thBoard		 Partial revisionof “Operational Proceduresfor Lending Capitalto Others”
Ratification of the guarantee provided by the Company to Tianjin Engley
Manufacturing Co., Ltd. (hereinafter referred to as “Tianjin Engley”)
June 19 2020 The 19th
Meeting
during the
4thBoard		 The Company provided a guarantee to Tianjin Engley Manufacturing Co., Ltd.
(hereinafter referred to asTianjin Engley)
The Company provided a guarantee to Tsingtao Engley Auto Part Co., Ltd. (hereinafter
referred to as Tsingtao Engley)
The Company provided a guarantee to Taizhou Maoqi Metal Co., Ltd. (hereinafter
referred to as Taizhou Maoqi)
The Company provided a guarantee to Linde+Engley (Tianjin) Auto Parts Co., Ltd.
(hereinafter referred to asLinde+Engley (Tianjin))
August 11 2020 The 20th
Meeting
during the
4thBoard		 Amended the company’s “Handbook Rules for Shareholders’ Meetings”, “Code of
Agenda for Board Meetings”, “Code of Ethical Conduct”, “Organizational Rules for the
Remuneration Committee”, “Rules for Dutiful Scope of Independent Directors” and
“BoardAssessmentMeasures”
Approval of the proposal that the subsidiary Changchun Engley Automobile Industry
Co., Ltd.（hereinafter referred to as “Engley Automobile”）presented a Letter of
Commitment
The Company provided a guarantee to Ningbo Maoxiang Material Co., Ltd.
(hereinafter referred to as NingboMaoxiang)
The Company provided a guarantee to Taizhou Maoqi Metal Co., Ltd. (hereinafter
referred to asTaizhouMaoqi)
View the disguised financing situation of the group companies in accordance with the
regulations prescribed by the competent authority
September 01 2020 The 21th
Meeting
during the
4thBoard		 Canceledguarantee to Kranndonk BeheersmaatschappijB.V.
Proposal of lending capitals to the subsidiary - Kranendonk Beheersmaatschappij B.V.
November 10 2020 The 22th
Meeting
during the
4thBoard		 View the Group's disguised financing situation of current quarter
November 24 2020 The 23th
Meeting
during the
4thBoard		 The company's simplified consolidated financial forecast for the fourth quarter of 2020
December 22 2020 The 24th
Meeting
during the
4thBoard		 The proposalof 2020 year-end bonus distribution
The proposal of the adjusted remuneration paid to managers based on a monthly basis in
2021
Proposalof 2021 Annual Budget and Operation Plan
Proposal of 2021 Annual Internal Audit Plan
Approalthe Company. prenseted aLetterofCommitment
Reduce the important subsidiary, Changchun Engley Automobile Industry Co., Ltd.
(hereinafter referred to as "Changchun Engley Company") with a total of shares reaching
10%
Proposed to increase capital for the subsidiaryEngleyIndustrialCo.,Ltd.
Proposalof lending capitals to the subsidiary- Kranendonk BeheersmaatschappijB.V.
The company continues to provide guarantee to Ningbo Maoxiang Metal Co., Ltd.
(hereinafter referred to as NingboMaoxiang)
Amended the company's "Administrative Measures for Endorsement Guarantee"
partially
March 16 2021 The 25th
Meeting
during the
4th Board		 Proposalof 2020remunerationdistribution foremployees, directors, and supervisors
Reviewed the proposal of the performance evaluation, remuneration policies, systems,
criteria and structurefordirectors,independent directors andmanagers
2019manager remuneration checklist
Report on the performance evaluation of the directors and the Board reviewed by the
RemunerationCommittee
2020 Operation Report andFinal Accounts
2020ProfitDistribution Plan
The proposal of Statement of Internal Control System during January 1~December 31,
2020
Proposal of amendmentsto“Rule of Procedure ofShareholder’sMeeting”
Proposalofamendments to“The process ofpreparingfinancial report”
Approval of the proposal that the subsidiary Changchun Engley Automobile Industry
Co., Ltd.（hereinafter referred to as “Engley Automobile”）presented a Letter of
Commitment
The Company provided a guarantee to Linde+Engley (Tianjin) Auto Parts Co., Ltd.
(hereinafter referred to asLinde+Engley (Tianjin))

- 47 -

Meeting Date Session Proposal
March 23 2021 The 26th
Meeting
during the
4th Board		 The company's simplified consolidated financial forecast for the first quarter of 2021
  1. Any Director or Supervisor had a Recorded or Otherwise Written Dissenting Opinion on Major Resolutions made by the Board of Directors in the Most Recent Year and as of the Date of Publication of the Annual Report

None

  1. Resignation or Dismissal of Chairman, General Manager, and heads of Accounting, Finance, Internal Audit and R&Din the Most Recent Year and as of the Date of Publication of the Annual Report

None

E. Accountant Fees

Accountant Fees Accountant Fees
AccountingFirm Name ofCPA CPA’sAuditPeriod Remark
PricewaterhouseCoopers
Taiwan		 LIU, MEI-LAN YANG,
MING-CHIN		 2020.01.01-2020.12.31
Unit: NTD1,000
Accounting Firm Name of CPA Audit
Fee		 Non-Audit Fee CPA’s
Audit
Period		 Remark
System
Design		 Business
Registration		 Human
Resource		 Others Subtotal
PricewaterhouseCoopers
Taiwan		 LIU,MEI-LAN 12,663 - 1,018 - - 1,018 2020.01.01~
2020.12.31
YANG,
MING-CHIN
  • F. Information on Replacement of CPAs

None

  • G. The Company’s Chairman, General Manager,Managers in Charge of its Finance and Accounting Operations did not hold any positions within the Company’s Independent Audit Firm or Its Affiliates in the Past Year

None

  • H. Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report. Where the counterparty in any such transfer or pledge of equity interests is a related party, disclose the counterparty's name, its relationship between that party and the company as well as the company's directors, supervisors, and ten-percent shareholders, and the number of shares transferred or pledged
Title Name 2020 2020 Current year to May 7, 2021 Current year to May 7, 2021
Net Change in
Shareholding		 Net Change in
EquityPledge		 Net Change in
Shareholding		 Net Change in
EquityPledge
Chairman&
Majority
Shareholder		 Honghan Industrial Co., Ltd.
Representative: Lin, Chi-Pin		 － － － －
Director Top-Gain Enterprises Ltd.
Representative: Chen,
Jung-Juan		 － － － －
Director Broad Light Consultants Ltd.
Representative:
Lin,
Chun-Pang

－		 － － －

- 48 -

Title Name 2020 2020 Current year to May 7, 2021 Current year to May 7, 2021
Net Change in
Shareholding		 Net Change in
EquityPledge		 Net Change in
Shareholding		 Net Change in
EquityPledge
Director Tsai, Meng-Han － － － －
Independent
Director		 Liou, Cheng-Hwai － － － －
Independent
Director		 Yeh, Chih-Ming － － － －
Independent
Director		 Hsu, Ching-Tao － － － －
General
Manager		 Lin, Chi-Pin － － － －
Executive
Assistant to
Chairman and
CFO		 Yang, Cheng-Feng － － － －

I. Information about any one of the top 10 shareholders who is the interested party to, or has marriage relationship with and is a relative within the second degree of kinship of another

April 19, 2021; Unit: 1, 000 shares; %

Name Current
Shareholding		 Current
Shareholding		 Spouse and
Minor
Shareholding		 Spouse and
Minor
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Remark
Shares % Shares % Shares % Name Relation
Honghan
Industrial
Co., Ltd.
Representati
ve:
Lin, Chi-Pin		 26,100 22.12 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited
Double Luck Investment
Limited
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
BroadLight
Consultants
Ltd.
Representati
ve:
Lin, Chi-Pin		 10,000 8.47 ─ ─ ─ ─ Honghan Industrial Co., Ltd.
Top-Gain Enterprises Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited.
Double Luck Investment
Limited
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Top-Gain
Enterprises
Ltd.
Representati
ve:
Lin, Chi-Pin		 10,000 8.47 ─ ─ ─ ─ Honghan Industrial Co., Ltd.
BroadLight Consultants Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited.
Double Luck Investment
Limited
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Bright 9,000 7.63 ─ ─ ─ ─ BroadLight Consultants Ltd. Same representative ─

- 49 -

Name Current
Shareholding		 Current
Shareholding		 Spouse and
Minor
Shareholding		 Spouse and
Minor
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Remark
Shares % Shares % Shares % Name Relation
Success Inc.
Representati
ve:
Lin, Chi-Pin		 Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Able Well International
Limited.
Able Gain Investment
Limited
Double Luck Investment
Limited.
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Able Well
International
Limited
Representati
ve:
Lin, Chi-Pin		 9,000 7.63 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Bright Success Inc.
Able Gain Investment
Limited
Double Luck Investment
Limited
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Able Gain
Investment
Limited
Representati
ve:
Lin, Chi-Pin		 7,995 6.78 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Bright Success Inc.
Able Well International
Limited
Double Luck Investment
Limited.
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Double
Luck
Investment
Limited
Representati
ve:
Lin, Chi-Pin		 5,120 4.34 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited
Superb Goal Ventures
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Superb Goal
Ventures
Limited
Representati
ve:
Lin, Chi-Pin		 5,120 4.34 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited
Double Luck Investment
Limited
Jade Profit CompanyLimited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─
Jade Profit
Company
Limited
Representati
ve:
Lin, Chi-Pin		 5,120 4.34 ─ ─ ─ ─ BroadLight Consultants Ltd.
Top-Gain Enterprises Ltd.
Honghan Industrial Co., Ltd.
Bright Success Inc.
Able Well International
Limited
Able Gain Investment
Limited
Double Luck Investment
Limited		 Same representative
Same representative
Same representative
Same representative
Same representative
Same representative
Same representative		 ─

- 50 -

Name Current
Shareholding		 Current
Shareholding		 Spouse and
Minor
Shareholding		 Spouse and
Minor
Shareholding		 Shareholding
by Nominee
Arrangement		 Shareholding
by Nominee
Arrangement		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Any one of the top 10 shareholders who is the
interested party to, or has marriage relationship with
and is a relative within the second degree of kinship
of another		 Remark
Shares % Shares % Shares % Name Relation
Superb Goal Ventures
Limited		 Same representative
Fubon Life
Insurance
Co., Ltd
Representati
ve:
Tsai Ming
Xing		 2,831 2.40 ─ ─ ─ ─ ─ ─ ─

J. The shares of the same re-invested enterprise held respectively by the Company, its Directors and Supervisors, managers , and any companies controlled directly or indirectly by the Company, and the combined percentage of shares held by such entities and persons

Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons		 Directors and Supervisors,managers, and any companies controlled directly or indirectly
by the Company, and the combined percentage of shares held by such entities and persons
Unit: 1,000 shares /%;December 31 2020
Re-invested Enterprise (Note 1) Ownership by TSMC Ownership by Directors,
Managers and
Directly/Indirectly Owned
Companies		 Total Ownership
Shares % Shares % Shares %
Changchun Engley Automobile Industry
Co., Ltd.		 1,298,704
96.57%
─
─
─
96.57%
Engley Automobile Industry Co., Ltd Note 2
100%
─
─
─
100%
Engley Holding (Samoa) Limited 16,000
80%
4,000
20%
20,000
100%
Changchun Engley Auto Parts Co., Ltd. Note 2
100%
─
─
─
96.57%
Chengdu Engley Auto part Co., Note 2
100%
─
─
─
96.57%
Suzhou Engley Auto Part Co., Ltd. Note 2
100%
─
─
─
96.57%
Liaoning Engley Auto Part Co., Ltd. Note 2
100%
─
─
─
96.57%
Changchun Lightweight Technology Co.,
Ltd.		 Note 2
100%
─
─
─
96.57%
Changsha Engley Auto Part Co., Ltd. Note 2
100%
─
─
─
96.57%
Yizheng Engley Auto Part Co., Ltd. Note 3
100%
─
─
─
96.57%
Foshan Engley Auto Part Co., Ltd. Note 4
100%
─
─
─
96.57%
Tsingtao Engley Auto Part Co., Ltd. Note 2
100%
─
─
─
96.57%
Linde+Engley (Tianjin) Auto Parts Co.,
Ltd.		 Note 2
54%
─
─
─
52.15%
Linde+Engley (Changchun) Auto Parts
Co.,		 Note 2
54%
─
─
─
52.15%
Tianjin Engley Manufacturing Co., Ltd. Note 5
100%
─
─
─
96.57%
Ningbo Maoxiang Material Co., Ltd. Note 2
51%
─
─
─
49.25%
Taizhou Maoqi Metal Co., Ltd. Note 1
51%
─
─
─
49.25%
Jilin Jinli Auto part Co., Ltd. Note 2
23%
─
─
─
22.21%
Chengdu Youli Auto part Co., Ltd. Note 2
20%
─
─
─
19.31%
Honley Auto. Parts Co.,Ltd 86,000
36.64%
─
─
86,000
38.63%
Constellium Engley (Changchun)
Automotive Structures Co., Ltd.		 Note 2
46%
─
─
─
44.42%

- 51 -

Re-invested Enterprise (Note 1) Ownership by TSMC Ownership by TSMC Ownership by Directors,
Managers and
Directly/Indirectly Owned
Companies		 Ownership by Directors,
Managers and
Directly/Indirectly Owned
Companies		 Total Ownership Total Ownership
Shares % Shares % Shares %
CECK Holdings Co., Limited(Note 6) 11,500
(Note 1)

81%
─
─
11,500
(Note1)

38.63%
Changchun CECK Auto. Parts Co.,Ltd.
(Note 6)		 Noe 2
46.82%
─
─
─
45.21%
Chongqing HC&C Auto Parts Co., Ltd
(Note 6)		 Note1
22%
─
─
─
21.25%
Engley Precision Industry B.V. 0.484
87.90%
0.121
12.1%
0.605		 100.00%
Kranendonk Beheersmaatschappij B.V. Note1
90.925%
Note 2
9.075%
─		 100.00%
Zhejiang Sanse Mold Technology Co.,
Ltd		 Note 2
20%
─
─
─
19.31%
Ningbo Engley Automobile Industry
Co.,Ltd		 Note 2
100%
─
─
─
96.57%
Wiser Decision Holding Company
Limited		 3,500
(Note 1)

100%
─
─
─
96.57%
Chi Rui (Cayman) Holding Limited 44,200 12.17%
─
─
─
11.75%

Note 1 ： The Company uses equity method to make investment: Please see “the Investment Structure” on page 7. Note 2 ： Limited Liability Company cannot issue stock.

  • Note 3 ： Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Auto Part Co., Ltd. jointly own 100% of shares of Yizheng Engley Auto Part Co., Ltd.

  • Note 4 ： Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Auto Part Co., Ltd. jointly own 100% of shares of Foshan Engley Auto Part Co., Ltd.

  • Note 5 ： Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Auto Part Co., Ltd. jointly own 100% of shares of Tianjin Engley Manufacturing Co., Ltd.

  • Note 6：Honley Auto. Parts Co.,Ltd reinvests in Changchun CECK Auto. Parts Co.,Ltd. and Chongqing HC&C Auto Parts Co., Ltd through CECK Holdings Co., Limited.

- 52 -

IV Capital Raising

A. Capital and Shares

1. Source of Capital

(1) Capitalization

Month/Year Issue Price Approved Capital Approved Capital Paid-in Capital Paid-in Capital Remark Remark Remark

Shares		 Amount Shares Amount Source of Capital
Capital
Increase by
Assets
Other than
Cash		 Others
2015/01/16 NTD$10 1 10 ─ ─ Capital stock for
establishment of
the Company		 ─ None
2015/05/05 NTD$10 300,000,000 3,000,000,000 100,000,000 1,000,000,000 Stock Swap ─
2016/01/25 NTD$147 300,000,000 3,000,000,000 110,000,000 1,100,000,000 Note ─
2018/08/10 NTD$147 300,000,000 3,000,000,000 119,000,000 1,190,000,000
Capital increase
for cash by
issuing new
shares		 ─
2019/03/04 - 300,000,000 3,000,000,000 118,007,000 1,180,070,000 Retirement of
treasure stock		 ─

Note: The first capital increase for cash by issuing 10,000,000 new shares was approved by Tai-zheng-shang (2) tzu No. 1041706472 on December 30, 2015.

  • (2) Type of Stock

Unit: Share

Unit: Share
Type of Stock ApprovedCapital Remark
IssuedShares UnissuedShares Total
Common Stock
118,007,000		 181,993,000 300,000,000
  1. Composition of Shareholders

April 19,2021

April 19,2021
Type of
Shareholders
Quantity

Government
Agencies		 Financial
Institutions		 Other Juridical
Persons		 Natural Persons Foreign
Institutions and
Foreigners		 Total
Number of Shareholders - 12 23 3,184 80 3,299
Shareholding - 4,373,592 4,704,329 18,253,618 90,675,461 118,007,000
HoldingPercentage(%) - 3.71% 3.99% 15.47% 76.83% 100%

Note: Mainland investors holds 0.72% of shares.

- 53 -

3. Distribution Profile of Share Ownership

Face value per share is NT$10 ； April 19, 2021

Shareholder Ownership (Unit: Share) Number of
Shareholders		 Ownership Ownership
Percentage
1
-
999		 338 42,419 0.04
1,000
-
5,000		 2,361
4,159,081
3.52
5,001
-
10,000		 264
2,043,049		 1.73
10,001
-
15,000		 88 1,125,657 0.95
15,001
-
20,000		 46 856,503 0.73
20,001
-
30,000		 58 1,480,812
1.25
30,001
-
50,000		 51
1,988,707		 1.69
50,001
-
100,000		 40 2,780,516 2.36
100,001
-
200,000		 25 3,504,993 2.97
200,001
-
400,000		 9 2,395,300 2.03
400,001
-
600,000		 3 1,506,517 1.28
600,001
-
800,000		 2
1,486,099		 1.26
800,001
-
1,000,000		 2
1,854,372
1.57
1,000,001
-
5,000,000		 3 5,327,723 4.51
5,000,001
-
10,000,000		 8 61,355,252
51.99
Over 10,000,001 1
26100000		 22.12
Total 3,299
118,007,000
100.00

4. Major Shareholders

Name, number of shares and ownership percentage of shareholders with more than 5% of shares, or the top ten shareholders

shares, or the top ten shareholders
April 19,2021;Unit: Share
Shares
Name of Major Shareholders
Registered
country		 Number of
Shares		 Ownership
Percentage
Honghan Industrial Co., Ltd. Samoa 26,100,000 22.12%
BroadLight Consultants Ltd. Samoa 10,000,000 8.47%
Top-Gain Enterprises Ltd. Samoa 10,000,000 8.47%
Bright Success Inc. Samoa 9,000,000 7.63%
Able Well International Limited Samoa 9,000,000 7.63%
Able Gain Investment Limited Samoa 7,995,252 6.78%
Double Luck Investment Limited Samoa 5,120,000 4.34%
Superb Goal Ventures Limited Samoa 5,120,000 4.34%
Jade Profit Company Limited Samoa 5,120,000 4.34%
Fubon Life Insurance Co., Ltd R.O.C 2,831,000 2.40%

- 54 -

  1. Market Price, Net Worth, Earnings and Dividends Per Share and related information in the past two years

Unit: NT$; Thousand Shares

Unit: NT$;Thousand Shares
Item Year
2019		 2020
Market Price
Per Share		 Highest Market Price 133.50 111.50
Lowest Market Price 89.10 44.10
Average Market Price 115.45 85.67
Net Worth
Per Share		 Before Distribution 91.96 93.86
After Distribution 89.46 92.01
Earnings Per
Share		 Weighted Average Shares 118,010 118,007
Earnings Per Share 5.46 4.07
Dividends
Per Share		 Cash Dividends 2.5 1.85 (Note)
Bonus
Shares		 BonusShares ─ ─
Bonus Shares out
ofCapital Reserve
─		 ─
Accumulated Undistributed
Dividend		 ─ ─
Return on
Investment		 Price/Earnings Ratio 21.14 21.05
Price/Dividend Ratio 46.18 46.31
Cash Dividend Yield 2.17 2.16

Note: The proposal for 2020 profit distribution is subject toapproval of the shareholders’ meeting.

  1. Company's dividend policy and it implementation

  2. (1) Dividend Policy is set out in the Articles of Incorporation

In terms of Dividend Policy, Article 129 of the Articles of Incorporationprovides that:

As the Company continues to grow, the need for capital expenditure, business expansion and a sound financial planning for sustainable development, it is the Company's dividends policy that the dividends may be allocated to the Shareholders in the form of cash dividends and/or bonus shares according to the Company's future expenditure budgets and funding needs.

Unless otherwise provided in the Applicable Listing Rules, where the Company makes profits before tax for the annual financial year, the Company shall allocate (1) a maximum of eight percent (8%) and a minimum of zero point five percent (0.5%) of such annual profits before tax for the purpose of employees' remunerations (including employees of the Company and/or any Affiliated Company) (the "Employees' Remunerations"); and (2) a maximum of three percent (3%) and a minimum of zero point five percent (0.5%) of such annual profits before tax for the purpose of Directors’ remunerations (the “Directors’ Remunerations”). Notwithstanding the foregoing paragraph, if the Company has accumulated losses of the previous years for the annual financial year, the Company shall set aside the amount of such accumulated losses prior to the allocation of Employees' Remunerations and Directors’ Remunerations. Subject to Cayman Islands law and notwithstanding Article 139, the Employees' Remunerations and the Directors’ Remunerations may be distributed in the form of cash and/or bonus shares, upon resolution by a majority votes at a meeting of the Board of Directors attended by two-thirds (2/3) or more of the Directors. The resolutions of Board of Directors regarding the distribution of the Employees' Remunerations and the Directors’ Remunerations in the preceding paragraph shall be reported to the Shareholders at the general meeting after such Board resolutions are passed.

- 55 -

Unless otherwise provided in the Applicable Listing Rules, the net profits of the Company for each annual financial year shall be allocated in the following order and proposed by the Board of Directors to the Shareholders in the general meeting for approval:

  • a. to make provision of the applicable amount of income tax pursuant to applicable tax laws and regulations;

  • b.to set off accumulated losses of previous years (if any);

  • c. to set aside ten percent (10%) as Legal Reserve pursuant to the Applicable Listing Rules unless the accumulated amount of such Legal Reserve equals to the total paidup capital of the Company;

  • d. to set aside an amount as Special Reserve pursuant to the Applicable Listing Rules and requirements of the Commission; and

  • e. with respect to the earnings available for distribution (i.e. the net profit after the deduction of the items a. to d. above plus any previously undistributed cumulative Retained Earnings), the Board of Directors may present a proposal to distribute to the Shareholders by way of dividends at the annual general meeting for approval pursuant to the Applicable Listing Rules. Dividends may be distributed in the form of cash dividends and/or bonus shares, and, subject to Cayman Islands law, the amount of dividends shall be at least ten percent (10%) of the net profit after the deduction of the items a. to d. above. Cash dividends shall comprise a minimum of ten percent (10%) and a maximum of one hundred percent (100%) of the total dividends allocated to Shareholders.

  • (2) Distribution of stock dividends approved by the Shareholders’ Meeting.

The Company’s proposal for profit distribution with NT$1.85 cash dividend per share, totaling NT$ 218,313,000,was approved by the Board meeting on March 16, 2021and will submit it to the Annual Shareholders’ Meeting for recognition on June 17, 2021.

  1. Impact to Business Performance and EPS Resulting from Bonus Shares Distribution resolved by the Shareholders’ Meeting

N/A. There is no proposal for bonus shares distribution discussed at the Shareholders’ Meeting this year.

  1. Bonuses to employees, Directors, and Supervisors

  2. (1) Ratios of bonusesto employees, Directors, and Supervisors, as set forth in the Company’s Articles of Incorporation:

    • Please see the section 1.6 “Company's dividend policy and it implementation” for more information.

  3. (2) The basis of current estimates for bonuses to employees, Directors, and Supervisors, the basis of calculating shares for employees stock bonus, and accounting methods of handling differences between the actual distributed amount and estimated amount

    • The Company’s 2020 income from continuing operations before income tax is NT$ 489,770,000 before deducting bonuses to employees, Directors, and Supervisors. Given the Company’s profit performance in 2020, the bonuses to employees and Directors were distributed by cash and accounted for NT$ 2,449,000 and NT$ 6,700,000respectively in accordance with the Articles of Incorporation. If there is any discrepancy between the amounts above and actual distributed amounts approved by the Shareholders’ meeting, the Company will make changes in accounting estimates in the year of the Annual

- 56 -

Shareholders’ Meeting.

  • (3) The amounts of bonuses approved by the Board of Directors

  • The Board meeting on March 16 2021 determined that the bonuses to employees and Directors were distributed by cash and respectively accounted for NT$ NT$ 2,449,000 and NT$ 6,700,000 .

  • (4) The actual distribution of bonuses to employees, Directors, and Supervisors in the previous fiscal year (including shares to be distributed, monetary amount and stock price) , and if any differences between the actual distributed amounts and the recognized amount of bonuses to employees, Directors, or Supervisors, the differences, reasons of differences and any method to address the differences should be clarified

Unit:NT$ 1,000
Item Distributed Amount Approved
by the Board Meeting		 Actual Distributed Amount Form of Distribution
Bonus paid to
Employees		 3,277 3,277 Cash
Bonus paid to
Directors		 8,000 8,000 Cash
Total 11,277 11,277 Cash
  1. Repurchase of Common Stock

None.

  • B. Corporate Bonds

  • Issuance of Corporate Bonds

Total
11,277
Repurchase of Common Stock
None.
rporate Bonds
Issuance of Corporate Bonds		 11,277
Cash
Corporate Bond Type Second domestic unsecured convertible corporate
bond
IssuingDate June 22 2018
FaceValue NT$100,000
Place of issuance and trading N/A
OfferingPrice Par
Total Amount NT$400million
Interest Rate 0%
Term Threeyears;Maturity: June 22 2021
Assurance agency None
Trustee Department of Transfer Agency Service, SinoPac
SecuritiesCorporation
Underwriter FubonSecuritiesCorporation
Attorney Baker & Mckenzie Liang
Justin LIANG,David LIN
Accountant PricewaterhouseCoopers Taiwan
YANG,MING-CHIN,HSU CHIENYEH
Repayment Holders of convertible bonds could convert such
bonds into the Company common shares in
accordance with Article 13 of the Regulations on
Issuance and Conversion, or sell them back to the
Company under Article 21. The Company could
make one-off cash payment based on par value of a
bond whenconvertible bonds became due, except

- 57 -

Corporate Bond Type Corporate Bond Type Second domestic unsecured convertible corporate
bond
that the Company withdrew to redeem on the Taipei
Exchange.
Outstanding principal amount NT$400million
Terms of Redemption or Early
Repayment		 Early redemption under Article 21 of the
Regulations on Issuance andConversion.
Restrictions Article 7 and 29 of the Regulations on Issuance and
Conversion are as follows:
Article 7
The convertible bonds are unsecured securities.
However, the convertible bonds can be secured by
claims or in-rem rights at the same level as other
warrant-linked & secured bonds or secured
corporate bonds, which are issued publicly or
privately after the convertible bonds are issued.
Article 29
Any relevant matter, which is not set out in the
Regulations on Issuance and Conversion of
Convertible Bonds, should be governed by the
applicable laws and rules.
Credit rating agency, date of assessment
and corporate bond Name of Credit
Rating Agencies, rating date and rating
results		 N/A
Other Rights Amount of
Converted
(Exchange or
Subscription)
Common Shares,
Overseas
Depositary
Receipts or Other
Securities as of the
Date of Publication of
the Annual Report		 None
Regulations on
Issuance and
Conversion
(Exchange or
Subscription)		 Please see the Regulations on Issuance and
Conversion of the Second Domestic Unsecured
Convertible Corporate Bonds
Dilution Effect and Other Adverse
Effects on Existing Shareholders		 Please see the Regulations on Issuance and
Conversion of the Second Domestic Unsecured
ConvertibleCorporate Bonds
Custodian of the Subject After
Conversion		 N/A

- 58 -

2. Convertible Corporate Bond

2. Convertible Corporate Bond 2. Convertible Corporate Bond
Corporate Bond Type Second Domestic Unsecured Convertible
Corporate Bonds
Year
Item		 As of 31 March 2021
Market Price of Corporate
Convertible Bond		 Highest 103.60
Lowest 96.80
Average 100.84
Conversion Price NT$157.60
Issuing (processing) date and the conversion
price at the time of issuance		 June 22, 2018
NT$177

Conversion method		 Delivered by issuing new shares
  • C. Preferred Shares

None

  • D. Overseas DepositaryReceipts

None

  • E. Employee Stock Options

None

  • F. Employee Restricted Stock

None

  • G. New Share Issuance in Connection with Mergers and Acquisitions

None

  • H. Implementation plan of funding

None

- 59 -

V Overview of Business Operation

A. Business Activities

  1. Scope of Business

  2. (1) Main Business of the Company and its Subsidiaries

The main product categories of the group cover automobile parts, products in relation to stamping and hot-pressing process, design and manufacturing of mould, development of new composite material and technology consulting service. The end products includevarious auto parts such asvehicle body stamping parts, cockpit carriers, under body shields, front ends, vehicle body parts, moulds, spare wheel pans, wheel arch liners, battery trays and door moulds. Recently the Group has taken steps to raise its market footprint in solutions for welding, cutting and assembling through flexible-joint robots.

  • (2) Current Products (Services) and the ratios of the sales of main products to total operating revenue

The Group mainly manufactures, processes, and sells products made from aluminum alloys, rolling bumpers, plastic products, auto parts and accessories. The Group also has several production lines of stamping, welding and hot-pressing parts. The main products are as follows:

  • a. Metal parts ： vegicle body stamping parts, cockpit carriers and vehicle body parts.

  • b. Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans, battery trays and door moulds.

Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans,
battery trays and door moulds.		 Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans,
battery trays and door moulds.		 Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans,
battery trays and door moulds.		 Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans,
battery trays and door moulds.		 Non-metal parts: under body shields, front ends, wheel arch liners, spare wheel pans,
battery trays and door moulds.
Unit: NT$1,000;%
Year
Service Item
2019
2020
Operating
Revenue
% of total
operating revenue
Operating
Revenue
% of total
operating revenue
Metal
13,555,918
60.95
14,252,498
65.85
Non-metal
5,432,247
24.43
5,165,490
23.87
Mould and
others
3,251,708
14.62
2,226,164
10.28
Total
22,239,873
100.00
21,644,152
100.00
Year
Service Item
2019		 2020
Operating
Revenue		 % of total
operating revenue
Operating
Revenue		 % of total
operating revenue
Metal 13,555,918 60.95 14,252,498 65.85
Non-metal 5,432,247 24.43 5,165,490 23.87
Mould and
others
3,251,708
14.62
2,226,164
10.28
Total 22,239,873
100.00
21,644,152
100.00
  • (3) Plans of New Product Development

The Group’s business involves metal and non-metal auto parts. To satisfy differentiated needs of downstream OEMs, and maintain its leading role in the industry, the Company plans to develop the following new products and technology: 

  - a. Application of stamping parts made by aluminium alloys composites: they can be applied to cockpit carriers, front and rear bumpers and underframes.

  - b. Reinforcement of self-designed structure and its capability of CAE simulated analysis: improvement for durability of products and reduction of deformation.

  - c. Development of CFRP related products: it meets the trend toward lightweight vehicle parts in the future for the OEMs.

  1. Industry Overview

  2. (1) Industry Status and Development

Since the earliest stage of the modernautomotive industry in China started in 1953, FAW Manufacturing Plant has established a solid ground for the future car market in China. In the past few years. The overall sales of cars in China continue to grow. Up to the end of 2019, mainland China had been ranked as the largest car market in terms of sales for ten

- 60 -

consecutive years. It has been more than thirty years after China initiated its first economic reforms. Particularly in the 21[st] century, the automobile industry in China has been constantly and actively progressing and achieved world-famous acknowledgement.

Projected Sales of Energy - efficient Carsin China

Unit ： 10,000 units of vehicles

==> picture [421 x 249] intentionally omitted <==

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

Passenger Special
Vehicle (EV) Bus (EV) Purpose Vehicle (EV) Passenger Vehicle (PHEV) Bus (PHEV)
----- End of picture text -----

Source ： Ministry of Industry and Information Technology

As a result of emission reduction policies, the compound annual growth rate in the global electric vehicle (including hybrid electric vehicle) market may remain above 32%. The market scale in 2020 is expected to reach 12,110,000 units, offering an opportunity for electric vehicle industry to grow rapidly. On August 16, 2017, the Ministry of Industry and Information in China issued “Measures for the Parallel Administration of the Average Fuel Consumption and New Energy Vehicle Credits of Passenger Vehicle Enterprises”, which took effect on April 1[st.] , 2018These measures required auto companies producing or importing over 30,000 non-NEV passenger cars per year to earn NEV credits equal to a set percentage of their non-NEV sales in China, starting from 2019. The Chinese Industry Information study shows that the total sales of NEV will account for 11% of total car sales in 2022. The growth momentum is mainly driven by passenger vehicles. The numbers of passenger vehicles (EV) may amount to 2.4 million in 2022 respectively. The NEV credits scheme initiated in 2018 will be the main reason resulting in an increase in passenger vehicles.

As a result of recent structural changes in the global automobile industry, auto parts manufacturers’ role in the automobile industry becomes more important. Therefore, more and more R&D activities are conducted by them with the aim of creating more output value. Despite of great growth potential in the automotive industry in China, the market may face the phase of stable profits due to many exogenous future challenges, including energy, transportation and environmental protection.With these upcoming challenges, it is the key for auto parts manufacturers to pursue the goal of sustainable and balanced growth in terms of business profits and its performance.

  • (2) Relations of Upstream, Midstream and Downstream Companies

The automotive supply chain are amongthe most complex in the word – from design and provision of raw materials in the upstream to automotive assembly plants and aftermarket

- 61 -

services in the downstream. The automotive supply chain companies form a cross-industry networkwith other partners in related industries. The roles of auto parts in the automotive supply chain are illustrated in the diagram below.

下游
汽車之組車廠商
Downstrea
Car Assembly
汽車之維修服務廠商
Aftermarket Service
Providers
Upstream Midstream Downstream
Plastic and Rubber industries;
ABS, PP and rubber
Steel Industry;
Iron and steel manufacturing
Non-ferrous metal;
Copper, zinc and aluminum
Glass Industry;
Raw materials for glass
production
EE Industry
Electrical components
Electronic Industry
Electronic components		 Auto Parts
Bumpers, windshields
Engine hoods, motor vehicle
doors
Wheel rims, thermostat
Headlight, car windows
Car battery, electrical parts,
alternator
Car sensors, TV dashboards		 Car Assembly Plants
Aftermarket Service
Providers

Source: Taiwan Industry Economics Services

The diagram shows that production of auto parts involve technologies of casting, stamping, welding, machining and hot pressing, and final products include headlight, wheels, sheet metal parts, alloy wheels, engine hoods, bumpers and others auto parts. In the automotive industry, the supply chain firms have a very close relationship with each other and the interrelationship between them may affect the whole industry. As a result of the complex process of auto making and assembling, auto parts manufacturers and auto makers forms a synergy network with long term cooperation, and to some extent auto makers may engage into vertical integration with the upstream or downstream firms to some extent.

(3) Development of Auto Parts

The traits of the auto parts industry include high industry dependence, long supply chain and the ability of promoting economic growth. In terms of production methods, auto parts can be divided into four types: car engine, car chassis, car body and accessories as well as

- 62 -

electronic products. The Group mainly produces the following car body and accessories: 1) metal auto parts, including metal cockpit carrier, front and rear bumpers, car doors and under frames; 2) non-metal auto parts, including front ends, under body shields and wheel arch liners. Car weight has increased by 20% to 30% with more than ten years manufacturing experience as a result of comfort and safety considerations. However, in the context of the green transformation of the global economy, major automakers - for example, Volkswagen, BMW, Toyota, GM and Ford, move toward production of light cars. In addition, breakthroughs in raw materials and technologies also facilitate the development of lightweight design for future car body products.

Volkswagen Passat CC: the ratio of hot-pressing components to a car body

==> picture [401 x 197] intentionally omitted <==

Source: China Society of Automotive Engineers

The development trend of lightweight vehicles concerns not only comfort and convenience of products, but also energy consumption of them with the aim of reducing environmental impact. When a car is running, it is required to overcome several resistance forces, including rolling resistance, grade resistance, acceleration resistance and air resistance. In addition to air resistance, other types of resistance forces have a positive correlation with product quality. A research conducted by German Volkswagen showed that the fuel efficiency of a car can increase by 0.3-0.5 liters per 100 km when reducing the car weight by 0.1 ton. Lightweight also helps improve controllability and car acceleration.

As mentioned above, key industrial trends involve how to find lightweight materials (such as high-strength steel, Almelec and other metal molding technique), and application of molding techniques for special plastics and compositematerials. Through application of new materials and improving metal working process (for example, application of cockpit carrier made by aluminium alloys), the Company aims to supply lightweight materials with the same tensile strength. Alternatively, the Company uses parametric modeling of auto parts to buildmodels and utilize the new technology such thermoforming to meet the goal of lightweight car body requested by the downstream car makers.

  • (4) Competition in the Relevant Product Market

As China is the largest automotive market in the world, production of auto parts in the upstream continues to grow with expandingautomotive market in China and increasing car ownership. Integration of auto parts plants is crucial to future development strategy and policy of the auto parts industry in China,and ultimately to equip themselves with

- 63 -

more differentiated products and better product quality. For an auto parts manufacturer, when its products are used by tier 1 companiesin their automobile assembly lines, it representsthat the auto parts supplier’s products are rather competitive. The Group has established cooperative relation withtier 1 car companies for more than decades and gained their recognition. The Group also continues to invest in advanced equipment and improve innovative production process to develop and produce more competitive products. The reasons why notable automobile manufacturers favor the Group’s products are as follows: 

  - a. Advanced development of moulds: the Group’s ability of designing, manufacturing, and testing moulds not only meets industrial high standards but also guarantee for quality moulds and product development.

  - b. Long standing trust: since its inception, the Group has endeavored to establish cooperative relationship with car companies in China for more than decades. With advanced technical skills of product development, the Group has earned the trust of car companies in the downstream as their partner developers in many consecutive years.

  - c. Timely responses to customers’ requests: the Group ensures timely transmission of information from logistics or customers to the department of quality control and logistics management through our on-site support teams in order to discover problems in time and improve troubleshooting efficiency.

  1. Research and Development

  2. (1) R&D expenses in the most recent fiscal year and as of the date of publication of the annual report

logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report		 logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report		 logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report		 logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report		 logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report		 logistics management through our on-site support teams in order to discover problems
in time and improve troubleshooting efficiency.
Research and Development
(1) R&D expenses in the most recent fiscal year and as of the date of publication of the
annual report
Unit: NT$1,000
Year
Item
2016		 2017 2018 2019 2020
A.R&Dexpense 530,169 577,548 747,148 681,579 745,575
OperatingRevenue 15,582,053 18,879,842 21,855,386 22,239,873 21,644,152
A/B 3.40% 3.06% 3.42% 3.06% 3.44%
  • (2) Successful New Technology or Product Development

The Company has devoted itself to improving metalwork process of stamping, rolling and assembly welding. To achieve the goal of lightweight car, the Company has always invested a lot in composite materials, high strength steel, assembly stamping and aluminum alloy, and constantly seek the most sophisticated skill of processing auto parts. In terms of GMT thermo-compression, LFT online dosing, laser metal welding, high strength steel by rolling, aluminum alloy profile extrusion processed andheat treating, the Company made a technical breakthrough to increase production efficiency and product yieldand reduce cost. The table below shows the Company’s achievements of research and development in the past five years:

- 64 -

Year Achievement Description Applicatin Scope of Sales
2016 Engine shield Reinforcing flexibility, impact resistence and toughness of engine
shields.		 Applicable to
frontend molds		 Frontend molds
Car engine
underbody shield		 A shiled with stiffening ribs, drain holes and cooling&heating
vents can ensure its bearing capacity, heat dissipation and
drainability to extend product lifetime. Furthermore, the shiled is
surrounded by structures for punching and shearing to solve
trimming issuee, reduce manpower, increase production efficiecny
and lower costs.		 Appliable to
under body
shield		 Underbody shield
Reinforced car
engine underbody
shield		 Two sides of a car body are installed with S-shaped stiffening ribs
in order to increase its strength and toughness, and extend serivice
life. In addiiotn, the utility model is well designed with a number of
characteristics, including good drainage, efficient heat dissipation
and easy replacement and matainance to improve product
competitiveness.		 Appliable to
under body
shield		 Underbody shield
Nervous type Car
Frontend		 Instead of metal headlight brackets, seamless plastic headlight
brackets require less parts and processiong and benefit in
lightweight autoparts.		 Applicable to
front end module		 Frontend molds
Noise reduction and
muffler function of
the car engine
underbody shield		 Round dimples on a underbody shiled can reduce the weight of the
underbody shield by using less materials and save costs. This type
of shields can also eliminate noises and ensure that drivers are saef
on the road. Reinforced structure around mountings holes and the
right side of the underbody shield is strengthend with stiffening
ribs.		 Appliable to
under body
shield		 Underbody shield
Car instrument
panel beam		 A main tublar bracket with holes can discharg welding slag in time
and prevent noise pollution. The holes are sealed by buckets to
ensure high leakproofness, prevent bimetallic corrosion and
increase service life. Furthermore, the untility mode are
high-functioning,hight-integrated,lightweight and high-strength.		 Applicable to
Car instrument
panel beam		 Car instrument
panel beam
Frontend molds
quiet gondor,
strength test device.		 In response to trends of lightweight car and modularization and
needs of verifying frontend molds, the test device is designed to
verifyfrontend moldsquietgondor and strength.		 Applicable to
frontend module
testing		 Underbody shield
Frontend molds
Locks holding
position daishe test
device.		 Due to much higher standard of impact resistance for bonnet locks
of frontend molds during driving at full speed, the test device is
designed to verify the quality of the holding position in order to
meet the strength requirements of the frontend molds locks
holding position.		 Applicable to
Frontend molds
Locks holding
position daishe
test		 Frontend molds
Auto-water cutting
equipment		 An auto-water cutting equipment can satisfy the needs of various
modern car types with advantages of less molds and batch
production. The equipment can save space, increase precison and
improve work environment and safety for machine operators to
inspect and test molds for various parts with characteristics of
precise positioning, user-friendy operation system and easy
maintenance.		 Applicable to
production of
wheel arch liners		 Applicable to Audi
Q3
Robotic flame
handling / paint /
gas marking station		 Instead of manual operation, the Company adopted automatic
robots to complete the process of flame handling-painting-marking.
The pocess of painting is finished in a closed but purified space to
ensure production safety and consistant quality and prevent
operators form health hazards.		 Applicable to
production of
spare wheel pans
and door
modules		 Spare wheel pans
and door modules
Reinforced ring
connection
detection device		 Meeting requirements of strength, size and product quality by
adopting connection detection device.		 Applicable to
reinforcement
plate for car seats		 Applicable to
reinforcement plate
for car seats
Front bracket
auto-assembly
device		 Automatically clamping by adopting assembly torque wrenches to
quarantee product quality and increase efficiency at work.		 Applicable to
engine brackets		 Applicable to engine
brackets
Sound reinforced
bracket self-locking
nut auto-assembly
device		 Increasing efficiency at work by using sleeve nuts driven by
servomotors, automatic clamps and laser detectors in order to
measure distances and ensure assembly precision of self-locking
nuts.		 Applicable to
reinforcement
brackets for car
audio		 Various assembly
structures of
self-locking nuts
2017 A welding machine
with self-balancing
microsystems		 A welding machine with self-balancing microsystems is designed
to make microadjustment by automatically measuring angle of
inclination and changes inpressure		 Applicable to
robot welding for
autoparts		 Robot welding for
various auto parts
A vertical welding
mechanic with a test
system		 A vertical welding mechanic with a test system is designed to
inspect and detect at any time wear conditions of workpiece
brackets and pillars. The relevant data can be automatically saved
and recorded with an alarm system.		 Applicable to
robot welding for
auto parts		 Robot welding for
various auto parts
A coating
manipulator shifting
device		 A coating manipulator shifting device is degined to make
microadjustment and monitor the levelness by using machines,
which are able to move verticallyand horizontally.		 Applicable to
coated auto parts		 Various coated auto
parts
A Inspect mould
with nut
anti-reverse and
anti-leak function		 An user-friendly inspect mould with an appropriate design and a
simple structure has anti-reverse and anti-leak function.		 Applicable to
riveted parts		 Various riveted
parts

- 65 -

A Riveting
equipment with nut
anti-reverse and
inspection function		 An user-friendly riveting equipment with an appropriate design
and a simple structure has nut anti-reverse and inspection function.		 Applicable to
riveted parts		 Various riveted
parts
An anti-leakage
process
improvement device		 An anti-Leakage process improvement device is designed to
improve the current status of spot welding station, prevent mixture
of materials and eliminate safetyrisks.		 Applicable to
riveted parts		 Various riveted
parts
Roll pressure front
hole inspection
equipment		 A kind of roll pressure front hole inspection equipment. This
design overcomes the failure to inspections after punching roll
pressure front molds, and achieves the goal of inspecting holes
without impact onproduction andprocessing.		 Applicable to
door sills		 Car door sills
A new kind of
automatization
decorating
equipment		 A new kind of user-friendly and highly automated decorating
equipment with an appropriate design and a simple structure to
complement deficienices of current technologies.		 Applicable to
exterior A-Pillar
trims		 Various exterior
A-Pillar trims
A kind of
circulating water,
cold water
improvement device		 A kind of circulating water device for cold water improvement is
designed to improve the colling effect, extend the service life of
electrode covers and increase production capacity.		 Applicable to
cooling system
for resistenace
welding		 Resistance welding
parts
An extension
welding system		 An extension welding system is designed to solve issues of high
fatigue strength and low efficiency out of current technologies.		 Applicable to
resistance spot
welding parts		 Various resistance
spot welding parts
Detection device
with anti-error
function		 A user-friendly detection device with an appropriate design and a
simple structure has anti-error function.		 Applicable to
door sills		 Car door sills
A new type of
device to avoid
leakage riveting
nuts		 A new type of user-friendly device with an appropriate design and
a simple structur to avoid leakage riveting nuts.		 Applicable to
door sills		 Car door sills
An anti-leakage
process functional
device		 An anti-leakage process functional device is designed to improve
the current status of spot welding station, prevent mixture of
materials and eliminate safetyrisks.		 Applicable to
wheel arch liners		 Various wheel arch
liners
A roll pressure front
hole inspection
device		 A kind of roll pressure front hole inspection equipment. This
design overcomes the failure to inspections after punching roll
pressure front molds, and achieves the goal of inspecting holes
without impact onproduction andprocessing.		 Applicable to
door sills		 Car door sills
An efficient
self-bending
equipment		 A new kind of user-friendly and highly automated self-bending
equipment with an appropriate design and a sceintific structure to
complement deficienices of current technologies.		 Applicable to
exterior A-Pillar
trims		 Various exterior
A-Pillar trims
An electric circle,
water cooled circuit		 A kind of electric circle for water cooled circuit is designed to
improve the colling effect, extend the service life of electrode
covers and increase production capacity.		 Applicable to
cooling system
for resistenace
welding		 Resistance welding
parts
A new type stretch
welding machine		 An extension welding system is designed to solve issues of high
fatigue strength and low efficiency out of current technologies.		 Applicable to
resistance spot
welding parts		 Various resistance
spot welding parts
2018 Static stiffness and
strength testing
device for frontend
module		 In response to trends of lightweight car and modularization and
needs of verifying frontend molds, the testing device is designed to
verify static stiffness and strength of frontend molds.		 Frontend molds Frontend molds
Plastic front end
module
eight-character
beam structure		 It can increase stuctural strength of frontend moldes without locker
bracket but reduce total weight of a vehicle. This beam structure
has been applied widely in the process of designing frontend molds
so that it can improve promotion to customers. Particulay it is
appplicable to new eneger cars and traditional cars when
introducing customers products with reiforced structure, such as
eight-character beam structure.		 Framework
design of
frontend molds		 Frontend molds
Automatic water
cutting device		 An auto-water cutting equipment can satisfy the following needs:
capacity requirements, precision of parts, less labor costs and a
safe workplace for operators with the aim of improving product
quality, technology level and yield rates and ultimately reducing
costs.		 Wheel arch liner
for Audi Q3		 Hot-pressing wheel
arch liner
Robotic flame
handling / paint /
gas marking station		 Instead of manual operation, the Company adopted automatic
robots to complete the process of flame handling-painting-marking.
The pocess of painting is finished in a closed but purified space to
ensure production safety and consistant quality and prevent
operators form health hazards.		 Spare wheel pans
and door
modules		 Spare wheel pans
and door modules
Reinforcing ring
riveting detection
device		 Meeting requirements of strength, size and product quality by
adopting riveting detection device.		 Reinforcement
plate for car seats		 Reinforcement plate
for car seats
Front bracket
auto-assembly bolts
device		 Advanced automated manufacturing process by adopting electronic
torque wrenches and pneumatic type clampto quarantee product
quality and increase efficiency at work.		 Applicable to
bolt assembly,
requiring precise
torgue contorl		 Various engine
brackets

- 66 -

Sound reinforced
bracket self-locking
nuts auto-assembly
device		 Increasing efficiency at work by using sleeve nuts driven by
servomotors and automatic clamps in order to measure distances
and ensure assembly precision of self-locking nuts.		 Reinforcement
brackets for car
audio		 Various assembly
structures of
self-locking nuts
A complexation
multiple materials
CCB		 It’s weight reduced by 35%-45% with less R&D expenses and less
parts for assembly. It also ensures overall precision and minimize
deformation risks on CCB’s size, resulting from welding. Its
surface is anti-erosion. It also simplify processing procedure,
decrease takt time and increase efficiency.		 Applicable to
Car instrument
panel beam		 Car instrument
panel beam
A complexation
materials CCB		 1. Simplifing processing procedure, decreasing takt time and
increasing efficiency;
2. Minimizing deformation risks on CCB’s size, resulting from
welding;
3. Less parts for assembly can ensure overall precision;
4. It’s weight significantly reduced by 40-50%;
5. It does not require surface treatment.		 Applicable to
Car instrument
panel beam		 Car instrument
panel beam
A complexation
materials CCB		 1.It is lighter than tranditional bumper beam;
2.High structural strength, high corrosion resistance and high
impact resistance;
3.The flexible design can be applied to parts with complex
structure;
4.It requires more simplied technology process without welding.		 Rear bumper
beam		 Rear bumper beam
2019 Leakage detection
device for metal
stamping parts		 A kind of leakage inspection device for metal stamping parts. It
belongs to automotive parts detection device.		 Metal stamping
parts		 Metal stamping
parts
RIM car front
bumper		 It puts two kinds of raw materials (polyethylene and isocyanate)
into temperature-controllable tanks equipped with the stirrer.
After accurate measurement, the two components are respectively
sprayed into the mixing chamber based on a certain proportion, in
which the materials are fully mixed in mist status. Then they are
injected into the mold under certain pressure, which will be cured
in the mold after chemical reaction, and finally form the
polyurethanepolymer.		 Car front bumper Car front bumper
LFT-D material
automotive rear
bumper beam		 It is the application of LFT-D material in the automotive rear
bumper beam.		 Automotive rear
bumper beam		 Automotive rear
bumper beam
Manufacturing
method of
complication
continuous glass
fiber reinforced
frontend module		 The complication continuous glass fiber reinforced frontend
structure is designed to apply finite element topology optimization
to locate the weak structure, which is then locally reinforced by
the complication continuous fiberglass board. In this way, it
increases the stiffness and strength of the weak locations to meet
the performance requirements, making the frontend module light
weight and longservice life.		 Frontend Frontend
Fiber local
reinforced plastic
spare wheel pan and
production method		 Fiber local reinforced plastic spare wheel pan belongs to
automotive spare wheel pan.		 Spare wheel pan Spare wheel pan
Production method
of continuous glass
fiber board
reinforced plastic
CCB assembly		 The design method of continuous glass fiber board reinforced
plastic CCB assembly applies the finite element topology
optimization to locate the weak structure, which is then locally
reinforced by the new complication continuous fiberglass board,
so as to achieve local reinforcement, uniform stress and lower
stress concentration of theplastic CCB assembly.		 Plastic CCB
assembly		 Plastic CCB
assembly
CCB vibration
testing by finite
element simulation
method		 It test the CCB vibration by finite element simulation method.
CCB assembly is an important automobile part. The results
obtained by conventional analysis method are not accurate. The
vibration performance of CCB is verified by finite element
method.		 CCB CCB
A kind of fiber local
reinforced plastic
door substrate		 The patent of continuous fiber board local reinforced door
substrate is invented in the development or production of
automotive door substrates, which aims to producer the door
substrate lighter than conventional metal and non-metal door
substrates under the premise of satisfying the performance
requirements. The patent realizes the door substrates of lower
weight and higher performance, achieving the effect of
lightweight automobiles.		 Door substrate Door substrate
A kind of spare
wheel pan injection
mold handling
mechanism		 The positioning mechanism is controlled by the hydraulic
cylinder. While positioning, it also realizes the functions of the
molding part, and the structure for positioning the sheet materials
inside the mold cavity is realized. No waste material will be
generated,so as to meet the design requirements.		 Spare wheel pan Spare wheel pan

- 67 -

Spare wheel pan
injection mold with
floating positioning
mechanism		 It makes use of the air cylinder and the nitrogen spring, so the
hanging mechanism can realize the hanging function without
affecting the appearance of the product. Moreover, it realizes the
positioning of the sheet material in the mold and effectively
controls the material flow stability of the organic sheet material in
the molding process, as well as solves the problem of placing the
organic sheet material in the horizontal injection molding machine
when plastic wrapping and molding of spare wheel pan. So it
provides the premises for the realization of plastic wrapping and
moldingof spare wheelpan made of organic sheet material.		 Spare wheel pan Spare wheel pan
Automotive CCB Using the statistical analysis of DOE, it designed a CCB for OEM
that meets the customer's needs. It was verified by the
experiments of the laboratory, such as the frequency sweep
vibration test and stiffness test to meet the various performance
requirements of the customer.		 Aluminum alloy
CCB		 Aluminum alloy
CCB
Automotive
frontend		 The main structure is of frame. The upper structure is for loading,
while the pillar is of reinforced structure, and the bottom is the
structure to control dimensions. The structure is streamlined,
which not only meets the performance requirements, but also
makes lightweight and reasonable arrangement.		 Frontend Frontend
2020 Local reinforcement
technology		 It uses continuous fiber board for local reinforcement of products,
so as to realize lightweightproducts.		 Mold Mold
Frontend integration
technology		 The integrated frontend module reduces the dimensional chain,
improves the assembly accuracy, shortens the length of the
assembly line, and elevates the assembly efficiency of the vehicle
body.		 Frontend Frontend
New CCB Lightweight, integration, simple process and better control of
accuracy		 CCB CCB
Complication
continuous glass
fiber tear bumper
beam		 Higher precision and lightweight Rear bumper
beam		 Rear bumper beam
Lightweight door
substrate		 Lower weight to achieve the same strength, with the weight
reduced by30%		 Door substrate Door substrate
Storage battery
pallet		 Low cost, low weight, higher precision and faster production Battery pallet Battery pallet
Complication
materials spare
wheelpan		 Lightweight and high integration Spare wheel pan Spare wheel pan
SMC upper cover of
battery		 Significant weight reduction, high chemical resistance, excellent
UV resistance and aging resistance, long service life, flame
retardance, non-toxic, non-hazardous, and good dimensional
stability		 Upper cover of
battery		 Upper cover of
battery
Lightweight mold The design minimizes the materials provided the desired
machining performance, so as to achieve the purpose of
lightweight and cost saving.		 Mold Mold

  1. Long-term and Short-term Plans for Business Development

  2. (1) Short-term plans for business development

    • a. Introducing new production line equipment to increase production capacity and manufacturing efficiency.

    • b. Seeking potential customers through existing product and five established production bases.

    • c. Promoting lightweight solutions of current products.

    • d. Improving production technology and R&D capabilities through academia-industry collaboration and recruit talents.

  3. (2) Long-term plans for business development

    • a. Staying up to date through cooperation in the supply chain and exploring new fields of R&D as well as following cutting-edge technologies.

    • b. Focusing on production processes with competitive advantages and introducing automotive manufacturing equipment (automated warehousing, robotic arms and progressive stamping) to continue innovation and improvement of R&D, design and manufacturing process.

- 68 - 

     - c. Providing comprehensive solutions in response to the policies of new energy industry in China’s13[th] five-year plan, dual-credit scheme and trends of light cars and electronic vehicles.

  • B. Market and the Overview of Production and Sales

  • Market Analysis

    • (1) Sales Area of Main Products (Service)
Unit: NT$1,000 Unit: NT$1,000
Year
Sales
Area		 2019 2020
Sales Amount % Sales Amount %
Domestic 21,549,796 96.90 21,356,927 98.67
Export 690,077 3.10 287,225 1.33
Total 22,239,873 100.00 21,644,152 100.00
  • (2) Market Share

The Group has committed itself to R&D and manufacturing of auto parts for more than a decade to provide the most comprehensive solutions for lightweight cars. In respect of design, R&D, testing and manufacturing, the Group has been a leading role in technology of the automobile industry in China, and continued to provide safer, more environment-friendly and energy efficient auto parts to customers. The Company particularly emphasizes R&D and manufacturing of three types of products, which are high strength cockpit carriers, fiberglass hot-pressing parts and stamping as well as roll parts to meet different requests from customers.

There are nearly 40 types of developed and developing frames of cockpit carriers. All frames of cockpit carriers for Audi produced by FAW-Volkswagen Automobile Co., Ltd.are manufactured by our Group. Until the end of March in 2020, batch production of and developed non-metal products are applied to more than eighty car brands, of which more than4.57 million products are front ends. These can show the importance of the Group to the downstream OEMs

Sales of different types of vehicles in mainland China

Unit ： 1,000 cars

Unit：1,000 cars
Type\Year 2018 2019 2020
Sedan/Hatchback 11,528 10,308 9,189
SUV 9,995 9,353 9,398
MPV 1,735 1,384 1,011
Minivan 453 400 395
Passenger Car 23,711 21,445 19,994

Source ： the China Association of Automobile Manufacturers and industrial information published by the Ministry of Industry and Information Technology.

For example, a vehicle is equipped with a cockpit carrier. In 2020the number of cockpit carriers sold to car makers was 3,300,000. Based on the number of passenger cars 3,602,000 in the table above, the Company’s sales represented 18.02% market shares in the passenger car market in China.

(3) Future Supply and Demand & Market Growth

Issued by the Ministry of Industry and Information Technology of China in June 2020"Decision on revising the "Measures for the Parallel Management of Average Fuel

- 69 -

Consumption of Passenger Car Companies and New Energy Vehicle Credits"", and fuel consumption standards and the new energy double-point policy will promote technological innovation in the industry and the production and promotion of new energy vehicles.

==> picture [433 x 195] intentionally omitted <==

Source: China Association of Automobile Manufacturers

It will enter China’s 14th Five-Year Plan in 2021,driven by the "New Energy Automobile Industry Development Plan (2020-2025)", electrification, intelligence, connectivity and digitization will accelerate the transformation and upgrading of the automobile industry, and the new energy vehicle market will also shift from policy-driven to market-driven change. Many research institutes in China predicted that the economic growth in China may remain 7.5% in 2021. Despite low Consumer Price Index in China, consumers tend to decrease unnecessary consumption with lower consumer confidence when GDP growth rate is not as high as before. Given that the growth rate in the base year is high, it can be assumed that the rapid expansion stage of the automotive industry in China may end, and the market gradually moves into the stage of stable development. However, China’s macroeconomic regulation and control is still in favor of development of car manufacturers and upstream auto part firms because macro-control emphasizes continuity and stability of economic policies, which benefits large-scale firms with promising long-term effect.

(4) Competitive Advantages

  • a. Key customers

The Group has been selected supplier for domestic car brans and received recognition of excellent performance from auto manufacturers. On the basis of existing customer, the Company continue expanding its scale and acquire valuable world famous customer, such as Volkswagen, Mercedes-Benz and BMW to seek more domestic and overseas business opportunities

b. Cost Advantage

The Group has stuck with its low cost strategy. To achieve this goal, the Company constantly refines its business model in respect of all management aspects. It also establishes a strict cost management system and various cost control measures from procurement, production and logistics. In particular, the Company takes cost of

- 70 -

manufacturing and batch production into consideration even in the early stage of designing and developing new products and moulds. Currently the Company has developed an effective cost management system so that the Company has a certain cost advantage in comparison to other competitors in the relevant market.

  • c. Advantage of technology in developing products and moulds

The Group’s ability in terms of product modularization, mould design and mould production has reached the skill level as other sophisticated companies in the car market. The R&D team often engaged into joint development projects on new products for different car brands with FAW-Volkswagen, SAIC Volkswagen, Beijing Benz, SAIC-GM and Brilliance Auto, and accordingly gained rich experience in product development. In addition, the Group has built close cooperation with companies from Germany, Italy and Taiwan. Particularly, the Group is able to develop various auto parts, includingaluminium alloy, hot-pressing and plastic molding composites, realize product standardization and improve production efficiency to strengthen its core competency.

d. Well-established production bases

The Group launched a tactical plan to arrange production bases few years ago. Up to now, the Company has set up production bases in Changchun, Chengdu, Tianjin, Foshan, Suzhou, Changsha ,Yizhengand Ningbo, and established production network in South China, Centrla China, North China, East China and North East China to reduce delivery distance from suppliers to automakers, and speed up response time requested by automakers. Briefly, the Company’s tactical plan in China has been completed so the Company can provide more suitable services to meet customers’ expectations and equip itself with geographic competitive advantages to improve market development.

  • (5) Positive Factors and Negative Factors affecting Development of a Business Vision and Mitigation Measures

  • a. Positive factors

    • (a) Policy support from the Chinese government:

Since China joined the WTO, China has played more important role in global car industry and became one of national car markets, which continue growing at a stable rate. Following the energy policy set out in China’s13[th] five-year plan, Chinese government will take more active actions – subsidies for example, to promote new energy and eco-friendly vehicles. While the new energy market scale is relatively small, this policy represents a great potential for long-term development of auto parts.

(b) A stable customer base in China:

A process of verification and validation is required before the tier 1 car companies select their suppliers. For an auto parts manufacturer, when its products are used in the automobile assembly line, it represents that the auto parts manufacturer’s products are quite competitive. In addition, the long-term cooperative relationship with existing customers will help the Group to be recognized more easily by other tier 1 car companies and enable the Group being more competitive to explore the market.

(c) A shift toward China in global sourcing:

In contrast with markets in Europe and America, China is the most important country, which is famous for its low-cost manufacturing, In recent years, global

- 71 -

sourcing in the auto parts industry gradually shifted toward China and set many procurement centers. Low-cost products are the major advantage for the Group to explore foreign markets in the future.

  • b. Negative factors and mitigation measures

  • (a) Increasing labor cost in mainland China:

In recent years, the minimum wage and employment protection in every province and city in China have increased and improved, resulting in growing labor cost. In addition, with development of society, the national average educational attainment level has increased, which caused a reduction of labor supply in China has reduced and led to increasing operating costs year by year.

Mitigation measure ：

The Company has committed to a more refined manufacturing process and automated production lines to reduce the demand for labor and improve product quality.

  • (b) High customer concentration:

The Group supplies its products to specific automobile manufacturers, and it is regarded by these customers as the best-performing firm. In the past, the Company had received orders from a single automobile manufacturer, which led to high customer concentration.

Mitigation measure:

The Group will accelerate product development to meet needs of other automobile manufacturers and then increase sales in order to reduce customer concentration.

  • (c) Relatively small scale company in comparison with global well-known companies:

By comparison with world-famous auto parts manufacturers, the Company has less asset value and smaller business scale, and its R&D capabilities and financial 。 strength is also not as good as those international competitors.

Mitigation measure:

Due to insufficient operating capital, the Company sources finance and funding by offering shares publicly to acquire. In the future, the Company may increase its asset base and profitability through M&A.

  1. Important Purpose of Main Products and the Manufacturing Process

  2. (1) Important Purposes of Main Products:

    • a. Metal ： vehicle body stamping parts, cockpit carrier and vehicle body parts.

    • b. Non-metal: Under body shield, front end, wheel arch liner, spare wheel pan, battery tray and door module.

The purposes of the main products are illustrated as the diagram below:

- 72 -

==> picture [387 x 175] intentionally omitted <==

(2) Manufacturing Process

The manufacturing processes vary depending on different product types. All processes are illustrated as the diagram below:

Non-metallic
injection		 Non-metal hot
pressing		 Metal stamping Metal welding Metal welding Metal welding Metal rolling Metal rolling Metal rolling
 Procurement
of raw
materials
 Testing and
inspection
 Storage
 Injection
moulding
 Assembling
 Testing and
inspection
 Packaging
 Delivery		  Procurement
of raw
materials
 Testing and
inspection
 Storage
 material
heating
 Hot-pressing
moulding
 Testing and
inspection
 Punching
 Testing and
inspection
 Assembling
 Testing and
inspection
 Packaging
 Delivery		  Procurement
of raw
materials
 Testing and
inspection
 Storage
 Blanking
 Drawing
process
 Trimming
punching
 Flanging and
restriking
 Dimensional
control
 Packaging
 Delivery		  Procureme
nt of raw
materials
 Testing
and
inspection
 Stamping
 Testing
 Storage		  Procure
ment of
outsourc
ed parts
 On-site
inspecti
on
 Storage		  Procureme
nt of
standard
parts
 On-site
inspection
 Storage		  Procureme
nt of raw
materials
 Testing
and
inspection
 Leveling
 Punching
 Roll
molding
 Cutting
 Testing
and
inspection
 Storage		  Procureme
nt of raw
materials
 Testing
and
inspection
 Storage
 Stamping
 Testing
and
inspection
 Storage		  Procureme
nt of
standard
parts
 On-site
inspection
 Storage
Welding sub-assembly
 Performance test of Welding
 Welding/riveting assembly
 Dimension measurement/performance
assessment
 Packing
 Shipment		  Welding sub-assembly
 Performance test of Welding
 Welding/riveting assembly
 Dimension measurement/performance
assessment
 Packing
 Shipment
  1. Supply of Primary Raw Materials

The Company has established a long term relationship with suppliers of primary raw materials, and paid attention to market price to stabilized purchased price of key raw materials, and also build strategic partnership with suppliers to get reliable supply.

Raw Materials Suppliers Supply
Status
GMT Party F,CMT, DALIANJINTIAN Good
Plastics SABIC, Nexeo Plaschem, Shanghai Juner(renamed as Shanghai
Juner)		 Good
Steel Sheet Zhangquan Hardware Products,SHANGHAI ANGSHOU,
PENGLONG TIANCHUANG, CHENGDU YIGANG, Tianjin
Baosteel、CHONGQING WENJIN, HONGZHONG STEEL
PROCESSING, China SteelShanghai, China SteelChangchun		 Good
  1. List of major suppliers and

(1) Any supplier accounted for at least 10% of total purchases in any of the most recent two years, please identify the customer name, purchase amount and its percentage, and specify the reasons of the variance (if applicable)

- 73 -

Unit: NT$ 1,000; %

Item
Name		 2019 2019 2019 2020 2020 2020
Amount % of total
annual net
purchases		 Relation
with issuer		 Name Name % of total annual
net purchases		 Relation
with issuer
1 CHANGCHUN
HONGZHONG
STEEL
PROCESSING
CO.,LTD.		 741,968 5.06 Note Beijing
Penglong
Tianchuang
Material
Trading
Co.,Ltd.		 564,242.0 0
3.94
Note
Others 13,926,195
94,94		 Others 13,753,957.0 0
96.06
Netpurchases 14,668,163
100.00		 Netpurchases 14,318,199.0 0
100.00

Reasons of Variance:

Before the Group procures raw materials from suppliers, part of them required verification made by main customers. The purchase amount from main suppliers is reliant on the demand of the downstream customers. The change between 2017 and 2018 is considered reasonable.

  • (2) Any customer accounted 10% of total purchases in any of the most recent two years, please identify the customer name, sales amount and its percentage, and specify the reasons of the variance (if applicable)

Unit: NT$ 1,000; %

Item 2019 2019 2019 2020 2020 2020
Name Amount % of total annual
net sales		 Relation with
issuer
Name		 Name % of total
annual net
sales		 Relation with
issuer
1 FAW-Volksw 10,269,822 46.18
None		 FAW-Volks
wagen		 9,468,510
43.75
None
agen
2 BeijingBenz 5,134,971 23.09
None		 BeijingBenz
4,458,051
20.60
None
Others 6,835,080 30.73 Others 7,717,591
35.65
Net sales 22,239,873 100.00 Net sales 21,644,152
100.00

Reasons of Variance:

The Group has been reliable supplier for FAW-Volkswagen and Beijing Benz. The sales amount is reliant on customers’ demand and the business performance. The change between 2018 and 2019 is considered reasonable.

  1. Production in the most recent two years

  2. (1) Production in the most recent two years

Unit: NT$ 1,000/ per1,000 item

ItemYear
Main Products		 2019 2020
Capacity Output Amount Capacity Output Amount
Metalparts 155,802
127,954		 15,679,462
166,115		 139,117
15,933,704
Non-metalparts 38,068
30,966		 5,886,173
39,165		 32,982
6,024,817
Total 193,870
158,920		 21,565,635
205,280		 172,099
21,958,521

(2) Variance Analysis

In terms of metal and non-metal products in 2019, the respective percentages of the total production are similar to the percentages in 2017. There is no significant change between 2017 and 2018.

  1. Sales in the most recent two years

  2. (1) Sales in the most recent two years

- 74 -

Unit: NT$ 1,000/ per item

Item
Year
Main Products		 2019 2019 2020 2020
Quantity Amount Quantity Amount
Metalparts 118,721,670 13,555,918 125,236,200 14,252,498
Non-metalparts 29,381,288 5,432,247
31,300,026		 5,165,490
Mould and others 976,708
3,251,708
414,364
2,226,164
Total 149,079,666
22,239,873
156,950,590
21,644,152

(2) Variance Analysis

Due to the growing sales of metal body parts, the annual sales in 2020are more than the annual sales in 2019.

  • C. The Number of Employees in the Most Recent Two Years and As of the Date of Publication of the Annual Report
Unit:person;%
Item Year
2019		 2020 As of May 7 2021
Staff
(persons)		 Manager 127 112 120
Production Linie
Worker		 2,597 2076 2,025
General
Employee		 1,731 2047 1,964
Total 4,455 4,235 4,116
Average Age 34.44 34.77 35.61
Average Employee Tenure(Year) 3.34 5.38 4.21
Distribution of
Education
Attainment
(%)		 Doctor 0.00% 0.00% 0.05%
Master 0.95% 0.97% 1.00%
Bachelor 32.19% 33.11% 32.51%
Senior High
School		 16.39% 18.80% 18.47%
Below Senior
High School		 50.48% 47.13% 47.97%

D. Environmental Protection Expenses

Disbursements for environmental protection: total losses (including damage awards) and fines for environmental pollution for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, and an explanation of the measures (including corrective measures) and possible disbursements to be made in the future (including an estimate of losses, fines, and compensation resulting from any failure to adopt responsive measures, or if it is not possible to provide such an estimate, an explanation of the reason why it is not possible).

In the most recent year and as of the date of publication of the annual report, no loss or fine incurred to the Group as s result of environment pollution.

E. Labor Relation

  1. Specified employee welfare measures, continuing education, job training, retirement system and its implementation, as well as labor agreements, labor rights and employment protection measures.

  2. (1) Employee welfare measures and its implementation

As the Company's primary business sites are located in mainland China, to protect employee welfare, it is required to offer mandatory benefits, including social insurance (covering pension, medical, maternity, work-related injury and unemployment) in accordance with local labor laws and regulations, and it also provide shuttle service, employee canteen and subsidies for car and house purchase. In addition, employees are

- 75 -

entitled to have holiday, paid vacation, maternity leave, wedding leave and compassionate leave. The Company organizes various activities, including monthly birthday party, annual sport event and gifts for festival greetings, to bond with its employees. The Company also encourages employees based on business performance and individual achievement through a year-end bonus and performance-based bonus.

  • (2) Continuing education, job training

To improve employees’ understanding of functionality in each department with its operating goal and relevant administrative procedures, the Company provides every new employee an on-board training to ensure his/her familiarity with work environment and applicable regulations. Furthermore, the Company regularly reviews each employee’s performance and capabilities, and continues to develop future managers in respect of technology and management in order to improve its competitiveness with talent human resources,

  • (3) Retirement system and its implementation

As the Company's primary business sites are located in mainland China, it is required to make contributions to employee pension insuranceand make payment to local Social Insurance Bureaus in accordance with local labor laws and regulations. Oncean employee reaches mandatory retirement age, he/she is entitled to receive pension form the local Social Insurance Bureau. The pension fund for all current employees and retired employees is arranged exclusively by the local governments.

  • (4) Labor agreements, labor rights and employment protection measures

All subsidiaries of the Company have complied with Employment Contract Act and other applicable regulations to protect labor legitimate interests and maintain harmony labor relations. Up to date, no labor dispute is required to be negotiated.

  • (5) Communication between employer and employee

To promote business philosophy and business culture, the Company has issued an internal publication “A Window to Engley” since 2017 to facilitate communication between the Company and its employees and strengthen bonding with employees and their recognitions.

Employees set up an union and initiate union activities under the Trade Union Law in China. The labor union represents all employees’ benefits and protects their legal interests. It also assists the Company in arrangement and usage of employee welfare and rewarding. Furthermore, the union organizes cultural or sport activities and help employees study politics, technology and business knowledge. The union educates employees about labor disciplines in order to complete tasks assigned by the Company. The union can sign the collective employment contract on behalf of employees with the Company and monitor the implementation of the labor contract.

  • (6) Labor safety

The Company set the department of system management, which will regularly check whether the workplace meets safety requirements in order to reduce the possibility of work-related accidents. The Group also offers health checks regularly to increaseemployees’ health awareness and improve employee physical and metal wellbeing.

The Company acquired the certification OHSAS18001. The usage of risk management tools can reduce risk of unsafe workplace and minimized the possibility of work-related accidents. Furthermore, the Company concerns food safety, it built employee canteens and delegate professional catering companies to prepare meals for

- 76 -

employees.

  1. Any loss incurred as a result of labor disputes in the most recent year and as of the date of publication of the annual report, and any loss, which may be incurred to date or in the future, and mitigation measures

The Group has recognized the importance of labor relations. In the most recent year and as of the date of publication of the annual report, no loss was incurred due to labor disputes.

F. Important Contracts

Nature of
Contract		 Party Duration Substance Restrictive
Provisions
Sales Contract Party A 2016.04.05-
2025.12.31		 Agreement of selling products None
SalesContract Party A 2017.01.15 Agreement of selling products None
SalesContract Party B 2014.05.09 Agreement of selling products None
SalesContract Party C 2014.09.24 Agreement of selling products None
SalesContract Party D 2017.01.01 Agreement of selling products None
Sales Contract Party E 2015.03.17 Agreement of selling products None
Construction
Contract		 Changchun Hongyuan
Construction Co., Ltd		 2017.12.19 Factory construction None
Loan
Agreement		 China Construction Bank
(Jimo Branch)		 2017.04.06-
2022.04.06		 RMB$ 50 million forTsingtao
Engley to build its plants		 None
Loan
Agreement		 China Construction Bank
(Jimo Branch)		 2017.02.13
2022.02.13		 RMB$ 30 million forTsingtao
Engley to build its plants		 None
Loan
Agreement		 Mega International
Commercial Bank		 2018.10.22-
2021.10.21		 €3.5 million for business
operation ofNingbo Maoxian		 None
Loan
Agreement		 TaishinInternational
Commercial Bank		 2019.10.30-
2022.10.29		 Joint credit contract None
Patent
Licensing		 Party F 2012.11.09-
2032.11.08		 Licensed Engley Automobile
Industry to use its patented
technology(SymaLITE)		 None
Patent
Licensing		 Party F Licensed20
13.03.04
Relicensed
2014.06.19		 Relicensed Lightweight to use its
patented technology (SymaLITE)		 None

- 77 -

VI.Overview of Company Financial Status

  • A. The Consolidated Financial Statements and Information for the Recent Five Fiscal Year, which includes CPAs’ names with audit opinions

  • Condensed Balance Sheet and Condensed Statement of Comprehensive Income

    • (1) Condensed Balance Sheet

Unit: NT$1,000

Year
Item		 Year
Item		 Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years
2016
(adjusted)		 2017 2018 2019 2020
Current Assets 10,643,774
11,692,130
16,236,255
14,799,104
16,465,423
Property, Plant and
Equipment		 6,883,445
8,511,298
8,808,774
9,379,161
9,970,842
Intangible Assets 856,576
1,540,036
1,469,390
1,381,716
1,338,264
Other Assets 3,397,387
3,643,411
4,504,079
4,630,796
4,589,393
Total Assets 21,781,182
25,386,875
31,018,498
30,190,777
32,363,922
Current
Liabilities		 Before
Distribution		 9,045,041
9,330,362
13,641,589
12,441,039
13,692,209
After
Distribution		 9,540,041
8,901,362
13,110,557
12,146,021		 Not distributed
yet
Non-current Liabilities 2,263,234
4,594,904
3,977,436
4,665,704
5,226,181
Total
Liabilities		 Before
Distribution		 11,308,275
13,925,266
17,619,025
17,106,743
18,918,390
After
Distribution		 11,803,275
13,496,266
17,087,993
16,811,725		 Not distributed
yet
Equity Attributable to
Shareholders of the Parent		 9,181,640
9,648,035
10,986,745
10,852,411
11,075,801
Capital Stock 1,100,000
1,100,000
1,190,000
1,180,070
1,180,070
Capital Surplus 6,979,967
7,053,536
7,969,511
8,371,087
8,371,087
Retained
Earnings		 Before
Distribution		 1,907,356
2,393,091
3,087,491
2,948,764
2,946,759
Before
Distribution		 1,412,356
1,964,091
2,556,459
2,653,746		 Not distributed
yet
Other Equity Interest (805,683)
(898,592)
(1,179,819)
(1,647,510)
(1,422,115)
Non-controlling Interests 1,291,267
1,813,574
2,412,728
2,231,623
2,369,731
Total Equity Before
Distribution		 10,472,907
11,461,609
13,399,473
13,084,034
13,445,532
Before
Distribution		 9,977,907
11,032,609
12,868,441
12,789,016		 Not distributed
yet

Source: The consolidated financial statement signed and audited by CPAs, is prepared in accordance with the International Financial Reporting Standards

Note: The Group acquired the control of Linde+Engley (Tianjin) and Linde+Engley (Changchun) in April 2016 and then acquired the control of Ningbo Maoxiang in December in 2016.After the period of purchase price allocation ended on December 31 2017, the Group adopted the acquisition-date fair valuesto revise estimates during the period of purchase price allocation, and adjusted retrospectively the financial statement on December 31 2016 in accordance with the IFRS 3.

- 78 -

(2) Condensed Statement of Comprehensive Income

Unit:NT$ 1,000

Year
Item		 Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years (Note)
2016
(adjusted)		 2017 2018 2019 2020
Operating Revenue 15,582,053 18,879,842 21,855,386 22,239,873 21,644,152
Operating Margin 3,379,030
3,934,018
4,242,876
3,744,203
3,456,702
Operating Net Profit 1,814,732
2,007,760
1,952,400
1,433,506
1,269,008
Non-operating Income and
Expenses		 289,099
(283,523)
(211,495)
(300,471)
(270,281)
Net profit before tax 2,103,831
1,724,237
1,740,905
1,133,035
998,727
Net Income of Continuing
Business Unit for this fiscal year		 1,786,605
1,354,171
1,451,327
968,020
825,466
Net Income 1,786,605
1,354,171
1,451,327
968,020
825,466
Other Comprehensive Income,
Net of Tax		 (691,391)
(118,845)
(308,487)
(548,701)
265,838
Total Comprehensive Income 1,095,214
1,235,326
1,142,840
419,319
1,091,304
Net income attributable to
stockholders of the parent		 1,652,876
1,072,177
1,123,400
644,193
480,621
Net income attributable to
non-controlling interests		 133,729
281,994
327,927
323,827
344,845
Total comprehensive income
attributable to stockholders of the
parent		 961,485
979,268
842,173
176,502
706,016
Total comprehensive income
attributable to non-controlling
interests		 133,729
256,058
300,667
242,817
385,288
Earnings Per Share(NT$) 15.12
9.75
9.89
5.46
4.07

Source: The consolidated financial statement signed and audited by CPAs, is prepared in accordance with the International Financial Reporting Standards

Note: The Group acquired the control of Linde+Engley (Tianjin) and Linde+Engley (Changchun) in April 2016 and then acquired the control of Ningbo Maoxiang in December in 2016. After the period of purchase price allocation ended on December 31 2017, the Group adopted the acquisition-date fair values to revise estimates during the period of purchase price allocation, and adjusted retrospectively the financial statement on December 31 2016 in accordance with the IFRS 3.

- 79 -

(3) The names of appointed certified accountants and their audit opinions in the last 5 years

Year AccountingFirm Name ofCPA Audit Opinion
2016 PricewaterhouseCoopers
Taiwan		 YANG, MING-CHIN,
WANG YU CHUAN		 Unqualified opinion
2017 PricewaterhouseCoopers
Taiwan		 YANG, MING-CHIN,
HSU CHIEN YEH		 Unqualified opinion
2018 PricewaterhouseCoopers
Taiwan		 YANG, MING-CHIN,
LIU, MEI-LAN		 Unqualified opinion
2019 PricewaterhouseCoopers
Taiwan		 YANG, MING-CHIN,
LIU, MEI-LAN		 Unqualified opinion
2020 PricewaterhouseCoopers
Taiwan		 LIU, MEI-LAN
YANG, MING-CHIN,		 Unqualified opinion

Note: The CPAs explained that the pro forma consolidated financial statement was made for Cayman Engley Industrial Co., Ltd.’s listing application.

B. Financial Analyses for the Past Five Fiscal Years

Item Year Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years Financial Information in the Last Five Years
2016
(adjusted)		 2017 2018 2019 2020
Financial Structure
（%）		 Debt to asset ratio 51.92
54.85
56.80
56.66
58.46
Long term capital to property, plant and
equipment ratio		 185.03
188.65		 197.27
189.25		 187.26
Solvency Current ratio（%） 117.68
125.31
119.02
118.95		 120.25
Quick ratio（%） 71.32
72.88
73.57
75.01
84.11
Interest coverage ratio（multiple） 20.45
8.83
7.70
4.48
4.69
Operating
Performance		 Receivable turnover rate(times) 4.18
4.17
4.41
4.28
3.91
Average cash recoveryday 88
88
83
85
93
Inventory turnover rate (times) 4.08
3.84
3.53
3.45
3.89
Payable turnover rate(times) 2.98
3.10
3.16
3.12
2.72
Days sales outstanding 90
96
103
106
94
Property, plant and equipment turnover rate
(times)		 2.65
2.45
2.52
2.45
2.24
Total asset turnover rate(times) 0.86
0.8
0.77
0.73
0.69
Profitability Return on assets(%) 10.26
6.44
5.84
3.96
3.29
Return on equity (%) 20.24
12.35		 11.68 7.31
6.22
Pre-tax netprofit topaid-in capital ratio(%) 191.26 156.75 146.29 96.01
84.63
Netprofit rate(%) 11.47
7.17
6.64
4.35
3.81
Earningsper share(NT$) 15.12
9.75
9.89		 5.46
4.07
Cash Flow
（%）		 Cash flow ratio 18.3
19.71
8.55
23.77
31.68
Cash flow adequacyratio 59.33
50.42
40.11
52.97
78.65
Cash reinvestment ratio 8.79 7.81
3.82
12.69		 19.21
Leverage Operatingleverage 1.28 1.42
1.51
1.95		 2.10
Financial leverage 1.06 1.12
1.15		 1.29 1.27
Analysis of significant changes in financial ratios over the last two years (excluding that every change in ratios was less
than 20%):
1. Reduction of interest coverage ratio: Net profit of the year is lower than that of the same period last year.
2. Increase of cash flow ratio: The account receivables of this year have been received successively, and the net cash
flow of operation activities has increased.
3. Increase of cash flow adequacy ratio: Increase in net cash flow from operating activities and increase in capex for
capacity expansion in recent years.
4. Increase of cash reinvestment ratio: Increase in net cash flow from operating activities and increase in capex for
capacityexpansion in recentyears.

Analysis of significant changes in financial ratios over the last two years (excluding that every change in ratios was less than 20%): 1. Reduction of interest coverage ratio: Net profit of the year is lower than that of the same period last year.

  1. Increase of cash flow ratio: The account receivables of this year have been received successively, and the net cash flow of operation activities has increased.

  2. Increase of cash flow adequacy ratio: Increase in net cash flow from operating activities and increase in capex for capacity expansion in recent years.

  3. Increase of cash reinvestment ratio: Increase in net cash flow from operating activities and increase in capex for capacity expansion in recent years.

Source: The consolidated financial statement signed and audited by CPAs, is prepared in accordance with the International Financial Reporting Standards

Note 1：The formula for financial analysis is specified on the next page.

- 80 -

  • Note 2：The Group acquired the control of Linde+Engley (Tianjin) and Linde+Engley (Changchun) in April 2016 and then acquired the control of Ningbo Maoxiang in December in 2016. After the period of purchase price allocation ended on December 31 2017, the Group adopted the acquisition-date fair values to revise estimates during the period of purchase price allocation, and adjusted retrospectively the financial statement on December 31 2016 in accordance with the IFRS 3.

The formula for financial analysis is as follows:

  1. Financial Structure

  2. (1) Debt Ratio = Total Liabilities / Total Assets

  3. (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment

  4. Solvency

  5. (1) Current Ratio = Current Assets / Current Liabilities

  6. (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities

  7. (3) Interest coverage ratio = Earnings before Interest and Taxes / Interest Expenses

  8. Operating Performance

  9. (1) Receivable Turnover Rate = Net Sales / Average Trade Receivables (including trade receivables and note receivables arising from operating activities)

  10. (2) Average Cash Recovery Day = 365 / Receivable Turnover Rate

  11. (3) Inventory Turnover Rate = Cost of Sales / Average Inventory

  12. (4) Payable Turnover Rate = 365 / Average Trade Payables (including trade payables and note payables arising from operating activities)

  13. (5) Days Sales Outstanding = Cost of Sales / Inventory Turnover Rate

  14. (6) Property, Plant and Equipment Turnover Rate = Net Sales / Average Net V\value of Property, Plant and Equipment

  15. (7) Total Asset Turnover Rate = Net Sales / Average Total Assets

  16. Profitability (1) Return on Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets

  17. (2) Return on Equity = Net Income / Average Total Equity

  18. (3) Operating Income to Paid-in Capital Ratio= Operating Income / Paid-in Capital

  19. (4) Pre-tax Net Profit to Paid-in Capital Ratio = Income before Tax / Paid-in Capital

  20. (5) Net Profit Rate = Net Income / Net Sales

  21. (6) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding

  22. Cash Flow

  23. (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities

  24. (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operating Activities / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

  25. (3) Cash Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)

  26. Leverage

  27. (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations

(2) Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

- 81 -

  • C. Audit Committee’s Review Report for the Most Recent Financial Statements

Cayman Engley Industrial Co., Ltd.

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2020 Business Report, Financial Statements, and proposal for allocation of earnings. The CPA firm of PricewaterhouseCoopers Taiwan was retained to audit the Company’s Financial Statements and has issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members. According to Article 14-4 of the Securities and Exchange Act and Article of 219 of the Company Law, we hereby submit this report.

To the 2021 Annual Shareholders’ Meeting of Cayman Engley Industrial Co., Ltd.

Cayman Engley Industrial Co., Ltd

Convener of the Auditing Committee:Liou, Cheng-Hwai

March 16 , 2021

- 82 -

  • D. The financial statements in the most recent fiscal year, including an auditor's report prepared by CPAs, and 2-year comparative balance sheet, statement of comprehensive income, statement of changes in equity, cash flow chart, and any related footnotes or attached appendices

  • See appendix: the consolidated financial statements for the most recent fiscal year.

  • E. Standalone financial statements in the most recent fiscal year, certified by a CPA

The Company is a foreign issuer
so this is not applicable.

  • F. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year and as of the date of publication of the annual report, the annual report shall explain how such difficulties affect the company's financial situation

None

- 83 -

VII Review and Analysis of the Company’s Financial Status, Financial Performance, and Risk Management

A. Financial Status

Unit:NT$ 1,000

Year
Item		 2019 2020 Change Change Note
Amount %
CurrentAssets 14,799,104 16,465,423 1,666,319 11.26 1
Property,Plant andEquipment 9,379,161 9,970,842 591,681 6.31
IntangibleAssets 1,381,716 1,338,264 (43,452) (3.14)
Other Assets 4,630,796 4,589,393 (41,403) (0.89)
Total Assets 30,190,777 32,363,922 2,173,145 7.20
CurrentLiabilities 12,441,039 13,692,209 1,251,170 10.06 2
Non-currentLiabilities 4,665,704 5,226,181 560,477 12.01 3
Total Liabilities 17,106,743 18,918,390 1,811,647 10.59 4
Capital Stock 1,180,070 1,180,070 - -
CapitalSurplus 8,371,087 8,371,087 - -
RetainedEarnings 2,948,764 2,946,759 (2,005) (0.07)
Non-controllinginterests 2,231,623 2,369,731 138,108 6.19
Total Equity 13,084,034 13,445,532 361,498 2.76
Analysis of changes (including that every change in ratios was more than 20% and its amount reached 1% of total
assets in the current year):
1.
The increase in current assets was mainly due to the increase in cash and notes receivable.
2.
The increase in current liabilities was mainly due to the increase in notes and accounts payable.
3.
The increase in non-current liabilities was mainly due to the increase in long-term loans.
4.
The increase in total liabilities was mainlydue to the increase inpayments and long-term loans.

B. Financial Performance

  1. Main reasons of major changes in operating revenue, net operating profit and pre-tax net profit in the last two years

Unit: NT$ 1,000

Year
Item		 2019 2020 Change Change Note
Amount %
Operating NetProfit 22,239,873 21,644,152 (595,721) (2.68)
Operating Costs 18,495,670 18,187,450 (308,220) (1.67)
OperatingMargin 3,744,203 3,456,702 (287,501) (7.68)
OperatingExpenses 2,310,697 2,187,694 (123,003) (5.32)
Non-operating income and
expenses		 (300,471) (270,281) 30,190 (10.05)
Net profit before tax 1,133,035 998,727 (134,308) (11.85)
NetProfit 968,020 825,466 (142,554) (14.73)
Other comprehensive
income		 (548,701) 265,838 814,539 (148.45) 1
Analysis of changes (including that every change in ratios was more than 20% and its
amount reached 1% of total assets in the current year):
1.The increase in other comprehensive income or loss was mainly due to the increase in exchange
differences on the translation of financial statements of foreign operatingcompanies.
  1. Sales projection and its rationale

- 84 -

The reinvestment company, which the Company is affiliated to, set a reasonable sales goal based on market demand and assessment of sales and supply made by customers. Please see the section of “Overviews of Business Operation” for relevant market analysis and industrial development.

  1. Plans in response to possible impact on the Company’s future financial performance

The industry where the Company runs its business still has a large potential customer base. Sales may grow with development of new projects, and business expansion plan of downstream customers. Furthermore, the Company also pays close attention to market news so as to discover development trends of the latest products in the future. By doing so ， the Company can improve its profitability and maintain stable operations.

C. Cash Flow

  1. Analysis of Cash Flow in the most recent year
sh Flow
Analysis of Cash Flow in the most recent year		 sh Flow
Analysis of Cash Flow in the most recent year		 sh Flow
Analysis of Cash Flow in the most recent year
Unit: NT$1,000
Year
Account Name		 2018 2019 Difference
Amount %
Net cash flow from operating
activities
2,604,230		 4,338,126 1,733,896 66.58
Net cash flow to investment
activities
1,876,037		 1,525,132 (350,905) (18.70)
Net cash flow from financing
activities
322,978		 1,540,427 1,217,449 376.94
Analysis of changes
1. Increase in net cash inflow from operating activities: Mainly due to the collection of receivables
during the year.
2. Decrease in net cash outflow from investing activities: Mainly due to the decrease in purchase of
equipment.
3. Increase in net cash outflow from financing activities: Mainly due to the repayment of loans during
theyear.

  1. Improvement plans for insufficient liquidity and liquidity analysis in 2019

    • (1) Improvement plant for insufficient liquidity: The insufficient liquidity didn’t occurred to the Company, so it is N/A.

    • (2) Analysis for the changes of cash flow in the next year: The Company owns adequate funds. It is expected that the operating activities will still show a net cash inflow. Therefore, it could support cash outflows of investment activities and financing activities, and there is no risk of insufficient liquidity.

  2. D. The impact of major capital expenditures in the most recent year on financial status

The plants in Changchun, Tianjin and Suzhou have undergone a series of renovations with more assembly lines to fulfill anticipated demand of new energy vehicles in the future. The company will improve products' added value by including craftsmanship but not limited to aluminum rinse and electroplating process. With increased businesses, the Company was able to repay loas gradually to decrease liabilities and reduce interest expenses. Curretly capital expenditures did not have negative impact on the Company’s financial status.

  • E. Reinvestment Policy in the Most Recent Year, Reinvestment Results with Reasons and Improvement Plans, and Investment Plan for the Upcoming Year

  • Reinvestment Policy

The Company’s reinvestment policy focuses on its core businesses, and aims to enhance vertical integration with upstream and downstream firms. Investment related plans are

- 85 -

analyzed and the benefit to the Group is also assessed appropriately. These plans are compliant with internal control systems approved by the Board of Directors or Shareholders’ Meeting – for example, “Investment Cycle” and “Regulations on Acquisition or Disposal of Assets”.

  1. The main reasons of reinvestment performance (profit or loss) in the most recent year and following improvement plants
following improvement plants following improvement plants following improvement plants following improvement plants following improvement plants
Unit：NT$1,000
Invested Company Shareholding
(direct and
indirect)		 Income or
Loss from
Reinvestment
Recognized in
2019		 Reasons of
Reinvestment
Performance		 Improvement Plan
Changchun
Engley
Automobile
Industry
Co., Ltd.		 96.57% 745,257 Good
business
performance
with
growing revenue.		 －
Changchun Engley Auto
Parts Co., Ltd.		 100.00% 110,662 Good
business
performance
with
growingrevenue.		 －
Suzhou
Engley
Auto
Part Co., Ltd.		 100.00% 61,753 Good
business
performance
with
growingrevenue.		 －
Chengdu Engley Auto
part Co.		 100.00% 92,915 Good
business
performance
with
growingrevenue.		 －
Yizheng Engley Auto
Part Co., Ltd.		 100.00% 13,233 Good
business
performance
with
growingrevenue.		 －
Liaoning Engley Auto
Part Co., Ltd.		 100.00% 5,206 Suspension of
business activities,
but any incurred
expense would be
recognized		 Given
that
orders
received are not as
many as expected, the
production
was
transferred to other
plants
in
order
to
maximize production
efficiency. The plants
might be sold in the
future.
Foshan
Engley
Auto
Part Co., Ltd.		 100.00% 76,331 Good
business
performance
with
growingrevenue.		 －
Tianjin
Engley
Manufacturing Co., Ltd.		 100.00% 34,719 Good
business
performance
with
growingrevenue.		 －
Changchun Lightweight
Technology Co., Ltd.		 100.00% 132,531 Good
business
performance
with
growing revenue.		 －
Changsha Engley Auto
Part Co., Ltd.		 100.00% (84,180) Early-stage startup Its performance could
be improved as it
continued
mass
produce.
Tsingtao Engley Auto
Part Co., Ltd.		 100.00% (42,535) Early-stage startup Its performance could
be improved as it
continued mass
produce.

- 86 -

Invested Company Shareholding
(direct and
indirect)		 Income or
Loss from
Reinvestment
Recognized in
2019		 Reasons of
Reinvestment
Performance		 Improvement Plan
Ningbo
Engley
Auto
Part Co., Ltd.		 100.00% (22,828) Early-stage startup Its performance could
be improved as it
continued mass
produce.
Linde+Engley
(Changchun) Auto Parts
Co.,		 54.00% 17,527 Good
business
performance
with
growingrevenue.		 －
Linde+Engley (Tianjin)
Auto Parts Co., Ltd.		 54.00% 399,745 Good
business
performance
with
growing revenue.		 －
Ningbo
Maoxiang
Material
Co.,
Ltd.
(China)		 51.00% (54,619) The car market is in
poor condition		 Its performance could
be improved as it
continued mass
produce.
Taizhou Maoqi Metal
Co., Ltd. (China)		 51.00% 54,319 Good business
performance with
growingrevenue.		 －
Jilin Jinli Auto part Co.,
Ltd.		 23.00% 2,984 Good business
performance with
growingrevenue.		 －
Chengdu
Youli
Auto
part Co., Ltd.		 20.00% 6,221 Good business
performance with
growing revenue.		 －
Constellium
Engley
(Changchun)
Automotive
Structures
Co.,Ltd.		 46.00% 72,694 Good business
performance with
growing revenue.		 －
Zhejiang Sanse Mold
Technology Co., Ltd		 20.00% (9,677) The car market is in
poor condition		 Its performance could
be improved as it
continued
mass
produce.
Changchun CECK Auto.
Parts Co.,Ltd.		 16.06% (38,491) Early-stage startup Its performance could
be improved as it
continued
mass
produce.
Chongqing HC&C Auto
Parts Co., Ltd		 16.32% 84 Good
business
performance
with
growingrevenue.		 －
Engley Automobile
Industry Co., Ltd		 100.00% (1,049) Increase
in
expenditure		 Strengthen
expenditure control
Engley Holding (Somoa)
Limited		 80.00% (11,625) COVID-19 influence
last year.		 Its performance could
be improved as it
continued mass
produce.
Engley Precision
Industry B.V.		 100.00%
(NOTE)		 (24,019)
(NOTE)		 COVID-19 influence
last year.		 Its performance could
be improved as it
continued mass
produce.
Kranendonk
Beheersmaatschappij
B.V.		 100.00%
(NOTE)		 (37,289)
(NOTE)		 COVID-19 influence
last year.		 Its performance could
be improved as it

- 87 -

Invested Company Shareholding
(direct and
indirect)		 Income or
Loss from
Reinvestment
Recognized in
2019		 Reasons of
Reinvestment
Performance		 Improvement Plan
continued mass
produce.
Wiser Decision
Holding Company
Limited		 100.00% 4,336 Good
business
performance
with
growingrevenue.		 －
Honley
Auto.
Parts
Co.,Ltd		 36.63% (95,864) Early-stage startup Its performance could
be improved as it
continued
mass
produce.
CECK Holdings Co.,
Limited		 36.63% (70,910) Recognized loss of
Changchun CECK.		 Continuous
mass
production and shipment
of Changchun CECK
products
should
be
improved

Note: The shareholding refers to the shares held by the investing company, which is one level higher than the invested company, and its recognized income or loss from investment, rather than total shareholding ratio.

3. Investment Plan for the Upcoming Year

The Company’s reinvestment policy meets the needs of operational development, every subsidiary’s business looks promising in the upcoming year, and the projected revenue is stable. The Company will draft a new investment plan where it is appropriate in respect of market trends, the Group’s business strategy and financial status.

  • F. Risk Management

  • The Effect of Interest Rate, Exchange Rate and Inflation upon the Company's Profits (Losses) , and future approaches to these fluctuations

(1) Interest Rate

The Group’s interest expenses in 2019 and 2020 amounted to 325,931,000 and 270,448,000 which respectively accounted for 1.47% and 1.25% of operating income. Safety Management is of the greatest importance to funding resources. Therefore, the Group has maintained good relationship with banks to increase credit limit with the lowest interest. The Group will consider limits of different financing source and related costs when it is raising funding. In the future, it will also pay attention to changes on interest rates, and take necessary action to mitigate the impact of interest rate changes upon this Group.

(2) Exchange Rate

The Group’s business operations mainly concentrate in China, except for some sourced raw material and equipment outside of China. In 2019 and 2020, the amounts resulted from foreign exchange losses amounted to 13,570,000 and 63,671,000 ， which respectively accounted for 0.06% and 0.29% of operating revenue. The robustness principle is applied to the Group’s foreign currency management in order to protect the Group from adverse effects of exchange rate volatility. The Group also collects relevant information about exchange rates to fully understand exchange rate trends and ensure profitability, which will not be subject to impact of exchange rate fluctuations. Furthermore, the Group’s financial statements are denominated in Taiwan dollars and

- 88 -

may result in translation exposure due to exchange rate changes. However, the translation exposure does not affect actual operating status.

  • (3) Inflation

In the past, the Group hadn’t experienced significant influence as a result of inflation. Although inflation may cause an increase in purchase cost, the Group can swiftly adjust its quotations to its customers and suppliers depending on market prices. The Group will also pay close attention to price changes on products in the upstream sector and accordingly consider such changes in its costs and quotations in order to reduce the impact resulting from cost changes.

  1. 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 future mitigation measures.

  2. (1) The Group has committed to its core business and operated its business in good faith. Because its financial policy is grounded on the robustness principal, the Group has not engages in high risk or highly leveraged investments.

  3. (2) The Group has established “Operational Procedures for Lending Capital to Others”, “Operational Procedures for Endorsements and Guarantees” and “Acquisition and Disposal of Assets Procedures”. Since the Group has complied with these regulations, the risks are limited.

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

  5. (1) Product line:

    • a. Current Products: The company maintains its strength in products including front ends, ，

    • battery trays, cockpit carriers, door sills, develops new products and provide more comprehensive services to customers (product modularization- customers need not assemble small spare parts).

    • b. Application of Aluminum alloys: Given the trend of energy efficiency and environmental protection, the Company takes active actions to develop products out of Aluminum alloys to achieve the goal of lightweight cars.

    • c. Application of hot-pressing parts: Given the trend of energy efficiency and environmental protection, the Company takes active actions to develop hot-pressing products to achieve the goal of lightweight cars with the same strength.

  6. (2) Engagement in development of auto parts though joint venture formed by Chinese and foreign car brands: the Company continues to develop auto parts for new car brands to maintains its relationship with current customers, including FAW-Volkswagen, FAW Car and SAIC Volkswagen. In addition, the Company explores new customers, such as HYUNDAI MOBIS Group, Chery Automobile and Great Wall Motor.

  7. (3) Engagement in design and development of Chinese brand auto parts: the Company cooperate with Chinese brand car manufacturers (FAW Car, Hongqqi, Geely and Chang’an Automobile) to design and develop new car types. With its experiences in design, R&D and manufacturing, the Company can provide customers more comprehensive and constructive advices.

  8. (4) Automation ：

    • a. Application of Robotic arms: Using robotic arms to load and unload materials aims to

- 89 -

increase production efficiency and minimize the impact of increased labor costs. 

  - b. Application of automated robots: For example, welding. Increasing the proportion of fully automated welding aims to increase production efficiency and precision.

  - c. Application of quick die change systems: In response to trends of mixed-model production (simultaneous production of different car models) and low inventories in the automotive industry, production lines are required to respond and adjust in timely manners. Quick die change systems can increase production efficiency.

  - d. Application of progressive dies: Introduction of progressive stamping increases production efficiency per unit and minimizes the impact of increased labor costs.

  - e. Fully automated detection: Using fully automated detection devices aims to grow production and improve product quality.

  • (5) Expected Expenses for R&D: the Company’s expected expenses for R&D in 2020 may account for 2% to 5% of total operating income.

  • Changes of Government Policies and Regulatory Environment and the Effect on the Company's Financial Status as well as mitigation measures

In the most recent year and as of the date of publication of the annual report, the Group has not been affected by any major changes of domestic and foreign government policies and regulatory environment. The Group implements its business in accordance with applicable government policies and legal requirements, and pays close attention to trends of government policies and changes in regulatory environment. When any change occurs, the Group will consult with relevant experts, including legal counsels and accountants, or delegate them to evaluate and design appropriate measures to take timely actions for changes in market environment. In the most recent year and as of the date of publication of the annual report, the Group’s financial status has not been affected by any changes of government policies and regulatory environment in Cayman Islands and Mainland China.

  1. Changes of Technology and Industry and the Effect on the Company's Financial Status as well as mitigation measures

The automobile industry has moved toward a more intelligent and energy efficient development as a result of advanced global technology and increasing awareness of environment protection and energy saving. Nowadays electric cars, self-driving cars, electronic monitoring systems (such as tire-pressure monitoring system) have been launched to the relevant market with a trend of energyefficiency (higher fuel efficiency and lighter car weight). The Group needs to update it manufacturing process and make investment in new equipment to meet standards of automobile manufacturers.

Responsive measures ：

In addition to industrial trend and the latest technology, the Group has conducted research on thickness, strength, high reliability and nature of products, and developed advanced manufacturing process, material and framework. In doing so, the Group can provide the most competitive products and service and then expand its market share in response to dynamic industrial environment and application of new technology.

  1. Effect of Changes in Corporate Image on the Company's Crisis Management and mitigation measures

Since its establishment, the Company has continued reinforcing internal management and improving quality management based on the philosophy of good faith. By creating an effective corporate image, a strong customer trust in our brand has been built so that there is

- 90 -

no such potential risk.

  1. Expected Benefits and Potential Risks Associated with any Merger and Acquisitions, and mitigation measures

As of the date of publication of the annual report, the Group has not had any M&A plan. If the Company has any M&A plan in the future, the Company will make a careful assessment and consider synergy to ensure shareholders’ interest.

  1. Expected Benefits and Potential Risks Associated with Expansion of Plants and mitigation measures

To respond to the continuous growth of the operation scale and meet the diversified demands of customers, Linde + Engley (Tianjin) Auto Parts Co., Ltd. will expand the plant for metal surface treatment, with an estimated capacity of 300,000 unit, which will be officially put into production in Q3, 2020.These expansionsenabled the Company strengthening its ability and increasing its production capacity as well as decreasing management and production costs for the purpose of expanding business and reinforcing competitiveness.

  1. Risks Associated with Concentration of Purchases and Sales and mitigation measures

  2. (1) Risks Associated with Concentration of Purchases and mitigation measures

There is no such risk associated with concentration of purchases. The Group’s primaryraw materials are steel and plastics. Part of them are required to be verified by major customers and then such specified raw materials will be imported through custom brokers. Because most of raw materials purchase by the Group are not rare and precious, and provided by many suppliers, it gives more negotiating space and less risk of a shortage.

  • (2) Risks Associated with Concentration of Sales and mitigation measures

FAW-Volkswagen Automobile Co., Ltd. was the Group’s main customer in 2019 and 2020 due to industry characteristics illustrated below: A. certification: Auto parts suppliers and their products are required to be certified by automobile manufacturers; B. business scale ： its scale meets the needs of automobile manufacturers in terms of scale production; C. capital scale ： The process of R&D, manufacturing, and sales in the automobile industry requires a huge initial investment; D.management system: the trend is repetitive manufacturing with limited quantity, which requires stable production management system; E. long-term cooperation: In general, there are long-term cooperative relationships between automobile manufacturers and suppliers. Automobile manufacturers may cooperate with one or several suppliers, and will not change these suppliers without reasonable reasons. Furthermore, customershave long-standing trust in the Group’s product quality and scheduled delivery date so transactions between two parties have gone smoothly. The reason why the ratio of sales from FAW-Volkswagen Automobile Co., Ltd to total sales has been decreasing, is that the Group actively develop new customers.

The Group will continue making efforts to improve existing customer satisfaction andstrengthen competitive advantages as well as maintain the long cooperative relation with customers. In addition, the Group will keep expanding its business to seek further strategic cooperation with other automobile manufacturers and explore possibility in upstream raw materials with the aim of more diverse end customers and products

  1. Potential Impact and Risk Associated with Bulk Transfer of Shares Owned by Directors, Supervisors and Major Shareholders with more than 10% shares, and the Company’s mitigation measures

- 91 -

The Company’s Directors, Supervisors and Major Shareholders with more than 10% shares do not transfer significant numbers of their shares of the Company and management levels do not experience significant changes.

  1. Potential Impact and Risk Associated with Management rights and Company’s mitigation measures

There is no change in the Company’s management rights in the Most Recent Year and as of the date of publication of the annual report. The Company has taken steps to improve corporate governance and introduced independent directors to establish the Audit Committee for protection of shareholders’ interest. Furthermore, the Company’s performance, which mainly relies on professional managers, has received its shareholders’ support. In the event of changes in management rights, the Company will not be affected significantly due to its well-established internal control regime and applicable management rules.

  1. Risks Associated with Litigious and Non-litigious Matters

If any final judgment, important ongoing lawsuit, non-litigation matter or administrative litigation matter in relation to the Directors, Supervisors, general managers, de facto responsible persons of the company, and the major shareholders and affiliated companies with more than 10% of the Company’s shares,may have a significant effect on the company's shareholders' equity or securities price, its fact, claim amount, starting date of legal actions, relevant parties and update of its status as of the date of publication of the annual reportshould be disclosed : None

  1. Other Important Risks and Mitigation Measures

The Company is registered in the Cayman Islands and its main business is operated in mainland China. Therefore, changes in macroeconomic situations, political environments and exchange rates in the Cayman Islands and mainland China will affect the Company’s business operation. Below are detailed information about macroeconomic situations, political and economic environments, foreign exchange controls, tax and relevant regulations in the Cayman Islands and mainland China as well as whether they recognize final and binding judgments on civil matters rendered by Taiwan courts.

  • (1) Registered Country: Cayman Islands

  • a. Changes in the macroeconomic situation and political environment

The Cayman Islands is a British Overseas Territory in the West Indies, which is located in the Caribbean Seain the south of Miami, Florida. Politics in the Cayman Islands has remained stable. Its capital city, George Town located in the Grand Cayman, is the center of administration, commerce and finance. The economy of the Cayman Islands is mainly fueled by the tourism sector and the financial services sector. The Cayman Islands is one of global financial centers.

The Cayman Islands Government took more active actions to improve its reputation as an offshore financial center. In 1986, a mutual legal assistance treat concerning the Cayman Islands was signed between the US and UK and it could prevent international criminal organizations from engaging into illegal transactions, including drug dealing or money laundering through the Cayman Islands.

As the Cayman Islands Governmentis taking actions to prevent crimes, it is also endeavoring to protect confidentiality of legal commercial conduct. The political and economic environment in the Cayman Islands has been stable for a long time, and it has been a safe place.

The Company is a holding company registered as an “exempted company”, which

- 92 -

refers to a company without substantial operational activities in the Cayman Islands. The Cayman Islands is the world’s fifth largest financial center and its politics remains stable for a long time.As a result, changes in macrocosmic situation and political and economic environment in the Cayman Islands will not have significant influence on the Company’s operation.

  • b. Risks associated with foreign exchange controls, tax and relevant regulations

The Cayman Islands hasn't imposed taxes relating toprofits, income and gains or appreciations on individuals or companies, and no estate tax or inheritance tax is applicable. In the case where a contract is signed or made in the Cayman Islands, the stamp duty may be applied to related parties. Except that, the Cayman Islands doesn't levy any tax, which matters to the Company. In general, transfer of shares owned by the Cayman companies doesn't involve the stamp duty except for those companies with interests of lands in the Cayman Islands.

Since there is no foreign exchange controls in the Cayman Islands, the Company’s financial activities will not be affected thereby. Furthermore, the Company is just a holding company in the Cayman Islands, which does not have business activities there. In this regard, local tax and relevant regulations will not have significant impact on the Company’s operation though the registered country is the Cayman Islands.

  • c. Recognition of final and binding judgments on civil matters rendered by Taiwan courts

As per legal opinions of the Cayman Islands, a final civil judgment rendered by a foreign court can be recognized by courts in the Cayman Islands and be enforceable there in the case where it meets the following requirements: A. it is a final and binding judgment; B. it is rendered by a foreign court, which has jurisdiction over the case; C. it relates to claims for monetary debts (excluding tax payables, administrative penalties, fines and other similar obligations) or non-monetary remedies (restricted in certain circumstances), and D. the judgment and its enforcement should not violate the principle of fairness or public policies of the Cayman Islands.

  • (2) The Country where the Main Business is: Mainland China

  • a. Changes in the macroeconomic situation and political environment

Since the “open door policy” was adopted in 1978, the economy of mainland China has continued to grow. Data from the National Bureau of Statistics in China shows that between2018~2020, the GDP figures in China were worth RMB$90,030 billion, 98,650 billion and 101,600 billion with the annual growth rates of 6.6%, 9.6% and3.0% ， . Although the rate of economic growth slowed slightly, China overtook Japan as the second largest economy behind the United States. To achieve this goal, the Chinese Government helps businesses reduce their costs, diminish the gap between countries and cities, increase minimum wage, and encourages innovation for industrial upgrades as well as support industries associated with energy efficiency and carbon emissions reduction. The overall economy in China is still subject to limited resources and environmental conditions, and facing challenges of supply and demand for labor as well as changes in China’s population. The key for China's economic growth in the long run will be more reliant on innovative development and adjustment of economic structure. In terms of recent economic situation in mainland China, price control would be the priority of macroeconomic regulation and control. When approaches of macroeconomic regulation and control become effective, economic growth rate will slow accordingly. Despite of this, medium- and long-term momentum for stable

- 93 -

economic growth remains.

  • b. Risks associated with Foreign Exchange Controls, Tax and Relevant Regulations

  • i. Risks associated with Foreign Exchange Controls

    • After 1978, foreign exchange controls in China switched gradually from central planning to market orientation. Since 1994, China has implemented a series of proposals to reform foreign exchange regulations and make the market mechanism work appropriately. They included: 1) the “regulated float regime”based on market supply and demand with the aim of using single exchange rate system; 2)a banking system for foreign exchange settlement and sale to take steps to make RMB convertible freely under the current account;3) establishment of an inter-bank foreign exchange market in order to improve exchange rates formation mechanism and keep reasonable and relatively stable RMB rate.

Exchange of RMB and foreign currency depended on political impact in China and international political and economic environment. On July 21, 2005, Chinese Government adopted a floating exchange rate system, and RMB stopped pegging to US dollar. The value of RMB is determined by a basket of foreign currencies so that the RMB rate is allowed to float conditionally. Foreign exchange in China is not fully deregulated. However, China continues to open up its foreign exchange market as a result of global economic development. In this regard, the current foreign exchange controls do not have significant impact on the Company’s business.

  • ii. Tax risk

  • Before January 1, 2008, the “Income Tax Law of the People's Republic of China for Enterprises with Foreign Investment and Foreign Enterprises”provided that 30% of enterprise income tax and 3% of local income tax are were applied to foreign investment and foreign enterprises established in China (hereinafter collectively referred to as “foreign investment”). Chinese Government offered various tax benefits, including tax exemptions, reduced tax rates, tax refunds to foreign investment and companies, which meet specified requirements and other policies. The “Income Tax Law of the People's Republic of China for Enterprises with Foreign Investment and Foreign Enterprises” (hereinafter referred to as the “China Tax Law”) and its enforcement rules both came into effect on 1 July, 1991 and were abolished on January 1, 2008. The income tax on foreign enterprises, which have establishments or places in Special Economic Zones engaged in production or business operations, and on enterprises with foreign investment of a production nature in Economic and Technological Development Zones, shall be levied at the reduced rate of 15%. The enterprise with foreign investment of a production nature scheduled to operate for a period of not less than ten years shall, from the year beginning to make profit, be exempted from income tax in the first and second years and allowed a fifty percent reduction in the third to fifth years (three years of exemption plus three years of 50% reduction). According to the China Income Tax Law and its enforcement rules, any exported enterprise with foreign investment, which total exports in any year are more than 70% of total products made by such enterprise, can enjoy 50 % reduction of enterprise income tax after the periods of tax exemption and reduction expire. In the case where any enterprises are in Special Economic Zones and Economic and Technological Development Zones and other enterprises for export, which pay 15% income tax rate, meet the aforementioned requirements, 10% of enterprise income tax will be applied.

On March 16, 2007, mainland China enacted the new “Enterprise Income Tax Law

- 94 -

of the People's Republic of China” and then enacted on December 6, 2007 the “Implementation Rules of Enterprise Income Tax Law of the People's Republic of China”. Since January 1, 2008, 25% of the enterprise income tax has been applied to domestic enterprises and foreign enterprises and a number of tax exemptions and benefits for foreign investment has been revoked. The enterprise income tax benefits for foreign enterprises will increase to 25% from lower tax rates in five years after the new Enterprise Income Tax Law came into enforce.

In terms of Value-Added Tax, all units and individuals engaged in the sale of goods, provision of processing, repair and replacement services, and the importation of goods within the territory of the People's Republic of China are taxpayers of Value-added Tax , and shall pay VAT (0%~17%) and zero tax for exportation of goods in accordance with Provisional Regulations of the People's Republic of China on Value-added Tax. Furthermore, the new Enterprise Income Tax Law and its Implementation Rules stated that the term "resident enterprise" as mentioned in this Law refers to an enterprise which is established under the law of a foreign country (region) but whose actual office of management is inside China. Any resident enterprise shall pay enterprise income tax (25%) on its incomes derived from China as well as on incomes that it earns external China.

c. Labor Contract Law

To clarify the rights and obligations of both parties of labor contracts, protect the legitimate rights and interests of employees, and establish and develop a harmonious and stable employment relationship, the “Labor Contract Law of the People's Republic of China” (hereinafter referred to as the “Labor Contract Law”) came into effect on January 1, 2018. Employers should comply with contracts and national regulations to pay reasonable remuneration in time to employees. Employers also need to enumerate explicitly the rights and obligations of both parties of labor contracts. In the case of statutory rights and benefits, they will increase labor costs for enterprises and it may have undesired effect on the company’s financial situation. If the rights and obligations of employees and employers are explicitly set out in labor contracts, it can avoid many conflicts to harmonize mutual relationship for a long run. The Company’s subsidiary has signed contracts with all employees in accordance with the Labor Contract Law, and developed labor policies as well as employees’ social insurances. While any changes in labor related law may have impact on the Company to a certain extent, the Company will keep paying attention to legal changes in China and make plans in response to these changes.

d. Dividend Allocation

Given that the Company is a holding company, the ability of paying dividends is subject to earnings and distributions of its affiliated companies and the measures and amounts of the distribution approved by the Board of Directors. In the regard, future distribution of dividends depend on overall operational performance, financial status, demand for cash and applicable laws and statutes.Under Chinese laws, Chinese subsidiaries only can distribute and pay dividends allocated from net profit. Net income will be based on retained earnings determined in accordance with Chinese GAAP and relevant financial regulations, which the standards are different from IFRS.

In addition, each of the Company’s subsidiaries in China is required to allocate at least 10% of net profit after tax as statutory earnings (which is non-distributable reserve. When the legal reserve accumulates up to 50% of the registered capital, the Company needn’t contribute to statutory earnings from net profit after tax) in the current year

- 95 -

before distribute profit in accordance with applicable laws and regulations.In the case where the Company’s subsidiaries in China pay dividends to the Company through outflow of capital (10%), the Company’s ability to distribute dividends to shareholders is likely to be affected.

  • e. Recognition of final and binding judgments on civil matters rendered by Taiwan courts

An explanation of the Supreme People’s Court is as follows :The Courtenacted the 《 Provisions of the Supreme People's Court on Recognition and Enforcement of the Civil Judgments of Courts of the Taiwan Region 》 (hereinafter referred to as 《 Provisions 》 )on May 22, 1998and it came into effect on May 26 1998. The Courtalso published 《 Responses to an Application for Recognition of Mediation Agreement on Civil Matters Reached at Courts in Taiwan Region or Reached at or Verified by Applicable Authorities 》 on April 27, 1999 and it came into effect on May 12, 1999 . On April 10, 2001, the Court published 《 Responses to an Application for Recognition of the Order of Payment Issued by a Court in Taiwan Region 》 and it came into enforce on April 27, 2001.In addition, the Court published 《 Supplementary Provisions of the Supreme People's Court on Recognition and Enforcement of the Civil Judgments of Courts of the Taiwan Region 》 (hereinafter referred as to 《 Supplementary Provisions 》 ) on April 24, 2009 and it came into effect on May 14 2009.

According to 《 Provisions 》 and 《 Supplementary Provisions 》， criteria of recognition of a civil judgment rendered by Courts in Taiwan Region are as follows ： (1) Such a judgment can be confirmed that they are authentic and binding judgments after reviewed by the People’s Court. (2) Such judgments do not fall within any of the following circumstances: A.Violation of One China Policy; B Application for recognition of a civil judgment, which is not final and binding; C. Application for recognition of a default judgment, in which the defendant(s) was not summoned legally, or the defendant(s) appearing in the court did not have capacity to action and no qualified representative person(s) was present at court; D. Such a judgment involves the matter, which the People’s Court has exclusive jurisdiction over; F.The People’s Court, or any foreign court made a judgment on the same matter, or any foreign arbitration institution made arbitration for the same matter, which was also recognized by the People’s Court; G. Application for recognition of civil judgments, which violate fundamental principals of national laws or impair social public interest.

(3) Other important matters

None.

- 96 -

VIII Special Disclosure

  • A. Information Related to the Company’s Affiliates

  • Consolidated Business Report of Affiliated Companies

    • (1) Organizational Chart: Please see II Company Profile.

    • (2) Basic Information of Affiliated Companies(As of December 12, 2020)

Unit: NT$1,000

Unit: NT$1,000
Name Date of
Establishment		 Address Paid-in Capital Main Business or Product Category
Engley Automobile
Industry Co.,Ltd		 2006/12/21 No.2379, Zhuoyue Street, Hi-Tech Zone,
Changchun, Jilin		 5,890,346 Manufacturing and Sale of Auto Parts
Engley Auto Parts 2001/02/09 No.567,Yumin Road, Economic Development
Area, Changchun, Jilin		 270,903 Manufacturing and Sale of Auto Parts
Suzhou Engley 2008/02/18 No.32, Taizhong Road, Yuewang yuezhen
Village, Shaxi Town, Taicang City, Suzhou,
Jiangsu		 437,474 Manufacturing and Sale of Auto Parts
Chengdu Engley 2009/11/19 No.268, South 4thRoad, Economic and
Technological Development Zone, Chengdu,
Sichuan		 146,380 Manufacturing and Sale of Auto Parts
Yizheng Engley 2011/05/27 No.31, Lianzhong Road, Automobile Industrial
Park,Yizheng, Jiangsu		 219,000 Manufacturing and Sale of Auto Parts
Liaoning Engley 2011/08/23 Yilu Industrial Park, Xintaizi Town, Tieling
County,Tieling,Liaoning		 275,940 Manufacturing and Sale of Auto Parts
Foshan Engley 2012/04/24 No.15-1, Dongyang 3rdRoad, Huanan Hardware
Industry Base, Danzao Town, Nanhai Area,
Foshan, Guangdong		 1,029,300 Manufacturing and Sale of Auto Parts
Tianjin Engley 2012/09/19 No.21 BaokangRd,Baodi Economic 1,104,329 Manufacturing and Sale of AutoParts

- 97 -

Name Date of
Establishment		 Address Paid-in Capital Main Business or Product Category
DevelopmentZone,Tianjin
Lightweight 2013/09/17 No. 699, Shunda Road, Hi-Tech Zone,
Changchun, Jilin		 239,060 Manufacturing and Sale of Auto Parts
Changsha Engley 2014/05/19 No 9, Qingyuan Road, Langli Industrial Park,
Changsha County, Changsha,Hunan		 166,440 Manufacturing and Sale of Auto Parts
Tsingtao Engley 2016/04/25 North of Dazhong 1stRoad and West of Yingliu
Road, New Automobile Industrial City,
Qingdao, Shandong		 747,929 Manufacturing and Sale of Auto Parts
Ningbo Engley
Automobile
Industry Co.,Ltd		 2019/1/29 No.209, Xingci 1stRoad, New Area, Hangzhou
Wan, Ningbo, Zhejiang		 177,390 Manufacturing and Sale of Auto Parts
Linde+Engley
(Changchun)		 2012/09/11 No.888, Jinghe Street, Economic Development
Area, Gongzhuling, Jilin		 89,521 Manufacturing and Sale of Auto Parts
Linde+Engley
(Tianjin)		 2013/03/27 No.34 Baokang Rd, Baodi Energy Conservation
and Environmental Protection Industrial Area,
Tianjin		 157,680 Manufacturing and Sale of Auto Parts
Ningbo Maoxiang 2000/06/23 No.609, Xiayingbei Road, Yinzhou District,
Ningbo,Zhejiang		 574,179 Manufacturing and Sale of Auto Parts ,
DesignandDevelopment of Moulds
Taizhou Maoqi 2014/12/26 No. 2298, Juying Road, East Section of Pengbei
Avenue,LuqiaoDistrict,Taizhou,Zhejiang		 613,200 Manufacturing and Sale of Auto Parts
Jilin Jinli Auto part
Co., Ltd.		 2007/01/04 No.1854,Jinghe Street, Economic Development
Area, Gongzhuling, Jilin		 87,600 Manufacturing and Sale of Auto Parts,
Stamping
Products
、
Hot-Presssing
Products
ChengduYouli 2010/11/09 No. 388, Section3, ChenglongAvenue, 130,893 Manufacturing and Sale of AutoParts,

- 98 -

Name Date of
Establishment		 Address Paid-in Capital Main Business or Product Category
Auto part Co., Ltd. Longquanyi District, Chengdu Economic and
Technological DevelopmentZone, Sichuan		 Stamping
Products
、
Hot-Presssing
Products
Constellium Engley
(Changchun)		 2009/12/14 No. 677 Sanyou Road, Economic Development
Zone, Chaoyang Changchun		 162,222 Manufacturing and Sale of Auto Parts,
Stamping
Products
、
Hot-Presssing
Products
Zhejiang Sanse
MoldTechnology		 2009/06/09 The Coastal Industrial Town of Sanmen, Taizhou
City,Zhejiang		 168,844 Manufacturing and Sale of Auto Parts ,
DesignandDevelopment of Moulds
Changchun CECK
Auto.Parts Co.,Ltd.		 2014/04/30 No. 2299, Chaoyue Street, Changechun, Jilin 760,213 Manufacturing and Sale of Auto Parts ,
DesignandDevelopment of Moulds
Chongqing HC&C 2016/05/19 No.3 Tongguan Avenue, Yufengshang Town,
Yubei District, Chongging		 1,191,706 Manufacturing and Sale of Auto Parts ,
DesignandDevelopment of Moulds
Taiwan Engley 2016/09/02 8F., No. 349, Sec. 2, Zhongshan Rd., Changhua
City, Changhua County		 54,396 Wholesale and Sale of Auto Parts
Engley Holding
（Samoa）Limited		 2016/10/25 Portcullis Chambers, P.O. Box 1225, Apia ,
Samoa,P.O.Box 1225,Apia , Samoa.		 350,133 General Investment
Engley Precision
IndustryB.V.		 2017/01/20 Herikerbergweg 238, 1101CM Amsterdam, The
Netherlands.		 579,573 General Investment
Kranendonk
Beheersmaatschapp
ijB.V.		 1998/11/25 Biezenwei 14 P.O. Box 6147, NL-4000 HC Tiel,
The Netherlands.		 636 Solutions
of
welding,
cutting
and
assembling by flexible robots.
Wiser Decision
Holding Company
Limited		 2018/10/23 8F., No. 349, Sec. 2, Zhongshan Rd., Changhua
City, Changhua County		 99,680 General Investment
HonleyAuto.Parts 2013/12/26 No. 32, Jingjian Road,Pingtung City 1,681,388 Manufacturing and Sale of AutoParts,

- 99 -

Name Date of
Establishment		 Address Paid-in Capital Main Business or Product Category
Co.,Ltd Stamping
Products
、
Hot-Presssing
Products
CECK Holdings
Co.,Limited		 2014/02/04 No. 88, Chenggong 2nd Road, Lingya District,
Kaohsiung City		 1,279,083 General Investment

  • (3) Under Article 369-3 of the Company Act is presumed the existence of controlling and subordinate relation: None

  • (4) Sectors covered by the Group’s Business The man businesses for the affiliated companies of the Group include manufacturing and sale of auto parts regarding stamping, rolling, and hot-pressing, design and manufacturing of moulds as well as technology consulting services and manufacturing and development of automation equipment.

- 100 -

  • (5) Name of Directors, Supervisors and General Manager in each Affiliated Company and their Shares hereof.
their Shares hereof.
March 31, 2020
Company Title Name of Representative(s) Shareholding
Shares %
Engley Automobile
Industry Co.,Ltd		 Chairman Lin, Chi-Pin ─
─
Engley Automobile
Industry Co.,Ltd		 Vice Chairman Lin, Shang-Wei ─
─
Engley Automobile
Industry Co., Ltd		 Director Liu Jun, Lin, Shang-Chi,
Zhang Ning, Meng Yan,
Wang Jun		 ─
─
Engley Automobile
Industry Co.,Ltd		 Supervisor Hou Quan Chang ─
─
Engley Automobile
Industry Co.,Ltd		 Supervisor Li Shi Guang, Wang Yi
Ning		 ─
─
Engley Automobile
Industry Co.,Ltd		 General Manager Wu Tingbo ─
─
EngleyAuotoParts Chairman Lin, Chi-Pin ─
─
EngleyAuotoParts Vice Chairman Lin, Chen-Yin ─
─
EngleyAuotoParts Director Lin, Shang-Chi ─
─
EngleyAuotoParts Supervisor Lin, Shang-Wei ─
─
SuzhouEngley Chairman Lin, Shang-Wei ─
─
Suzhou Engley Director Lin, Chen-Yin, Chen,
Jung-Juan		 ─
─
SuzhouEngley Supervisor Lin, Shang-Chi ─
─
SuzhouEngley General Manager Chen,Ming-Hui ─
─
ChengduEngley Chairman Lin, Shang-Wei ─
─
Chengdu Engley Director Lin, Chen-Yin, Lin,
Shang-Chi		 ─
─
Chengdu Engley Supervisor Chengzijian ─ ─
Chengdu Engley General Manager Chengan ─ ─
Foshan Engley Auto
Part Co.,Ltd.		 Executive Director Lin, Chi-Pin ─
─
Foshan Engley Auto
Part Co.,Ltd.		 Supervisor Lin, Chen-Yin ─
─
Foshan Engley Auto
Part Co.,Ltd.		 General Manager Lv, Dong-Sheng ─
─
Tianjin Engley ExecutiveDirector Lin, Chi-Pin ─
─
Tianjin Engley Supervisor Lin, Shang-Chi ─
─
Lightweight ExecutiveDirector Lin, Shang-Wei ─
─
Lightweight Supervisor SunShuYuan ─
─
Lightweight General Manager Ma Ji ─
─
Changsha Engley Director&General
Manager		 Lin, Chen-Yin ─
─
Changsha Engley Director Lin, Shang-Wei, Lin,
Shang-Chi		 ─
─
ChangshaEngley Supervisor Chengzijian ─
─
Changsha Engley Director&General
Manager		 Lin, Shang-Wei ─
─

- 101 -

Company Title Name of Representative(s) Shareholding Shareholding
Shares %
Changsha Engley Director Lin, Chen-Yin, Lin,
Shang-Chi		 ─
─
ChangshaEngley Supervisor Yang, Cheng-Feng ─
─
Yizheng Engley Director&General
Manager		 Lin, Shang-Wei ─
─
Yizheng Engley Director Lin, Chen-Yin, Lin,
Shang-Chi		 ─
─
YizhengEngley Supervisor Yang, Cheng-Feng ─
─
TsingtaoEngley ExecutiveDirector Lin, Shang-Wei ─
─
TsingtaoEngley Supervisor Lin, Shang-Chi ─
─
TsingtaoEngley General Manager Lu Shi Yong ─
─
Liaoning Engley Chairman&General
Manager
Lin, Shang-Wei		 ─
─
Liaoning Engley Director Lin, Chen-Yin, Lin,
Shang-Chi		 ─
─
LiaoningEngley Supervisor Yang, Cheng-Feng ─
─
Taiwan Engley Director ChengDengRan ─
─
Linde Changchun Chiarman Lin, Chi-Pin ─
─
Linde Changchun Vice Chairman Ulrich Schoof ─ ─
Linde Changchun Director Lin, Chen-Yin, Nishant
Arya, WangHong		 ─
─
Linde Changchun Supervisor Lin, Shang-Chi ─ ─
Linde Changchun Supervisor Michael Lindner ─
─
Linde Changchun Director&General
Manager		 Wu Tingbo ─
─
LindeTianjin Chiarman Lin, Chi-Pin ─
─
LindeTianjin Vice Chairman UlrichSchoof ─
─
Linde Tianjin Director Lin, Chen-Yin, Nishant
Arya, Wang Hong		 ─
─
LindeTianjin Supervisor Lin, Shang-Chi ─
─
LindeTianjin Supervisor Michael Lindner ─
─
Linde Tianjin Director&General
Manager		 Wu Tingbo ─
─
Jilin Jinli Auto part
Co., Ltd.		 Executive
Director&General
Manager		 Hsiao Chia Chen ─
─
Jilin Jinli Auto part
Co.,Ltd.		 Supervisor Lin, Shang-Chi ─
─
Chengdu Youli Auto
part Co.,Ltd.
Chairman		 Hsiao Chia Chen ─
─
Chengdu Youli Auto
part Co.,Ltd.
Director		 Yang Chi Ming, Pai Tsung
Hsien		 ─
─
Chengdu Youli Auto
part Co.,Ltd.
Supervisor		 Lin, Shang-Chi ─
─
Chengdu Youli Auto
part Co.,Ltd.
General Manager		 Tseng Jui Tien

- 102 -

Company Title Name of Representative(s) Shareholding Shareholding
Shares %
Constellium Engley
(Changchun)
Automotive
Structures Co.,Ltd.		 Chiarman Paul Warton ─
─
Constellium Engley
(Changchun)
Automotive
Structures Co.,Ltd.		 Vice Chairman Lin, Chi-Pin ─
─
Constellium Engley
(Changchun)
Automotive
Structures Co.,Ltd.		 Director Gao Min, Lin, Chen-Yin,
Lionel Pierre Chapis		 ─
─
Constellium Engley
(Changchun)
Automotive
Structures Co.,Ltd.		 Supervisor Tsai, Chi-Chung ─
─
Constellium Engley
(Changchun)
Automotive
Structures Co.,Ltd.		 General Manager Sun Li Meng ─
─
Honley Auto. Parts
Co.,Ltd		 Chiarman Yun Tasi Fu ─
─
Honley Auto. Parts
Co.,Ltd		 Director Tsai Sung Chao、Zheng Jing
Ren、Lin, Shang-Wei, Lin,
Shang-Chi, Cheng Ming
Hai,LiuHongYi
─
─
Honley Auto. Parts
Co.,Ltd		 Supervisor Wang Chun Chieh ─
─
Honley Auto. Parts
Co.,Ltd		 General Manager Cheng Zong Rong ─
─
CECK Holdings
Co.,Limited		 General Manager Cheng Zong Rong ─
─
Changchun CECK
Auto.Parts Co.,Ltd.		 Chiarman Lin, Chi-Pin ─
─
Changchun CECK
Auto.Parts Co.,Ltd.		 Director Zheng Jing Ren, Cheng
ZongRong		 ─
─
Changchun CECK
Auto.Parts Co.,Ltd.		 Supervisor Ma Lain Bo, Yun Tasi Fu,
Chen Kuan Fu		 ─
─
Changchun CECK
Auto.Parts Co.,Ltd.		 General Manager Chen Tzu Ming ─
─
Chongqing HC&C
AutoParts Co.,Ltd		 Chairman Lin, Shang-Wei ─
─
Chongqing HC&C
AutoParts Co.,Ltd		 Director&General
Manager		 Jing Yi Wen ─
─
Chongqing HC&C
Auto Parts Co., Ltd		 Director Lin, Shang-Chi, Liu An
Min, Li Yang, Cheng Zong
Rong, Yun Tasi Fu, Guan
YuLiang,Zheng JingRen		 ─
─

- 103 -

Company Title Name of Representative(s) Shareholding Shareholding
Shares %
Chongqing HC&C
AutoParts Co.,Ltd		 Supervisor Deng Ping Chiun, Tsai Sung
Jau
─
─
Engley Holding
(Samoa)Limited		 Chairman Lin, Shang-Wei ─
─
Engley Holding
(Samoa)Limited		 Director Lin, Chen-Yin, Lin,
Shang-Chi		 ─
─
Kranendonk
Beheersmaatschappij
B.V.
Chairman		 Lin, Shang-Wei ─
─
NingboMaoxiang Chairman Lin, Shang-Wei ─
─
NingboMaoxiang Vice Chairman Chang Chun Yao ─
─
Ningbo Maoxiang Director Lin, Shang-Chi,
WuMingHuei		 ─
─
Ningbo Maoxiang Director&General
Manager		 JAN GOHOUNGO
JOERGENSEN
NingboMaoxiang Supervisor Yang, Cheng-Feng ─
─
TaizhouMaoqi ExecutiveDirector Lin, Shang-Wei ─
─
TaizhouMaoqi Director Yang, Cheng-Feng ─
─
Taizhou Maoqi General Manager Yang Xue ─ ─
Zhejiang Sanse Chairman&General
Manager
Li Jia Chun		 ─
─
Zhejiang Sanse Director PanQiWei ─
─
Zhejiang Sanse Director Wang WenShuang ─
─
Zhejiang Sanse Director Long Wei Guo ─ ─
Zhejiang Sanse Director Lin, Shang-Wei ─
─
Zhejiang Sanse Director Wang Yu Ping ─ ─
Zhejiang Sanse Director Cai Ye ─
─
Zhejiang Sanse Supervisor Li Ming Hui ─ ─
Ningbo Engley Executive
Director&General
Manager		 Lin, Shang-Wei ─
─
Ningbo Engley Supervisor Lin, Shang-Chi ─ ─
Wiser Decision
Holding Company
Limited		 Director Lin, Shang-Chi ─
─
Chi Rui (Cayman)
Holding Limited		 Chairman I Yuen InvestmenCo., Ltd.
(Representative:
Hsiao Chia Chen)		 ─
─
Chi Rui (Cayman)
Holding Limited		 Director Tseng Yu Ching、Lin Ming
Tan、Pai Yu Hua、Lin Hsing
Hui

─
─
Chi Rui (Cayman)
HoldingLimited		 Supervisor Pai Tsung Hsien ─
─

- 104 -

(1) Financial Status and Operational Performance of Every Affliated Companies (As of December 31, 2019)

Company Capital
(Note1)		 Total Assets
(Note1)		 Total
Liabilities
(Note1)		 Net Worth
(Note1)		 Operating
Revenue
(Note 2)		 Operating
Net Profit
(Note 2)		 Current profit
and loss
(After tax)
(Note2)
EPS
(Note 2)
EngleyAutomobileIndustry Co.,Ltd 5,890,346 20,333,217 6,020,377 14,312,840 6,040,561
168,417		 771,727 Note 3
EngleyAuotoParts 270,903 3,109,343 872,223 2,237,120 2,235,538 41,619 110,662
Note 3
SuzhouEngley 437,474
2,808,490		 1,802,519 1,005,971
2,213,542
93,400		 61,753 Note 3
ChengduEngley 146,380 2,462,026 727,723 1,734,303 1,621,189 81,897 92,915 Note 3
Yizheng Engley 219,000
354,540
99,966
254,574
232,339
16,603
13,233
Note 3
Liaoning Engley 275,940
156,754
240
156,514
460
(9,263)
5,206
Note 3
Foshan Engley 1,029,300 2,527,662
1,353,230		 1,174,432
1,982,657		 55,694
76,331
Note 3
Tianjin Engley 1,104,329 2,684,072
1,549,415		 1,134,657 2,991,565 33,886 34,719 Note 3
Lightweight 239,060 586,577 92,205 494,372
603,753		 154,859 132,531
Note 3
ChangshaEngley 166,440 558,891
555,771
3,120		 86,361
(60,604)		 (84,180) Note 3
TsingtaoEngley 747,929 1,836,153 1,363,132
473,021
1,416,292
(26,861)		 (42,535) Note 3
NingboEngley 177,390
268,463
128,309
140,154
298,619
(30,349)
(22,828)
Note 3
Linde Changchun 89,521
771,575		 531,072
240,503		 681,923 55,351
32,458		 Note 3
LindeTianjin 157,680 4,653,763 2,163,338 2,490,425 4,977,954
846,148		 740,268 Note 3
NingboMaoxiang 574,179 1,287,257 503,303 783,954
261,890		 (76,390) (107,096) Note 3
TaizhouMaoqi 613,200 1,297,117 730,230 566,887 686,299 93,400 106,508 Note 3
JilinJinli Auto part Co.,Ltd. 87,600 431,123 291,102
140,021
189,489		 (5,138) 12,973 Note 3
ChengduYouli Auto part Co.,Ltd. 130,893 615,859 57,997 557,862
151,927		 7,984
31,103		 Note 3
Constellium Engley (Changchun)
Automotive Structures Co.,Ltd.		 162,222
1,379,811
727,724
652,087
1,161,886
223,029
158,031
Note 3
Zhejiang Sanse Mold Technology Co.,
Ltd		 168,844
1,070,819
678,710
392,109
484,500
(45,555)
(48,387)
Note 3
Changchun CECK Auto. Parts Co.,Ltd. 760,213
1,943,501
1,938,692
4,809
482,539
(207,611)
(239,695)
Note 3
Chongqing HC&C Auto Parts Co., Ltd 1,191,706
1,381,364
240,404
1,140,960
152,229
517
517
Note 3
Taiwan Engley 54,396 51,520 3,825 47,695 14,828 (866) (1,049) Note 3
HonleyAuto.Parts Co.,Ltd 1,681,388
2,213,698
1,057,150
1,156,548
65,926
(81,218)		 (261,710) (1.56)
CECK Holdings Co.,Limited 1,279,083
1,151,446
509,667
641,779
-
-
(193,585)		 (1.55)
Wiser Decision Holding Company
Limited		 99,680
107,863
-
107,863
-
-
4,336
0.42

- 105 -

Note 1: The number was calculated based on the exchange rates on December 31 2020 (US$28.48NT$ 1,RMB 4.38:NT$1). Note 2: The number was calculated based on average yearly exchange rates in 2019 (US$29.55:NT$ 1,RMB 4.28:NT$1). Note 3 ： These Companies are limited companies without issuance of shares.

2. Consolidated Financial Statements

The Foreign Company needn’t prepare consolidated financial statements, which are set out in the Chapter Five of the IFRS. For the Company’s 。 consolidated financial statement, please refer to Consolidated Financial Statements Independent Auditors’ Report

  1. Representation Letter for Consolidated Financial Statements: Not applicable for foreign companies.

  2. Relation Report

    • N/A. The Company is not the subordinate company defined in the Chapter “Affiliated Enterprises” of Company Act.

  3. B. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

None.

  • C. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

None.

- 106 -

  • D. Other matters that require additional description

  • Major differences with Provisions on Protection of Shareholder Equity in Taiwan As a result of slight differenes between laws of the Cayman Islands and R.O.C, the “checklist of legal protection of shareholder equity in th the country where foreign issuers are registered” (hereinafter referred to as the “checklist of legal protection of shareholder equity”) revised by the TWSE can not be fully applied to the Company. Below are the details informaino on the differences between laws of the Cayman Islands and the Company’s Article of Incorporation.

Difference Law of the Cayman Islands Article of Incorporation
A company which buys back
its shares and assigns or
transfers those shares to its
employees may restrain such
shares from being assigned or
transferred to others within a
specific period of time which
shall in no case be longer than
two years.		 The Board of Directors may
determine terms and
conditions on treasury shares.
The Companies Law of the
Cayman Islands does not
include any provision relating
to employee rewards
programs.		 Article 1 provides that treasury
shares refer to as shares that
were previously issued but
were purchased, redeemed or
otherwise acquired by the
Company and not cancelled, in
accordance with these
Articles, the Companies Law
of the CaymanIslands and the
Applicable Listing Rules.
Article 40 D provides the
disposal of treasure shares.
However, the legal counsel in
the Cayman Island clarifies
that the restrictions agreed
between the company and the
employee is a contractual
matterbetweenthemselves.
5. The following matters shall
be specified in the notice of
a general meeting, and shall
not be proposed as ad hoc
motions:
(1) election or discharge of
Director or supervisors;
(2) amendments to these
Articles;
(3) dissolution, merger, share
swap or spinoff of the
Company;
(4) entering into, amendment
to, or termination of any
contract for lease of its
business in whole, or for
entrusting business, or for
regular joint operation with
others;
(5) the transfer of the whole or
any material part of its
business or assets;
(6) the takeover of another's
whole business or assets,
whichwill have amaterial		 The Companies Law of the
Cayman Islands does not have
any provision about ad hoc
motions. The legal counsel in
the Cayman Island further
explains that a notice of a
regular shareholders’ meeting
with proposals and relevant
information should be given to
shareholders to facilitate their
understanding. In addition, the
notice also includes the agenda
item “any other proposal”.
Other than unofficial or minor
matters, the Chair cannot
include important matters for
this agenda item. In the event
of new important matters,
another meeting for discussion
is required in accordance with
applicable procedures. In an
urgent circumstance where it
is necessary to discuss
important matters as ad hoc
motions at shareholders’		 The Companies Law of the
Cayman Islands does not have
any provision about ad hoc
motions. Therefore, the item 5
is set out in the Article 50 of
these Articles.
The legal counsel in the
Cayman Island further
explains that a notice of a
regular shareholders’ meeting
with proposals and relevant
information should be given to
shareholders to facilitate their
understanding. In addition, the
notice also includes the agenda
item “any other proposal”.
Other than unofficial or minor
matters, the Chair cannot
include important matters for
this agenda item. In the event
of new important matters,
another meeting for discussion
is required in accordance with
applicable procedures. In an
urgent circumstance whereit

- 107 -

Difference Law of the Cayman Islands Article of Incorporation
effect on the business
operation of the Company;
(7) the private placement of
equity-linked securities;
(8) granting waiver to the
Director’s engaging in any
business within the scope
of business of the
Company;
(9) distribution of part or all of
its dividends or bonus by
way of issuance of new
Shares;
(10) capitalization of the Legal
Reserves and Capital
Reserves arising from the
share premium account or
endowment income, in
whole or in part, by issuing
new Shares which shall be
distributable as dividend
shares to the then
Shareholders in proportion
to the number of Shares
being held by each of
them;		 meeting, detailed information
for such ad hoc motions need
to be submitted to the next
meeting for recognition.
Despite no explicit prohibition
of ad hoc motions under laws
of the Cayman Islands, the
legal counsel advises that ad
hoc motions are not
appropriate at shareholders’
meeting.		 is necessary to discuss
important matters as ad hoc
motions at shareholders’
meeting, detailed information
for such ad hoc motions need
to be submitted to the next
meeting for recognition.
3. A company whose
shareholders may exercise
their voting power in
writing or by way of
electronic transmission in a
shareholders' meeting shall
describe in the shareholders’
meeting notice the method
of exercising their voting
power. A shareholder who
exercises his/her/its voting
power at a shareholders
meeting in writing or by
way of electronic
transmission shall be
deemed to have attended the
said shareholders’ meeting
in person, but shall be
deemed to have waived
his/her/its voting power in
respective of any
extemporary motion(s) and
the amendment(s) to the
contents of the original
proposal(s) at the said		 The Companies Law of the
Cayman Islands does not have
any provision specifying the
item 3.		 The Companies Law of the
Cayman Islands does not have
any provision specifying the
item 3. Therefore, the first
paragraph of the item 3 is set
out in Article 68 of the
Articles. Furthermore, the
legal counsel in the Cayman
Islands is of the opinion that a
shareholder who exercises his
votes in writing shall be
deemed to have appointed the
chairman of the general
meeting as his or her proxy to
exercise his or her voting
right. Considering the legal
counsel’s opinions, Article 68
will include the second
paragraph of Article 68 (a
shareholder who exercises his
votes in writing or by way of
electronic transmission shall
be deemed to have appointed
the chairman of the general
meeting ashis or herproxy to

- 108 -

Difference Law of the Cayman Islands Article of Incorporation
shareholders’ meeting. exercise his or her voting right
at such general meeting in
accordance with the
instructions stipulated in the
written or electronic
document, but shall be deemed
to have waived his votes in
respective of any ad hoc
motions and the amendments
to the contents of the original
proposals at such general
meeting; provided, however,
that such appointment shall be
deemed not to constitute the
appointment of a proxy for the
purposes of the Applicable
ListingRules.)
5. In case a shareholder who
has submitted his votes by
written ballot or electronic
transmission intends to
attend the general meeting
in person, he shall, at least
two (2) days prior to the
date of the meeting revoke
such vote by written ballot
or electronic transmission
and such revocation shall
constitute a revocation of
the proxy deemed to be
given to the chairman of the
general meeting. If a
shareholder who has
submitted his or her vote in
writing or by way of
electronic transmission does
not submit such a
revocation before the
prescribed time, his or her
vote by written ballot or
electronic transmission and
the proxy deemed to be
given to the chairman of the
general meeting.		 The Companies Law of the
Cayman Islands does not have
any provision specifying the
item 5.		 The Companies Law of the
Cayman Islands does not have
any provision specifying the
item 5. It is set out in Article
70 of the Articles. The legal
counsel in the Cayman Islands
is of the opinion that under
common law, a person may
revoke its proxy by attending
the meeting in person. Because
a shareholder who exercises
his votes in writing or by way
of electronic transmission shall
be deemed to have appointed
the chairman of the general
meeting as his or her proxy to
exercise his or her voting right
at such general meeting in
accordance
with
the
instructions stipulated in the
written
or
electronic
document, the item 5 may not
be enforceable.
4. After the service of the
power of attorney of a proxy
to the company, in case the
shareholder issuing the said
proxy intends to attend the
shareholders’ meeting in
personorto exercise		 The Companies Law of the
Cayman Islands does not have
any provision specifying
power of attorney or collection
of its documents.		 The Companies Law of the
Cayman Islands does not have
any
provision
specifying
power of attorney or collection
of its documents. The item 4 is
set out in Article 62B of the
Articles.Thelegalcounsel in

- 109 -

Difference Law of the Cayman Islands Article of Incorporation
his/her/its voting power in
writing or by way of
electronic transmission, a
proxy rescission notice shall
be filed with the company
two days prior to the date of
the shareholders’ meeting as
scheduled in the
shareholders’ meeting notice
so as to rescind the proxy at
issue, otherwise, the voting
power exercised by the
authorized proxy at the
meeting shallprevail.		 the Cayman Islands of the
opinion that under common
law, a person may revoke its
proxy
by
attending
the
meeting in person, the item 4
may not be enforceable.
The following matters, which
may involve shareholders
important interests, shall
resolved by a majority of the
shareholders present who
represent two-thirds or more
of the total number of its
outstanding shares:
1. Enter into, amend, or
terminate any contract for
lease of the company’s
business in whole, or for
entrusted business, or for
regular joint operation with
others, or for transfer the
whole or any essential part
of its business or assets, for
gaining of the transfer of
another’s whole business or
assets, which has great
bearing on the business
operation of the company.
2.Amendments to these
Articles;
3.When amendments to these
Articles violate the rights of
special shareholders, such
amendments are required to
be approved at the Special
Shareholder Meeting.
4.Distribution of part or all of
its dividends or bonus by
way of issuance of new
Shares;
5.Resolution concerning
dissolution, merger, or
spinoff.		 The Companies Law of the
Cayman Islands does have
specific
requirements
or
prohibitions for Subparagraph
1, 4 and 5.
In terms of Subparagraph
2.and 3., Article 24 of the
Companies
Law
of
the
Cayman Islands provides that
any
amendments
to
the
Articles need to obtain a
Special Resolutions reached
by a shareholders’ meeting.
In terms of Subparagraph 5.
(dissolution)，Article 116 of
the Companies Law of the
Cayman Islands states that a
company’s
voluntary
dissolution should be approved
by
a
Special
Resolution.
However,
a
company
in
general meeting resolves when
it is unable to pay it debts. The
legal counsel is of the opinion
that
the
aforementioned
resolutions
of
the
shareholders’ meeting can be
ordinary resolution, special
resolution, or otherwise a
higher quorum specified in the
Article of Incorporation.
In terms of Subparagraph
5.(merger), the legal counsel is
of opinion that a merger
requires a Special Resolution
under Article 233(6) of the
Companies
Law
of
the		 1. The Companies Law of the
Cayman Islands does have
specific requirements or
prohibitions for
Subparagraph 1, 4 and 5.
Subparagraph 1, 4 and 5 are
set out in
Article32(a)(b)(c)(d)(g) of
the Articles. Supermajority
Resolution Type
orSupermajority Resolution
Type B is required special
resolution reached at
shareholders’ meeting (see
definitions above).
2. Article 24 of the Companies
Law of the Cayman Islands
provides that any
amendments to the Articles
need to obtain a Special
Resolutions reached by
ashareholders’ meeting. In
this regard, Subparagraph 2
is set out in Article 157 of
the Articles. In another
word, a company can amend
memorandums and/or
Article of Incorporation by
special resolutions from
time to time. The quorum in
a shareholders’ meeting is
subject to the Article 51 (the
holders of Shares being
more than an aggregate of
one-half (1/2) of all Shares
in issue present in person or
by proxyand entitled to

- 110 -

Difference Law of the Cayman Islands Article of Incorporation
Cayman
Islands
except
otherwise stated in the Articles
of Incorporation.		 vote shall be a quorum for
all purposes).
3. Article 24 of the Companies
Law of the Cayman Islands
provides that any
amendments to the Articles
need to obtain special
resolutions reached by
shareholders’ meetings.
Therefore, Subparagraph 3
is set out in Article 18 of the
Articles. Once amendments
to these Articles violate the
rights of special
shareholders, such
amendments are required to
obtain a special resolution
reached by the general
shareholders’ meeting and
another special resolution
reached by the special
shareholders meeting. The
quorum in a shareholders’
meeting is subject to the
Article 51 (the holders of
Shares being more than an
aggregate of one-half (1/2)
of all Shares in issue present
in person or by proxy and
entitled to vote shall be a
quorum for all purposes).
4. In terms of dissolution
under Subparagraph 5,
Article 116 of the
Companies Law of the
Cayman Islands states that a
company’s voluntary
dissolution should be
approved by a Special
Resolution. However, a
company in general meeting
resolves when it is unable to
pay it debts. The legal
counsel is of the opinion
that the aforementioned
resolutions of the
shareholders’ meeting can
be ordinary resolution,
special resolution, or
otherwise a higher quorum
specifiedintheArticle of

- 111 -

Difference Law of the Cayman Islands Article of Incorporation
Incorporation. The
Subparagraph 5 for
dissolution is set out in
Article 33 of the Article of
Incorporation. If the
Company resolves that it be
wound up voluntarily
because it is unable to pay
its debts as they fall due,
either a Supermajority
Resolution Type A or a
Supermajority Resolution
(See definitions above) is
required (Article 33(a)). If
the Company resolves that it
be wound up voluntarily
because for other reasons, a
Special Resolution is
required (Article 33(b)).
The quorum in a
shareholders’ meeting is
subject to the Article 51 (the
holders of Shares being
more than an aggregate of
one-half (1/2) of all Shares
in issue present in person or
by proxy and entitled to
vote shall be a quorum for
all purposes).
In terms of dissolution under
Subparagraph 5, the legal
counsel is of opinion that a
mergerrequires a Special
Resolution under Article
233(6) of the Companies
Law of the Cayman Islands
except otherwise stated in
the Articles of
Incorporation. The
Subparagraph 5 concerning
mergers set out in Article 31
(c) of the Article of
Incorporation. The quorum
in a shareholders’ meeting
is subject to the Article 51
(the holders of Shares being
more than an aggregate of
one-half (1/2) of all Shares
in issue present in person or
by proxy and entitled to
vote shallbe a quorum for

- 112 -

Difference Law of the Cayman Islands Article of Incorporation
allpurposes).
Supervisors No specific provision
concerning Supervisors under
the Companies Law of the
Cayman Islands		 The Company has established
the Audit Committee instead
of Supervisors so it is not
necessary to amend the Article
of Incorporation.
1.Any shareholder(s) who has
continuously holding 3% or
more of the total number of
the outstanding shares of the
company over a consecutive
year may request in writing
the Supervisors to institute,
for the company, an action
against Directors of the
company. The Taiwan
Taipei DistrictCourt can be
the initial trial court.
2. In case the Supervisors fails
to institute an action within
30 days after having
received the shareholder’s
request, the shareholders
may institute the action for
the company. The Taiwan
Taipei DistrictCourt can be
the initial trial court.		 The Article of Incorporation of
the Cayman Company does
not have specific provision or
prohibitive pros ion for this
matter. The applicable law of
the Cayman Islands provides
that any shareholder(s) can file
a lawsuit on behalf of the
company under the following
circumstances: (A) where the
alleged wrong is ultra vires (i.e.
beyond the capacity of) the
company or illegal, which
cannot be recognized by
shareholders, or (B) where
what has been done amounts to
a “fraud on the minority”.
Given that such litigations
against major shareholders,
they will not cause the
company to bring an action. In
other words, in the case of (B),
the wrongdoers are themselves
in control of the company and
the existence of fraud need to
be proved)
In general, any conduct within
the company’s capacity, or
which can be recognized by
shareholders with majority
consent even though it is
beyond the capacity of the
company, courts in the
Cayman Islands tend be more
lenient towards internal
conduct in the company.		 The Aritle of Incorporation of
the Cayman Company does
not have specific provision or
prohibitive prosion for this
matter. Furethermore, the
Company has established the
Audit Committee instead of
Supervisors. The explanation
ofTaizhengshangtzu No.
1011702189 issued by the
TSWE on July 27 2012 stated
that Supervisors shall be
replaced by Independent
Directors of the Audit
Committee. Therefore,
Supervisors specified in the
item 1 and 2 are replaced by
Independent Directors of the
Audit Committee, which are
set out in Article 123 of the
Articles. The competent court
having proper jurisdiction
includes Taipei District
Court.Furthermore, the legal
counsel in the Cayman Islands,
Article 123 of the Articles
needs to meet legal
requirements of laws of the
Cayman Islands. In a word, if
such Directors consider a legal
action may not benefit the
company, they are not
obligated to file a litigation
against other Directors
although a request is made by
any shareholder(s) 3% or more
of the total number of the
outstanding shares of the
company.
1.The Directors of a company
shall have the loyalty and
shall exercise the due care of
a good administrator in
conducting the business
operationofthe company;		 According to the Companies
Law of the Cayman Islands,
any Director shall owe
fiduciary duties to his/her
company. If any Director
violates the aforesaidfiduciary		 After considering opinions of
legal counsel in the Cayman
Isalnds (see the left column),
the item 1, 2 and 3 are set forth
in Article 97B of the Articles.
However, thelegalcounsel

- 113 -

Difference Law of the Cayman Islands Article of Incorporation
and if any of them acting
contrary to this provision,
shall be liable for the
damages to be sustained by
the company therefrom. The
Shareholders’ Meeting may,
by its resolution, consider
the earnings in such an act as
earnings of the company.
2. If any Director of a company
has, in the course of
conducting the business
operations, violated any
provision of the applicable
laws and regulations, and
thus caused damage to any
other person, he/she shall be
liable, jointly and severally
with the company.
3. Managers and Supervisors
of a company have the same
liability as Directors within
performing their duties.		 duties for himself or others
and receives gainings, a court
can order him/her to return
his/her gainings.
According to applicable laws
of the Cayman Islands, if
any Director of a company
has, in the course of
conducting the business
operations, caused damage to
any third party, the third party
is entitled to file a claim
against the company for
compensation. The company is
also entitled to request such a
Director to compensate any
loss as a result of the third
party’s claim. From the legal
perspective of the Cayman
Islands, the third party can not
directly file a claim against
Directors even though they
have a joint and several
liability specified in the
Article of Incorporation.		 noted that from the legal
perspective of the Cayman
Islands, the third party can not
directly file a claim against
Directors even though they
have a joint and several
liability specified in the
Article of Incorporation.

IX Any matters listed in Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred in the most recent fiscal year and as of the date of publication of the annual report, such situations

None.

- 114 -

Appendix ： Consolidated Financial Statements in the most recent year

Cayman Engley Industrial Co., Ltd. and its Subsidiaries Consolidated Financial Statements Independent Auditors’ Report

2020 and 2019

(Stock Code 2239)

Address ： The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands

- 115 -

**These three financial statements are translated from the traditional Chinese version and are unaudited by a PCA.

Independent Auditors’ Report

(2021)PWCR20004199

To the Board of Directors and Shareholders ofCayman Engley Industrial CO., LTD.,

Audit Opinion

We have audited the consolidated balance sheets of Cayman Engley Industrial CO., LTD. and its subsidiaries (the “Company”) as at December 31[st] , 2020 and 2019, and the consolidated comprehensive profit or loss statement, consolidated statement of changes in equitiesand consolidated cash flow tablefor the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the abovementioned consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31[st] , 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended, in accordance with the “Regulations Governing the Preparations of eaFinancial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis of Audit Opinion

We conducted our audits in accordance with the “Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants” and auditing standards generally accepted in the Republic of China (ROC GAAS) in 2019; and conducted our audits in accordance with the “Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants”, JinguanzhengshenZi No. 1090360805 Letter issued by the Financial Supervisory Commission on February 25[th] , 2019 and auditing standards generally accepted in the Republic of China (ROC GAAS) in 2019. Our responsibilities under those standards are further described in the “Auditors’ Responsibilities for the Audit of Consolidated Financial Statements” section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certifies Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidences we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 116 -

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, are of most significance in our audit of the consolidated financial statements of the Company’s consolidated financial statements for the year ended December 31[st] , 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in the process of forming our opinion thereon, we do not provide a separate opinion on these matters.

Deadline of the Recognition of the Sales Revenue Description

For accounting policies on the recognition of revenue, please refer to Note 4 (29) of the consolidated financial report. For explanation of accounting of sales revenues, please refer to Note 6 (24) of the consolidated financial statement. The operating income ofthe Company is mainly derived from sales transactions with car-assembly manufacturers. Since the automobile industry is the buyer's market, the recognition of revenue comes into effect after the customer has accepted the goods and confirmed the transfer of control of products.

Since the impact of revenue on the overall financial statements is enormous, as revenue recognition is based upon completion time of customer acceptance, plus said recognition usually involves many manual controls which may increase the risk that revenue recognition is not recorded in the correct period of time, thereby affecting correctness of deadline of revenue recognition. Therefore, the accountants listed deadline for sales revenue recognition as one of the key matters for auditing.

Audit procedures in response

The accountants have implemented the following procedures in response to the specific aspects specified in the abovementioned key audit matters ：

  1. Understand the sales revenue operating procedures of car-assembly manufacturers of the Company; Evaluate and test effectiveness of the design and implementation of internal control system of car-assembly manufacturers related to revenue recognition

  2. Verify the sales transaction with the group car assembly manufacturer within a certain period before and after the date stated in the balance sheet, and verify the proof of the transfer of control of the goods provided by the car assembly manufacturers to confirm the correctness of the transaction recognition deadline.

Evaluation of Allowance for Inventory Valuation Losses Description

For accounting policies on inventory valuation, please refer to the Note 4 (12) of the consolidated financial report. For uncertainties of accounting estimations and assumptions of

- 117 -

inventory valuations, please refer to Note 5 (2) of the consolidated financial report. For description of inventory accounting, please refer Note 6 (3) of the consolidated financial report. Balance of inventory and allowance for inventory valuation of December 31[st] , 2020 are NT $4,388,744and NT $316,914 thousands respectively.

The Company is mainly engaged in the manufacturing and sales of automobile parts.The value of inventories is subject to fluctuations of the demand market and rapid changes in technologies, which may result in higher inventory depreciation losses or outdated risks. Taking into account the significant impact on the financial statements of the inventory of the Company and its allowance for depreciation losses, the net realization value used in inventory valuation often involves subjective judgments, and thus has a high level of estimation uncertainty. Therefore, the accountants listed evaluation of allowance for inventory valuation losses as one of the key matters for auditing.

Audit procedures in response

The accountants have implemented the following procedures in response to the specific aspects specified in the abovementioned key audit matters:

  1. Understand and evaluate the rationality of the Company's inventory valuation policies.

  2. Obtain the inventory age statement, check inventory items randomly to examine logic behind inventory age calculation and information correctness to ensure appropriate categorization of inventory age.

  3. As for net realizable value valuated of inventory items, the accountants have discussed with the management team and obtained supporting documentation to assess rationality of valuation allowance decisions.

Responsibilities of the Management Team and Those in Charge with Governance for the Consolidated Financial Statements

The management team 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 for the necessary internal control related to the preparation of theconsolidated financial statements to ensure that said statements are free from material misstatement, whether due to fraud or error, in accordance with the published and effective International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as recognized and endorsed by the Financial Supervisory Commission.

When preparing the consolidated financial statements, responsibilities of the management team includes assessing the Company’s ability to continue as a going concern, disclosing, as applicable, related matters, and adopting the going concern basis of accounting

- 118 -

unless the management team either intends to liquidate the Company or to cease operations of which, or has no realistic alternative but to do so.

Those charged with governance of the Company (including members of the Audit Committee) are responsible for overseeing the financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives to audit the consolidated financial statements 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.Reasonable assurance is a high level of assurance, but not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered significant if, individually or in the aggregate, said misstatements could reasonably be expected to influence the economic decisions of users of theconsolidated financial statements.

When auditing in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also implemented the following procedures

  1. Identify and assess risks of material misstatement of the consolidated financial statements, whether due to fraud or error; Design and perform audit procedures responsive to the said risks; Obtain audit evidence sufficient and appropriate to provide basis for audit 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 the necessary 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 Company’s internal control.

  3. Evaluate appropriateness of accounting policies adopted by the management team, and the rationality of accounting estimations and related disclosures made by the management team.

  4. 4.Conclude on the appropriateness of the management team’s adaptation 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

- 119 -

Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw the attention of consolidated financial report users in our auditors’ report to the related disclosures in the consolidated financial statements; or, if such disclosures are inappropriate, we shall modify our audit opinions accordingly. 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 Company to lose the ability to continue as a going concern.

  1. Evaluate the overall presentations, structure and content of the consolidated financial statements, including relevant notes, 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 financial information of entities within the Company, in order to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Company

audit.

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 personnel under individual specification of the accounting firm have complied with relevant ethical requirements regarding independence of The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and to communicate with them all relationships and other matters that may reasonably be thought to affect our independence (including related safeguarding measures).

From the matters communicated with those charged with governance, we determine matters that were of most significance in the audit of the Company’s consolidated financial statements for the year ended December 31[st] , 2019, which are therefore key audit matters. We describe these matters in our auditors’ report, unless law or regulation precludes public disclosure about the matters or when, in extremely rare circumstances, we determine that the matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh benefits to public interest of such communication.

- 120 -

PricewaterhouseCoopers Taiwan

Liu, Mei-Lan

Certified Public Accountants

Yang, Ming-Ching

Previously Securities and Futures Commission, Ministry of Finance

Approval Issuance No. (81) Taicaizheng (6) inancial No. 33095

Financial Supervisory Commission

Approval Issuance No. JinguanzhengshenZi No. 1070323061 March 16th, 2021

- 121 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries

Assets Consolidated Balance Sheets
December 31st2020 and December 31st, 2019
Unit：NTD(thousands)
December31st2020
NOTES
Amount
%
6(1)
$ 4,578,467
14
8,189
-
6(2)& 8
2,614,707
8
6(2)&8
3,190,063
10
7(3)
2,249
-
7(3)
116,202
-
6(3)
4,071,830
13
6(4)&7(3)
877,294
3
6(5)&8
1,006,422
3
16,465,423
51
6(6)&7(3)
99,094
-
6(7)
1,240,282
4
6(8)&8
9,970,842
31
6(9)
1,382,073
4
6(10)
1,338,264
4
6(30)
325,602
1
6(11)&8
1,542,342
5
15,898,499
49
$ 32,363,922
100		 December31st2019 December31st2019
Amount
$ 3,175,493
-
1,411,697
3,629,404
2,279
73,544
4,652,754
814,179
1,039,754
14,799,104
108,439
1,220,207
9,379,161
1,332,216
1,381,716
314,803
1,655,131
15,391,673
$ 30,190,777		 %
Current Assets
1100
Cash and cash equivalent
1110
Financial assets measured at
amortised cost - current
1150
Notes receivable, net
1170
Accounts receivable, net
1180
Accounts receivable - related
parties, net
1200
Other receivables
130X
Inventory
1410
Prepayments
1470
Other current assets
11XX
Total current assets
Non current assets
1517
Financial assets at fair value through
other comprehensive profit or loss –
non-current
1550
Investment accounted for using
equity method
1600
Property, plant and equipment
1755
Right-of-use assets
1780
Intangible assets
1840
Deferred income tax assets
1900
Other non-current assets
15XX
Total non-current assets
1XXX
Total assets		 11
-
5
12
-
-
15
3
3
49
-
4
31
4
5
1
6
51
100

(continued)

- 122 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries

Liabilities and equities Consolidated Balance Sheets
December 31st2020 and December 31st, 2019
Unit：NTD(thousands)
December31st2020
December31st2019
NOTES
Amount
%
Amount
%
6(13)
$ 2,770,210
9
$ 3,005,943
10
6(23)
298,911
1
265,348
1
2,064,144
6
1,400,885
5
7(3)
88,921
-
101,579
1
4,859,350
15
3,636,629
12
7(3)
561,856
2
381,309
1
6(14)
1,428,511
4
1,244,928
4
7(3)
2,738
-
7,289
-
35,967
-
86,146
-
7(3)
111,214
-
95,239
-
6(15)(16)
(17)&7(3)
1,470,387
5
2,215,744
7
13,692,209
42
12,441,039
41
6(15)
-
-
393,118
1
6(16)
4,217,915
13
3,313,657
11
6(30)
456,104
1
445,284
2
7(3)
348,556
1
294,799
1
6(17)
203,606
1
218,846
1
5,226,181
16
4,665,704
16
18,918,390
58
17,106,743
57
6(19)
1,180,070
4
1,180,070
4
6(20)
8,371,087
27
8,371,087
27
6(21)
481,639
2
442,409
2
1,647,510
4
1,179,819
4
817,610
4
1,326,536
4
(
1,422,115 )
(
4 ) (
1,647,510 )
( 5 )
11,075,801
34
10,852,411
36
6(22)
2,369,731
8
2,231,623
7
13,445,532
42
13,084,034
43
9
$ 32,363,922
100
$ 30,190,777
100
Current Liabilities
2100
2130
2150
2160
2170
2180
2200
2220
2230
2280
2300
Short-term borrowings
Contract liabilities-current
Notes payable
Notes payable –related parties
Accounts payable
Accounts payable – related parties
Other payables
Other payables - related parties
Income tax payable
Lease liabilities – current
Other current liabilities
21XX
Total current liabilities
Non current liabilities
2530
2540
2570
2580
2600
Bonds payables
Long-term borrowings
Deferred income liabilities
Lease liabilities－non-current
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
3110
Total liabilities
EQUITY ATTRIBUTABLE TO
SHAREHOLDERS OF THE
PARENT COMPANY
Common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
3320
3350
Legal reserve
Special reserve
Unappropriated retained earnings
Other interests
3400
Other interests
31XX
Total equity attributable to
shareholders of the
36XX
Non-controlling interests
3XXX
3X2X
Total equity
contingent liabilities and
unrecognized contractual
commitments
Total liabilities and interests

Please refer to the accompanying notes, an integral part of the consolidated financial statements.

Chairman ： Lin, Chi-Pin

General manager ： Lin,Chi-Pin

Accounts supervisor ： Yang,Cheng-Feng

- 123 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries Consolidated Statement of Comprehensive Income January 1[st] to December 31[st] , 2020 and January 1[st] to December 31[st] , 2019Unit ： NTD ( thousand)


Items
(Except earnings per share, which is in NTD)
2020
2019
NOTES
Amount
%
Amount
%
6(23)&7(3)
$ 21,644,152
100
$ 22,239,873
100
6(3)&7(3)
(
18,187,450) (
84) (
18,495,670) (
83)
3,456,702
16
3,744,203
17
6(28)&7(3)
(
472,782) (
2) (
571,114) (
3)
(
914,443) (
4) (
1,033,701) (
5)
(
745,575) (
4) (
681,579) (
3)
12(2)
(
54,894)
- (
24,303)
-
(
2,187,694) (
10) (
2,310,697) (
11)
1,269,008
6
1,433,506
6
6(25)
12,448
-
7,777
-
6(26)
163,743
1
106,880
-
6(24)
(
120,179)
1 (
40,567)
-
6(27)
(
270,448) (
1) (
325,931) (
1)
6(8)
(
55,845) (
1)
48,630)
-
(
270,281) (
1) (
300,471) (
1)
998,727
5
1,133,035
5
6(30)
(
173,261) (
1) (
165,015) (
1)
$ 825,466
4
$ 968,020
4
4000
Operating revenue
5000
Operating cost
5900
Operating margin
Operating expenses
6100
Marketing expenses
6200
Administrative expenses
6300
Research and development
expenses
6450
Expected credit impairment loss
6000
Total operating expenses
6900
Operating income
Non-operating income and
expenses
7100
Interest incomes
7010
Other incomes
7020
Other profit and loss
7050
Finance cost
7060
Share of profit and loss of associates
and joint ventures recognized using
equity method
7000
Total non-operating income and
expenses
7900
Income before tax
7950
Income expenses
8200
Net profit of the year

(Continued)

- 124 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries Consolidated Statement of Comprehensive Income January 1[st] to December 31[st] , 2020 and January 1[st] to December 31[st] , 2019Unit ： NTD ( thousand)


Items
(Except earnings per share, which is in NTD)
2019
2018
Notes
Amount
%
Amount
%

6(6)
($ 3,959)-
$ 3,150
-
(
3,959
-
3,150
-
265,918
1 (
554,901) (
2)
6(7)
3,879
-
2,626
-
(
269,797) (
1) (
552,275)(
2)
($ 265,838) (
1) ($ 549,125)(
2)
$ 1,091,304
5
$ 418,895
2
$ 480,621
2
$ 644,193
3
344,845
2
323,827
1
$ 825,466
4
$ 968,020
4
$ 706,016
3
$ 176,502
1
385,288
2
242,393
1
$ 1,091,304
5
$ 418,895
2
6(31)
$ 4.07
$ 5.46
$ 4.03
$ 5.32
Components of other
comprehensive profit and loss (net)
Items not reclassified to profit or
loss
8316
Unrealized assessed profit or
loss invested by equity tools
measured at fair value through
other comprehensive profit or
loss
8310
Total items not reclassified to
profit or loss
Subsequent items that may be
reclassified to profit or loss
8361 Exchange differences on
translation for financial
statements of foreign
organizations in operation
8370
Share of other comprehensive
income of associates and joint
ventures recognized using equity
method that may be reclassified to
profit or loss
8360
Total Subsequent items that may
be reclassified to profit or loss
8300
Othercomprehensive profit or
loss (net)
8500 Total comprehensive profit or
loss for the year
Net profit (loss) attributable to:
8610
Shareholders of the parent
company
8620
Non-controllong interests
Comprehensive income/loss (net)
attributable to:
8710
Shareholders of the parent
company
8720
Non controlling interests
Total comprehensive income
Earnings per share
9750
Total basic earnings per share
9850
Total diluted earnings per
share

Please refer to the accompanying notes, an integral part of the consolidated financial statements.

General manager ： Lin,Chi-Pin

Chairman ： Lin, Chi-Pin

Accounts supervisor ： Yang,Cheng-Feng

- 125 -

Cayman Engley Industrial CO., LTD. and itsSubsidiaries Consolidated Statement of Changes in Equities Jan. 1[st] to Dec. 31[st] , 2019 and Jan. 1[st] to Dec. 31[st] , 20181 Unit: NTD (thousand)

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

Jan. 1st to Dec. 31st, 2019
Balance on Jan. 1st2019
Total consolidated profit and loss of the year
Other comprehensive profit and loss of the year
Total comprehensive profit and loss of the year
Appropriation and distribution of retained
earnings in2018
Legal surplus reserve
Special surplus reserve
Cash dividend
Changes in afflilates and joint ventures as recognized by equity method
Changes in non-controlling interests
Agreement to purchase additional equity of subsidiaries
Bought back of treasury stock
Treasury shares wrote off
Cash dividend of subsidiary shareholders
Balance on Dec.31st2019
Jan. 1stto Dec. 31st2020
Balance on Jan.1st2020
Total consolidated profit and loss of the year
Other consolidated profit and loss of the year.
Total consolidated profit and loss of the year
Appropriation and distribution of retained earnings in 2018
Legal reserves
Special reserves
Cash dividends
Agreement to purchase additional equity of subsidiaries.
Cash dividend of subsidiary shareholders
Balance on Dec. 31st, 2020		 Notes Capital stock –
Common equity		 Surplus
Capital stock –
Amount
Capital stock		 Surplus
Capital stock –
Amount
Capital stock		 Retained earnings
Special capital
reserve
Unappropriated
earnings		 Retained earnings
Special capital
reserve
Unappropriated
earnings		 Other in terests
Financial assets
measured at fair
value through
other
comprehensive
income		 Treasurystock
 Total
 Non-controlling
interests		 Total equity
Capital stock –
Amount		 Legal
reservie		 Special capital
reserve		 Exchange
differences on
translation of
foreign financial
statements
6(21)
6(7)
6(22)
6(32)
6(19)
6(19)
6(22)
6(21)
6(22)&
6(32)
6(22)		 $ 1,190,000
-
-
-
-
-
-
-
-
-
-
(
9,930 )
-
$ 1,180,070
$ 1,180,070
-
-
-
-
-
-
-
-
$ 1,180,070		 $ 7,767,094
-
-
-
-
-
-
-
-
457,600
-
(
64,813 )
-
$ 8,159,881
$ 8,159,881
-
-
-
-
-
-
-
-
$ 8,159,881		 $ 202,417
-
-
-
-
-
-
8,789
-
-
-
-
-
$ 211,206
$ 211,206
-
-
-
-
-
-
-
-
$ 211,206		 $ 330,069
-
-
-
112,340
-
-
-
-
-
-
-
-
$ 442,409
$ 442,409
-
-
-
39,230
-
-
-
-
$ 481,639		 $ 898,592
-
-
-
-
281,227
-
-
-
-
-
-
-
$ 1,179,819
$ 1,179,819
-
-
-
-
467,691
-
-
-
$ 1,647,510		 $ 1,858,830
644,193
-
644,193
(
112,340 )
(
281,227 )
(
531,032 )
-
-
(
209,321 )
-
(
42,567 )
-
$ 1,326,536
$ 1,326,536
480,621
-
480,621
(
39,230 )
(
467,691 )
(
295,018 )
(
187,608 )
-
$ 817,610		 ($ 1,179,819 )
-
(
470,841 )
(
470,841 )
-
-
-
-
-
-
-
-
-
($ 1,650,660 )
($ 1,650,660 )
-
229,354
229,354
-
-
-
-
-
($ 1,421,306 )		 $ -
-
3,150
3,150
-
-
-
-
-
-
-
-
-
$ 3,150
$ 3,150
-
(
3,959 )
(
3,959 )
-
-
-
-
-
( $ 809 )		 ($ 80,438 )
-
-
-
-
-
-
-
-
-
(
36,872 )
117,310
-
$ -
$ -
-
-
-
-
-
-
-
-
$ -		 $ 10,986,745
644,193
(
467,691 )
176,502
-
-
(
531,032 )
8,789
-
248,279
(
36,872 )
-
-
$ 10,852,411
$ 10,852,411
480,621
225,395
706,016
-
-
(
295,018 )
(
187,608 )
-
$ 11,075,801		 $ 2,412,728
323,827
(
81,010 )
242,817
-
-
-
424
(
268,655
-
-
-
(
155,267 )
$ 2,231,623
$ 2,231,623
344,845
40,443
385,288
-
-
-
(
78,552 )
(
168,628 )
$ 2,369,731		 $ 13,399,473
968,020
(
548,701 )
419,319
-
-
(
531,032 )
16,555
553,525
(
457,600 )
(
36,872 )
-
(
155,267 )
$ 13,084,034
$ 13,084,034
825,466
265,838
1,091,304
- -
- -
(
295,018 )
(
266,160 )
(
168,628 )
$ 13,445,532

Please refer to the accompanying notes, an integral part of the consolidated financial statements 。

General Manager: Lin, Chi-Pin

Chairman: Lin, Chi-Pin

Accounts supervisor: Yang, Cheng-Feng

- 126 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries

Consolidated Statementf Of Cash Flow

Jan.1[st] to Dec. 31[st] 2020 and Jan. 1[st] to Dec.31[st] ,2019 Unit ： NTD(thousand)

CASH FLOW FROM OPERATING ACTIVITIES
Income before tax of the year
Items for adjustment
Income and expense items
Depreciation expense-Property,plant and
equipment
Depreciation expense-Right of use of assets
Amortization
Profit or loss evaluated of financial assets
measured by fair value through profit or loss
Recognized share of profit(loss) of
subsidiaries or associates using equity
method
Loss of disposal of property, plant and
equipment
Loss of goodwill
Intangible asset disposal loss
Expected credit impairment loss
Interest income
Interest cost-financing
Interest expense – lease liability
Interest expense – joint loan amortization
Corporate debt redemption loss
Recognized income of deferred government
grants
Lossfrom unrealizedforeign currency
exchange
Asset/liability changes related to operating
activities
Net changes of assets related to operating
activities
Notes receivable
Accounts receivable, net
Accounts receivable, related parties
Other receivables
Other receivables-related parties
Inventory
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities related to operating
activities
Contract liabilities
Notes payable
Notes payable-related parties
Accounts payable
Accounts payable-related parties
Other payables
Other payables- related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interests received
Interests paid
Income taxes paid
Net cash flow from operating activities		 Notes
2020
2019
$ 998,727
$ 1,133,035
6(9)(28)
1,127,521
1,076,641
6(10)(28)
148,048
170,632
6(11)(28)
117,261
120,046
-
1,320
6(7)
55,845
48,630
6(24)
10,328
4,726
6(10)(24)
50,643
11,338
-
124
12(2)
54,894
24,303
6(25)
(
12,448 ) (
7,777 )
6(27)
247,816
304,294
6(9)(27)
18,520
20,952
6(27)
4,112
685
-
8,475
6(17)
(
18,366 ) (
5,226 )
80,967
(
42,640 )
(
1,209,642 ) (
298,557 )
390,452
418,756
30
376
961
(
674 )
3,389
(
4,295 )
584,855
730,255
(
76,606 )
278,960
(
34,360 )
10,823
(
70,060 ) (
40,337 )
33,563
(
257,222 )
663,259
(
186,052 )
(
12,658 ) (
12,927 )
1,222,721
(
90,240 )
180,547
(
214,748 )
184,122
(
24,134 )
(
4,551 ) (
436 )
58,045
4,091
3,126
(
13,350)
4,801,061
3,169,847
12,448
7,777
(
264,696 ) (
314,281 )
(
210,687) (
259,113)
4,338,126
2,604,230

(Continued)

- 127 -

Cayman Engley Industrial CO., LTD. and its Subsidiaries Consolidated Statementf Of Cash Flow

Jan.1[st] to Dec. 31[st] 2020 and Jan. 1[st] to Dec.31[st] ,2019 Unit ： NTD(thousand)

Cash flow from investment activities
Acquisition of investments accounted for using
equity method
Acquisition of property, plant and equipment
Disposal of real estate, plant and equipment prices
Acquisition of intangible assets
Refundable deposits decrease
Financial assets measured by amortized cost
Dividends received from investments accounted
for using equity method
Financial assets measured at fair value through
other comprehensive income-non-current
Net cash outflow from investment
activities
CASH FLOW FROM FINANCING ACTIVITIES
Increase in short-term loans
Decrease in other borrowing
Lease principal repayment
Issuance of convertible bonds
Borrow long-term loans
Repayment of long-term loans
Number of cash payments for new syndicate loans
organizing fees
Cash dividends of shareholders form subsidiary
Distributed cash dividends
Acquisition of the non-controlling price equity of
subsidiaries
Bought back treasury stocks
Net cash inflow (outflow) from financing activities
Exchange rate change
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year		 Notes
2020
2019
6(7)
( $ 132,219 )
$ -
6(33)
(
1,418,893 ) (
1,911,371 )
31,816
21,847
6(10)
(
73,270 ) (
67,491 )
6(5) (11)
50,122
63,948
(
8,189 )
-
6(7)(33)
25,501
124,969
7(3)
-
(
107,939 )
(
1,525,132 ) (
1,876,037 )
6(34)
(
303,696 )
800,749
6(34)
-
(
9,713 )
6(34)
(
111,239 ) (
145,357 )
6(34)
(
476,400 ) (
623,600 )
6(34)
2,707,402
2,465,052
6(34)
(
2,626,688 ) (
1,728,707 )
-
(
12,334 )
6(22)
(
168,628 ) (
155,267 )
6(21)(34)
(
295,018 ) (
531,032 )
6(32)
(
266,160 ) (
345,897 )
6(19)
-
(
36,872 )
(
1,540,427 ) (
322,978 )
130,407
(
470,975 )
1,402,974
(
65,760 )
6(1)
3,175,493
3,241,253
6(1)
$ 4,578,467
$ 3,175,493

Please refer to the accompanying notes, an integral part of the consolidated financial statements.

General manager ： Lin,Chi-Pin

Chairman ： Lin, Chi-Pin

Accounts supervisor ： Yang,Cheng-Feng

- 128 -

Cayman Engley Industrial CO., LTD Consolidated Financial Statements Notes

Dec.31[st] 2020 and Dec. 31[st] 2019

Unit:NTD (thousand) (Unless specified otherwise)

1. Company history

Cayman Engley Industrial Co., LTD. (hereinafter referred to as the “Company”) was incorporated in January 2015 in British Cayman Islands, as the controlling company for the reorganization of the organizational structure of the application for listing in Taiwan. The Company held a 100% shareholding in Changchun Engley Auto Industrial Co., LTD on May 5[th] , 2015 in the form of a capital increase and a share swap. Changchun Engley Auto Industrial Co., LTD increased its capital by cash in December 2018, and the Company has not changed its shareholding ratio of 96.57%. The Company and its subsidiaries (hereinafter referred to as the “Group”) were mainly dedicated to businesses such as the production of automobile parts, stamping products, hot-pressed products, mold designs, manufacturing and related technical consulting services.

Since January 27[th] , 2016, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE).

2. Date and procedures of approval of financial statements

The accompanying consolidated financial statements were issued upon approval by the Board of Directors on March 16[th] , 2020.

  1. Application of new and revised International Financial Reporting Standards and its interpretations

(1)Effects of the adoption of newly issued or amended International Financial Reporting Standards as endorsed by the Financial Supervisory Commission (hereinafter referred to as the “FSC”)

Newly issued and amended International Financial Reporting Standards, and its interpretations, as endorsed by the FSC effective from 2019 are as follows:

interpretations, as endorsed by the FSC effective from 2019 are as follows:
Newly issued / revised / amended Standards and Interpretations Effective date
issued by IASB
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ January 1st, 2020
Amendments to IFRS 3, ‘Definition of a business’ January 1st, 2020
Amendments to IFRS 9, IFRS 39 and IFRS 7 ‛ Interest rate benchmark reform’ January 1st, 2020
Amendment to IFRS 16, ‘Covid-19-related rent concessions’ June 1st, 2020
(Note)

Note: Earlier application from January 1, 2020 is allowed by FSC.

Upon evaluation by the Group, none of the above guidelines and interpretations had a significant effect on the Company's financial condition and financial performances.

- 129 -

(2) The impact of the newly issued and revised IFRSs approved by the FSC that have not been adopted

The following summarizes the standards and interpretations for the newly issued, amended and revised IFRSs approved by the FSC in 2021 ：

The following summarizes the standards and interpretations for
amended and revised IFRSs approved by the FSC in 2021：		 the newly issued,
Newlyissued /revised / amended Standards andInterpretations

Amendments to IFRS 4, ‘Extension of the temporary exemption from
applying IFRS 9’
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest
Rate Benchmark Reform— Phase 2’		 Effective date issued
byIASB
January 1st, 2021
January 1st, 2021

Upon evaluation by the Group, none of the above guidelines and interpretations had a significant effect on the Company's financial condition and financial performances.

(3) The impact of IFRSs issued by the International Accounting Standards Board but not yet endorsed by the FSC

The following summarizes the standards and interpretations for the newly issued, amended, and revised of the IFRSs that have been issued by the IASB but have not yet been endorsed by the FSC:

FSC:
Newly issued / revised / amended Standards and Interpretations Effective date issued by
IASB
Amendments to IFRS 3, ‘Reference to the conceptual
framework’
Amendments to IFRS 10 and IAS 28 ‛Sale or investment of assets
between investors and their affiliates or joint ventures’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts— cost of fulfilling a contract
Annual improvements to IFRS Standards 2018–2020		 January 1st, 2022
To be determined by the
IASB
January 1st, 2023
January 1st, 2023
January 1st, 2023
January 1st, 2023
January 1st, 2023
January 1st, 2022
January 1st, 2022
January 1st, 2022

Upon evaluation by the Group, none of the above guidelines and interpretations had a significant effect on the Company's financial condition and financial performances.

4. Summary Explanation of Major Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out as below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively hereinafter

- 130 -

referred to as the “IFRSs”).

(2)Basis for preparation

  • 1.Except for the following important matters, the consolidated financial statements have been prepared under the historical cost convention.

  • (1) Financial assets and liabilities (including derivatives) measured at fair value through gains and losses, as measured by fair value.

  • (2)Financial assets/financial assets available-for-sale measured at fair value through other consolidated gains and losses by fair value.

  • 2.The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires the management team to exercise its judgement in the process of applying the Group’s accounting policies. Items involving a higher degree of judgement or complexity, or for which assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 5.

(3)Basis of consolidation

  1. Basis for the preparation of consolidated financial statements

  2. (1)All subsidiaries are included as entities in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Company obtains control over said subsidiaries, and ceases when the Company loses control of said subsidiaries.

  3. (2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  4. (3)Profit and loss and other comprehensive profits and losses are attributed to the parent company's owner and non-controlling interests. The total profit and loss are also attributed to the parent company's owner and non-controlling interests, which may result in the loss of non-controlling rights.

  5. (4) A change in a shareholding in a subsidiary that does not result in a loss of control (transaction with an uncontrolled right) is treated as a rights transaction, which is considered a transaction with the owner. The difference between the amount of the adjustment of the non-controlling interest and the fair value of the consideration paid or received is directly recognized in the equity.

  6. (5) When the Group loses control over a subsidiary, remaining investment to the former subsidiary is re-measured by fair value, and deemed fair value of the originally recognized financial asset or cost of originally recognized investment in an affiliate or joint venture. Differences between the fair value and carrying value are recognized as profit or loss of the year. For all amounts recognized as other comprehensive profit or loss and related to the subsidiary, basis for accounting treatment of which is the same as direct disposal of relevant assets or liabilities by the Group. In other words, if said value is previously recognized as gain or loss of other

- 131 -

comprehensive profit or loss, said value shall be re-categorized as profit or loss upon disposal of relevant assets or liabilities. As such, when the Group loses control over a subsidiary, the gain or loss should be re-categorized as profit or loss from equity.

  • 2.Subsidiaries included in the consolidated financial statements:
Investment company Name
Subsidiary Name
Businessnature		 Percentage of equity held
December 31st,
2020
December 31st,
2019
Note
The Company
Changchun Engley Automobile
Industry Co., Ltd.
Production and sales of
various auto parts
The Company
Engley Automobile Industry Co.,
Ltd
International trade
The Company
Engley Holding (Samoa) Limited General investment
The Company
Engley Precision Industry B.V. General investment
Changchun Engley
Automobile Industry Co., Ltd.
Wiser Decision Holding
Company Limited
General investment
Changchun Engley
Automobile Industry Co., Ltd.
Changchun Engley Auto Parts
Co., Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Chengdu Engley Auto part Co., Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Suzhou Engley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Ningbo Engley Automobile
Industry Co.,Ltd
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Liaoning Engley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Changchun Lightweight
Technology Co., Ltd.
Production and sales of
composite material
Changchun Engley
Automobile Industry Co., Ltd.
Changsha Engley Auto Part Co.,
Ltd.
Production and sale of
various auto parts
Changchun Engley
Automobile
Industry Co., Ltd.
YizhengEngley Auto Part Co.,
Ltd.
Production and sale of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
FoshanEngley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Tsingtao Engley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Linde+Engley (Tianjin) Auto
Parts Co., Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Linde+Engley (Changchun) Auto
Parts Co.,
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Tianjin Engley Manufacturing
Co., Ltd.
Production and sales of
various auto parts
Changchun Engley
Automobile Industry Co., Ltd.
Ningbo Maoxiang Material
Co., Ltd. (China)
Production and sales of
various auto parts ,
mold design and
development
Ningbo Maoxiang Material
Co., Ltd. (China)
TaizhouMaoqi Metal Co., Ltd.
(China)
Production and sales of
various auto parts
Suzhou Engley Auto Part Co.,
Ltd.
YizhengEngley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Suzhou Engley Auto Part Co.,
Ltd.
FoshanEngley Auto Part Co.,
Ltd.
Production and sales of
various auto parts
Suzhou Engley Auto Part Co.,
Ltd.
Tianjin Engley Manufacturing
Co., Ltd.
Production and sales of
various auto parts
Engley Holding (Samoa)
Limited
Engley Precision Industry B.V. General investment		 96.57
96.57
100
100
-
80
80
-
39.5
39.5
Note 6
100
-
Note 5
100
100
-
100
100
-
100
100
-
100
100
Note 4
100
100
-
100
100
-
100
100
-
90
90
Note 1
98.6
98.6
Note 2
100
100
-
54
54
-
54
54
-
99.5
99.5
Note 3,
Note 8
51
51
-
100
100
-
10
10
Note 1
1.4
1.4
Note 2
0.4
0.5
Note 3,
Note 8
60.5
60.5
Note 6

- 132 -

Investment company Name
Subsidiary Name
Business nature
Engley Precision Industry B.V. KranendonkBeheersmaatschappij
B.V.
R & D and
manufacturing of soft
robot software		 Percentage of equity held
December 31st,
2020
December 31st,
2019
Note
100
75
Note 7

  • Note1: Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Automobile Parts Co., Ltd. jointly hold 100% of the shares of YizhengEngley Automobile Parts Manufacturing Co., Ltd.

  • Note 2: Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Automobile Parts Co., Ltd. jointly hold 100% of the shares of FoshanEngley Automobile Parts Co., Ltd.

  • Note 3: Changchun Engley Automobile Industry Co., Ltd. and Suzhou Engley Automobile Parts Co., Ltd. jointly hold 100% of the shares of Tianjin Jinli Mold Manufacturing Co., Ltd.

  • Note 4: Ningbo Engley Automobile Industry Co., Ltd was established on January 29th, 2019.

  • Note 5:Wiser Decision Holding Company Limited was established by the Group on October 23rd, 2018 with a registered capital of USD 3500 thousand. The investment of USD 3,500 thousand has been remitted on September 11th, 2019.

  • Note 6:The Company acquired Engley Precision Industry B.V. 39.5% equity from non-controlling interests in November 2019. The Company and Engley Holding (Samoa) Limited jointly hold 100% equity of Engley Precision Industry B.V.

  • Note 7:The Group acquired 25% equity interest in KranendonkBeheersmaatschappij B.V. from a non-controlling interest in June 2020, from which date the Group holds 100% equity interest in KranendonkBeheersmaatschappij B.V.

  • Note 8: In April 2020, Changchun Engley Industrial Co., Ltd. increased 0.1% of its equity interest in Tianjin EngleyMould Manufacturing Co. After the increase, the shareholding of Changchun Yingli Industrial Company Limited in Tianjin YingliMould Manufacturing Company Limited is 99.6% and the shareholding of Suzhou Engley Auto Parts Co., Ltd. in Tianjin EngleyMould Manufacturing Co. is 0.4%.

  • Subsidiaries not included in the consolidated financial statements None.

  • 4.Adjustments and treatments for subsidiaries with different balance sheet dates None.

  • 5.Significant restrictions

  • None.

  • 6.Subsidiaries with non-controlling interests that are material to the CompanyGroup:

The total of the non-controlling interests of the Group’s non-controlling interests on December 31st, 2020 and 2019 are respectively 2,369,731 NTD (thousand) and 2,231,623 NTD (thousand). Information of non-controlling interests that are material to the Group and its belonging subsidiaries are as follows:

its belonging subsidiaries are as follows:
Name of subsidiary
Main business
location		 Non-controlling interests
December 31st.2020
December 31st, 2019
Amount
Shareholding
Amount
Shareholding
Linde+Engley (Tianjin) Auto Parts
Co., Ltd.
China
Ningbo Maoxiang Material Co.,
Ltd. (China)
China		 $ 1,053,519
46%
$ 1,169,487
46%
$461,040
49%
$449,081
49%

- 133 -

Aggregate financial information of subsidiaries: Balance sheet

Balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Comprehensive statement
Income
Income before tax
Income expense
Net profit of continuing operations
of the year
Loss of closed operations
Net profit for the year
Other comprehensive income (net
after tax)
Current comprehensive profit or
loss
Total comprehensive profit and
loss attributed to non-control
rights and interests
Payment to non-controlling equity
dividends		 $
(
(




$

$
(
(




$

Jan.
$
Jan.
Linde+Engley (Tianjin)

1stto Dec.31st, 2020
4,977,954
812,245
113,890)
698,355
-
698,355
-
698,355
321,243
169,411


(



$

$

$

Comprehensive statement

- 134 -

Income
Income (Loss) before tax
Income benefits(Expense)
Income (Loss) of continuing
operations of the year
Loss of closed operations
Income (Loss)
Other comprehensive income (net after
tax)
Current comprehensive profit or loss
Total comprehensive profit and loss
attributed to non-control
rights and interests		 Ningbo Maoxiang Material Co., Ltd.
Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 901,924
$ 997,028
5,243 ( 192,143)
( 356)
35,579
4,887
( 156,564)
-
-
4,887
( 156,564)
-
-
$ 4,887
($ 156,564)
$ 2,395
($ 76,716)
$-
$-
4,887
-
$ 4,887
$ 2,395
$-
Cash flow statement
Net cash inflow (outflow) from
operating activities
Net cash inflow (outflow) from
investment activities
Net cash inflow (outflow) from
financing activities
Impact of exchange rate on current
cash and cash equivalents
(Decrease) increase in cash and cash
equivalents
Cash and cash equivalents on
January1st
Cash and cash equivalents on
December 31st
Net cash outflows (inflows) from
operating activities
Net cash inflows (outflows) from
investment activities
Net cash inflows (outflows) from
financing activities
Impact of exchange rate on current
cash and cash equivalents		 Linde+Engley (Tianjin) Auto Parts Co., Ltd.
Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 1,130,898
$ 918,171
( 890,725)
( 527,042)
179,366 ( 435,397)
14,955
( 11,776)
434,494
( 56,044)
317,207
373,251
$ 751,701
$ 317,207
Ningbo Maoxiang Material Co., Ltd.
Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 279,448
$ 138,499
( 19,473)
( 36,735)
( 234,114)
( 62,772)
2,081
( 3,376)		 Linde+Engley (Tianjin) Auto Parts Co., Ltd.
Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 1,130,898
$ 918,171
( 890,725)
( 527,042)
179,366 ( 435,397)
14,955
( 11,776)
434,494
( 56,044)
317,207
373,251
$ 751,701
$ 317,207
Ningbo Maoxiang Material Co., Ltd.
Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 279,448
$ 138,499
( 19,473)
( 36,735)
( 234,114)
( 62,772)
2,081
( 3,376)

$ 138,499
( 36,735)
( 62,772)
( 3,376)

- 135 -

Increase in cash and cash equivalents
Cash and cash equivalents on
January1st
Cash and cash equivalents on
December 31st		 27,942
90,942
$ 118,884		 35,616
55,325
$ 90,941
  • (4) Foreign currencies exchange

The items listed in the financial reports of each entity within the Group are measuredin the currency (that is, functional currency) of the main economic environment in which the entity operates. This consolidated financial statement is presented in the company's functional currency "NTD" as the expression currency.

  1. Foreign currency transactions and balances

  2. (1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

  3. (2)Monetary assets and liabilities denominated in foreign currencies at the period end areevaluated and adjusted at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon adjustment at the balance sheet date is recognized in current profit or loss.

  4. (3) Non-monetary assets and liabilities denominated in foreign currencies measured atfair value through profit or loss are evaluated and adjusted at the exchange rates prevailing at the balance sheet date. The generated adjustment differences are recognized as profit or loss. Non-monetary assets and liabilities denominated in foreign currencies measured at fair value through other comprehensive profit or loss are evaluated and adjusted at the exchange rates prevailing at the balance sheet date. The generated adjustment differences are recognized as other comprehensive profit or loss. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are measured using the historical exchange rates at the dates of the initial transactions.

  5. (4) All exchange differences are presented under ‘Other Gains and Losses’ in the Profit and Loss Statement.

  6. 2.Translation of foreign operations

The operating results and financial positions of all Group entities, affiliated companies and joint agreementswith a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • (1) Assets and liabilities presented in each balance sheet are translated at the closing exchange rate at the date of that balance sheet;

  • (2) Incomes and expenses for presented in each statement of comprehensive income comprehensive balance sheet are translated at average exchange rates of that period; and

  • (3) All resulting exchange differences are recognized in other comprehensive incomeprofit or loss.

(5) Classification criteria for distinguishing between current and non-current assets and liabilities

  1. Assets that meet one of the following criteria are classified as current assets:

  2. (1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.

- 136 -

  • (2)Assets held mainly for trading purposes.

  • (3) Assets that are expected to be realized within twelve months from the balance sheet date.

  • (4) Cash or cash equivalents, excluding restricted cash and cash to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

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

  • 2.Liabilitiesthat meet one of the following criteria are classified as current liabilities:

  • (1) Liabilities that are expected to be settled within the normal operating cycle.

  • (2) Liabilities held mainly for trading purposes.

  • (3) Liabilities that are to be settled within twelve months from the balance sheet date.

  • (4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issuance of equity instruments do not affect its classification.

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

  • (6) Cash equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that fulfill the above definition held for the purpose to meet short-term cash commitments are categorized as cash equivalents.

  • (7) Financial assets at amortised cost

The Group’s time deposits which do not fall under cash equivalents are those with a short maturity

period and are measured at initial investment amount as the effect of discounting is immaterial.

(8) Financial assets measured at fair value through profit or loss

  • 1.Financial assets that are not measured at amortized cost or measured at fair value through other comprehensive gains and losses.

  • The Group adopts transaction date accounting for financial assets measured at fair value through profit or loss in accordance with customary transactions

  • Financial assets measured at fair value through profit or loss are initially recognized at fair value. Related transaction costs are recognized in profit or loss. These financial assets are subsequently measured at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.

(9) Financial assets measured at fair value through other comprehensive income

  1. Refers to an irrevocable choice at the time of initial recognition, and reports the changes in fair value of equity instrument investments that are not held for trading in other comprehensive profit or loss; or debt instrument investments that also meet the following conditions:

  2. (1) The financial asset is held under a business model whose purpose is to collect contractual cash flows and sell.

  3. (2) The contractual terms of the financial asset generate cash flow on a specific date, which is the entire interest for payment of principal and the principal amount in circulation.

  4. The Group adopts transaction day accounting for financial assets that are measured at fair

- 137 -

value through other comprehensive income in accordance with transaction practices.

  1. The Group's initial recognition is measured by its fair value plus transaction costs, and subsequently measured by fair value

  2. (1)Changes in fair value attributable to equity instruments are recognized in other comprehensive income or loss, and at the time of division, the cumulative benefit or loss previously recognized in other comprehensive income or loss shall not be reclassified to profit or loss and transferred to retained earnings. When the right to receive dividends is 。

  3. established, the economic benefits asso

  4. (2) Changes in fair value of a debt instrument are recognized in other comprehensive income and recognized in impairment losses, interest income and foreign currency conversion gains and losses recognized in other comprehensive income are recognized in profit or loss and, at the time of division, accumulated benefits or losses recognized in other comprehensive income are reclassified to profit or loss.

(10) Accounts and notes receivables

  1. Refers to contractual agreements that the account and receipt of the unconditional right to exchange the value of the consideration for the transfer of goods or services.

  2. 2.For short-term accounts receivable and bills that are not paid, the discount is not significant, and the Group measures by the original invoice amount.

(11) Financial assets loss

After the Group has measured financial assets by fair value of debt instruments and by amortized cost, in consideration of all reasonable and corroborative information (including forward-looking) on every asset liability statement date, allowance loss of those that have not significantly increased its credit risk since original recognition is measured by the 12-month expected credit loss amount. For those that have significantly increased its credit risk since original recognition, the allowance loss is measured by the expected amount of credit loss during its period of existence. Accounts receivable or contract assets that do not contain significant financial components are measured by the amount of expected credit losses during its period of existence.

(12) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(13) Inventories

Inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted-average method. Cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads, but excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, after deducting estimated cost of completion and applicable variable selling expenses.

(14) Investment accounted for using equity method / Associate corporation

  • 1.An associate enterprise is an entity that has a significant impact on the Group and has no control over it. It is generally a share that directly or indirectly holds more than 20% of its voting rights. The Group handles the investment of associate companies in the equity method and recognizes the cost upon acquisition.

  • The Group’s share of profit or loss after the acquisition of an associate enterprise is

- 138 -

recognized as current gains and losses, and other comprehensive profit or loss shares after its recognition is recognized as other comprehensive gains or losses. If the loss share of the Group of any associate company equals or exceeds its interest in the affiliated enterprise (including any other unsecured receivables), the Group does not recognize any further loss, unless the Group establishes a legal obligation, presumes an obligation, or has paid for it on its behalf for the relevant affiliate company.

  • 3.When the affiliate company generates non-profit or loss and other comprehensive profit and loss interest changes, which does not affect shareholding ratio of the company, the Group recognizes interest changes the Group enjoys under shares of said affiliate company as “capital reserve” according to shareholding ratio.

  • 4.Unrealized gains and losses generated by transactions between the Group and an affiliate company have been eliminated in accordance with their share of the rights and interests of the associate enterprise. Unless evidence indicates that the transferred property of the transaction has been derogated, the loss is not realized or sold and thus should be eliminated. Accounting policies of the affiliate company has been adjusted as necessary, in line with the policies adopted by the Group.

  • 5.Upon issuance of new shares by an affiliate company, if the Group has not purchased or acquired said shares according to ratio, leading to changes in investment ratio while the Group still imposes a significant impact over which, increase or decrease in net value of said equity is subject to adjustments to the “capital reserve” and “investment using equity method”. If the investment ratio is lowered, in addition to the above adjustment, and the interest or loss previously recognized in other comprehensive gains and losses is related to the decrease in the ownership interest, and the profit or loss is reclassified to profit or loss when the relevant asset or liability is disposed of, it is reclassified to profit or loss according to reduction ratio.

  • 6.When the Group loses significant impact on an affiliate company, the remaining investment in the former affiliate company is re-measured according to fair value. The difference between fair value and book value is recognized as current profit or loss.

  • 7.When the Group disposes of an affiliate company, if the Group loses significant impact on said affiliate company, all amounts previously recognized in other comprehensive profit or loss in relation to the affiliate company, if the accounting treatment of which is the same as the Group’s direct disposal of related assets or liabilities, that is, if it is previously recognized as other comprehensive profit or loss, it will be reclassified as profit or loss upon disposal of relevant assets or liabilities. When significant impact on an affiliate enterprise is lost, the gain or loss is reclassified from equity as profit or loss. If the Group continues to hold significant impact on an affiliate company, the amount previously recognized in other comprehensive gains and losses will be transferred in the above manner in proportion.

  • When the Group disposes of an affiliate company, if significant impact on said affiliate company is lost, the capital reserve related to the affiliate company is transferred to profit or loss. If the Group continues to hold significant impact on the affiliate company, the capital reserve is transferred to profit or loss according to proportion of disposal.

(15) Property, plant and equipment

  1. Property, plant and equipment are initially recorded at cost of acquisition. Relevant interests incurred during the construction period are capitalized.

  2. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, only when it is probable that future economic benefits associated with the item will flow to the Group, and cost of the said item can be measured reliably. Carrying amount of the replaced part is derecognized. All other repairs and maintenance charges are recognized as

- 139 -

current profit or loss at time of occurrence.

  • 3.Follow-up measurements of property, plant and equipment adopt cost model, and are depreciated using the straight-line method according to their estimated service lives. 。

  • Significant components of a property, plant, and equipment are depreciated separately.

  • 4.Assets’ residual values, service lives and depreciation methods are reviewed at each financial year-end by the Group. If expectation values of the assets’ residual values and service lives differ from previous estimates, or if expected patterns of consumption of said asset’s future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in accounting estimate under IAS8‘Accounting Policies, Changes in Accounting Estimates and Errors’ from the date of change.

Estimated service lives of property, plant and equipment are as follows: ：

Housing and building 10~20 years
Mechanical equipment 3~10 years
Transportation equipment 4~5 years
Office equipment 3~10 years
Mold equipment 5~10 years
Rental equipment 10 years

(16) Assets / Operating lease (lessee) － Right-of-use assets / lease liabilities

  1. The lease assets are recognized as a right-of-use asset and the lease liabilities at the date when they are available for use by the Group. When a lease contract is a lease of a short-term or low-value asset, it is recognized as an expense by the straight-line method during the lease period.

  2. Lease liabilities shall be recognized at present value at the beginning of the lease by discounting outstanding leases to the Group's increased borrowing rate. Lease payments shall include:

  3. (1) Fixed benefits, less any incentives for which the lease may be charged.

  4. (2) Subsequent acquisition interest method is measured by amortization cost method, and the interest expense shall be included during the lease period. When a non-contractual modification causes a change in the lease period or a lease payment, the lease liability will be reassessed and the measurement will be adjusted for the right-of-use asset.

  5. The assets are recognized at cost at the beginning of the lease, which includes:

  6. (1)The original measurement of the right-of-use the lease liability;

  7. (2) Any lease payments paid on or before the start date; and

  8. (3) Any original direct costs incurred in the beginning ；

Subsequent acquisition cost measurement, in which the depreciation expense is applied to either at the end of the useful life of the right-to-use asset or at the end of the lease period, whichever comes first. When a lease liability is reassessed, the right-to-use asset will adjust any re-measured amount of the lease liability.

  1. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference between remeasured lease liability in profit or loss.

  2. (17) Intangible assets

  3. 1.Intangible assets

- 140 -

Mainly computer software, patents and specialized technology recognized by cost of acquisition, amortized on a straight-line basis over its estimated service life of 10 to 20 years.

  • 2.Goodwill

Goodwill arising on a merge or acquisition of a business. Company merge is differences of fair values of identifiable net assets acquired upon deductions of acquisition prices, which is recognized as goodwill.

  • (18) Non-financial assets loss

  • The Group estimates the recoverable amount of assets with indications of impairment on the balance sheet date. When the recoverable amount is lower than the book value, the impairment loss is recognized. The recoverable amount refers to the higher value between fair value of an asset minus the cost of disposal or value of use. When the impairment loss of an asset recognized in previous years does not exist or decrease, the impairment loss is reversed, but the book value of said asset increased by the derogation loss should be no more than book value of said asset upon deduction of depreciation or amortization if the asset is not recognized for impairment loss

  • 2.Recoverable amounts of goodwill, non-determined service lives of intangible assets and intangible assets that are not yet available are estimated on a regular basis. When the recoverable amount is lower than book value, the impairment loss is recognized. Impairment loss on goodwill impairment is not reversed in subsequent years.

  • 3.If the goodwill is for the purpose of the impairment test, it will be allocated to the cash generating unit. This apportionment is based on the identification of the operating department. Goodwill is distributed goodwill to a cash-generating unit or cash-generating unit group that is expected to benefit from the merge of business that generates said goodwill.

  • (19) Loans

  • Refers to the long-term and short-term loans borrowed from the bank, and other long-term and short-term borrowings. The Group measures by fair value after deducing transaction cost at the time of original recognition, and any subsequent differences between the price and the redemption value after deducting the transaction cost. The interest expense method is used to recognize the interest expense in profit or loss during the circulation period according to the amortization procedure.

  • 2.The expenses paid when establishing a loan is deemed to be part or all of the loan, which is recognized as the transaction cost of the loan, which is deferred to the adjustment of the effective interest rate at the time of the expenditure; When it is not possible to withdraw part or all of the loan amount, it is recognized as the prepayment amount and amortized over the period in which the amount is relevant.

(20)Accounts and notes payable

  • 1.Refers to debts to pay for raw materials, goods or services on credit, and notes payable incurred by operation of non-operation.

  • Belongs to short-term accounts and notes payable without bearing interest. The Group measures by initial invoice amount as the effect of discounting is immaterial.

(21)Interchangeable bonds payable

Convertible corporate bonds issued by the Group are embedded with a conversion right (that is, the holder can choose to convert into the ordinary shares of the Group, but not a fixed amount of shares converted by a fixed amount), the right to sell and the right to buy. At the initial

- 141 -

issuance, the issue price is classified into financial assets or financial liabilities according to conditions of issuance. The treatment of which is as follows:

  • 1.The embedded conversion rights, the resale rights and the repurchase rights are accounted for as “financial assets or liabilities measured at fair value through profit or loss” at date of original recognition. Based on fair value assessment at the time, the difference is recognized as “profit or loss of financial assets (liabilities) measured at fair value through profit or loss”.

  • Principal contract of corporate bonds: the difference between the issuance amount and redemption value is recognized as corporate bond premium at the time of original recognition, after measuring with remaining value of which upon deduction of the above-mentioned “financial assets or liabilities measured at fair value through profit or loss”. The subsequent effective interest method is adopted to recognize which in profit or loss during the circulation period based on the amortization procedure as an adjustment item for “financial costs”.

  • 3.Any transaction costs directly attributable to the issuance are allocated to the components of liability according to proportion of original book value of each of the above items.

  • 4.With the transfer of holders, liability components of the account (including “amount of corporate bonds payable” and “financial assets or liabilities measured at fair value through profit or loss”) are treated according to subsequent measurements of classification, and part of book value is used as the issuance cost for the exchange of common shares.

(22) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract is fulfilled, cancelled or expires.

(23) Offsetting financial instruments

Financial assets and liabilities are offset and reported in net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts, and that there is an intention to settle on a net basis or to realize the asset and settle the liability simultaneously.

(24) Employee benefits

  1. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid, and recognized as expense in the period when the employees render service.

- 142 -

2.Pensions

Pensions contributed to by a certain ratio of total local employee salaries on a monthly basis according to contribution system defined by the Republic of China.

3.Termination benefits

Termination benefits are benefits provided in exchange for termination of employment before the normal date of retirement or when an employee decides to accept an offer of benefits from the company. The Group recognizes it as expense when it ceases to be able to revoke the termination benefits or when it is too early to identify the costs of restructuring. Benefits that are not expected to be fully repaid within 12 months after the balance sheet date should be discounted.

  1. Employees’ compensation, and directors’ and supervisors’ remuneration

  2. Employees’ compensation, and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation, and that these amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

- (25) Employee share based payment

Equity-settledshare-based payment arrangements are employee services received measured at fair value of the equity instruments granted at grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. Fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on service conditions that are expected to be satisfied and estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

(26) Income tax

  • 1.Income tax expense for the period comprises current and deferred income tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income, or items recognized directly in equity, in which cases the tax is 。

  • recognized in other comprehensive income or equity.

  • 2.The current income tax expense is calculated on the basis of tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. The management team evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions, where appropriate, based on the amounts expected to be paid to tax authorities.

  • 3.Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between tax bases of assets and liabilities, and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill, or of an asset or liability in a transaction (other than a business merge) that at the time of the transaction affects neither accounting nor taxable profit or loss. Temporary differences are not recognized if they arise on investments in subsidiaries and affiliates, and that timing of reversal of said temporary difference is controlled by the Company, and it is probable that the temporary difference will not reverse in the foreseeable future.

- 143 -

Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date, and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

  • 4.Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

  • Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(27)Share capital

  1. Ordinary shares are classified as equity. Differences between incremental costs directly attributable to the issuance of new shares, and book value upon impact of income tax are recognized in adjustments to the shareholder's equity

  2. Where the Company repurchases issued shares, the consideration paid, including any directly attributable incremental costs (net after tax) is recognized in deductions from equity attributable to the Company’s equity holders. When the repurchased stock is reissued, differences between the received consideration after deducting any incremental costs directly attributable to the issuance of new shares, and book value upon impact of income tax are recognized in adjustments to the shareholder's equity.

(28) Dividends

Dividends allocated to shareholders of the Company are recognized in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders meeting. Cash dividends are recognized as liabilities.

(29) Revenue recognition

1.Production sales

  • (1) The Company operates the manufacture and sale of automobile parts and related products of molds, and the sales receipts are recognized when the control of the products is transferred to the customers. When the product is shipped to the designated location, the risks of oldness, outdatedness and impairment have been transferred to the customer, and the customer accepts the product according to the sales contract, or the customer witnesses that all the acceptance criteria have been met, the commodity delivery hence occurs.

  • (2) Sales revenue of automobile parts are deducted from the net amount of the estimated sales discount at contract price. The sales discount given to the customer is usually based on the estimated future sales volume of the item. The Group estimates the sales discount based on historical experience using the expected value method. Limited by portions of the income recognition amount that are likely not to be significantly changed in the future, estimates are updated on each balance sheet date. Estimated sales discount payable to customers related to the sales by asset balance sheet date is recognized as refund liability. Payment terms of sales transaction are 30 days after date of delivery, which is consistent with market practice. Therefore, it is assessed that the contract does not contain a major

- 144 -

financial component.

  • (3)The Group recognizes income and receivables when opening the customer's bill every month according to bill amount of the bill it has the right to open.

  • 2.Software service revenue

The Group provides services related to the development of customized software. Labor income is recognized as income during the financial reporting period of service provision to the customer. The fixed price contract is recognized based on the proportion of all services that have been actually provided by balance sheet date, and completion ratio of services is based on the basis that services actually provided are all service that should be provided. The customer pays the contract price in accordance with the agreed time schedule. When the service provided by the Group exceeds the customer's payment, it is recognized as a contractual asset. If the customer pays more than the services already provided by the Company, it is recognized as a contractual debt.

(30) Government grants

Government grants are not recognized until there is reasonable assurance that the company will comply with the conditions attaching to them, and the grants received is recognized by fair value. If the nature of a government grant is to compensate for expenses already incurred of the Group, said grant should be recognized as current profit or loss in the period of occurrence of relevant expenses on a systematic basis. Government grants related to property, plant and equipment are recognized as current profit or loss over the estimated service life of relevant asset straight line method.

(31) Business merge

  • 1.The Group adopts the acquisition method for enterprise merges. The merging consideration is calculated based on the transferred assets, the liabilities incurred or bore, and fair value of issued equity instruments. The transferred consideration, including fair value of any asset and liability generated by the contingent consideration. The costs associated with the acquisition are recognized as an expense at the time of the occurrence. Identifiable assets and liabilities incurred in the business merge are measured at fair value of the acquisition date. The Group takes individual acquisition transactions as benchmark. Components of non-controlling interests are current ownership interests, and their holders are entitled to share the company's net assets on a pro-rata basis at time of liquidation, and choose to measure by fair value of date of acquisition or by proportion of identifiable net assets of the acquired non-controlling interest. All other components of the non-controlling interest are measured at fair value of the acquisition date.

  • 2.If the total of fair value of transferable considerations, non-controlling interests of the acquirer and interests of the previously held acquirer exceeds fair value of the identifiable assets and liabilities assumed, it is recognized as goodwill on the acquisition date. If differences between fair value of identifiable assets and liabilities assumed exceeds the transfer consideration, the non-controlling interest of the acquirer and the previously held equity of the acquirer is recognized as current profit or loss.

(32) Operating units

Information of operating units of the Group and internal management report provided to the main operating decision-maker is reported in consistent manners. The main operating decision-maker is responsible for allocating resources to and assessing performance of operating

- 145 -

units.

5. Major sources of significant accounting judgments, estimations and hypothetical uncertainties

The preparation of these consolidated financial statements requires the management team to make critical judgements in applying the Group’s accounting policies, and to make reasonable estimates concerning future events based on current conditions on balance sheet date for accounting estimates and assumptions. Made assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experiences and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. An explanation on significant accounting judgments, estimations and hypothetical uncertainties is addressed below:

(1) Significant judgements in applying accounting policies

There are no significant judgements in accounting policies.

(2) Significant accounting estimations and assumptios

1.Goodwill impairment assessment

The assessment process of goodwill impairment relies on the subjective judgment of the Group, which includes identifying cash-generating units and allocating assets and liabilities and goodwill to the relevant cash-generating units and determining the recoverable amount of the cash-generating units. Please refer to Note 6(10) for an explanation of a goodwill impairment assessment.

On Dec.31st 2020, the group recognized the loss as 577,516 NTD (thousand).

  1. Inventory evaluation

Since inventories must be valued at the lower between the cost and net realizable value, the Group must use judgments and estimates to determine net realizable value of the inventory on the balance sheet date. Due to the rapid changes in technology, the Group assessed the amount of normal loss, outdated or no market sales value on the balance sheet date, and reduced the inventory cost to net realizable value. This stock evaluation is mainly based on the estimation of product requirements during the future specific period, and may hence result in major changes.

On December 31st, 2020, book value of the Company's deposit was 4,071,830 NTD (thousand).

6. Contents of significant accounting items

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hands
Demand deposit		 Dec. 31st, 2020
$ 1,085
4,577,382		 Dec. 31st, 2019
$ 1,528

3,173,965

$ 3,175,493

$ 4,578,467

  1. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. Exposure amount of the largest credit risk on the balance sheet date is book value of cash and cash equivalents.

  2. The Group reports regular deposits with original due dates greater than three months as "financial assets carried at amortized cost".

  3. The Group has no cash and cash equivalents pledged to others.

- 146 -

(2)Notes and accounts receivable, net

Notes and accounts receivable, net
Notes receivable
Deduct：Discount notes receivable
Less：Allowance loss
Accounts receivable
Less：Allowance loss
1.Age analysis of notes and accounts receivable are as
Notes receivable
Not overdue
Notes receivable
Not overdue
In 90 days
In 91-180 days
Over 181 days		 Dec. 31st, 2020
$ 2,621,339
-
2,621,339
( 6,632)
$ 2,614,707
$ 3,327,873
( 137,810)
$ 3,190,063
follows:
Dec. 31st, 2020
$ 2,621,339		 Dec.31st, 2019
$ 1,471,313
( 59,616)
$ 1,411,697
-
$ 1,411,697
$ 3,718,324
( 88,920)
$ 3,629,404
Dec. 31st, 2019

$ 1,411,697
$ 3,051,624
495,297
37,612

133,791

$ 3,718,324

$ 3,074,661
109,245
9,650
134,317

$ 3,327,873

The above age analysis is based on overdue days.

  1. The balance of accounts and notes receivable on December 31st, 2020, December 31st, 2019 and January 1st, 2019 are generated by customer contracts and the balance of receivables from January 1st, 2019 is 4138,960 NTD (thousand).

  2. 3.Amount of facilities of the largest credit risk of the Group’s bills and accounts receivable on December 31st, 2020 and December 31st, 2019, regardless of collateral or other credit enhancements held, is the carrying amount of each type of notes and accounts receivable.

  3. 4.On December 31st, 2020 and December 31st, 2019, for the provision of short-term borrowings, some of the Group's subsidiaries provided accounts receivable to the bank for pledge, amounting to 0 and 431,000 NTD (thousand) respectively.

  4. 5.On December 31st, 2020 and December 31st, 2019, for the issuance of bank acceptance bills, some of the Company's subsidiaries provided notes receivable to the bank for pledge, amounting to 774,760 and 640,750 NTD (thousand) respectively.

  5. 6.The Group assesses some of the notes receivable (which are bank drafts) discounted to the bank meets the requirements for the exclusion of financial assets, provided that the receiver (the accepting bank) refuses to pay and the Group is liable to pay, although the credit rating of the receiver (the accepting bank) mentioned above is extremely high, in general, the Group does not expect the accepting bank to refuse payment. The Group has posted to the bank, but it has not yet matured, the following summary information is available:

Amount deducted

Dec.31st, 2020 Dec.31st, 2019 $ 59,616 $ 59,616

  • 7.On December 31st, 2020 and December 31st, 2019, the business model of the Group’s notes receivable was achieved through the acquisition of contractual cash flows and the sale of financial assets. Therefore, such notes are measured at fair value through other comprehensive income.

- 147 -

  • 8.For details of pledge of the notes and accounts receivable, please refer to the attached Appendix 8 of the consolidated financial report.

  • 9.For related credit risk information, please refer to Note 12 (2).

  • (3) Inventories

Finished goods
Raw material
Work in process
Total
Finished goods
Raw material
Work in process
Total		 Cost
$ 2,790,081
898,391
700,272
$ 4,388,744		 End of 2020 End of 2020
Allowance for
Obsolescence and
valuation loss		 Carrying amount
($ 212,559)
( 66,048)
( 38,307)
($ 316,914)
End of 2019		 $ 2,577,522
832,343
661,965
$ 4,071,830
Cost Allowance for
Obsolescence and
valuation loss		 Carrying amount
$ 3,386,100
992,281
584,331
$ 4,962,712		 ($ 200,907)
( 77,275)
( 31,776)
($ 309,958)		 $ 3,185,193
915,006
552,555
$ 4,652,754

Inventory-related expense losses recognized in the current period ：

Cost of inventories sold
Amount of obsolescence
stock and valuation loss
Revenue from sales of
waste and scrap
Unamoritized fixed factory
overhead
Prepayments
Prepayments
Prepayment of software
Input tax
Other
Total		 $
(

$		 Jan. 1stto Dec.31st, 2020
18,573,809
1,879
481,208)
92,970
18,187,450
End of 2020
506,858
48,335
167,435
154,666
877,294		 $
(
 Jan. 1stto Dec.31st, 2019
18,812,501
75,209
392,040)
-
18,495,670
End of 2019
446,986
40,004
226,867
100,322
814,179
$

$

$


$
$

(4)Prepayments

- 148 -

(5) Other current assets

Other current assets
Refundable deposits
Other current assets
Total		 $ End of 2020
793,529
212,893		 $
End of 2019
861,221
178,533
1,039,754

$
1,006,422

$

Please refer to Appendix 8 of the consolidated financial statements for nature of refundable deposits

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

Items
Non-current item:
Equity instruments
Unlisted, over the counter, emerging stocks
Adjustment for change
Exchange rate impact
Total		 $ Dec. 31st ,2020
107,939
838)
8,007)
99,094		 $ Dec. 31st ,2019
107,939
3,262
2,762)
108,439

(
(
$

(

$

  • 1.The equity instruments acquired by the Group in April 2019 are classified as equity instruments that are strategic investments as financial assets measured at fair value through other comprehensive income and loss. The fair value of those investments on December 31st, 2020 is 99,094 NTD (thousand) and on December 31st, 2019 is 108,439 NTD (thousand). Please refer to note 7 (3) for the transaction of related parties.

  • Regardless of any collateral or other credit enhancement held by the Group, the maximum amount of exposure to credit risk for financial assets measured at fair value through other comprehensive income was 99,094 NTD (thousand) on December 31st, 2020and 108,439 NTD on December 31st, 2019.

  • 3.The details of the recognition of financial assets as measured at fair value through other comprehensive income are as follows:

Jan. 1[st] to Dec.31[st] , 2020 Jan. 1[st] to Dec.31[st] , 2019

Equity instruments measured at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income ($ 4,100) $ 3,262

  • 4.Information on credit risk for financial assets measured at fair value through other comprehensive income is given in Note 12 (2).

- 149 -

(7) Investments accounted for using equity method

Balance on Jan. 1stof the year
Addition of investments accounted
for using equity method
Share of profit or loss of investments
accountedfor using equity method
Changes in capital surplus
Earnings distribution of investments
accounted for using equity method
Other equity changes-culative
conversion
Effect of exchange rate
Balance of Dec.31stof the year		 Dec.31st,2020
Dec.31st,2019

$ 1,220,207
132,219
( 55,845)
-
( 74,472)
3,879
14,294
$ 1,240,282

$ 1,356,176

( 48,630)
8,789
( 71,619)
2,626
( 27,135)
$ 1,220,207

Associate corporation

  • 1.On January 19, 2020, Changchun Engley Automobile Industry Co., Ltd., a subsidiary of the Group, invested 16.06% in Changchun Ceck Auto Parts Co., Ltd., a subsidiary of Honley Auto. Parts Co., Ltd.The increase in the Group's consolidated shareholding in Ceck is 40.96%.The investment amount was US$4.4 million and the investment amount was remitted on February 24 of the same year.

  • Information of the major associates of the Group is as follows:

Corporation name Main
business
Shareholdingratio
location Dec.31st.2020Dec.31st.2019Relationship
Measuring
method
ConstelliumEngley
Honley Auto. Parts Co.,Ltd
Zhejiang Sanse Mold Technology
Co., Ltd		 China 46%
46%
Strategic
investment
Equity
method
Taiwan 36.63%
36.63%
Strategic
investment
Equity
method

China
20%
20%
Strategic
investment
Equity
method

Honley Auto. Parts Co., Ltd increased it capital and reduced it in 2019. The company did not subscribe according to the shareholding ratio which resulted in its shareholding ratio as 36.63%.

- 150 -

3.Financial information of major associates of the Group is as follows:

Balance sheet

Balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share of net assets of associates
Goodwill
Carrying value of associates
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share of net assets of associates
Goodwill
Carrying value of associates
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Total net assets
Share of net assets of associates
Goodwill
Carrying value of associates		 ConstelliumEngley (Changchun) Automotive Structures
Co., Ltd
Dec. 31st, 2020
Dec. 31st, 2019
$ 950,692 $ 859,673
429,119
380,459
( 702,355) ( 628,306)
( 25,369)
-
$ 652,087
$ 611,826
$ 299,960 $ 281,440
-
-
$ 299,960
$ 281,440
Honley Auto. Parts Co.,Ltd
Dec. 31st, 2020
Dec. 31st, 2019
$ 686,516 $ 828,688
1,527,182
1,688,290
( 441,944) ( 569,110)
( 615,206)
( 635,240)
$ 1,156,548
$ 1,312,628
$ 388,863 $ 480,856
-
-
$ 388,863
$ 480,856
Zhejiang Sanse Mold Technology Co., Ltd
Dec. 31st, 2020
Dec. 31st, 2019
$ 655,628 $ 657,120
415,191 441,986
( 676,036) ( 637,382)
( 2,674)
( 27,156)
$ 392,109
$ 434,568
$ 78,421 $ 86,913
233,342
229,613
$ 311,763
$ 316,526

Co.,
Dec. 31st, 2020
950,692
429,119
702,355)
25,369)
652,087
299,960
-
299,960
Honley Auto.
Dec. 31st, 2020
686,516
1,527,182
441,944)
615,206)
1,156,548
388,863
-
388,863
Zhejiang Sanse Mold
Dec. 31st, 2020
655,628
415,191
676,036)
2,674)
392,109
78,421
233,342
311,763
Co.,
Ltd
$
(




$
$ 611,826
281,440
-

$


$
$ $

$
(
(




$

$

$

$
(
(

$
(
(

$
$

$
$

$
$

- 151 -

Statement of Comprehensive Income

ConstelliumEngley (Changchun) Automotive Structures Co., Ltd.

Income
Net profit of continuing
operations in the current period
Income (loss) on discontinued
operations
Other comprehensive profite
and loss (net after tax）
Total comprehensive profit and
loss in the current period

Dividends received from
associates

Income

Net loss of continuing
operations in the current period
Income (loss) on discontinued
operations
Other comprehensive profit and
loss(net after tax)
Total comprehensive profit and
loss in the current period
(
Dividends received from
associates
Income
Net loss of continuing
operations in the current period(
Income (loss) on discontinued
operations
Other comprehensive profit and
loss(net after tax)
Total comprehensive profit and
loss in the current period
Dividends received from
associate		 $ Jan. 1st to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
1,161,886
$ 1,294,309
158,031
$ 153,456
-
-
-
-
158,031
$ 153,456
60,444
$ 124,969
Honley Auto. Parts Co.,Ltd
to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
65,926
$ 37,208
261,710)
( 341,000)
-
-
10,590
7,169
251,120)
($ 333,831)
-
$-
Zhejiang Sanse Mold Technology Co., Ltd
to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
484,500
$ 606,859
48,387)
( 61,669)
-
-
-
-
48,387)
($ 61,669)
-
$-		 to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
1,161,886
$ 1,294,309
158,031
$ 153,456
-
-
-
-
158,031
$ 153,456
60,444
$ 124,969
Honley Auto. Parts Co.,Ltd
to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
65,926
$ 37,208
261,710)
( 341,000)
-
-
10,590
7,169
251,120)
($ 333,831)
-
$-
Zhejiang Sanse Mold Technology Co., Ltd
to Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
484,500
$ 606,859
48,387)
( 61,669)
-
-
-
-
48,387)
($ 61,669)
-
$-
$ $


$


$
Jan. 1st

(


$




$ Jan. 1st
$


($

to Dec.31st, 2020
484,500
48,387)
-
-
48,387)
-

(

$

4.Sum of book value of the Group’s individual non-significant associates and shares of results of their operations are summarized as follows:

At the end of 2020 and at the end of 2019, total carrying values of the Group’s non-significant associates was 239,696 and 141,385 NTD (thousand) respectively.

- 152 -

Income(loss) of continuing
operations in the current
period
Income(loss) on
discontinued operations
Other comprehensiveprofit
and loss(net after tax）
Total comprehensive profit
and loss in the current
period
Dividends received from
associates		 Jan. 1st to Dec. 31st,2020

$ 17,667
-

-

$ 17,667
$-		 Jan. 1st to Dec. 31st,2019
$ 17,667
-
-
$ 17,667
$-



- 153 -

(8) Property, plants and equipment

(8)Property, plants and equipment
Cost of house
and buildings
Machinery equipment
Transport equipment
Office equipment
Mold equipment
Unfinished works and equipment to be
inspected
Cost subtotal
Accumulated depreciation
House and building
Machinery equipment
Transport equipment
Office equipment
Mold equipment
Accumulated depreciation subtotal
Accumulated impairment
House and building
Machinery equipment
Transport equipment
Office equipment
Accumulated impairment subtotal
Total		 Jan.1st toDec. 31st,2020
Opening balance Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 End balance



(
(
 $ 3,572,487
7,403,227
75,842
506,408
1,242,677
1,094,739
$ 13,895,380
($ 859,591)
( 2,779,682)
( 49,473)
( 279,483)
( 475,030)

($ 4,443,259)
($ 64,888)
( 8,045)
5)
22)
($ 72,960)
$ 9,379,161		 $ 48,659

476,560
5,319
62,029
186,954
844,013
$ 1,623,534
($ 181,007)

( 643,828)
( 8,504)
( 80,389)
( 213,793)
($ 1,127,521)
$ -
-
-
-
$-		 ($ 3,997)
( 151,320)
( 8,672)
( 11,968)
( 38,596)
-
($ 214,553)
$ 892
124,120
8,057
10,707
28,633
$ 172,409
$ -
-
-
-
$-		 $ 687,717
73,325
-
22,301
38,693
( 887,300)
($ 65,264)
$ -
39,287
-
-
1,004
$ 40,291
$ -

-

-
-
$-
 $ 74,615
126,136
1,271
10,491
24,464
18,514
$ 255,491
($ 21,186)
( 50,837)
( 908)
( 6,505)
( 12,085)
($ 91,521)
($ 1,054) (
( 131) (
- (
-
(
($ 1,185)
(		 $ 4,379,481
7,927,928
73,760
589,261
1,454,192
1,069,966
$ 15,494,588
($ 1,060,892)
( 3,310,940)
( 50,828)
( 355,670)
( 671,271)
($ 5,449,601)
$ 65,942)
8,176)
5)
22)
$ 74,145)
$ 9,970,842

The Group adopted an amendment retrospective adjustment to IFRS 16 to transfer leased equipment belonging to the lessee of 165,822 NTD (thousand) to the right-of-use asset on January 1[st] , 2019.

Jan. 1[st] to Dec. 31[st] ,2019

- 154 -

Cost of house
and buildings
Machinery equipment
Transport equipment
Office equipment
Mold equipment
Rental equipment
Unfinished works and equipment to be
inspected
Cost subtotal
Accumulated depreciation
House and building
Machinery equipment
Transport equipment
Office equipment
Mold equipment
Rental equipment
Accumulated depreciation subtotal
Accumulated impairment
House and building
Machinery equipment
Transport equipment
Office equipment
Accumulated impairment subtotal
Total		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 Opening balance
Added amount
Amount ofdisposition Trading ofthe year
Effect of exchange
rate changes		 End balance







(
(
 $ 3,602,696
6,395,583
79,074
424,370
842,241
290,295
792,048
$ 12,426,307
($ 711,976)
( 2,104,344)
( 49,760)
( 227,266)
( 324,045)
( 124,473)
($ 3,541,864)
($ 67,297)
( 8,344)
5)
23)
($ 75,669)
$ 8,808,774		 $ 45,760
763,741
10,515
83,524
315,513
-
769,352
$ 1,988,405
($ 174,808)
( 641,834)
( 8,979)
( 76,219)
( 174,801)
-
($ 1,076,641)
$ -
-
-
-
$-		 ($ 762)
( 26,906)
( 10,864)
( 19,231)
( 11,214)
-
( 4,193)
($ 73,170)
$ 357
18,969
7,406
16,565
3,300
-
$ 46,597
$ -
-
-
-
$-		 $ 56,228
541,656
-
35,755
142,065
( 290,295)
( 417,839)
$ 67,570
($ 4,843)
( 154,131)
-
( 2,931)
2,931
124,473
($ 34,501)
$ -
-
-
-
$-		 ($ 131,435)
( 270,847)
( 2,883)
( 18,010)
( 45,928)
-
( 44,629)
($ 513,732)
$ 31,679
101,658
1,860
10,368
17,585
-
$ 163,150
$ 2,409
299
-
1
$ 2,709		 $ 3,572,487
7,403,227
75,842
506,408
1,242,677
-
1,094,739
$ 13,895,380
($ 859,591)
( 2,779,682)
( 49,473)
( 279,483)
( 475,030)
-
($ 4,443,259)
($ 64,888)
( 8,045)
( 5)
( 22)
($ 72,960)
$ 9,379,161



The Group adopted an amendment retrospective adjustment to IFRS 16 to transfer leased equipment belonging to the lessee of 165,822 NTD (thousand) to the right-of-use asset on January 1[st] , 2019.

- 155 -

  • 1.Property, plants and equipment loading cost and capital ratios and interest rates
Capitalized amount
Capitalized interest rate interval		 $ Jan. 1stto Dec. 31st,2020
41,781
1.25%~9.36%		 $ Jan. 1stto Dec. 31st,2019
37,864
1.25%~9.36%

  1. For information on immovable property, plants premises and equipment, please refer note 8.

  2. For the impairment loss of property, plant and equipment, please refer to Note 6 (12) for details.

  3. (9)Lease transaction-lessee

  4. The underlying assets of the Group's tenders include land, buildings, transport equipment and office equipment. The lease contract period usually ranges from 2 to 47 years. The lease contract is negotiated on individual basis and contains various terms and conditions, except that the assets of the lease may not be used as collateral for borrowing, there are no other restrictions.

  5. Information on the book value of the right-to-use assets and the recognized depreciation expense is as follows:

is as follows:
Land
House and building
Machinery equipment
Transport equipment
Office equipment
Land
House and building
Machinery equipment
Transport equipment
Office equipment		 December 31st.2020
Amount value
Amount value
$ 942,463
$ 953,203
402,333
341,513
9,303
-
27,426
36,685
548
815
$ 1,382,073
$ 1,332,216
December 31st.2019
Depreciationexpense
Depreciationexpense
$ 953,203
341,513
-
36,685
815
$ 1,332,216		 $ 26,958
87,194
29,659
25,995
826
$ 170,632
  • 3.Information regarding the profit and loss related to the lease is as follows:
Items affecting current profit and loss
Lease liabilities interest expenses
Short term lease expenses
Low value assets lease expenses		 Jan. 1st to Dec. 31st,2020
Jan. 1st to Dec. 31st,2019
$ 18,520 $ 20,952
11,343 20,463
- 215

  • 4.The increase in the right-of use assets of the Group from January 1 to December 31, 2020 was 。

  • 173,220 NTD (thousand) and January 1 to December 31, 2019 was 95,707 NTD (thousand).

  • 5.The cash outflow from the Group's leasing from January 1st to December 31st, 2020 was 141,102 NTD thousand and January 1st to December 31st, 2019 was 186,987 NTD thousand.

- 156 -

(11)Intangible assets

Jan. 1st to Dec. 31st,2020

Jan.1st toDec. 31st,2020 Jan.1st toDec. 31st,2020 Jan.1st toDec. 31st,2020
Cost
Computer
software
Exclusive
technology
Goodwill
Accumulated
amortization
Computer
software
Exclusive
technology
Accumulated loss
Goodwill		 Opening balance Cost acquired
Decrease in this
period
Current transfer
Effect of
exchangerateEnding balance
$ 518,165
626,633
616,754		 $ 73,270
-
-
$ 73,270
($ 49,644)
( 67,617)
($ 117,261)
($ 50,643)
($ 50,643)
 $ -
-
-
$-
$ -

-
$-

$-
$-		 $ 9,141
-
-		 $ 19,047
10,177
22,514

$ 51,738
($ 5,127)
( 4,812)		 $ 619,623
636,810

639,268

$1,761,552
($ 130,406)
( 238,498)		 $ 9,141
$ 419
-


$ 1,895,701


($ 184,758)

( 310,927)

($ 368,904)		 $ 419

($ 9,939)


($ 495,685)

($ 10,932)		 $-
($ 177)


($ 61,752)

($ 10,932)
$-
($ 177)


($ 61,752)

$ 1,381,716

$ 1,338,264
Cost
Computer
software
Exclusive
technology
Goodwill
Accumulated
amortization
Computer
software
Exclusive
technology
Accumulated loss
Goodwill		 Jan.1st toDec. 31st,2019
Opening balance Cost acquired
Decrease in this
period
Current transfer
Effect of
exchangerateEnding balance
$ 43,959
$ 67,491
($7,551)
$36,551
($22,285)
$ 518,165
649,892
-
-
-
( 23,259)
626,633
645,199
-
-
-
( 28,445)
616,754
$1,739,050
$67,491
($7,551)
$36,551
($73,989)
$1,761,552
($ 93,584)
($ 49,428)
$7,427
$ -
$ 5,179 ($ 130,406)
( 176,076)
( 70,618)
-
-
8,196 ( 238,498)
($ 269,660)
($120,046)
$7,427
$ -
$13,375 ($ 368,904)
$ - ($ 11,338)
$ -
$ -
$ 406 ($ 10,932)
$ - ($ 11,338)
$ -
$ -
$ 406 ($ 10,932)
$1,469,390
$1,381,716

  • 1.The above amortization expenses are recognized under manufacturing expenses and operating 。

  • expenses in the comprehensive profit and loss statement.

- 157 -

2.Goodwill is distributed to the cash generating units of the Group:

December 31[st] .2020

Goodwill:
Netherlands K Company
Ningbo Maoxiang
Linde+Engley (Tianjin)
Goodwill：
Netherlands K Company
Ningbo Maoxiang
Linde+Engley (Tianjin)		 Goodwill:
Netherlands K Company
Ningbo Maoxiang
Linde+Engley (Tianjin)
Goodwill：
Netherlands K Company
Ningbo Maoxiang
Linde+Engley (Tianjin)		 Acquired from
first
timemerge		 Acquired from
first
timemerge		 Acquired from
first
timemerge		 Acquired from
first
timemerge		 Acquired from
first
timemerge
$ 458,200
38,992
121,991
$ 619,183		 ($ 50,643)
( 11,109)
-

($ 61,752)
December31st,
Acquired from first
timemerge
$ 458,200
38,992
121,991
$ 619,183		 $ -
( 11,338)
-
($ 11,338)		 $ 16,393
( 2,216)
( 16,200)
($ 2,023)

Corporation merges and acquisitions are recognized as goodwill by purchase price in addition to purchase prices as direct costs of the relevant purchases; or by deducting differences of fair values of acquired identifiable net assets from fair valuse calculated by evaluation of the acquired company's rights and interests by evaluation method on date of acquisition for completed business merges with control acquired.

  1. As of December 31st, 2020, the Group’s goodwill generated by business merges and acquisitions was 577,516 NTD (thousand), which mainly compromises operating income increases and benefits of potential customer relationships from expected business merges and acquisitions. According to IAS 36, impairment tests should be carried out on goodwill acquired by business merges at least once every year. Impairment tests of goodwill distribute goodwill to cash-generating units that are expected to benefit from said consolidations. Each company is a cash-generating unit that produces a unique cash flow. Therefore, impairment of goodwill is based on the calculation of the companies’ use value and net asset value of valuation to assess whether which shall be provided as impairment. The use of value is based on the estimated cash flows from the five-year financial budget approved by the management, and more than five years of cash flows are calculated using the estimated growth rates described below. The main assumptions used to calculate the value of use are as follows:
Netherlands K Company
Discount rate
Growth rate
Ningbo Maoxiang
Discount rate
Growth rate
Linde+Engley (Tianjin)
Discount rate
Growth rate		 December 31st.2020
18.36%
2.71%
17.11%
2.50%
15.54%
2.50%		 December 31st.2019
18.96%
2.81%
16.10%
3.00%
15.02%
3.00%

- 158 -

As recoverable amount calculated based on value of the use by the Group is less than the carrying value, thus a goodwill impairment loss of 61,752 NTD (thousand) was recognized in 2020. Calculation of use value mainly considers operating net profit rate, growth rate and discount rate. The management level determines the operating net profit rate based on previous performances and its expected progress on market development. Average growth rate of weighting used is consistent with forecasts of the industry report, and the discount rate used is the pre-tax ratio and reflects the specific risks associated with the relevant operating departments.

(11) Other non-current assets

Other non-current assets
Prepayable to equipment
Refundable deposits
Other non-current assets		 End of 2020
$ 1,050,953
258,237
233,152		 End of 2019
$ 1,252,559
240,667

161,905
$ 1,655,131

$ 1,542,342

Please note the nature of the refund deposit and please refer to Note 8 of the financial report.

(12) Non-financial impairment loss

  • 1.As of December 31st 2020 and December 31st 2019, the cumulative impairment recognized by the Group is determined to be less than the recoverable amount of the subsidiary, Ningbo Maoxiang and K Company, and the subsidiary, Liaoning Engley, adjusted the carrying amount of its real estate, plant and equip ment according to the evaluation results as follows:
Accumulated impairment-House and building
Accumulated impairment –Machinery equipment
Accumulated impairment–Transport equipment
Accumulated impairment–Office equipment
Accumulated impairment–Goodwill		 End of 2020
$ 65,942
8,176
5
22
61,752
$ 135,897		 End of 2019
64,888
8,045
5
22
10,932
$
$
83,892
  1. For the impairment of property, plants and equipment and intangible assets, please refer to Note 6 (11) and (10) for details.

(13) Short-term loans

Short-term loans
Credit loan
Secured loan
Interest rate range		 Dec. 31st, 2020
$ 2,633,135
137,075		 Dec. 31st, 2019
$ 2,617,997

86,246

$ 2,770,210


$ 2,704,243
0.92%~5.44%

0.84%~4.15%

Please refer to the detailed financial statement Note 8 for the warranty of the loan.

- 159 -

(14) Other payables

Other payables
Payable equipment
Payroll payable
Payable to social security and provident fund
Interbank/shareholder loan
Compensation to employees and directors
Other payables
Total		 Dec. 31st, 2020
$ 369,602
241,372
44,430
44,514
9,149
719,444		 Dec. 31st, 2019
$ 366,567
244,763
76,082
44,696
11,277

501,543
$ 1,244,928

$ 1,428,511

  • 1.The social security expenses and housing provident funds of the China subsidiaries of the Group are paid at a certain rate in accordance with the Social Security Law of the People's Republic of China and the Housing Provident Fund Regulations of the People's Republic of China, which are based on the monthly salary of the employees, and the social security expenses and housing provident funds which should be listed in the annual financial statements for the actual salary of the employees.

  • 2.The interest rate of interbank borrowings on December 31, 2020 and December 31, 2019 was 4.35 %.

(15) Bonds payable

First-time unsecured convertible corporate debt in China
Second-time unsecured convertible corporate debt in China
Deduct：Discount on corporate debt
Sub-total
Deduct: Corporate debt due within one year or one business cycle
Total		 End of 2019
$ -
400,000
( 1,934)
$ -
400,000
( 1,934)		 End of 2019
$ 476,400
400,000
( 6,882)
869,518
( 476,400)
$ 393,118

  • 1.On the 8th of November 2016, the Company in the Republic of China, the company's board of directors for the first time issued a non-guaranteed convertible corporate bond, as follows:

  • (1)The conditions for the first time releasing company's domestic non-guaranteed conversion of corporate bonds are as follows: A.The company has been approved by the authorities to issue the first non-guaranteed transfer of corporate bonds locally, with a total amount of 1,100,000 NTD (thousand), and a coupon rate of 0% for three years. The circulation period is from January 10, 2017 to January 10, 2020. The convertible bonds will be paid in cash at the face of the bond upon maturity. This convertible corporate bond was listed on the Taipei Exchange on January 10, 2017.

    • B.The holder of this conversion company bond shall, from the day after the expiration of three months after the date of issuance of the bond, to the expiration date, at any time, except for the suspension of the transfer period as required by the method or the decree, may request the Company to convert to the ordinary Shares, the rights and obligations of

- 160 -

the converted ordinary shares are the same as the original issued ordinary shares. 

  - C. The price of the company's conversion bonds at the time of issuance is set at 181 NTD per share. The conversion price of the converted corporate bonds is determined by the pricing model stipulated in the conversion method. In the future, if there is any adjustment of the conversion price in accordance with the conversion method, it will be adjusted according to the pricing model specified in the conversion method. As of December 31, 2019, the conversion price of the converted corporate bonds has been adjusted to 162.40 NTD per share.

  - D.The holder of a bond may, within 40 days before the maturity of the two-year conversion, request the company to buy back its converted corporate bonds at the rate of 100% of the face value of the bond.

  - E.From the date of the three-month issue of the conversion of the company's bonds to the 40th day before the expiration of the issue period, if the company's common stock closing price exceeds 30% of the current conversion price for 30 consecutive business days, the company will within 30 business days thereafter, the creditors are notified and the bonds outstanding in cash are recovered in cash in denominations on the base date of the recovery. When the conversion of the company's bond issuance expires on the 30th day after the expiration of the issue period and the 40th day before the expiration of the issue period, if the outstanding balance of the converted corporate bond is less than 10% of the original issue, at any later time, recover all its bonds in cash at the face of the bond

  - F.According to the conversion method, all the Company's recovered (including those bought by the securities firm's business office), repaid, or converted, the converted corporate bonds will be cancelled, not sold or issued, and the conversion rights attached to them will be eliminated.

  • (2)In the issuance of convertible corporate bonds, the Group separates the equity-type conversion rights from the components of each liability in accordance with IAS 32 “Financial Instruments: Expression”, and accounts for “Capital Reserves – Options” of 44,895 NTD (thousand). The convertible corporate bonds of the Company was due on January 10, 2020 and accounts for “Capital Reserves – Other”. The embedded buyback right and sellback right, in accordance with the provisions of IAS 39 “Financial Instruments: Recognition and Measurement”, it is not closely related to the economic characteristics and risks of the main contract debt commodity and is therefore treated separately and the net amount of “financial assets or liabilities measured at fair value through profit or loss.” The effective interest rate on principal contract debts after separation is 1.53%.

  • The second unsecured convertible corporate bonds in the Republic of China, issued by the Board of Directors of the Company on April 11, 2018, the Republic of China, are as follows:

  • (1)The second time company's in-domestic non-guarantee conversion of the company's debt is as follows:

    • A.The company has been approved to raise and issue the second unsecur ed convertible bonds by the competent authorities locally, with a total amount of 400,000 NTD (thousand) and a coupon rate of 0% for three

- 161 -

years. The period of circulation is from June 22, 2018 to June 22, 2021. The principal amount of the convertible bonds will be paid in cash upon maturity. The converted corporate bonds were listed and traded at the Taipei Exchange on June 22, 2018.

  • B.Within three months after the maturity of the issue date and to the maturity date, the holders of the convertible bond may at any time request to the Group for the conversion of the ordinary shares of the company, except for the transfer period required to be suspended according to the regulations or by the laws. The rights and obligations of the ordinary shares after the conversion are the same as those originally issued.

  • C.This conversion company debt at the time of issue conversion price is set at 177 NTD per share, the conversion price of this conversion company debt is determined according to the pricing model stipulated in the conversion method. After the continuation of the conversion price adjustment in line with the conversion method, will be adjusted according to the pricing model stipulated in the conversion method. As at December 31, 2020, the conversion price of this conversion company debt has been adjusted to 157.6 NTD per share.

  • D.The bondholders may, upon the expiry of the issuance period of the conversion corporate bonds, request the company to buy back the convertible corporate debt held by the bond at 100% of its denomination. 。

  • E. When the closing price of the ordinary shares of the company exceeds 30% of the current conversion price 40 days after the maturity of the three-month conversion bond issue for 30 consecutive business days, the creditors will be notified within the next 30 business days and recover the negotiable bonds in cash at the denomination of the bonds on the basis of the base date. When the conversion corporate bond issuance is three months from the next day to the forty days before the expiration of the issuance period, and when the outstanding balance of this convertible debenture is less than 10% of the total original issue, the company may, at any later time, recover all its bonds in cash at the face of the bond.

  • F. According to the provisions of the conversion method, all the company's bonds (including by the securities merchants’ business premises), repayment, or converted shall be written off, not will not be sold or issued, its attached conversion rights shall be eliminated.

  • (2) In the issuance of convertible corporate bonds, the Group separates the equity-type conversion rights from the components of each liability in accordance with IAS 32 “Financial Instruments: Expression”, and accounts for “Capital Reserves – Options” of 13,352 NTD (thousand). The embedded buyback right and sellback right, in accordance with the provisions of IAS 39 “Financial Instruments: Recognition and Measurement”, it is not closely related to the economic characteristics and risks of the main contract debt commodity and is therefore treated separately and the net amount of “financial assets or liabilities measured at fair value through profit or loss.” The effective interest rate on principal contract debts after separation is 1.25%.

(The rest of this page is intentionally left blank.)

- 162 -

(16) Long-term loans

ng-term loans
Nature of loan Duration and repayment method Interest rate Warranty End of 2020
Syndicated credit
From Oct.30,2019 to Oct.30,2022,		 1.55% None $ 1,260,720
loan monthly interest payments
Credit loan From Jan. 23,2018 to Oct. 1.30%~3.75% None 216,709
21,2021,every 2 months and quarterly
interest payments
Credit loan From Apr. 10,2017 to Apr. 9,2023, 1.63%~3.30% None 260,588
monthly and quarterly interest
payments
Credit loan From Jun. 17,2019 to Jun.30,2023, 3.55%~3.85% None 1,854,930
monthly and quarterly interest
payments
Credit loan From Jun. 29,2019 to Jun.30,2021, 1.25% None 63,269
quarterly interest payments
Credit loan From Sept. 18,2020 to Dec. 10,2023, 3.85%~5.04% None 657,000
monthly interest payments
Credit loan From Nov. 16,2020 to Nov.4 ,2022, 1.30% None 74,769
monthly interest payments
Leasing loan From Dec. 20,2017 to Set.20, 2022, 6.69% Machinery 47,620
quarterly interest payments equipment
Leasing loan From Apr. 12,2018 to Jan.12,2022, 5.62% Machinery 14,147
quarterly interest payment. Equipment
Leasing loan From Jun.8,2018 to Mar.8,2022, 6.51% Machinery 45,675
quarterly interest payments equipment
Leasing loan From Jun.8,2018 to Mar.8,2022, 6.51% Machinery 29,620
quarterly interest payments equipment
Leasing loan From Jun.8,2018 to Mar.8,2022, 6.51% Machinery 29,205
quarterly interest payments equipment
Leasing loan From Jun.8,2018 to Mar.8,2022, 7.11% Machinery 79,170
quarterly interest payments equipment
Leasing loan From Jul. 11,2018 to May 11,2022, 9.36% Machinery 243,246
quarterly interest payments equipment
Leasing loan From May.21,2019 to May 11,2022, 6.00% Machinery 69,983
quarterly interest payments Equipment
Leasing loan From Mar. 6,2020 to Mar. 30,2023, 6.2%~8.25% Machinery 128,744
monthly interest payments Equipment
Leasing loan From Mar. 10,2020 to Mar. 9,2023, 5.83% Machinery
monthly interest payments equipment 160,242
$ 5,235,637
educt：Syndicate d loan bank expense ( 7,537)
duct：Long-term borrowing due within one year or one business cycle ( 1,010,185)
$ 4,217,915
Nature of loan Duration and repayment method Interest rate Warranty End of 2019
Syndicated credit
From Oct.30,2019 to Oct.30,2022,		 1.55% None $ 1,444,370
loan monthly interest payments
Credit loan From Apr. 20,2017 to Sept.4,2022, 4.65%~4.75% None 1,379,200
monthly and quarterly interest payments
Credit loan From Jun. 2,2017 to Jun.1,2020, 1.30%~5.70% None 177,632
monthly and quarterly interest
payments
Credit loan From Feb.13,2017 to Apr.17,2022, 3.90%~5.70% None 242,006
monthly interest payments
Credit loan From Sept.25,2017 to Oct.21,2021, 1.30%~5.46% None 359,292
monthly, every 2 months, and quarterly
interest payments

Deduct ： Syndicated loan bank expense

Deduct ： Long-term borrowing due within one year or one business cycle

- 163 -

Nature of loan
Duration and repayment method
Interest rate
Warranty
Credit loan
From Sept.25,2017 to Jul.7,2021,
quarterly interest payments
3.21%~3.64%
None
Credit loan
From Nov. 23,2017 to Nov.23,2020,
quarterly interest payments
3.17%
None
Credit loan
From Nov.30,2018 to Nov.30,2021,
monthly interest payments
4.60%
None
Credit loan
From Jul. 29,2019 to Jul. 24,2021,
quarterly interest payments
1.25%
None
Leasing loan
From Jul. 11,2018 to May 11, 2022,
quarterly interest payments
9.36%
Machinery
equipment
Leasing loan
From Jun.8,2018 to Mar.8,2022,
quarterly interest payment.
7.11%
Machinery
Equipment
Leasing loan
From Jun.8,2018 to Mar.8,2022,
quarterly interest payments
6.51%
Machinery
equipment
Leasing loan
From May 21, 2019 to May20, 2022,
quarterly interest payments
6.00%
Machinery
equipment
Leasing loan
From Dec.20,2017 to Sept20,2021,
quarterly interest payments
6.69%
Machinery
equipment
Leasing loan
From Apr.12,2018 to Jan. 12,2022,
quarterly interest payments
5.62%
Machinery
equipment
Leasing loan
From Jun.8,2018 to Mar.8,2022,
quarterly interest payments
6.51%
Machinery
equipment
Leasing loan
From Jun.8,2018 to Mar.8,2022,
quarterly interest payments
6.51%
Machinery
equipment
educt：Syndicated loan bank expense
educt：Long-term borrowing due within one year or one business cycle










Deduct ： Syndicated loan bank expense

Deduct ： Long-term borrowing due within one year or one business cycle

  1. The Company signed a joint credit contract at a total of 70,000 USD (thousand) with Taishin Bank and Far Eastern International Bank on October 8, 2019. Taishin Bank acted as the management bank to support the repayment of loans from financial institutions and to enrich medium-term working capital. As of 31 December 31, 2020, the amount of the funds transferred was US$42,188 USD (thousand) and the amount not transferred was19,062 USD (thousand).

  2. In addition to other relevant provisions, the above syndicated loan contract also includes the following restrictions: During the credit period, the following financial ratios shall be maintained, and shall be subject to the annual consolidated financial report verified by the accountant and the second quarter consolidated financial report reviewed by the accountant, and the audit shall be carried out every six months. ：

  3. (1) Current ratio ： Not less than 100%.

  4. (2) Liability ratio ： Not more than 150%.

  5. (3) Interest coverage ratio ： Should not be less than 500%.

  6. (4) Total equity ： Not less than NT $ 100 million (inclusive).

  7. 2.In accordance with the provisions of the loan credit contract, during the duration of the contract, the company must comply with specific financial ratios at the end of the year and half of the year, such as current ratio, liability ratio, interest coverage ratio and total equity. As of December 31, 2020, the company has not

- 164 -

violated the above restrictions. 。

(17) Other current liabilities and other non -current liabilities

Item
End of 2020
End of 2019
Current：
Long-term loans due within one year
$ 1,010,185 $ 1,735,253
Corporate bonds due within one year
398,066
476,400
Other
62,136
4,091
Total
$ 1,470,387
$ 2,215,744
Item
End of 2020
End of 2019
Non-current:
Deferred government subsidy income
$ 203,040 $ 218,290
Other non-current liability-Other
566
556
Total
$ 203,606
$ 218,846
The
Company's
subsidiaries,
Liaoning
Engley
Auto
Parts
Co.,
Ltd.,
FoshanEngley Auto Parts Co., Ltd., Tianjin Engley Mold Manufacturing Co.,
Ltd., Changsha Engley Auto Parts Co., Ltd. Changchun Engley Automobile
Industry Co., Ltd. have obtained development incentive subsidies from the
Economic Development Zone Management Committees of various regions which
sums up to 244,688 NTD (thousand), and revenues are recognized year by year
based on 50 years. The Group recognized other income of 5,226 NTD (thousand)
and 6,247NTD (thousands) from January 1 to December 31, 2020 and from
January 1 to December 31, 2019 respectively. The Group recognises other
income of RMB 18,366 thousand and RMB 5,226 thousand from January 1 to
December 31, 108 and January 1 to December 31, 107, respectively.

(18) Pension

  • 1.Since July 1, 2005, Engley Automobile Industry Co., Ltd., a subsidiary of the Group, has established a certain retirement policy based on the Labor Pension Act, which is applicable to employees of their nationality. The company and its domestic subsidiaries choose to apply the part of the labor pension system stipulated in the "Labor Pension Act", and pays labor pension of 6% of the employee’s salary monthly to the employee’s personal account with the Bureau of Labor Insurance. The individual employee pension account and the amount of accumulated income can be paid monthly or at one time to the employee upon retirement.

  • 2.Engley Precision Industry B.V and KranendonkBeheersmaatschappij B.V., subsidiaries of the Group, are based on the retirement method stipulated by the local government, and provide pension insurance or retirement benefits according to the salary of local employees. The company has no further obligations except for the annual allocation.

  • 3.All mainland subsidiaries of the Group shall receive pension funds at a fixed rate of 13-16% per month in accordance with the pension insurance system provided by the Government of the People's Republic of China. The pension for each employee is arranged by the Government Management Co-ordinated. The Group does not have any further obligations except to make monthly transfer. The pension plan for the period from 1 January 1 to December 31, 2020, and from

- 165 -

January 1 to December 31, 2019 are 10,035 NTD (thousand) and 121,283 NTD (thousand) respectively.

(19) Share capital

  1. As of December 31, 2020, the company has a capital of 3,000,000 NTD(thousand) which is divided into 300,000, 000 shares. The net capital is 1,180,070 NTD (thousand) with a denomination of NT$10 per share.

  2. The company's common stock period and the end of the circulation of the number of external shares adjusted as follows:

January 1st
Reclaim shares
December 31st		 Year 2020 Year 2019
Shares (thousand shares) Shares(thousand shares)
118,317
-
118,007		 118,317
( 310)
118,007

  • 3.Treasury shares

  • (1) Reasons and number of share recovery:

Jan. 1, 2020 to Dec. 31, 2020: None.

Name of company
holding the shares
Reason for recovery
Item		 Year 2019 Year 2019 Year 2019
Share
(thousand shares)
Accounting
amount
The Company
To safeguard the
company's credit and
shareholders ' equity
Jan. 1
The Company
To safeguard the
company's credit and
shareholders ' equity
Recover this
period
Current
elimination
Dec.31		 683
310
( 993)
-		 $ 80,438
36,872
( 117,310)

$-

  • (2)The Securities and Exchange Act stipulates that the proportion of a company to buy back an outstanding share shall not exceed 10% of the total number of shares issued by the company; The total amount of shares bought back shall not exceed the reserve surplus plus the premium of issued shares and the amount of capital reserve realized.

  • (3) The Treasury shares held by the Company shall not be pledged under the provisions of the Securities and Exchange Act and shall not enjoy the rights of shareholders until they have been transferred.

  • (4)In accordance with the provisions of the Securities and Exchange Act, the shares purchased by the employee for the transfer of shares shall be transferred within three years from the date of purchase, and those who are overdue are deemed not to have issued shares of the Company and shall handle the change registration and sale of the shares. In order to maintain the Company's credit and shareholders’ rights and interests, the shares bought back should be changed and cancelled within six months from the date of change registration and sales of shares.

  • (5) To safeguard the Company’s credit and the rights of the shareholders, the Company continuously bought back 310 thousand (accounting value of

- 166 -

36,872 NTD thousand) of the Company’s shares (treasury shares) in January 2019. On February 20, 2019, the board of directors approved the cancellation of the total amount of 9,930,000 yuan (993,000 shares) of the shares purchased by the Company from November 14, 2018 to January 7, 2019 which was approved by the competent authorities on January 17,2019 and the capital change registration was completed.

(20) Capital reserves

In accordance with the provisions of the company law, the excess of the proceeds from the issuance of shares in excess of the par value and the capital reserve from the gift received, in addition to making up for losses, when the company does not accumulate losses, in proportion to the original shares of shareholders issued to new shares or cash. In addition, in accordance with the relevant provisions of the Securities and Exchange Act, when the above capital reserve is allocated for capital replenishment, the total amount shall not exceed 10% of the paid-in capital annually.The Company may not supplement the capital surplus unless the surplus fund is still insufficient to fill the capital deficit.

(21) Retained surplus

  1. The Company is in the growth stage. Based on capital expenditure, business expansion and sound financial planning for sustainable development, the company's dividend policy will be based on the Company's future capital expenditure budget and capital demand, with cash dividends and / or stock dividends allocated to the shareholders of the Company.

  2. 2.According to the current stipulations of the Company, if the company has a surplus after each year's final settlement, it will be assigned according to the following order:

  3. (1) Pay taxes in accordance with the law.

  4. (2) To compensate for the accumulated losses in the previous year.

  5. (3) A 10% of the statutory surplus is allocated, but not to the extent that the statutory surplus has reached the actual paid-in capital received by the Company.

  6. (4) A special surplus reserve that must be deposited in accordance with regulations.

  7. (5) Add up the accumulated unallocated surplus in the previous year to the amount of the current year’s surplus after deducting the preceding items (1) to (4) aforementioned, and the available surplus may be proposed by the Board of Directors and submitted to the shareholders’ general meeting for approval in accordance with the resolutions of the listing laws. Dividend distribution can be distributed in the form of cash dividends and / or stock dividends and, without contravening British Cayman Islands law, the dividend amount should be at least ten per cent (10 per cent) of the surplus of the current year, and the cash dividend allotment should not be less than ten per cent (10 per cent) of the total shareholders' dividends, subject to a ceiling of 100 per cent.

  8. The statutory surplus reserve shall not be used except to make up for the losses of the Company and to issue new shares or cash in proportion to the original

- 167 -

shares of the shareholders, provided that the portion of the reserve exceeds 25 per cent of the paid-in capital.

  • 4.When the Company distributes the surplus, according to the statutory provisions, the debit balance of the other equity item on the balance sheet of the year is required to be listed before the credit balance of the year is allocated, and when the debit balance of the other equity item is rolled back, the reverse amount shall be included in the available surplus.

  • At the time of allocation, in accordance with the letter from JinguanzhengshenZi No. 101001285, dated April 6,2012, the total amount of special surplus for the accounts of other shareholders in the current year that occurred is not allowed to be allocated; however, the company has already applied the IFRS for the first time and the difference between the amount already mentioned and the net amount of other equity deductions should be added to the special surplus reserve.

  • 6.On June 19,2020 and June 24,2019, the Company adopted the resolutions of the shareholders' meeting for the distribution of profits for 2019 and 2018 respectively:

Statutory surplus reserve
Special surplus reserve
Cash dividend		 Year of 2020 Year of 2019
Amount
Dividend per share
(NTD)
Amount
Dividend per share
(NTD)
$ 39,230
$ 112,340
467,691
281,227
295,018 $ 2.50
531,032 $ 4.50
  • 7.On March 16, 2021 after the resolution of the board of directors, the resolution for the 2020 surplus distribution was as follows:
(23) Year 2020
Amount
Dividends per share
Statutory surplus reserve
$ 29,301
Cash dividend
218,313
$ 1.8
Non-controlling equity
Year of 2020
Year of 2019
Balance beginning of the year
$ 2,412,728
$ 2,412,728
Share attributable to non-controlling interests
Net profit
344,845
323,827
Cash dividend
( 168,628)
( 155,267)
Exchange difference for
conversion of financial
statements of foreign
40,443 ( 81,434)
Difference Non-control interests
(Note1, Note 2)
( 78,552)
( 268,655)
Balance, end of the year
$ 2,369,731
$ 2,231,623

(Note1) The decrease in noncontrolling interests from January 1 to December 31, 2019 was due to the execution of the agreement to acquire additional shares of a subsidiary, which reduced noncontrolling interests by $268,655 thousand and reduced retained earnings by $209,321 thousand.

(Note2) The decrease in non-controlling interests from January 1, 2020 to

- 168 -

December 31, 2020 is due to the acquisition of 25% of KranendonkBeheersmaatschappij B.V. by Engley Precision Industry B.V. in June 2020.

(23) Operation revenue

Customer contract revenue Year of 2020
$ 21,644,152		 Year of 2019
$ 22,239,873

1. Details of Customer contract revenue

The revenue of the Group is derived from the provision of goods and services to be transferred over time and at a certain point in time. The revenue may be subdivided into the following geographical areas:

Contract revenue
Internal department
transaction revenue
External customer contract
Income recognized at a certain
point in time
Gradually recognized income over
time		 Yearof 2020 Yearof 2020
China
Other regions		 Total
$ 26,273,823 $ 302,053
( 4,916,896)
( 14,828)		 $ 26,575,876

( 4,931,724)

$ 21,644,152

$ 21,356,927


$ 287,225

$ 21,356,927

-

$ 57,117
230,108

$ 21,414,044

230,108
$ 21,356,927

$ 287,225


$ 21,644,152
Contract revenue
Internal department transaction
revenue
Revenue from external customer
contract
Income recognized
at a certain point in time
Gradually recognized income over
time		 Yearof 2019
China Other regions Total
$ 26,300,599
( 4,750,803)
$ 21,549,796
$ 21,549,796

-
$ 21,549,796		 $ 699,289
( 9,212)
$ 690,077
$ 64,260
625,817
$ 690,077		 $ 26,999,888
( 4,760,015)
$ 22,239,873
$ 21,614,056
625,817
$ 22,239,873

The reporting department information provided by the Group to major decision-makers belongs to China.

- 169 -

2.Contract liabilities

  • (1)The Group recognizes the contract liabilities related to customer contract revenue as follows:

Dec. 31[st] , 2020 Dec. 31[st] , 2019 Dec. 31[st] , 2018 Contract liabilities: Contract liabilities -Advance payment $ 298,911 $ 265,348 $ 522,570

  • (2) Recognized revenue of contract liabilities at the beginning of the current period

Jan.1[st] to Dec.31[st] , 2020 Jan.1[st] to Dec.31[st] , 2019 Initial balance of contract liabilities Recognized income for the current period Revenue from mold $ 212,677 $ 445,461

(24) Other benefits and losses

(24) the current period
Revenue from mold
Other benefits and losses		 $ 212,677 $ 445,461
(25)
(26)		 Loss incurred from disposal of
property, plant and equipment
Net foreign currency exchange
loss
Net profit of financial assets
measured at fair value through
profit or loss
Property, plant and equipment
impairment loss
Goodwill impairment loss
Other expenses
Interest income
Bank deposit interest
Other income
Government grants
Other income－other		 Jan.1stto Dec.31st, 2020
($ 10,328)
( 63,671)
34,021
( 50,643)
( 29,558)
($ 120,179)		 Jan.1stto Dec.31st, 2019

($ 4,726)

( 13,570)

19,691

-

( 11,338)

( 30,624)

($ 40,567)
Jan. 1stto Dec.31st, 2019
$ 7,777
Jan. 1stto Dec.31st, 2019
$ 70,788

36,092

$ 114,657

( 63,671)

Jan. 1stto Dec.31st, 2020
$ 12,448
Jan. 1stto Dec.31st, 2020
$ 135,619
28,124

$ 163,743

- 170 -

(27) Financial costs

(27) Financial costs Financial costs
(28)
(29)		 Jan. 1stto Dec.31st, 2020
Interest expense
Interest of loans
$ 284,649
Lease liabilities
18,520
Convertible corporate bond
4,948
Amortization of the hosting
fee of syndication
4,112
312,229
Less: the capitalization
amount of the eligible item
( 41,781)
$ 270,448
Additional information on expense
Jan. 1stto Dec.31st, 2020
Employees’ benefits
$ 2,175,483
Depreciation of property, plant
and equipment
1,127,521
Right-of-use asset depreciation
expense
148,048
Amortization expenses of
intangible assets
117,261
$ 3,568,313
Employee welfare expenses
Jan. 1stto Dec.31st, 2020
Salary
$ 1,887,253
Labor and health insurance
52,703
Pension
10,035
Other employment expenses
225,492
$ 2,175,483		 Jan. 1stto Dec.31st, 2019
$ 329,374
20,952
12,784
685
363,795
( 37,864)
$ 325,931
Jan. 1stto Dec.31st, 2019
$ 2,339,691
1,076,641
170,632
120,046
$ 3,707,010
Jan. 1stto Dec.31st, 2019
$ 1,892,215
71,694
121,283
254,499
$ 2,339,691

Employees’ benefits
Depreciation of property, plant
and equipment
Right-of-use asset depreciation
expense
Amortization expenses of
intangible assets
Employee welfare expenses
Salary
Labor and health insurance
Pension
Other employment expenses
$

$


$
$

$


$
$


$

  1. According to the articles of association, if the company makes a profit in the year, it shall allocate a minimum pre-tax employee remuneration of 0.5% and a maximum of 8%, for the directors’ remuneration, also a minimum of 0.5% and a maximum of 3%.

  2. The remuneration of the employees and the directors’ compensation are as follows:

ollows:
Employee remuneration
Directors’ compensation		 Jan. 1stto Dec.31st, 2020
$ 2,449
6,700		 Jan. 1stto Dec.31st, 2019
$ 3,277
8,000

$ 9,149
$ 11,277

The aforementioned amounts are included in the payroll accounts, from January 1 to December 31, 2020 and January 1 to December 31, 2019, based on the profitability as of the current period and estimated according to the

- 171 -

company's articles of association.

In accordance with the resolution of the Board of Directors on March 25, 2020, the actual amount of remuneration received by the employees and the directors in 2019, was consistent with the amount recognized in the financial report.

Information regarding the employee compensation and director compensation approved by the board of directors of the company can be found at the public information website.

(30) Income tax

1.Tax expense

Components of tax expense:

Jan. 1st to Dec.31st, 2020 Jan. 1stto Dec.31st, 2019 Jan. 1stto Dec.31st, 2019
Current tax：
Current income tax $ 186,539 $ 254,227
Overestimation of income tax in
previous years ( 26,226) ( 16,957)
Total current income tax 160,313 237,270
Deferred income tax:
Original generation and revision
of temporary differences 12,948 ( 72,255)
Deferred income tax expense 12,948 ( 72,255)
Income tax expense $ 173,261 $ 165,015
2.Relationship between income tax expense and accounting profit:
Jan.1st toDec.31st,2020 Jan.1st to Dec.31st,2019
Net income before tax at the
statutory tax rate		 $ 175,177
$		 204,125
Tax-free income in accordance
with tax law		 ( 22,541) ( 31,321)
Taxation loss unrecognized
deferred income 46,851
9,168
Tax assets
Overestimation of income tax in
previous years		 ( 26,226) ( 16,957)
Income tax expense $ 173,261
$		 165,015

- 172 -

  1. The amount of deferred taxable assets or liabilities arising from temporary differences, tax losses and investment write-downs are as follows:
differences, tax losses and investment write-downs are as follows: and investment write-downs are as follows: and investment write-downs are as follows:
Temporary difference：
- Deferred tax assets:
Allowance for bad debts
Income from unrealized
land grants
Sluggish inventory and
price loss
Payable social security
expenses and provident
fund
Tax loss
Other
Subtotal
- Deferred income tax
liabilities:
Foreign long-term
investment income
Land use-of-right tax
difference
Intangible asset tax
difference
Tax difference of property,
plant and equipment
Other
Subtotal
Total		 Jan.1st toDec.31st,2020
Opening balance
Recognized in profit
andloss
Business
combination Ending balance
$ 18,892
$ 10,762 $ -
$ 29,654
24,273
( 180) -
24,093
53,133
5,462 -
58,595
8,992
( 4,517) -
4,475
167,754
( 10,337) -
157,417
41,759
9,609
-
51,368
$ 314,803
$ 10,799
$-
$ 325,602
($ 300,524)
$ - $ -
($ 300,524)
( 35,762)
- 548
( 35,214)
( 61,373)
- 11,643
( 49,730)
( 13,244)
- 736
( 12,508)
( 34,381)
( 23,747)
-
( 58,128)
($ 445,284)
($ 23,747)
$ 12,927
($ 456,104)
($ 12,948)
$ 12,927
Opening balance
Recognized in profit
andloss
$ 18,892
$ 10,762
24,273
( 180)
53,133
5,462
8,992
( 4,517)
167,754
( 10,337)
41,759
9,609
$ 314,803
$ 10,799
($ 300,524)
$ -
( 35,762)
-
( 61,373)
-
( 13,244)
-
( 34,381)
( 23,747)
($ 445,284)
($ 23,747)
($ 12,948)		 $ -
-
-
-
-
-
$-
$ -
548
11,643
736
-
$ 12,927
$ 12,927
Temporary difference:
-Deferred tax assets:
Allowance for bad debts
Income from unrealized
land grants
Sluggish inventory and
price loss
Payable social security
expenses and provident
fund
Tax loss
Other
Subtotal
- Deferred income tax
liabilities:
Foreign long-term		 Jan.1st toDec.31st,2019 Jan.1st toDec.31st,2019 Jan.1st toDec.31st,2019 Ending
balance
$ 18,892
24,273
53,133
8,992
167,754
41,759
$ 314,803
($ 300,524)
Opening balance
Recognized in profit
andloss		 Business
merge
$ 9,615
$ 9,277
24,831
( 558)
33,104
20,029
21,508
( 12,516)
90,347
77,407
52,899
( 11,140)
$ 232,304
$ 82,499
($ 300,524)
$ -		 $ -
-
-
-
-
-
$-
$ -

- 173 -

investment income
Land use-of-right tax
difference
Intangible asset tax
difference
Tax difference of property,
plant and equipment
Other
Subtotal
Total		 ( 38,242)
( 76,550)
( 14,706)
( 24,137)
($ 454,159)		 -
-
-
( 10,244)
($ 10,244)
$ 72,255		 2,480
15,177
1,462
-
$ 19,119
$ 19,119		 ( 35,762)
( 61,373)
( 13,244)
( 34,381)

($ 445,284)
  1. The effective period of the tax loss that has not been used by the Group and the amount of unrecognized deferred taxable assets are as follows:
The effective period of the tax loss that has not been used by the Group and the
amount of unrecognized deferred taxable assets are as follows:		 The effective period of the tax loss that has not been used by the Group and the
amount of unrecognized deferred taxable assets are as follows:		 The effective period of the tax loss that has not been used by the Group and the
amount of unrecognized deferred taxable assets are as follows:
December 31st, 2020
Year of
occurrence
Number of declarations /
approved numbers
Amount		 not yet deducted
Unrecognized
deferred income
taxassets
Final deduction
year
2015
2016
2017
2018
2019
2020		 $ 31,755
143,103
137,175
304,637
386,169
223,048
$ 1,225,887		 $ 31,755 $ 26,332
2020
73,473 38,496
2021
137,175 71,634
2022
304,637 32,826
2023
386,169 38,462
2024
223,048
192,610
2025
$ 933,209
$ 400,360
Year of
occurence
2014
2015
2016
2017
2018		 Number of declarations / Number of declarations / Number of declarations / Number of declarations / Number of declarations / Unrecognized
deferred income
Final deduction












$ 627,280
$ 557,650

- 174 -

  1. Tax rate of subsidiaries in China:

Reinvestment company

Chengdu Engley Auto part Co., Changchun Engley Automobile Industry Co., Ltd.

Tianjin Engley Manufacturing Co., Ltd.

Linde+Engley (Tianjin) Auto Parts Co., Ltd.

Suzhou Engley Auto Part Co., Ltd.

Applicable tax condition and applicable tax rate

Applicable tax rate: 15%; Western Development Offer for 8 consecutive years since 2013 Applicable tax rate: 15%; Applying a preferential tax rate high-tech project from 2018

Applicable tax rate: 15%; Applying a preferential tax rate high-tech project from 2018 Applicable tax rate: 15%; Applying a preferential tax rate high-tech project from 2019 Applicable tax rate:15%; Applying a preferential tax rate high-tech project from 2018

Changchun Lightweight Technology Co., Ltd.[Applicable tax rate:15%; Applying a preferential tax rate ] high-tech project from 2020 The other subsidiaries in China Applicable tax rate: 25% and Netherlands

  • 6.The Company has not recognized the deferred income tax liabilities for the taxable temporary differences related to the investment of certain subsidiaries, and the temporary differences in deferred income tax liabilities that were not recognized as at December 31, 2020 and December 31, 2019 were 4,005,175 NTD (thousand) and 3,233,448 NTD (thousand) respectively.

(31) Earnings per share

Jan.1st toDec.31st,2020
After tax amount
Weighted average
numberof shares in
circulation (thousand
shares)
Basic earnings per share
Net profit for current attributable to
the common shareholders of the parent
company
$ 480,621
118,007
Diluted surplus per share
Net profit for current attributable to the
common shareholders of the parent
company
480,621
118,007
The effect of diluting potential ordinary
shares
Convertible Corporate
4,948
2,538
Debt Employee dividend
-
39
Impact of net profit plus potential
common stock attributable to the
common shareholders of the parent
company
$ 485,569
120,584
$		 Jan.1st toDec.31st,2020 Jan.1st toDec.31st,2020 Jan.1st toDec.31st,2020
After tax amount
Weighted average
numberof shares in
circulation (thousand
shares)		 Earning per
share (NTD)
118,007
118,007
2,538
39
120,584
$		 $ 4.07
4.03

- 175 -

Basic earnings per share
Net profit attributable to ordinary
shareholders of the parent company
Diluted earning per share
Net profit attributable to ordinary
shareholders of the parent company
Effect of dilution on ordinary shares
Convertible corporate debt
Employee compensation
Impact of net profit plus potential
common stock attributable to the
common shareholders of the parent
company		 Jan.1st toDec.31st,2019
After tax amount
Weighted average
numberof shares in
circulation (thousand
shares)
Earning per
share (NTD)
$ 644,193
118,010
$ 5.46
644,193
118,010
12,784
5,381
-
62
$ 656,977
123,453
$ 5.32		 Jan.1st toDec.31st,2019
After tax amount
Weighted average
numberof shares in
circulation (thousand
shares)
Earning per
share (NTD)
$ 644,193
118,010
$ 5.46
644,193
118,010
12,784
5,381
-
62
$ 656,977
123,453
$ 5.32		 Jan.1st toDec.31st,2019
After tax amount
Weighted average
numberof shares in
circulation (thousand
shares)
Earning per
share (NTD)
$ 644,193
118,010
$ 5.46
644,193
118,010
12,784
5,381
-
62
$ 656,977
123,453
$ 5.32
$ 644,193
644,193
12,784
-

$ 656,977		 118,010
118,010
5,381
62
123,453

(32) Transactions with non-controlling interests

Acquisition of additional interests in subsidiaries

  1. In June 2020, the Group acquired 25% of the issued shares of Kranendonk Beheersmaatschappij B.V. for $266,160 thousand in cash. The transaction reduced the non-controlling interest by $52,726 thousand and increased the equity attributable to the owners of the parent company by $52,726 thousand. The effect of the change in the equity of KranendonkBeheersmaatschappij B.V. from January 1 to December 31, 2020 on the equity attributable to the owners of the parent company is as follows:
Non-control interests purchased
The consideration of payment to a non-controlling interest
Actual acquisition of the difference between the equity price
and the account of the non-controlling interests of
The reduction in retained surpluses is attributable to:
Parent company equity
non-controlling interests		 Jan. 1stto Dec.31st, 2020
$ 52,726
( 266,160)
($ 213,434)
($ 187,608)
($ 25,826)
The reduction in retained surpluses is attributable to:
Parent company equity
($ 187,608)
non-controlling interests
($ 25,826)		 The reduction in retained surpluses is attributable to:
Parent company equity
($ 187,608)
non-controlling interests
($ 25,826)
2. The Group granted Engley Precision Industry B.V. non-controlling shareholders with the
option to implement the equity investment agreement in November 2019. Please refer to Note
6(15) for details of the equity acquisition agreement for this subsidiary. The transaction
reduced the non-controlling interests by 268,655 NTD (thousand) and the retained earnings
by 209,321 NTD (thousand) respectively.
Jan. 1stto Dec.31st, 2019
Non-control interests purchased $ 268,655
Prepayment of additional equity deposit for the
acquisition of subsidiaries at the beginning of the ( 122,675)
period
Appraisal of the exchange of liabilities for the
acquisition of subsidiaries at the beginning of the		 ( 9,404)

- 176 -

period

The consideration of payment to a non-controlling
interest
Actual acquisition of the difference between the equity
price and the account of the non-controlling interests of
The reduction in retained surpluses is attributable to:：
Parent company equity		 ( 345,897)
($ 209,321)
($ 209,321)

The above liability for the acquisition of subsidiary agreement is due to the Group's transfer of 60.5% equity interest in Engley Precision Industry B.V., through which the Group acquired 75% equity interest in KranendonkBeheersmaatschappij B.V. (Company K), in which the Group's consolidated shareholding in Company K is 36.3%. The Group's consolidated shareholding in K was 36.3%, and the equity investment agreement gave Engley Precision Industry B.V. a non-controlling interest shareholder an option to transfer 39.5% of its shareholding to the Group during the contract period. The financial liabilities should be recognized at the present value of the redemption rights and the related equity accounts should be adjusted.

(33) Information of cash flow supplement

1.Investment activities with only partial cash payment:

Purchase of real estate, plant and equipment
Plus：Beginning payment of equipment
Less: Ending payment of equipment
Less：Beginning prepayment of equipment
Plus：Ending prepayment of equipment
Cash payment		 Jan. 1stto Dec.31st, 2020
$ 1,623,534
366,567
( 369,602)
( 1,252,559)
1,050,953		 Jan. 1stto Dec.31st, 2019
$ 1,988,405
552,218
( 366,567)
( 1,515,244)

1,252,559

$ 1,911,371

$ 1,418,893

2.Investment activities that do not affect cash flows:

Dividends revenue
Plus：Beginning account dividends
Less: Ending account dividends
Effect of exchange rate
Increase in cash		 Jan. 1stto Dec.31st, 2020
$ 74,472
9,578
( 60,444)
1,895		 Jan. 1stto Dec.31st, 2019
$ 71,619
61,686
( 9,578)

1,242

$ 25,501


$ 124,969

- 177 -

(34) Changes in liabilities from financing activities

(34)Changes in liabilities from financing activities ties from financing activities ties from financing activities
Short term
loan
Other loan
Bonds
payable
Dividendpayable
Long term
loan
Lease liability
Total liabilities from
financingactivities
Jan.1st2017
$ 3,005,943 $ 44,696 $ 869,518 $ - $ 5,048,910 $ 390,038 $ 9,359,105
Changes in financing cash flow ( 303,696) - ( 476,400) ( 295,018) 80,714 ( 111,239) ( 1,105,639)
Current increase
- - - 295,018 - - 295,018
Effect of exchange rate
67,963
( 266) - -
94,364 7,751 169,812
Change in bond discount
- - 4,948 - - - 4,948
After sale revolving into loan
-
-
-
-
4,112
173,220
177,332
Dec.31st, 2018
$ 2,770,210
$ 44,430
$ 398,066
$-
$ 5,228,100
$ 459,770
$ 8,900,576		 Short term
loan
Other loan
Bonds
payable
Dividendpayable
Long term
loan
Lease liability
Total liabilities from
financingactivities
$ 2,770,210
$ 44,430
$ 398,066
$-		 $ 5,228,100
$ 459,770
$ 8,900,576
Short term Bonds Dividend Long term Total liabilities from
loan Other loan payable payable loan Lease liability financingactivities
Jan.1st, 2019 $ 2,337,360 $ 56,068 $ 1,471,860 $ - $ 4,489,064 $ 454,777 $ 8,809,129
Changes in financing cash flow 800,749 ( 9,713) ( 623,600) ( 531,032) 736,345 ( 145,357) 227,392
Current increase - - - 531,032 - - 531,032
Effect of exchange rate
( 132,166) (		 1,659) - - ( 164,850) ( 15,089) ( 313,764)
Change in bond discount - - 21,258 - - - 21,258
Syndicate loans organizing fees - - - - ( 12,334) - ( 12,334)
Other non-cash changes - - - -
 685 95,707
96,392
Dec.31st, 2019 $ 3,005,943 $ 44,696 $ 869,518 $ -
$ 5,048,910		 $ 390,038
$ 9,359,105

7. Related party transactions

(1)Ultimate controller

The ultimate controller of the Group is Lin Chi Pin.

(2)Name and relationship of related parties

Name of related party Relationship with the Group Jilin Jinli Auto part Co., Ltd. Associates Chengdu Youli Auto part Co., Ltd. Associates Honley Auto. Parts Co.,Ltd. Associates ConstelliumEngley (Changchun) Automotive Structures Co., Associates Ltd. LINDE+WIEMANN GmbH KG Other relationship Changchun CECK Auto. Parts Co.,Ltd. Associates Chongqing HC&C Auto Parts Co., Ltd. Associates Tianjin Chinli Auto Parts Industrial Co., Ltd. Associates Qingdao Youli Auto Parts Industrial Co, Ltd. Associates Zhejiang Sanse Mold Technology Co., Ltd Associates Yuyuan Investment Co., Ltd. Other relationship(Not related since Jun 3[rd] , 2019)

- 178 -

(3) Major transactions with related persons

1.Sales

ales
Merchandise sale﹕
－Associates		 Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
$ 15,189

$ 6,880

There is no significant difference between the transaction price and the terms of payment for the goods sold and the non-related person.

2. Purchase

se
Goods purchase﹕
－Associates
－Other related		 Jan. 1stto Dec.31st, 2020
$ 991,534
223,595		 Jan. 1stto Dec.31st, 2019
$ 1,170,379

139,145
$ 1,309,524

$ 1,215,129

Commodities are purchased from associated enterprises on general commercial terms and conditions. There is no significant difference between the transaction price and the terms of payment from the general supplier, and the general manufacturer pays within 30 to 90 days of the monthly settlement.

3.Accounts receivable

Accounts receivable to related
－Associates		 December 31st,2020
$ 2,249		 December 31st,2019
$ 2,279

The sales and purchases of related parties are written off in the form of offsetting receivables and payables.

4.Other receivables

Other receivables
Receivables to related:
－Associates
－Other related parties		 December 31st,2020
$ 64,044
113		 December 31st,2019
$ 16,569

111
$ 64,157
$ 16,680

Other accounts receivable from these associated enterprises are due to the receivables and dividend receivables generated from the lease of plant between the Group and related parties.

5.Notes payable

Notes payable
Notes payable to related:
－Associates		 December 31st,2020
$ 88,921		 December 31st,2019
$ 101,579

- 179 -

6.Accounts payables

6.Accounts payables
Accounts due to related﹕
－Associates
－Other related parties
7.Other payables
Payables to related﹕
－Associates
8.Prepayment
Prepayment to related
－Associates		 December 31st,2020
$ 510,086
51,770		 December 31st,2019
$ 351,049

30,260

$ 561,856


$ 381,309

December 31st,2020
$ 2,738

December 31st,2019
$ 7,289

December 31st,2020
$ 12,114
December 31st,2019

$ 26,953

The advance payment of the party concerned is due to the advance payment made by the Group and the associated enterprise.

9.Operating expense/other payables

Associates
－Associates
－Other related parties		 Jan. 1stto Dec.31st, 2020
Ending other
Operating expenses
Payables
$ 18
$ -
41,172
-		 Jan. 1stto Dec.31st, 2020
Ending other
Operating expenses
Payables
$ 18
$ -
41,172
-		 Jan. 1stto Dec.31st, 2020
Ending other
Operating expenses
Payables
$ 18
$ -
41,172
-		 Jan. 1stto Dec.31st, 2020
Ending other
Operating expenses
Payables
$ 18
$ -
41,172
-		 Jan. 1stto Dec.31st, 2019
Ending other
Operating expenses
Payables
$ 12
$ -
39,817
-		 Jan. 1stto Dec.31st, 2019
Ending other
Operating expenses
Payables
$ 12
$ -
39,817
-		 Jan. 1stto Dec.31st, 2019
Ending other
Operating expenses
Payables
$ 12
$ -
39,817
-		 Jan. 1stto Dec.31st, 2019
Ending other
Operating expenses
Payables
$ 12
$ -
39,817
-
$ 41,190 $ - $ 39,829 $ -

Operating expenses are mainly related to the salary expenses of related technical services and production management instructors.

10.Lease transaction-lessee

  • (1) The Group undertakes lease holdings from Jilin Jinli Auto Parts Co., Ltd. for a period of 16 years. Rent is prepaid quarterly.

  • (2) Acquisition of right-of-use assets

Due to the application of IFRS16, the Group increased its right-of-use assets on January 1st ,2019 by 204,728 NTD(thousand).

  • (3) Lease liability

  • A. Ending balance:

Lease liability
A. Ending balance:
Jilin Jinli
B. Interest expense:
Jilin Jinli		 December 31st,2020
$ 154,359
December 31st,2020
$ 7,339

- 180 -

11.Acquired financial assets

Acquired financial assets
Account
Associates－
Other related
parties
Financial assets at fair value
through other comprehensive
profit or loss – non-current		 Number of shares
traded
5,379,400		 Object of
transaction
Shares		 Jan.1stto Dec.31st, 2019
Acquired proceeds
$ 107,939

The Group purchased the shares of Chi Rui (Cayman) Holding Limited, a total of 5,379 thousand shares, from the related party Yiyuan Investment Co., Ltd., and the purchase price was USD 3,500 thousand. The change of the register of shareholders was completed on April 19, 2019. It is a strategic investment of the Group. Please refer to the explanation in Note 6 (3).

(4) Salary information of key management

Salary and benefits of short term
employees		 Jan. 1stto Dec.31st, 2020
$ 101,907		 Jan. 1stto Dec.31st, 2019


$ 67,205

8. Pledged assets

The details of the guarantee for our assets are as follows:

Assets
Refundable deposit
(List other current
assets)
Refundable deposit
(List other non-current
assets)
Property, plant and
equipment
Notes receivable
Accounts receivable		 Carrying value
December 31st,2020
December 31st,2019
Guaranteed purpose
$ 793,529 $ 861,221
Acceptance deposit and margin
of agreement to acquire
subsidiary
258,237 240,667
Lease loan
1,106,191
1,007,567 Short term loan and lease loan
774,760 640,750 Acceptance deposit
-
431,000
Short term loan
$ 3,181,205
$ 3,181,205		 Carrying value
December 31st,2020
December 31st,2019
Guaranteed purpose
$ 793,529 $ 861,221
Acceptance deposit and margin
of agreement to acquire
subsidiary
258,237 240,667
Lease loan
1,106,191
1,007,567 Short term loan and lease loan
774,760 640,750 Acceptance deposit
-
431,000
Short term loan
$ 3,181,205
$ 3,181,205		 Carrying value
December 31st,2020
December 31st,2019
Guaranteed purpose
$ 793,529 $ 861,221
Acceptance deposit and margin
of agreement to acquire
subsidiary
258,237 240,667
Lease loan
1,106,191
1,007,567 Short term loan and lease loan
774,760 640,750 Acceptance deposit
-
431,000
Short term loan
$ 3,181,205
$ 3,181,205
December 31st,2020
$ 793,529
258,237
1,106,191
774,760
-
$ 3,181,205

793,529
258,237
1,106,191
774,760
-
$ 3,181,205

  1. Significant contingent liabilities and unrecognized contractual commitments

Capital expenditures that have been signed but not yet incurred:

Property, plant and equipment December 31st,2020
$ 2,617,071		 December 31st,2019
$ 1,770,975

10. Major disaster losses

None.

- 181 -

11. Important post term matters

None.

12. Others

(1) Capital management

The objective of capital management of the Group is to ensure that the Group continues its operation, maintains the optimum capital structure to reduce the cost of capital and to provide remuneration to shareholders. To maintain or adjust the capital structure, the Group may adjust the dividend paid to shareholders, return the capital to shareholders, issue new shares, or sell assets to reduce debts. The Group monitors its capital using the debt-to-capital ratio, which is calculated as net debt divided by total capital.

The net debt is calculated as total borrowings (including "curr ent and non-current borrowings" as stated in the consolidated balance sheet) less cash and cash equivalents. The calculation of total capital is calculated as "equity" listed on the consolidated balance sheet plus the net amount of debt.

As of December 31, 2020 and December 31, 2019, the debt to capital ratio of the Group was as follows:

Group was as follows:
Total loan
Less : Cash and cash equivalents
Net debt
Total equity
Total capital
Debt to capital ratio		 December 31st,2020
$ 8,448,343
( 4,578,467)
3,869,876
13,445,532
$ 17,315,408
22.35%		 December 31st,2019
$ 8,980,716
( 3,175,493)
5,805,223
13,084,034

$ 18,889,257

30.73%

(2) Financial instruments

1.Types of financial instruments

Financial assets
Financial assets measured at fair value through other
comprehensive income
Select the specific equity instrument investment
Financial assets measured by amortized cost
Cash and cash equivalents
Financial assets measured at amortised cost -
current
Notes receivable
Accounts receivable(including related parties)
Other accounts receivable(including related
parties)
Refundable deposits		 December 31st,2020

$ 99,094
4,578,467
8,189
2,614,707
3,192,312
116,202
1,051,766
$ 11,660,737		 December 31st,2019
$ 108,439
3,175,493
-
1,411,697
3,631,683
73,544
1,101,888
$ 9,502,744

- 182 -

Financial liabilities

Financial liabilities measured by amortized cost
Short term loan
$ 2,770,210
Notes payable(including related parties)
2,153,065
Accounts payable(including related parties)
5,421,206
Other accounts payable(including related parties)
1,431,249
Corporate debt payable(including those parts
which are due within one year)
398,066
Long term loan (including those parts which are
due within one year)
5,228,100
$ 17,401,896
Lease liability(including those parts which are due
within one year)
$ 459,770		 $ 3,005,943
1,502,464
4,017,938
1,252,217
869,518
5,048,910
$ 15,696,990
$ 390,038

2.Risk management policy

The daily operations of the Group are affected by a number of financial risks, including market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk. The overall risk management policy of the Group focuses on unpredictable events in the financial market and seeks to reduce the potential adverse impact on the financial position and financial performance of the Group.

  • 3.The nature and extent of significant financial risks

  • (1) Market risk

Currency risk

  • A.The Group is a transnational operation and therefore is subject to exchange rate risk arising from exchanges that are different from the functional currencies of our company and subsidiaries, mainly in CNY, USD and Euro. The relevant exchange rate risk arises from future business transactions and recognized assets and liabilities. 。

  • B. The Group's business involves a number of non-functional currencies (the functional currency of our company and some subsidiaries is the New Taiwan dollar and the functional currency of some subsidiaries is Euro and CNY). Therefore, the Group is affected by exchange rate fluctuations. Information on foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

(Currency:functional currency)
Financial asset
Currency
CNY：NTD
USD：NTD
Financail liabilities
Currency
USD：CNY
Euro：NTD
Euro：CNY		 December31st,2020
Foreign currency
(inthousand)
Exchange
rate
Carrying
amount(NTD)
$ 5,837 28.48
$ 166,238
2,049 35.02
71,756
$ 14,802 6.52
$ 421,561
80,585 35.02
2,822,087
18,489 8.00
647,485

- 183 -

(Foreign currency:functional
currency)
Financial assets
Currency
USD：NTD
Euro：NTD
Financial liabilities
Currency
USD：CNY
Euro：NTD
Euro：CNY		 December31st,2019
Foreign currency
(inthousand)
Exchange
rate
Carrying
amount(NTD)
$ 23,711
29.98
$ 710,856
9,837
33.59
330,425
$ 22,269
6.89 $ 667,625
72,585
33.59
2,438,130
19,461
7.79
653,695

C.All exchange benefits and losses were recognized as losses by the Group’s monetary projects from January 1 to December 31, 2019 and from January 1 to December 31, 2018 due to exchange rate fluctuations (including realized and unrealized). The total amount of losses was 13,570 NTD (thousand) and 83,497 NTD(thousand) respectively.

D.The analysis of foreign currency market risks of the Group arising from significant exchange rate fluctuations is as follows:

fluctuations is as follows:
(Currency:functionalcurrency)
Financial assets
Currency
CNY: NTD
USD：NTD
Financial liabilities
Currency
USD: CNY
Euro：NTD
Euro：CNY		 Jan.1st toDec.31st,2020
Sensitivity analysis
Amplitude of
fluctuation
Impact profit
and loss
Affect other
comprehensive
profit and loss
1%
$ 1,662
-
1%
718
-
1%
$ 4,216
-
1%
28,221
-
1%
6,475
-

- 184 -

(Currency:functional currency)
Financial assets
Currency
USD：NTD
Euro：NTD
Financial liabilities
Currency
USD：CNY
Euro：NTD
Euro：CNY		 Jan. 1stto Dec.31st, 2019
Sensitivity analysis
Amplitude of
fluctuation
Impact profit
andloss
Affect other
comprehensive
profit andloss
1%
$ 7,109
-
1%
3,304
-
1%
$ 6,676
-
1%
24,381
-
1%
6,537
-

Price risk

  • A. The equity instruments in which the Group is exposed to price risk are those held for financial assets measured at fair value through profit or loss and those measured at fair value through other comprehensive income. In order to manage the price risk of equity instruments, the Group diversifies its investment portfolio according to the limits set by the Group.

  • B. The Group invests mainly in equity instruments issued by domestic companies, which are subject to uncertainty about the future value of the investment target. If the price of such equity instruments rises or falls by 1%, and all other factors remain unchanged, the other comprehensive profit and loss due to January 1 to December 31, 2020 and January 1 to December 31, 2019 is classified as an increase or decrease of 991 and1,084 NTD thousand in the profit or loss of equity investment measured at fair value through other comprehensive profit and loss, respectively.

  • Cash flow and fair value interest rate risk

  • A. The interest rate risk of the Group stems mainly from short-term and long-term borrowings issued at floating interest rates, which expose the Group to cash flow rate risk. The Group's borrowings are mainly fixed and floating interest rates. From January 1 to December 31, 2019 and from January 1 to December 31, 2018, the Group's borrowings at floating rates are denominated in US dollars and Euros.

  • B. When the interest rate on borrowing rises or falls by 1%, and all other factors remain unchanged, the net (loss) after tax (loss) on January 1 to December 31, 2020and January 1 to December 31,2019 will be reduced or increased by 60,044 NTD (thousand) and 60,499 NTD (thousand) respectively, mainly due to changes in interest charges arising from floating rates.

  • (2) Credit risk

  • A. The credit risk of the Group is the risk of financial loss arising from the inability of the counterparty of the customers or the financial instrument to meet the contractual obligations of the Group, mainly from the inability of the counterparty to settle accounts receivable paid according to the terms of collection and the contractual cash flows classified as investments in debt instruments measured at fair value through profit or loss.

  • B. In accordance with the internal and explicit credit policy, each operating entities within the Group shall conduct management and credit risk analysis for each new customer before setting the terms and conditions for payment and delivery. The internal risk control system assesses the credit quality of the customer by taking into account its financial position, past experience and other factors. The limits of individual risks are set by the Board of Directors according to internal or external ratings, and the use of credit limits is regularly monitored. The main credit risk comes

- 185 -

from cash and cash equivalents and deposits with banks and financial institutions. It also comes from customers' credit risks and includes outstanding receivables. For banks and financial institutions, only good credit rating agencies will be accepted as trading counterparts.

  • C.The Group uses IFRS 9 to provide the following assumptions as a basis for determining whether there has been a significant increase in credit risk for financial instruments since the initial recognition:

  • When the contractual payments are overdue for more than 30 days in accordance with the agreed terms of payment, credit risk has increased significantly since the initial recognition of the financial asset.

  • D.When setting a two series of investment targets for independent rating, the Company determines that the subject matter of the investment is a significant increase in credit risk.

  • E. The Company uses IFRS 9 to provide the premise that a breach is deemed to have occurred when the contract amount is more than one year overdue under the agreed terms of payment.

  • F. The Company will use a simplified approach to customer accounts receivable to estimate expected credit losses on the basis of the loss rate method.

  • G. The Company incorporates a loss rate based on the historical and current information of a given period to estimate future forward-looking considerations to assess the loss of allowance for accounts receivable, the loss rate method for January 1 to December 31, 2020 and January 1 to December 31, 2019 is as follows:

December 31st,2020
Expected loss rate
Not overdue
0.12%
Within 90 days
4.01%
91-180 days
16.57%
More than 181 days
98.15%
December 31st,2019
Expected loss rate
Not overdue
0.00%
Within 90 days
0.83%
91-180 days
45.85%
More than 181 days
50.50%		 Expected loss rate
$ 5,698,249
109,245
9,650
134,317
$ 5,951,461
Expected loss rate
$ 4,465,600
495,297
37,612
133,791
$ 5,132,300		 Total carrying value
$ 6,632
4,379
1,599
131,832
$ 144,442
Total carrying value
$ -
4,111
17,245
67,564
$ 88,920
  • H. The Company’s statement of changes in the allowance for receivables from the adoption of simplified practices is as follows:
TheCompany’sstatement of changes in the allowance for receivables from th
f simplified practices is as follows:		 nt of changes in the allowance for receivables from th
s as follows:		 nt of changes in the allowance for receivables from th
s as follows:		 nt of changes in the allowance for receivables from th
s as follows:		 e adoption e adoption
2020
Note
receivable
Accounts
receivable
Other accounts
receivable
January 1st
$ 72,162
$ 72,162
$ 21
Impairment loss
( 4,168)
( 4,168)
3,248
Effect of exchange rate( 1,497)
( 1,497)
( 64)
December 31st
$ 66,497
$ 66,497
$ 3,205		 2020
Note
receivable
Accounts
receivable
Other accounts
receivable		 Total
$ 72,162
( 4,168)
( 1,497)
$ 66,497		 $ 21
3,248
( 64)
$ 3,205		 $ 72,183
( 920)
( 1,561)
$ 69,702

$ 69,702

- 186 -

Note
receivable
January 1st
$ -
Impairment loss
-
Effect of exchange rate -
December 31st
$-		 2019 2019 2019
Note
receivable		 Accounts
receivable		 Other accounts
receivable
Total
$ 66,497
26,072
( 3,649)

$ 88,920
 $ 3,205
( 1,769)
( 50)
$ 1,386		 $69,702
24,303
( 3,699)
$90,306

  • (3) Liquidity risk

  • A.Cash flow forecast is executed by individual operating entities within the Group and is summarized by the Finance Department of the Group. The Group Finance Department monitors the liquidity needs of the Group to ensure that it has sufficient funds to meet operational needs and maintains sufficient outstanding loan commitments at all times to prevent the Group from breaching the relevant borrowing limits or terms. The forecasting considers the company's debt financing plan, compliance with debt terms, compliance with internal balance sheet financial ratio targets, and external regulatory requirements.

  • B. The Group Finance Department invests the remaining funds in demand deposits with interest rates, money market deposits, and the instruments chosen are appropriately maturing or sufficient liquid to meet the above forecasts to provide adequate adjustments.

  • C. The amount of outstanding loans of the Group as of December 31, 2020 and December 31,2019 were 9,656,566 NTD (thousand) and 5,537,978 NTD (thousand) respectively.

  • D.The following table is a list of non-derivative financial liabilities of the Group and is grouped by the relevant maturities. Non-derivative financial liabilities are analyzed on the basis of the balance sheet to the remaining period from the contractual maturity date. The amount of contractual cash flow disclosed in the following table is undiscounted amount.

Non-derivative financial liabilities:

Dec.31st, 2020
Short term loan
Notes payable
Notes payable-related party
Accounts payable
Accounts payable-related party
Other payables
Other payables-related party
Lease payment
Corporate bonds payable (including part due
within one year)
Long-term loans (including the part due
within one year)
Non-derivative financial liabilities:
Dec.31st, 2019
Short term loan
Notes payable
Notes payable-related party
Accounts payable
Accounts payable-related party
Other payables
Other payables –related party
Lease liability (including part due within one
year)
Corporate bonds payable (including part due
within one year)
Long term loan (including part due within
one year)		 1 year or less
$ 2,796,609
2,064,144
88,921
4,859,350
561,856
1,428,511
2,738
127,612
400,000
1,176,976
1 year or less
$ 3,050,195
1,400,885
101,579
3,636,629
381,309
1,244,928
7,289
109,841
476,400
1,960,877		 1-2 years
$ -
-
-
-
-
-
-
96,061

2,498,707
1-2 years
$ -
-
-
-
-
-
-
75,439
400,000
1,181,185		 2-3 years
3-5 years
5years or
more
Total
$ - $ - $ - $ 2,796,609
- - -
2,064,144
- - - 88,921
- - -
4,859,350
- - - 561,856
- - -
1,428,511
- - - 2,738
79,813 81,717 155,631
540,834
400,000
1,796,495 -
-
5,472,178
2-3 years
3-5 years
5years or mor
Total
$ - $ -
$- $ 3,050,195
- -
- 1,400,885
- -
-
101,579
- -
-
3,636,629
- -
-
381,309
- -
-
1,244,928
- -
-
7,289
49,406 63,174
178,313
476,173
- -
-
876,400
2,348,115 -
-
5,490,177

- 187 -

(3) Fair value information

  1. The various levels of valuation techniques used to measure the fair value of financial and non-finished tools are defined as follows:

  2. The first level ： the price of the same assets or liabilities that the enterprise can obtain in the active market (without adjustment). The active market refers to a market with sufficient frequency and quantity of assets or liabilities to provide pricing information on a continuous basis.

The second level ： Observable inputs that are directly or indirectly connected to assets or liabilities, except those included in the first level.

The third level ： Unobservable input value of assets or liabilities.

  1. Financial instruments not measured by fair value

  2. (1)Except for those listed in the table below, the financial instruments of the Group that are not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, accounts receivable - related parties, other receivables, short-term loans, the carrying amount of notes payable, accounts payable, accounts payable - related parties, other payables, other payables - related parties and long-term borrowings (including the portion due within one year) is a reasonable approximation of fair value.

Financial liabilities:

Financial liabilities:
Corporate bonds payable (including due
within one year)
Corporate bonds payable (including due
within one year)		 Jan.1st toDec. 31st, 2020
$ Book value
398,066
$		 Fair value
The third level
397,778


Jan.1st toDec. 31st,
2019
$ Book value
869,518
$		 Fair value
The third level
867,747
  • (2) The methods and assumptions used by the Group to measure the fair value and the assumptions are as follows:

Convertible bonds: The convertible bonds issued by the Company, whose coupon rate and market interest rate are approximated, so the fair value of their expected cash flow is estimated to be about its book value.

  • 3.Financial and non-financial instruments measured at fair value are classified by the Group on the basis of the nature, characteristics and risks of assets and liabilities and the basis for the fair value hierarchy and the relevant information is as follows:
December 31st,2020
Asssets
Repetitive fair value
Financial assets measured at fair value through
other comprehensive income
- Corporate debt redemption		 The 1stlevel

$-		 The 2ndlevel
$-		 The 3rdlevel
$ 99,094		 $ Total
99,094

- 188 -

December 31[st] ,2019 The 1[st] level The 2[nd] level The 3[rd] level Total Assets Repetitive fair value Financial assets measured at fair value through other comprehensive income - Equity securities $ - $ - $ 108,439 $ 108,439

  1. The methods and assumptions used by the Group to measure fair value are described below:

  2. (1) Fair value of financial instruments without an active market is obtained by evaluating technology or by reference to counterparty quotes. The fair value obtained through the evaluation technique may be derived by reference to the present fair value, cash flow discount or other valuation techniques of other financial instruments with substantially similar conditions and characteristics.

  3. (2) The Group incorporates credit risk assessment adjustments into the calculation of fair value of financial instruments and non-financial instruments to reflect the counterparty credit risk and the credit quality of the Group.

  4. 5.There was no transfer between the first level and the second level from January 。

  5. 1 to December 31,2020 and from January 1 to December 31, 2019.

  6. The following table shows the changes in the third level from January 1 to December 31, 2020 and January 1 to December 31, 2019:

Opening balance
$ Current addition
-
Recognized as loss in profit or loss
for the period (Note 1)
-
Benefits recognized in other
comprehensive income (Note 2)
(
Impact of exchange rate
(
Ending balance
$ Note 1: Recognized as business benefits and		 $ -
-
(
(		 Jan.1stto Dec.31st, 2020
108,439
4,100)
5,245)
99,094
losses.		 $
(

(		 Jan.1stto Dec.31st, 2019
1,320
107,939
1,320)
3,262
2,762)
108,439

$
$

Note 2: The unrealized valuation of gains and losses on equity instrument investments measured at fair value through other comprehensive income.

  1. Wi t h i n y e a r o f 2 0 2 0 a n d y e a r o f 2 0 1 9 , t h e r e w a s n o t r a n s f e r r i n g f r o m

  2. t h e t h i r d g r a d e .

  3. 8.The evaluation process of fair value classified in Level 3 is carried out by the finance department responsible for the independent fair value verification of financial instrument, which enables the evaluation result to be close to the market state and periodically reviewed to ensure that the evaluation result is reasonable.

  4. Quantitative information about the significant unobservable input value of the evaluation model used in the third level fair value measurement project and the sensitivity analysis of the significant unobservable input value change are explained below:

- 189 -

Equity
securities
Corporate
debt
redemption
right		 December
31st,2020 Fair
value
Evaluated
technology
Major
unobservable
Input value
Range (Weighted
average)
Relationship between
input value andfairvalue
$ 99,094
Discounted cash
flow method
Long term
revenue growth
rate
0%~5%
The higher the long term
revenue growth rate and
long term pre-tax business
net profit, the higher the
fair value.
December
31st,2019 Fair
value
Evaluated
technology
Major
unobservable
Input value
Range (Weighted
average)
Relationship between
input value and fair value
$ 108,439Binary tree
evaluation modelVolatility
28.91%
The higher the volatility,
the higher the fair value
  • 10.The evaluation model and evaluation parameters used by the Group have been carefully evaluated, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For financial assets and financial liabilities classified as the third level, if the parameter changes are assessed, the effect on the current period profit or loss or other comprehensive income is as follows:

December 31[st] ,2020

December31st,2020
Financial assets
Equity securities
Financial assets
Corporate bond
redemption right		 Input value Change Recognized as profit andloss
Recognized in other
comprehensive income
Favorable change
Unfavorable
change
Favorable change
Unfavorable
change
Cash flow
±1%
Input value
Change		 $ -
$ -
$ 991
($ 991)
December31st,2019
Recognized as profit andloss
Recognized in other
comprehensiveincome
Favorable change
Unfavorable
change
Favorable change
Unfavorable
change
Volatility
±1%		 $ -
$ -
$ 1.084 ($ 1.084)

13. Notes for disclosure

(1) Information regarding major transactions

  1. For money loan to others ： Please refer to schedule 1.

  2. Endorsement for others ： Please refer to schedule 2.

  3. The situation of holding securities at the end of the period (excluding investment subsidiaries, affiliated enterprises and joint venture control): please refer to schedule 3.

  4. For the amount of accumulated purchase or sale of the same securities amounts to 300 million NTD or more than 20% of the amount of capital received: please refer on schedule 4.

- 190 -

  1. The amount of immovable property obtained amounts to NT $300 million or the amount of capital received is more than 20%: please refer schedule 5.

  2. The amount of disposition of real estate amounts to 300 million NTD or more than 20% of the paid-in capital: none.

  3. 7.The amount of the person entering or sold with the relationship up to 100 million NTD or the capital received is more than 20%: Please refer schedule 6.

  4. The amount of the receivable is up to 100 million NTD or th e amount of capital received is more than 20%: Please elaborate on schedule 7.

  5. Engage in derivatives trading ： none.

  6. Business relations and important transaction transactions and amounts between the parent company and its subsidiaries and between subsidiaries: Please refer schedule 8.

(2) Information of re-investment

The name of the invested company, the region and other relevant information (excluding mainland invested companies): Please refer schedule 9.

(3) Information of China investment

  • 1.Basic information ： Please refer to schedule 10.

  • 2.Major transactions arising directly or indirectly from the investment companies of the mainland through the cause and transfer of the third region: Please refer schedule 10.

(4) Information of Main stockholder

Information of Main stockholder: Please refer schedule 11.

14. Information of operation departments

(1) General information

The management of the Group has identified the reporting departments on the basis of the reporting information applicable to the formulation of decisions by the main operating decision makers, and has divided the business organizations into Changchun Engley Automobile Industry Co., Ltd. according to the nature of the company Changchun Engley Auto Parts Co., Ltd., Chengdu Engley Auto part Co.,FoshanEngley Auto Part Co., Ltd.,Linde+Engley (Tianjin) Auto Parts Co., Ltd. and Suzhou Engley Auto Part Co., Ltd., while the Group’s revenue mainly produces and sells auto parts, stamping products, hot pressing molding products and so on.

(2) Measurement of departmental information

The profit and loss of the operating department of the Group is measur ed by pre-tax profit and loss and is used as the basis for performance evaluation. The accounting policies of the operating departments are the same as the summary of important accounting policies described in Note 4.

(3) Departmental profit and loss and assets information

Provided to key operational decision makers from January 1, 2018 to December 31

- 191 -

and 2017,From 1st to December 31, the department's information should be reported as follows:

Income
Customers from
revenue from customers,
Income from customers
Income from other
sectors within the
enterprise
Total income
Departmental profit and
los
Income
Revenue from customers
outside the enterprise
Income from other
sectors within the
enterprise
Total income
Departmental profit and
 Changchun
Engley
Industrial
$ 5,561,372
479,189		 Changchun
Engley
auto parts
$ 647,158

1,588,380		 Chengdu
Engley
$1,531,096

90,093		 Jan. 1stto Dec. 31st,2020
FoshanEngley Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,969,568 $ 4,955,380 $ 2,201,448

13,089
22,574
12,094

$ 1,982,657
$ 4,977,954
$ 2,213,542

$ 91,139
$ 854,159
$ 62,848
Jan.1stto Dec.31st, 2019
FoshanEngle
y
Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,671,038 $ 4,753,436
$ 2,434,035
8,267
18,820
37,695

$ 1,679,305
$ 4,772,256
$ 2,471,730

$ 58,730
$ 897,734
$ 85,670		 Jan. 1stto Dec. 31st,2020
FoshanEngley Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,969,568 $ 4,955,380 $ 2,201,448

13,089
22,574
12,094

$ 1,982,657
$ 4,977,954
$ 2,213,542

$ 91,139
$ 854,159
$ 62,848
Jan.1stto Dec.31st, 2019
FoshanEngle
y
Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,671,038 $ 4,753,436
$ 2,434,035
8,267
18,820
37,695

$ 1,679,305
$ 4,772,256
$ 2,471,730

$ 58,730
$ 897,734
$ 85,670		 Jan. 1stto Dec. 31st,2020
FoshanEngley Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,969,568 $ 4,955,380 $ 2,201,448

13,089
22,574
12,094

$ 1,982,657
$ 4,977,954
$ 2,213,542

$ 91,139
$ 854,159
$ 62,848
Jan.1stto Dec.31st, 2019
FoshanEngle
y
Linde+Engley
(Tianjin)
Suzhou Engley
Auto
$ 1,671,038 $ 4,753,436
$ 2,434,035
8,267
18,820
37,695

$ 1,679,305
$ 4,772,256
$ 2,471,730

$ 58,730
$ 897,734
$ 85,670
Tsingtao Engley
$ 1,402,261

14,031
Total

$ 18,268,283

2,219,450

$ 20,487,733

$ 6,040,561


$ 2,235,538


$1,621,189
$ 2,213,542

($ 163,740)
Changchun
Engley
Industrial

$ 4,962,279
497,536

$ 114,794


$ 95,340


$ 91,139


$ 854,159

$ 62,848

Changchun
Engley
auto parts
$ 813,092

1,437,315

Chengdu
Engley

$ 2,407,630

80,343

$2,487,973

$ 5,459,815


$ 2,250,407

$ 1,679,305

($ 37,327)

$ 112,514


$ 347,805


$ 58,730
($ 98,828)

(4) Adjustment information of department revenue and profit and loss

come
$ 5,459,815
$ 2,250,407
$2,487,973
$ 1,679,305
$ 4,772,256
$ 2,471,730
$ tal profit and
($ 37,327)
$ 112,514
$ 347,805
$ 58,730
$ 897,734
$ 85,670
($ Adjustment information of department revenue and profit and loss		 come
$ 5,459,815
$ 2,250,407
$2,487,973
$ 1,679,305
$ 4,772,256
$ 2,471,730
$ tal profit and
($ 37,327)
$ 112,514
$ 347,805
$ 58,730
$ 897,734
$ 85,670
($ Adjustment information of department revenue and profit and loss		 1,536,550
$ 20,658,0
98,828)
$ 1,366,
1. The adjusted total income of this period and the total income of the continuing business department are adjusted as
Jan.1stto Dec.31st, 2020
The operating department's adjusted income should be reported
$ 20,487,733
$ Adjusted income of other operating departments
6,088,144

Total operating departments
26,575,877

Eliminate interdepartmental income
( 4,931,725)
(
Total consolidated operating income
$ 21,644,152
$ 2.A reconciliation of income before tax and continuing segments revenue before tax:
Jan.1stto Dec.31st, 2020
The adjustment of pre-tax gains and losses by the operating
segments
should be reported
$ 1,014,202
$ Adjustment of post-tax gains and losses by other operating
segments
582,862

Total operating departments
1,597,064

Eliminate inter-departmental
gains and losses
( 598,337)
(
Continued business sector
pre-tax gains and losses
$ 998,727
$		 follows:
Jan.1stto Dec.31st, 2019

20,658,036
6,341,851
26,999,887
4,760,014)
22,239,873
Jan.1stto Dec.31st, 2019


(

$

$

1,366,298
497,106
1,863,404
730,369)
1,133,035


(

$

(5) Information regarding products and labor

External customer revenue mainly comes from the production of automotive parts, stamping products, hot pressing molding products, mold design, manufacturing and related technical advisory services and other business.

The detail of income balance is as follows:

The detail of income balance is as follows:
Commodity sales revenue
Income from molding and others
Total		 Jan. 1stto Dec.31st, 2020
$ 19,417,988
2,226,164		 Jan. 1stto Dec.31st, 2019
$ 18,988,165

3,251,708

$ 22,239,873

$ 21,644,152

- 192 -

(6) Regional information

Reginal information of the Group as of January 1[st] to December 31[st] ,2019 and from January 1[st] to December 31[st] , 2018 is as follows:


from January 1st
to December 31st, 2018 is as follows:
to December 31st, 2018 is as follows:
China
Other regions		 Jan. 1stto Dec.31st, 2020
Jan. 1stto Dec.31st, 2019
Income
Non-current assets
Income
Non-current assets
$ 21,356,927 $ 12,992,300
$21,549,796
$12,581,212
287,225
800,476
690,077
764,440
$ 21,644,152
$ 13,792,776
$22,239,873
$13,345,652

$13,345,652

The regional income system of the Group is calculated based on the country of sale. Non-current assets refer to property, plant and equipment, right-to-use assets, intangible assets, prepaid equipment payments (other non-current assets on the books) and land-use rights (other non-current assets on the books), but excluding financial instruments and deferred income tax assets.

(7) Information of major customers

The information of major customers o the Company in 2019 and 2018 is listed below:

Company A
Company B		 Jan.1st toDec.31st,2020
Jan.1st toDec.31st,2019
Amount
%
Amount
%
$ 9,468,510
44% $ 10,269,822
46%
4,458,051
21% 3,917,242
18%

(End of the page)

- 193 -

�������������������������������������������������������

����������������������

������������������� ������������������� �������������������
�����������������������������
��������� �������������
�������
������		 ����������������������� ���������� ���������������� �������������
�����		 �������
�������������		 �������
������
�������		 ������
�������
������		 ��������
����
�������		 �������
�������
�����
������		 ��������
�����������
������		 ����������
���������
����������
���������		 ��������
���������
������
������
�����		 ����
�����
�����������		 �������
�����������
����������
����		 �������
�����������
��������
�����		 ����
� ����������������������
��������		 ����������
�����������������������		 ���������������� ��� �������
�		 �������
�		 �������
�		 ����� � �
�		 ���������
��������		 ���� ���� ���� ���������
�		 ���������
�
� ���������������
������������������
�������		 ����������������������
������������		 ���������������� ��� �������
�������
�����
�����		 � �
���������
��������		 ���� ���� ���� ���������
���������
� ���������������
������������������
�������		 �����������������������
����		 ���������������� ��� �������
�
�
�����		 � �
���������
��������		 ���� ���� ���� ���������
���������
����
�
� ���������������
������������������
�������		 ����������������������
������������		 ���������������� ��� �������
�
�
�
�		 �
���������
��������		 ���� ���� ���� ���������
���������
����
�
� ���������������
������������������
�������		 �����������������������
������������		 ���������������� ��� �������
�������
�������
�����		 � �
���������
��������		 ���� ���� ���� ���������
���������
� ���������������
������������������
�������		 �����������������
��������������������		 ���������������� ��� �������
�
�
�
�		 �
���������
��������		 ���� ���� ���� ���������
���������
����
�
� ���������������
������������������
�������		 ������������������������
������������		 ���������������� ��� �������
�������
������
���������		 � �
���������
��������		 ���� ���� ���� ���������
���������
� ���������������
������������������
�������		 ����������������������
���������������		 ���������������� ��� �������
�������
������
�
�		 �
���������
��������		 ���� ���� ���� ���������
���������
� ���������������
������������������
�������		 ����������������������������������������� ��� �������
�������
�������
�
�		 �
���������
��������		 ���� ���� ���� ���������
���������
� ���������������
����������������������		 ������������������������
������������		 ���������������� ��� �������
������
������
�����		 � �
���������
��������		 ���� ���� ���� �������
�������
� ���������������
����������������������		 �����������������������
������������		 ���������������� ��� �������
������
������
�����		 � �
���������
��������		 ���� ���� ���� �������
�������
� ���������������
����������������������		 �����������������
��������������������		 ���������������� ��� �������
�
�
�
�		 �
���������
��������		 ���� ���� ���� �������
�������
����
�
� �����������������������
������������		 ������������������������
������������		 ���������������� ��� �������
�������
�������
�����		 � �
���������
��������		 ���� ���� ���� �������
�������
� �����������������������
������������		 ����������������������
������������		 ���������������� ��� �������
�������
������
���������		 � �
���������
��������		 ���� ���� ���� �������
�������
� �����������������������
������������		 ���������������������
����		 ���������������� ��� ������
������
�
�����		 � �
���������
��������		 ���� ���� ���� �������
�������
� �����������������������
������������		 �����������������������
������������		 ���������������� ��� �������
�������
�������
����������		 � �
���������
��������		 ���� ���� ���� �������
�������
� �����������������������
������������		 �����������������
��������������������		 ���������������� ��� �������
�������
�������
�����		 � �
���������
��������		 ���� ���� ���� �������
�������
� ����������������������
������������		 ������������������������
������������		 ���������������� ��� ������
�
�
�
�		 �
���������
��������		 ���� ���� ���� �������
�������
����
�
� ����������������������
������������		 �����������������������
������������		 ���������������� ��� ������
�
�
�
�		 �
���������
��������		 ���� ���� ���� �������
�������
����
�
� ������������������������
������������		 �����������������������
������������		 ���������������� ��� ������
������
������
�
�		 �
���������
��������		 ���� ���� ���� ������
������
� ������������������������������������������������
�������������		 ���������������� ��� �������
�������
�������
�
�		 �
���������
��������		 ���� ���� ���� �������
�������
� �����������������������
����		 ���������������������
����		 ���������������� ��� ������
������
�
�
�		 �
���������
��������		 ���� ���� ���� ������
�������
� ���������������������
����		 �����������������������
����		 ���������������� ��� ������
������
�
�
�		 �
���������
��������		 ���� ���� ���� ������
�������

���������������������������������������������������������������

�������������������

- 194 -

�������������������������������������������������������

����������������������

������������������� ������������������� �������������������
�����������������������������
��������� �������������
�������
�����������������������
������		 ���������� ���������������� �������������
�����		 �������
�������������		 �������
������
�������		 ������
�������
������		 ��������
����
�������		 �������
�������
�����
������		 ��������
�����������
������		 ����������
���������
����������
���������		 ��������
���������
������
������
�����		 ����
�����
�����������		 �������
�����������
����������
����		 �������
�����������
��������
�����		 ����

  • ������������������������������������������������������������������������������������������������������������������

  • ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������

  • ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ����������������������������������������������������������������������������������������������������������������������������������������������������

  • ��������������������������������������������������������������������������������������������������������������������

  • �������������������������������������

  • ����������������������������������������������������

  • ���������������������������������������������������������������������������������������������������������������������

�������������������

- 195 -

�������������������������������������������������������

�������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
����������������������
��������
�
���������������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
��
��������
������������������
��
���
�
���������������
����������������������
�
��������������������
����������������������
�
�����������������������
���
�����������������
������
����������		 �����������
�������������������
��������������������
�����������
���������
������
����������
�������
�������
�����������
�������
������
�����������
�������
������
�������
������
�����������
������
������������
��������
����
��������������������
�������������������
����������������
�������������������
������������
�������������
�������������
�����������
���
������������
������������
����������
�����������
�������
�����������
��������
�����
��������������������
�����������������������������
�������������
�����������������
��������������������
�
���������
�
���������
�
�������
�
�������
�
�
�
�����
���������
�
�
�
�
�����
��������������������
����������������������
�
���������
�������
�������
�������
�
�����
���������
�
�
�
�����
�����������������������
������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
�����������������������
����
�
���������
�������
�������
�������
�
�����
���������
�
�
�
�����
���������������������
����
�
���������
�������
�������
�������
�
�����
���������
�
�
�
�����
����������������������
������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
������������������������
������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
��������������������
�������
�
���������
�������
�������
�
�
�����
���������
�
�
�
��
��������������������
�����������
�
���������
�������
�������
�������
�
�����
���������
�
�
�
��
�����������������������
������������
�
���������
�������
�������
�
�
�����
���������
�
�
�
�����
����������
�����������������������
�
���������
�������
�
�
�
�����
���������
�
�
�
�����
�����������������
��������������������
�
���������
���������
�������
�������
�
�����
���������
�
�
�
�����
����������������������
������������
�
���������
���������
�������
�������
�
�����
���������
�
�
�
�����
����������������������
������������
�
���������
���������
�������
�������
�
�����
���������
�
�
�
�����
�����������������������
������������
�
���������
�������
�������
�������
�
�����
���������
�
�
�
�����
������������������������
������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
��������������������
����������������������
�
���������
���������
���������
�������
�
������
���������
�
�
�
�����
����������������������
����������������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
�����������������������
����
�
���������
�������
�������
�������
�
�
���������
�
�
�
�����
�����������������������
������������
�
���������
�������
�������
������
�
�����
���������
�
�
�
�����
���������������������
����
�
���������
�������
�������
�������
�
�����
���������
�
�
�
�����
�����������������
��������������������
�
�������
�������
�
�
�
�
���������
�
�
�
�����
����������������������
����������������������
�
�������
�������
�������
�
�
�����
���������
�
�
�
�����
���������������������
���
�
�������
�������
�������
������
�
�
�������
�
�
�
�����

  • ���������������������������������������������������������������

  • ������������������������������

  • �������������������������������������������������������������������������������������������

������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ������������������������������������

��������������������

- 196 -

�������������������������������������������������������

���������������������� �����������������������������������

�������
�����������������
������
����������		 �����������
�������������������
��������������������
�����������
���������
������
����������
�������
�������
�����������
�������
������
�����������
�������
������
�������
������
�����������
������
������������
��������
����
��������������������
�������������������
����������������
�������������������
������������
�������������
�������������
�����������
���
������������
������������
����������
�����������
�������
�����������
��������
�����
�������������

������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ ����������

  • ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� �������������������������������������������

  • �����������������������������������������������������������������������������������������������������������

  • ����������������������������������������������������

  • ���������������������������������������������������������������������������������������������������������

  • �����������������������������������������������������������������������������������������������

  • ����������������������������������������������������������������������������������������������

  • �������������������������������������������������������������������������������������������������������������������������������������������

  • �����������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

��������������������

- 197 -

�������������������������������������������������������

����������������������������������������������������������������������������������������������������������������������������������������

�����������������

������������

���������������

����������������������������

�������������� ���������������������������������
������		 �������������������
��������������������
������		 ������������������ ������ ������ ����
������ �������������� ������������
�����		 ���������
�������������������������
���������������		 ���������������������������� � ����������������������������������
������������������������������������
�������
���������
�������
�
�������������������
�����
���������������������������
������
�
������
�		 ������ ������
�

���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� �������������

���������������������

- 198 -

�������������������������������������������������������

������������������������������������������������������������������������������������������������������������������������������������

�����������������������������������

����������������������
���������������������������������
������
������������������
�����������
������
������
������


����������		 ��������� �������� ��������������������������
����
������
�������������		 ��������������������������
����
������
�������������
������
������		 ������
������		 ������
������������
��������
���������
��
��������		 ������
������
�������������������������
���������������
�����������������������������
���������������������
~~�����������������������~~
������������������
�������������
�������
~~�����~~
������������
����
�
�������������������������
���������������
����������������������������
�����������������
�
�
���
������������������
�������������
�������
������
���
����������
�
�������������������������
���������������
��������������������������������
����������������������������
��������
�
�
���
������������������
�������������
�������
���
����������
�
�������������������������
���������������
�����������������������������
�������������
�
�
���
������������������
�������������
�������
���������
������
���
�
������������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
�
����������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
�
���������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
�
���������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
������������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
�
����������������������������
�������
�����������������������������
���������������������
�
�
���
������������������
�������������
�������
�
������������
����
�
���������������������������
�����������������������������
������������������������������
�
�
���
������������������
�������������
�������
�
���������
������
���
�
�������������������������
�����������������������������
������������������������������
�
�
���
������������������
�������������
�������
�
���������
������
���
�
���������������������������
�����������������������������������
����
����������������������
������
����������
�����������
�		 �
��
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�������		 �
���������
�
�
�������
�
�������
�
�������
�
���������
�
���������
�
���������
�
�������
�
���������
�
�������
�
�������
�
�������
�
�������		 �
���������
�
���������
�
������
�
�
�������
�������
���
�
�������
�������
�����
�
�������
�������
�����
�
���������
���������
�����
�
���������
���������
�����
�
���������
���������
�����
�
�������
�������
���
�
���������
���������
���
�
�������
�������
���
�
�������
�������
�����
�
�������
�������
�����
�
�
�
�		 �
��
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�������

  • ��������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • �����������������������������������������������������������������������������������������������������������������������

��������������������

- 199 -

�������������������������������������������������������

������������������������������������������������������������������������������������������������

�����������������

����������

���������������

����������������������������

���������������������������������������������������

������������
�����������
������		 ���������� ����������
����		 �����������
������		 ���������
�����		 �����������
������		 ��������
����		 ����� ������������
�������������		 ������������ ������ ������������
�����
�������������		 �����������
��������
�����		 �����
������
�����
�������
������
���������
������		 �����
��������������������
�����
��������������������		 ��������
�������		 ���������
������������
���������
��������		 �
�		 �
�		 �
�		 �
�		 ��
�		 �����������
�����������		 ����������
������
����������
������		 �
�

������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ������� ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� �����������������������������������������������������������������������������������������������������������������������������������������

������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ ���������������������������������������������������������������������������������������������������������

�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ����������������������������

�������������������

- 200 -

�������������������������������������������������������������������������������������������������������������������

��������������� ����������������������������

�������������������������������������������������������

�����������������������������������

����������������������� ������ ������������ ��������
��������
�����		 ������
���������		 ������������
��������������
��������		 ������������ ���������
������������
�����������������������������������������������
���������������������������		 �������
������������
�����������
����������
���������
��������������������������
���������		 ����
�������
���������������������������������������������������������������������������������
��������
�������
�
����
�������
������������
����
����
�������
�
����
���������������������������������������������������������
���������������������
��������
�������
����
�������
������������
����
����
������
����
�����������������������������������������������������������������������������������
������
���������
����
�������
������������
����
����
�������
����
������������������������������������������������
���������������������
��������
�������
����
�������
������������
����
����
������
����
����������������������������������������������������������������������������������
������
���������
����
�������
������������
����
����
�������
����
���������������������������������������������������������������������������������
������
�������
����
�������
������������
����
����
�������
����
�����������������������������������������������������������������������������������
������
�������
����
�������
������������
����
����
�������
����
��������������������������������������������������������
�������
����������������������
������
�������
����
�������
������������
����
����
������
����
��������������������������������������������������������
���������������������
��������
�������
����
�������
������������
����
����
������
����
�������������������������������������������������������������������������������
��������
�������
����
�������
������������
����
����
������
����
��������������������������������������������������������
���������������������
��������
�������
����
�������
������������
����
����
������
����		 �����
�����
�����
�����
�����

���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ����������������������������������������������������������������������

  • ����������������������������������������������

��������������������

- 201 -

������������������������������������������������������� ��������������������������������������������������������������������������������������� �����������������

������������

��������������� ����������������������������

��������������������������������

�����������������������
�����������		 ����������������������� ������������ ���������
���������������
��������������		 ������������ ������ �������������� ����������
��������������
�����������
���������������
��������������
�������		 ��������
���������������
�����������		 ����
������������������������������
���������������������������������
��
���
���������������������������������
��
���
������������������������������
��
���
����������������������������
��
���
����������������������������
��
���
����������������������������
��
���
������������������������������
��
���
����������������������
������������������
������������������������������
��
���
������������������������������
������������		 ���������������������������������
����������������������������
��
���
������������������������������
�������
���
���������������������������������
��
���
�����������������������������
��
���
����������������������������
��
���
������������������������������
��
���
������������������������������
��
���
����������������������������������
������������������������������
�������
���
��������������������������������
������������		 ������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������
������������
�������������		 �������
�
�����
������
�����
�������
�����
�������
����
�������
�����
�������
�����
�������
�����
�������
����
�������
����
�������
����
�������
�����		 �
�
�
�
�
�
�
�
�
�
�
�		 �
�
�
�
�
�
�
�
�
�
�		 �
�
�
�
�������
�
�
�
������
������
�������
�		 �
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����
�
�����

���������������������������������������������������������������������������������������������������������������������

���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� �������������������������������������������������������������������������������������������������������������������� ����������������������������������������������

��������������������������������������������������������������������������������������������������������������

��������������������

- 202 -

�������������������������������������������������������

������������������������������������������������������������������������������������������������������������������������������������

�����������������������������������

�������������

���������������

����������������������������

������������������

������
�������		 �������������� ������������������ �������������������� ������� ������ �������������������� �������������������
�������������������
������
�������
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�		 ��������������������������
����
���������������������������������
�������������������������
���������������
���������������������������
�������
�������������������������
���������������
��������������������������������
������������
�������������������������
���������������
��������������������������������
������������
�������������������������
���������������
����������������������������
�������
�������������������������
���������������
����������������������������
�������
�������������������������
���������������
�����������������������������
�������
�������������������������
���������������
������������������������������
������������
������������������������������
�������
���������������������������������
�������
������������������������������
�������
���������������������������������
�������
������������������������������
�������
�����������������������������
�������
������������������������������
�������
����������������������������
�������
���������������������������������������������������������
�������
����������������������������
�������
���������������������������
�������
����������������������������
�������
���������������������������
�������
����������������������������
�������
�����������������������������
�������
����������������������������
�������
����������������������������
�������
����������������������������
�������
������������������������������
�������
������������������������������
��������
������������������������������
�������
������������������������������
��������
������������������������������
�������		 �
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�		 ����������������
������������������
����
������������������
����
����������������
����������������
����������������
������������������
����
����������������
����������������
������������������
����
����������������
����������������
����������������
����������������
������������������
����		 �������
�
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
���������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������		 ����
����
����
����
����
����
����
����
����
����
����
����
����
����
����
����
����
����
����
����

����������������������

- 203 -

�������������������������������������������������������

  • ������������������������������������������������������������������������������������������������������������������������������������

�����������������������������������

�������������

��������������� ����������������������������

������������������

������
�������		 �������������� ������������������ �������������������� ������� ������ �������������������� �������������������
�������������������
������
�������
�
�
�
�
�
�
�
�
�
��		 ������������������������������
��������
����������������������������
�������
����������������������������
�������
������������������������������
�������
������������������������������
�������
������������������������������
�������
������������������������������
�������
������������������������������
������������
�����������������������������
�������
�������������������������		 ����������������������������
�������
���������������������������
�������
���������������������������
�������
������������������������������
������������
������������������������������
������������
������������������������������
�������
���������������������������
�������
��������������������������������
������������
���������������������������������
�������
���������������������������		 �
�
�
�
�
�
�
�
�
�		 ����
������������������
����
������������������
����
����
����
����������������
����
����		 ������
�
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
�������
�����������������������������������
����������������������������
���������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������
�������
�
������
�����������������������������������
����������������������������
������
�����������������������������������
����������������������������		 ����
����
����
����
����
����
����
����
����
����

  • ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� �������������������������������������

  • ���������������������������������������������������������������������������������������������������

  • �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ����������������������������������������������������������������������������������������������������������������������������

  • �����������������������������������������������

  • �����������������������������������������������

  • ��������������������������������������������������

  • ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ������������������������������������������������������������������������������������������������������������������������������������������������������������� �����������������������������������������������������������

����������������������

- 204 -

�����������

�������������������������������������������������������

�������������������������������������������������������������������������������������������������

������������������

��������������� ����������������������������

���������������
�����������������������		 �����������������
��������		 ������������
������
���������
����
������������������������		 ������������
������
���������
����
������������������������		 ������
������
��������
������
�����������������������		 ������
������
��������
������
�����������������������		 �����������������������
�������		 �����������������
�����������������������		 ����
������������������������������������������������������������� ������
�����������������������		 �����
�		 �����
�
���
�
������
�		 ������
��		 ������
��
��������������������������������������������������������� �����
�����������������		 �������
�������
�
������		 �������
�������
�		 �������
�
�������������������������������������������������������� ���������������������������� �������
�������
�
������		 �������
�������
�		 �
�����
�������������������������
����������
���
����������������������������������
�������������������������
����������
���
������������������������		 �����
�����������������
������
���������������������������������������
�������������������		 ������
�������
�
�������
�������
�������
������
������		 ������
�����
�
�����
�������
��������
�
�
�����
���������������������������
��������������������������		 ���������������������������� �������
�������
�
������		 �������
�������
�		 �
�����
��������������������������
���������������������������������		 ��������������������������������� �������
�������
�
�������		 �������
�������
�		 �
�����

�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

��������������������

- 205 -

������������������������������������������������������� ��������������������������������������������� �����������������������������������

����������

��������������� ����������������������������

�������� ��������
������������������������������ ����������������� �������������� ����������
������		 �����������
����������
����������
�����������
�����������
�������		 �����������������
����������������
�������������������		 �����������
����������
����������
�����������
�����
�������		 ����������
�������������
�������		 ������������
����������
���������
��������
��������
�����������		 ����������
���������
����
������������
�������������		 ��������������
��������
����������		 ������������� ����
������� ������ �������� ��������� ������
���������������� ���������
�		 �
�		 �
�		 �
�		 �
�		 �
�		 �������
�		 �����
�������
�		 ����������
�		 �
�		 �����
��������������������������������� ��������������
������� ��������������������
��������
���������������� �������
�
�
�
�
�
�������
������
�������
���������
�
�����
������������������������������ ��������������
������� ��������������������
��������
���������������� �������
�
�
�
�
�
������
������
������
���������
�
�����
��������������������������� ��������������
������� ��������������������
��������
���������������� �������
�
�
�
�
�
������
������
������
���������
�
�����
���������������������������� ��������������
������� ��������������������
��������
���������������� �������
�
�
�
�
�
������
������
������
�������
�
�������
���������������������� ��������������
������������������ ��������������������
��������
���������������� �������
�
�
�
�
�
�����
������
�����
�������
�
�����
����������������������������� ��������������
������� ��������������������
��������
���������������� ���������
�
�
�
�
�
���������������������������
�������		 ��������������
��������������������		 ������
������
������
���������
�
�������
��������
���������������� ���������
�
�
�
�
�
������������������������������
�������		 ��������������
��������������������		 ������
������
������
���������
�
�������
��������
���������������� �������
�
�
�
�
�
����������������������������������
����		 ��������������
��������������������		 �������
������
�������
�������
�
�����
��������
���������������� �������
�
�
�
�
�
�����������������������������
�������		 ��������������
��������������������		 �������
�		 ������
�������
�		 �����
�
�����
��������
���������������� �������
�
�
�
�
�
����������������������������
�������		 ��������������
��������������������		 �������
�		 ������
�������
�		 �������
�
�����
��������
���������������� �������
�
�
�
�
�
������������������������������
�������		 ��������������
��������������������		 �������
�		 ������
�������
�		 �������
�
�����
��������

�������������������

- 206 -

������������������������������������������������������� ��������������������������������������������� ����������������������������������� ����������

��������� �������������
��������������������������
�������� ��������
������������������������������ ����������������� �������������� ����������
������		 �����������
����������
����������
�����������
�����������
�������		 �����������������
����������������
�������������������		 �����������
����������
����������
�����������
�����
�������		 ����������
�������������
�������		 ������������
����������
���������
��������
��������
�����������		 ����������
���������
����
������������
�������������		 ��������������
��������
����������		 ������������� ����
������� ������ �������� ��������� ������
���������������� ������
�
�
�
�
�
��������������������������������
������������		 ��������������
��������������������		 ������
�����
������
�������
�
�����
��������
���������������� �������
�
�
�
�
�
������������������������������
������������		 ��������������
��������������������		 �������
�����
�������
���������
�
�����
��������
���������������� �������
�
�
�
�
�
��������������������������� ��������������
��������������������		 ��������
�		 �����
�������
�		 �������
�
�����
��������
���������������� �������
�
�
�
�
�
������������������������� ��������������
��������������������		 �������
�����
������
�������
�
�����
��������
���������������� ������
�
�
�
�
�
���������������������������� ��������������
��������������������		 ������
�����
�����
������
�
��������
���������������� �������
�
�
�
�
�
����������������������������
�������		 ��������������
��������������������		 ������
�����
�����
�������
������
��������
���������������� �������
�
�
�
�
�
����������������������������
����������������������������		 ��������������
��������������������		 �������
�����
������
�������
�������
��������
������������ �������
�
�
�
�
�
�������������������������
����������������		 ���������������������
������������������		 �������
�		 �����
������
�		 �������
�
��������
������������������������������� ����������������
�������������������		 �������
�
�
�
�
�
��������
�		 �����
�������
�		 ������
�
�������������
���������������� ���������
�		 �
�
�		 �
�		 �
�		 �
�		 ���
�		 �����
��
�		 �������
�		 �
�
��������������������� ��������������
��������������������
��������

  • ��������������������������������������������������������������������������������������������������������

  • ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

  • ������������������������������������������������������������������������������������������������������������������������������������

  • ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

�������������������

- 207 -

�������������������������������������������������������

���������������������������������

������������������

�����������

������ ����� �����
������������ �����
�������������������������
�������������������������
�����������������������
����������������������������
�����������������
�������������������������		 ����������
������
����������
�����
����������
�����
���������
�����
���������
�����
���������
�����

- 208 -

開曼英利工業股份有限公司 Cayman Engley Industrial Co., Ltd.

Representative ： Lin, Chi-Pin

More from Cayman Engley

Regulatory Filings 2026
May 22
Interim / Quarterly Report 2026
May 15
Interim / Quarterly Report 2026
May 15
Regulatory Filings 2026
May 15
Interim / Quarterly Report 2026
May 14
Regulatory Filings 2026
May 14
Interim / Quarterly Report 2026
May 14
Interim / Quarterly Report 2026
May 14
Regulatory Filings 2026
May 14
Audit Report / Information 2026
May 13
View all filings →