TA YIH — Annual Report 2020

Aug 9, 2021

Stock code：1521

TA YIH INDUSTRIAL CO.,LTD.

2020 ANNUAL REPORT

Address：No. 11, Xinxin Road, Anping Industrial Zone, Tainan City Telephone：(06)2615151

June 22, 2021 Printed

Designated information reporting website：https://sii.twse.com.tw Website for inquiry for this year：

Stock Exchange Public Information Observatory：http://mops.tw se.com.tw Company website：http://www.tayih-ind.com.tw

1. Company Spokesman

Name：Hung-Chi Wang

Title：Senior Assistant General Manager, Finance department

Contact Telephone：(06)2615151 ext. 220

Email：chi@tayih-ind.com

2. Company Acting Spokesman

Name：Chun-Hao Wang

Title：Assistant General Manager, Chairman office

Contact Telephone：(06)2615151 ext. 248

Email：king@tayih-ind.com.tw

3. Address and telephone of Company and factory

Address of Company and factory：No. 11, Xinxin Road, Anping Industrial Zone,Tainan City Telephone：(06)2615151

4. Contact information of agency handling shares transfer

Name：CTBC Bank

Address：No.83, 5th Floor, Section 1, Chongqing South Road, Taipei

Website：www.ctbcbank.com

Telephone：(02)66365566

5. Contact information of the certified public accountant for the most recent annual financial report

Name of accounting firm：Deloitte Taiwan

Independent accountant：Accountant Chi-Chen Li, Accountant Chao-Chin Yang

Address：No. 189, 13th Floor, Section 1, Yongfu Road, Tainan City Website：www.deliotte.com.tw

Telephone：(06)2139988

6. Name of any exchanges where the company's securities are traded offshore ： None

Method by which to access information on said offshore securities：None

7. Website of company ： http://www.tayih-ind.com.tw

Table of Contents

1‧To the shareholders’ report	1
2‧Introduction of the Company	3
2-1.Date of Establishment	3
2-2.Company milestones	3
3‧Corporate Governance Report	6
3-1.Organizational system	6
3-2.Information on the company's directors, supervisors, president, vice presidents,	7
deputy assistant general managers, and the supervisors of all the company’s
divisions and branch units
3-3.Remuneration paid during the most recent fiscal year to directors, supervisors,	13
president, and vice presidents
3-4.The state of the company's implementation of corporate governance	23
3-5.Information on CPA professional fees	64
3-6.Information on replacement of certified public accountant	65
3-7.Where the company's chairman, president, or any managerial officer in charge of	65
finance or accounting matters has in the most recent year held a position at the
accounting firm of its certified public accountant or at an affiliated enterprise of
such accounting firm
3-8.Any transfer of equity interests and/or pledge of or change in equity interests by a	65
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
3-9.Relationship information, if among the company's 10 largest shareholders any	66
one is a related party or a relative within the second degree of kinship of another
3-10.The total number of shares and total equity stake held in any single enterprise by	68
the company, its directors and supervisors, managers, and any companies
controlled either directly or indirectly by the company
4‧Information on capital raising activities	69
4-1.Company Capital and shares	69
4-2.The section on company debts	73
4-3.The section on preferred shares	73
4-4.The section on global depository receipts	73
4-5.The section on employee share subscription warrants	73
4-6.The section on "new restricted employee shares”	73
4-7.The section on issuance of new shares in connection with mergers or acquisitions	73
or with acquisitions of shares of other companies
4-8. The section on implementation of the company's capital allocation plans	73
5‧An overview of operations	74
5-1.A description of the business	74
5-2.An analysis of the market as well as the production and marketing situation	76
5-3.The number of employees employed for the 2 most recent fiscal years, and during	82
the current fiscal year up to the date of publication of the annual report, their
average years of service, average age, and education levels
5-4.Disbursements for environmental protection	82
5-5.Labor relations	82
5-6.Important contracts	85
6‧The company's financial status	87
6-1.Condensed balance sheets and statements of comprehensive income for the past 5	87
fiscal years
6-2.Financial analyses for the past 5 fiscal years	89
6-3.Supervisors' report for the most recent year's financial statement	94

6-4.Consolidate Financial statement for the most recent fiscal year	94
6-5.A parent company only financial statement for the most recent fiscal year,	94
certified by a CPA
6-6.If the company or its affiliates have experienced financial difficulties in the	94
most recent fiscal year or during the current fiscal year up to the date of
publication of the annual report, the annual report shall explain how said
difficulties will affect the company's financial situation
7．Analysis of its financial position and financial performance, and risks	95
7-1.Review and analysis of financial status	95
7-2.Review and analysis of financial performance	95
7-3.Analysis of cash flow	96
7-4.he effect upon financial operations of any major capital expenditures during the	96
most recent fiscal year
7-5.The company's reinvestment policy for the most recent fiscal year, the main	96
reasons for the profits/losses generated thereby, the plan for improving
re-investment profitability, and investment plans for the coming year
7-6.Risk analysis and evaluation	97
7-7.Other important matters	100
8‧Special items	101
8-1.Information related to the company's affiliates	101
8-2.Where the company has carried out a private placement of securities during the	102
most recent fiscal year or during the current fiscal year up to the date of
publication of the annual report
8-3.The subsidiaries holding or disposal of the company’s shares in the company	102
during the most recent fiscal year or during the current fiscal year up to the date
of publication of the annual report
8-4.Additional description of other matters	102
9．If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the	102
Securities and Exchange Act, which might materially affect shareholders' equity or
the price of the company's securities, has occurred during the most recent fiscal year
or during the current fiscal year up to the date of publication of the annual report,
such situations shall be listed one by one
2020 Consolidate Financial Statements	103
2020 Individual Financial Statements	104

‧ 1 The shareholders’ report

1-1.Business results for 2020：

1-1-1.Review of business performance：

Owing to the impact of COVID-19 pandemic, the Company's net operating income for 2020 was NT$ 4,797,165,000, a decrease of NT$593,031,000 (decreased by 11%) compared with NT$5,390,196,000 in 2019.

In terms of net profit before tax, it was NT$ 178,629,000 in 2020, a decrease of NT$269,722,000 compared with NT$ 448,351,000 in 2019 (a decrease of 60.2%). In terms of net profit after tax, it was NT$ 159,750,000 in 2020, a decrease of NT$200,707,000 from the NT$ 360,457,000 in 2019. The earning per share in 2020 is NT$2.10.

Unit：NT$ thousands

			Unit：	NT$ thousands
Year	2020	2019	Amount increasing / decreasing	Increase / Decrease %
Net operatingincome	4,797,165	5,390,196	(－) 593,031	(－) 11.0%
Net operating profit	186,734	411,978	(－) 225,244	(－) 54.7%
Pre-tax income	178,629	448,351	(－) 269,722	(－) 60.2%
Net income after tax	159,750	360,457	(－) 200,707	(－) 55.7%
EPS after tax(NTD/share)	2.10	4.73	(－) 2.63	(－) 55.7%

• 1-1-2.Budget implementation：no financial forecast was released for 2020.

1-1-3.Analysis of financial revenue and expenditure and profitability：

• (1)Financial structure

Debt to assets ratio：52.03%

Long-term capital accounted for real estate, plant and equipment ratio：189.66%

• (2)Profitability

Return on assets：4.43％

Return on assets：8.72％ Return on equity：3.33％ Earnings per share：NT$ 2.10

• 1-1-4.Status of research and development

• (1)Research and development expenses for the past 2 years

In 2019, the expenses were NT$ 199,992,000, which accounted for 3.71% of the net operating income.

In 2020, the expenses were NT$ 178,836,000, which accounted for 3.73% of the net operating income.

• (2)On-going research and development projects：

• ①R&D and the mass production of Advanced headlights of motorcycles.

• ②R&D and the mass production of Mini LED BI PES headlights of motorcycles.

• ③R&D and the mass production of Microstructure optical application lamps.

• ④R&D and the mass production of Hyperboloid lens application lamps.

• ⑤R&D and the mass production of Millimeter wave transparent materials.

• ⑥R&D of Electronic ASPICE import.

• ⑦R&D of Adjustable lightness and low-energy LED headlights for MRT vehicles.

• ⑧Product development on Special LED light tube for rail vehicles.

• ⑨R&D of aerospace lighting.

1-2.Overview of Business Plan of 2021：

• 1-2-1.Business strategy

• (1)With the customer-first spirit, expand business domestically and overseas.

• (2)Cultivate management and technical talents and optimize the product development system.

• (3)Strengthen production management systems and production technology and capacity, and establish a zero waste plant.

• (4)Comply with standards consistently, reduce cost of poor quality, and enhance

1

satisfaction of customers.

(5)Protect environment and employees’ health and perform corporate social responsibility.

• 1-2-2.Expected Sales Volume and Ground for the Expectation

  • (1)Expected sales volume：About 450 ~ 460 thousand automobiles to be sold domestically.

  • (2)Ground：As planned based on the plan of the plant.

• 1-2-3.Important Production and Marketing Policies

  • (1)Secure orders to be placed by domestic customers for automobiles and expand the market of motorcycles progressively.

  • (2)Strive for orders for car lights and molds to be placed by Koito Group.

  • (3)Analyze and master the cost of car lights and molds in the plant and take actions to improve their weaknesses.

  • (4)Conduct mass production of medium sized VA/VE continuously and reduce production cost.

  • (5)Promote the TPS production system to build a zero waste production management system.

• 1-3.Future Corporate Development Strategies：

• 1-3-1.Enhance added value for products and strive to get orders of products from domestic customs to increase the sales figures.

• 1-3-2.Enhance satisfaction of customers consistently and expand European market progressively.

• 1-3-3.Develop improvement projects and conduct energy saving activities to reduce consumption of energy resources as well as production cost.

• 1-3-4.Familiarize with environmental safety regulations and information, strengthen the resource and energy management mechanism, and develop various waste reduction programs.

1-4.Influence of External Competition, Legal Requirements and Overall Business Environment： Looking back in 2020, we were materially impacted by the Covid-19 pandemic in the global auto industry.Even though Taiwan properly prevented the pandemic from spreading widely, yet our orders from overseas customers were still sharply reduced in the first half year of 2020 due to the global economic recession. The overall revenue of 2020 therefore dropped by 11% compared with that of 2019.

The impact of the pandemic has still existed this year, but each countrys’concept of the pandemic prevention has been enhanced and Covid-19 vaccines have also been developed maturely. We believe that the pandemic will be controlled. With the forecast of a strong economic recovery and the extension of the government policy of subsidizing the purchase of a new car to replace the existing one, it is expected that the domestic automobile sales volume will still be from 450 to 460 thousand, almost the same as that of last year. As for the exportation, we intend to not only strive for domestic and overseas orders from Kioto Group, but also develop the markets in North America and Europe continuously to get new customers and more orders of new model lights and molds. Moreover, to enhance production efficiency and reduce production cost, the Company will continuously conduct various improvement activities for cost rationalization.

In the coming future, the Company will fulfill corporate governance, perform corporate social responsibility and invest in research and development consistently. In addition, with the corporate philosophy of sincerity and sustainable development, the Company, supported by all of you as shareholders and led by the excellent management team, guarantees its stable growth and will create reasonable profits and values for shareholders, employees and the society. We hope that all of you as shareholders can support, encourage and direct us as usual.

We with you, ladies and gentlemen, good heath and the best of luck.

Chairman：Chun-I Wu

2

‧ 2 Introduction of the Company

• 2-1.Date of Establishment ： January 28, 1976

2-2.Company milestones：

• 2-2-1.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the company’s merger and acquisition： None.

• 2-2-2.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the reinvestment in subsidiaries：please refer to page 96 for details.

• 2-2-3.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the company’s merger and acquisition： re-organization of the company：None.

• 2-2-4.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, in which a major quantity of shares belonging to directors, supervisors, or shareholders holding greater than a 10 percent stake in the company is transferred or otherwise changes hands：None.

• 2-2-5.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, any change in managerial control; any material change in operating methods or type of business; and any other matters of material significance that could affect shareholders' equity：None.

• 2-2-6.Other information：

1976		The company established Da Yih Industrial Co., Ltd. in 1964. Due to business
		expansion, it was renamed Da Yih Industrial Co., Ltd. in 1976, with its capital
		increased to NT $10,000,000 and employs 200 employees.
1979		The new Anping plant was completed and production, and entered the domestic auto
		parts OEM market.
1980		The capital was increased to NT$ 50,000,000.
1981		Signed a technical cooperation treaty with Japan's Stanley Electric Co., Ltd.
1982		The capital was increased to NT$ 105,000,000.
1983	February	The construction of the new office building was completed and the capital was
		further increased to NT$135,000,000.
1984		Achieved the CNS mark from Bureau of standards, Metrology and Standards,
		Ministry of Economic Affairs.
1985		The capital was further increased by NT$ 165,000,000.
1986		In cooperation with Yulon Motor Co., which developed the Feeling X-101 car model,
		the Company designed the car lights for Feeling X-101.
1987		The technical cooperation with Japan's Stanley Electric Co., Ltd. terminated.
1988	May	Joint venture with Japan Koito Manufacturing Co., Ltd., the capital was increased to
		NT$ 220,000,000.
1989		Designed the car lights for Yulon Motors’ 303 series.
1990	May	Integrate the Toyota Production System (TPS) with the Corporate Synergy
		Development Center and Kuozui to reduce costs and improve production methods,
		and inventories were reduced by 47%.
	July	The expansion of the investment plant was set up at No. 9 Xinxin Road, and the
		headlamp factory was rationalized with consistent operations was re-established and
		incorporated into the BMC mirror production.
	September	The plastics factory is completed with rapid change of molding machine and the
		operation of one person handling three machines.
1991	February	Established a painting factory.
	August	The capital was expanded to NT$268,000,000.
	December	The mold NC EDM equipment was introduced to improve the precision of mold
		processing. Another 3,100 sq ft of land and factory were purchased for the headlight
		factory.
1992	May	Multi-color forming machine is integrated into the rear lamp production factory, and
		the development of the multi-color mold.
		Established Chao Wei company with Nanzhong Company to produce mirrors for
		headlights.
	September	It participated in the National Unity Circle event organized by the Corporate Synergy
		Development Center and was awarded the Excellent Organization Award and Golden
		Tower Award for both the Production and Non-Production Cooperation Group. The
		capital was expanded to NT$289,180,000.

3

	October	Won the "Q1 Quality Award" from Ford Lio Ho Motor Company.
1993		The second set of BMC forming equipment was imported and the capital was
		expanded to NT$450,000,000.
1994	April	The Securities and Exchange Commission approved the public offering of shares, and
		the capital was expanded to NT$500,000,000 in September.
1995	September	The cash increase of NT$49,000,000 for employees to subscribe for the shares, the
		amount of capital increased to NT$630,000,000.
	October	Received the Labor Safety and Health Automatic Inspection Excellence Award from
		the provincial government and the Industry Bureau awarded the 84th National
		Quality Month Quality Manufacturer Award.
1996	February	Obtained ISO 9002 International Quality Assurance System certification from the
		Bureau of Standards, Metrology & Inspection, M.O.E.A.
	March	Signed a technical cooperation contract with VALEO from France.
	June	Signed a technical cooperation contract. With BOSCH from Germany.
1997	January	Acquired the highest honor of the Sanyang System, " Top Ji-Jun Memorial Award ".
	March	It has been certified by Aerospace Industrial Development Corporation and Corporate
		Synergy Development Center and has officially become a cooperative factory of
		Aerospace Industry.
	October	The company's stock is listed on the market.
		Signed the technical cooperation with the US LUMINATOR company and the agency
		contract in Asia.
1998	March	Achieved the German TUV QS 9000/ISO 9001 International Quality Assurance
		System Certification.
	July	The capital was expanded to NT$693,000,000.
	October	The headlamp factory is included in the automated BMC mirror clean room
		production line, which greatly increases the mirror production capacity.
1999	July	Signed a technical cooperation contract with the LUMINATOR company in the
		United States.
	August	The capital was expanded to NT$762,300,000.
2000	January	Received the Best Presentation Award for Revitalizing Competitive Advantage of
		China Motor Corporation.
2001	February	Established the Optoelectronics department for research and develop optical
		components.
2002	July	Become a qualified supplier of track lamps by Siemens (SIEMENS).
	December	Achieved the German TUV ISO 14001 and OHSAS 18001 Certified Occupational
		Safety certification.
2003	May	Established a demonstration machine and began to import qualified track lighting
		suppliers.
2004	December	Achieved the German TUV TS 16949 Quality certification.
2005	March	Awarded the Excellent Quality Award of Yulon Nissan Motor Co., Ltd.
	November	Introduce the headlights store design and promote the rear lead production system.
2006	January	Won the 2005 best performance award from the China Motor Corporation.
	February	Won the overall cost advantage award of the excellent manufacturer of Yulon Nissan
		Automobile Cooperation Factory System.
	April	Won the 2006 Special Contribution award from Ford Lio Ho Motor Company Auto
		2006 and the 2005 Output Excellence Award from Kuozui Motors.
	August	Achieved the 3C certification of the mainland regulations.
	September	Certified as a qualified supplier by Daimler-Chrysler's Northeast Asia.
	November	Achieved the Japanese JIPM TPM Awards.
2007	March	Won the overall cost advantage award of the excellent manufacturer of Yulon Nissan
		Automobile Cooperation Factory System.
		Received the Excellent Supplier Award from Ford Lio Ho Motor Company.
	April	Won the Kuozui Motors Original Price Plan award.
2008	January	Won the VA/VE and the excellent supplier of China Motor Corporation.
	February	Awarded the Excellent Performance Award by Yulon Nissan Motor Co., Ltd.
	March	Won the silver medal of the excellent manufacturer of Ford Lio Ho Motor Company.
	April	Started to resell automotive lamps to Suzuki, Mitsubishi and Mazda in Japan.
2009	February	Introduce an automatic steering headlamp (AFS) production line.
	December	It was awarded the A-level manufacturer by the third-party safety and health
		management system of the Kuozui Motors.
2010	January	Won the excellent supplier of China Motor Corporation.
	February	Awarded the Excellent Quality Award of Yulon Nissan Motor Co., Ltd.
	March	Won the silver medal of the excellent manufacturer of Ford Lio Ho Motor Company.
	April	Won the Kuozui Motors Original Price Plan award.

4

	August	Sales of remote flashlight to the United States started.
2011	January	Won the excellent supplier of China Motor Corporation.
	February	Awarded the Excellent Quality Award of Yulon Nissan Motor Co., Ltd.
	April	Won the Kuozui Motors Original Price Plan award.
		Won the silver medal of the excellent manufacturer of Ford Lio Ho Motor Company.
2012	February	Won the excellent supplier of China Motor Corporation.
		Won the VA/VE and the excellent supplier of China Motor Corporation.
	April	Won the silver medal of the excellent manufacturer of Ford Lio Ho Motor Company.
		Won the first quality award from Luxgen, Yulon Motor Company.
	November	Registered as a traffic safety and health family of the Ministry of Labor.
2013	January	Received the energy-saving model award of China Motor Corporation.
	March	Won the 2012 Kuozui Motors Original Price Plan award.
	April	Won the silver medal of the excellent manufacturer of Ford Lio Ho Motor Company.
	October	Production of LED headlights.
	November	Appraised as the senior store over 30 years by the Tainan City Business Association.
2014	February	Won the excellent supplier of China Motor Corporation.
	April	Received the overall outstanding performance award of Luxgen, Yulon Motor
		Company.
	September	Production of LED fog light and resale to Japan.
2015	February	Won the excellent supplier of China Motor Corporation.
		Won the A-level rating of TQ Evaluation of China Motor Corporation.
	March	Awarded the Excellent Quality Award of Yulon Nissan Motor Co., Ltd.
	April	Won the 2014 Kuozui Motors Original Price Plan award.
		Received the overall outstanding performance award of Luxgen, Yulon Motor
		Company.
	November	Won the best supplier for electric equipment of FCA..
2016	March	Won the excellent supplier of China Motor Corporation.
		Won the AA-level rating of TQ Evaluation of China Motor Corporation..
		Awarded the Excellent Quality Award of Yulon Nissan Motor Co., Ltd.
	April	Won the Kuozui Motors Best quality award
		Won the Kuozui Motors VA best performance award.
		Received the overall outstanding performance award of Luxgen, Yulon Motor
		Company.
2017	February	Awarded the Excellent Design and Development Award of Yulon Nissan Motor
		Co., Ltd.
	April	Won the Kuozui Motors Best quality award
		Won the Kuozui MotorsTTT best performance award.
		Received the overall outstanding performance award of Luxgen, Yulon Motor
		Company.
	July	Won the Taiwan Region Quality Award from Nissan Motor Co., Ltd.
2018	February	Won the Toyota Motor Corporation Taiwan Region Contribution Award
	March	Won the excellent supplier of China Motor Corporation.
		Received the Yulon Nissan Motor Company's Design and Development Excellence
		Award and the Improved Skills Award
	March	Received the overall outstanding performance award of Luxgen, Yulon Motor
		Company.
2019	March	Won the excellent supplier of China Motor Corporation.
	April	Won the Kuozui Motors VA best performance award.
		Won the Kuozui Motors’ original price improvement award.
		Won the YAMAHA Technology Development Excellence Global Award.
	November	Won the best supplier of FCA
2020	January	Passed the French AFNOR AS9100 aviation quality certification
	March	Won the excellent supplier and Design and Development Excellence Award of China
		Motor Corporation.
		Received the Yulon Nissan Motor Company's Supplier of the Year and the Excellent
		Quality Award
2021	March	Received the Yulon Nissan Motor Company's overall outstanding performance award
		and the Design and Development Excellence Award

5

‧ 3 Corporate Governance Report

3-1.Organizational system

3-1-1.Organization

==> picture [564 x 661] intentionally omitted <==

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

Shareholders’ meeting
Board of Director The remuneration
committee
Auditing Office
The auditing committee
Chairman
Vice Chairman
President
Vice president
Production department Technical department FunctionMold FunctionQuality Business department FunctionFinance
Project Mgnt
Office
3-1-2.Businesses of major departments
Department Major businesses
Establishing the performance goals and salary of directors, supervisors and managers
The remuneration committee
and regularly reviewing
Assisting the board of directors to improve corporate governance performance and
The auditing committee
strengthening internal control system
Ensuring that the internal control system can operate efficiently and continuously and
Auditing Office
strengthening corporate governance
Planning and implementation of management policies, implementation of IT, human
General manager office
resource, training, and general administrations
The preparation of the board of directors’ meeting and the translation of foreign
Chairman office
documents
Occupational safety and health office Safety and health management
Planning and execution of accounting operations, cost management, fund scheduling
Finance department
and budget control
Procurement department Procurement of production materials
Opto-electronics department R&D and manufacturing of products other than car lights
Business department Development of domestic and foreign markets
Quality assurance function Quality target planning and execution
Machine mold function Development and production of mold and frames
Technical Department New product development and design
Product production, material requirements and production scheduling, planning and
Production department
introduction of new equipment, new technology and new construction methods
Dept. Dept.
GM’s Office
Assembel Production Design Department Procurement dept. Chairman’s Office and health office
Production Tech Dept. Prodoction Mgnt Dept. Parts Production Dept. Development promotion Electronic Tech Dept. Machine Mold Factory Business Department Opto-electronics dept. Finance Department Occupational safety
Quality assurance dept.
----- End of picture text -----

6

3-2.Information on the company's directors, supervisors, president and vice president, deputy assistant general managers, and the supervisors of all the company’s divisions.

3-2-1.Information of directors and supervisors

April 24, 2021

Title (Note 1)	Nationality or place of registration	Name	Gender	Elect Date	Term	First time When elected Date (Note 2)	Shares holding when elected	Shares holding when elected	Current Number of shares held	Current Number of shares held	Shares held by spouse and minor children currently	Shares held by spouse and minor children currently	Shares held n	under other’s ame	Major experience (education) (Note 3)	Holding a concurrent post The Company or the other company Position	For those who are the spo are supervisors within the degree of kinship.	For those who are the spo are supervisors within the degree of kinship.	uses of or second	Notes (4)
							Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio			Title	Name	Relation
Director	Republic of China	Ding wan Investment Industrial Co., Ltd.		June 12,2020	3 years	June 12, 2014	10,000	0.01%	10,000	0.01%	－	－	－	－	－	－	－	－	－	－
Chairman	Republic of China	Chun-I Wu (Representative of Dinwan)	Male	June 12,2020	3 years	June 15, 1988	1,254,488	1.65%	1,254,488	1.65%	396,821	0.52%	－	－	Pei-men Senior Agricultural and Industrial Vocational School	Tayih Kenmos Auto Parts Co., Ltd. Chairman. Fuzhou Koito Tayih Automotive Lamp Co., Ltd. Vice Chairman. TYC Brother Industrial Co., Ltd. Director.	director director	Ching- Liang You Yu-Hsien Wu	Brother-in- law Father and son	－
Director	Japan	Koito Manufacturing Co., Ltd.		June 12,2020	3 years	June 15, 1988	24,774,750	32.50%	24,774,750	32.50%	－	－	－	－	－	－	－	－	－	－
Vice chairman	Japan	Watanabe Masami (Representative of Koito Manufacturing Co.,Ltd.)	Male	June 12,2020	3 years	April 01, 2004	－	－	－	－	－	－	－	－	Vice President of the Company. Applied Chemistry Department, University of Yamanashi.	－	－	－	－	－
Director	Japan	Yamamoto Kakuya (Representative of Koito Manufacturing Co., Ltd.)	Male	June 12,2020	3 years	August 08, 2019	－	－	－	－	－	－	－	－	Department of Industrial Chemistry, Faculty of Engineering, Shizuoka University, Japan	Director, Hubei Koito Automotive Lamp Co., Ltd. Chairman, Fuzhou Koito Tayih automotive Lamp Co., Ltd. Director,Guangzhou Koito Automotive Lamp Co., Ltd. Vice Assistant Manager, Koito ManufacturingCo.,Ltd.	－	－	－	－
Director	Japan	Konagaya Hideharu (Representative of Koito Manufacturing Co.,Ltd.)	Male	June 12,2020	3 years	June 12,2020	－	－	－	－	－	－	－	－	Faculty of Science and Engineering, Waseda University, Japan		－	－	－	－
Director	Republic of China	Yu-Hsien Wu	Male	June 12,2020	3 years	June 12, 2014	25,101	0.03%	25,101	0.03%	－	－	－	－	Supervisor of the Company Loyola Marymount University MBA	Vice Chairman of Tayih Kenmos Auto Parts Co., Ltd.	Chairman	Chun-I Wu	Father and son	－
Director	Republic of China	Cheng-Yuan Wu	Male	June 12,2020	3 years	June 14, 2017	－	－	－	－	－	－	－	－	Special assistant of the company Master of Economics, University of South California	Vice President	－	－	－	－
Independent director	Republic of China	Wan-I Wu	Male	June 12,2020	3 years	June 14, 2017	－	－	－	－	－	－	－	－	Vice President of Ken-Hama Co., Ltd. Director and Vice President of Toyota Tsusho Corporation. Department of Labor Relations, Cultural University.	Director and Manager of Ken-Hama Co., Ltd.	－	－	－	－
Independent director	Republic of China	Hsiu-Fon Chen	Female	June 12,2020	3 years	June 14, 2017	－	－	－	－	－	－	－	－	Associate Professor, Chang Jung Christian University Master of Laws, University of Washington, USA Master of Laws, University of Tokyo, Japan	Partner, Chienyeh Law Office Member of the Appeal Review Committee of Tainan City Government Member of the State Compensation Incident Handling Review Subcommittee of the Ministry of the Interior	－	－	－	－

7

Title (Note 1)	Nationality or place of registration	Name	Gender	Elect Date	Term	First time When elected Date (Note 2)	Shares holding when elected	Shares holding when elected	Current Number of shares held	Current Number of shares held	Shares held b minor childr	y spouse and en currently	Shares held n	under other’s ame	Major experience (education) (Note 3)	Holding a concurrent post The Company or the other company Position	For those who are the spo are supervisors within the degree of kinship.	For those who are the spo are supervisors within the degree of kinship.	uses of or second	Notes (4)
							Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio			Title	Name	Relation
Independent director	Republic of China	Ze-Xiang Ting	Male	June 12,2020	3 years	June 12,2020	－	－	－	－	－	－	－	－	Supervisor of Ya Hong Electronics Technology Co., Ltd. Director of CPA Associations R.O.C. Department of Finance and Taxation, Chung Hsing University	Partner Accountant of Nan Tai CPAs & Co.. Independent director of TEKOM Technology Co.,LTD. Director of CPA Associations R.O.C.	－	－	－	－
Director	Japan	Yamamoto Hideki (Representative of Koito Manufacturing Co., Ltd.)	Male	June 14,2017	3 years	April 01, 2016	－	－	－	－	－	－	－	－	Master in Mechanical Engineering, Meiji University	Vice President.	－	－	－	Dismissed after re-election on June 12,2020
Director	Republic of China	Yuan Hong Investmen Co., Ltd.		June 14,2017	3 years	June 14, 2017.	746,000	0.98%	746,000	0.98%	－	－	－	－	－	－	－	－	－	Dismissed after re-election on June 12,2020
Director	Republic of China	Ching-Liang Yu (Representative of Yuan Hong)	Male	June 14,2017	3 years	June 28, 2002	－	－	－	－	－	－	－	－	Senior Assistant Manager of the Company	Vice President of the Company. Supervisor of Juoku Technology Co., Ltd.	Chairman	Chun-I Wu	Brother-in- law	Dismissed after re-election on June 12,2020
Supervisor	Republic of China	Kuo Qi Min Investment Co., Ltd.	－	June 14,2017	3 years	June 14, 2017	1,257,601	1.65%	1,257,601	1.65%	－	－	－	－	－	－	－	－	－	Dismissed after re-election on June 12,2020
Supervisor	Republic of China	Bor-Wen Kerng (Representative of Kuo Qi Min)	Male	June 14,2017	3 years	June 23, 2015	－	－	－	－	－	－	－	－	Independent director of TYC Brother Industrial Co., Ltd. Professor of Department of Institute of Informatiom, National Cheng Kung University PhD, Purdue University	Supervisor of Tayih Kenmos Auto Parts Co., Ltd.	－	－	－	Dismissed after re-election on June 12,2020
Supervisor	Japan	Konagaya Hideharu	Male	June 14,2017	3 years	June12, 2008	－	－	－	－	－	－	－	－	Graduate School of Fundamental Science and Engineering, Waseda University, Japan	－	－	－	－	Dismissed after re-election on June 12,2020
Supervisor	Republic of China	Yih Heng Investment Co., Ltd.	－	June 14,2017	3 years	June12, 2014.	33,000	0.04%	33,000	0.04%	－	－	－	－	－	－	－	－	－	Dismissed after re-election on June 12,2020

8

Title (Note 1)	Nationality or place of registration	Name	Gender	Elect Date	Term	First time When elected Date (Note 2)	Shares holding when elected	Shares holding when elected	Current Number of shares held	Current Number of shares held	Shares held by spouse and minor children currently	Shares held by spouse and minor children currently	Shares held under other’s name	Shares held under other’s name	Major experience (education) (Note 3)	Holding a concurrent post The Company or the other company Position	For those who are the spouses of or are supervisors within the second degree of kinship.	For those who are the spouses of or are supervisors within the second degree of kinship.	For those who are the spouses of or are supervisors within the second degree of kinship.	Notes (4)
							Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio			Title	Name	Relation
Supervisor	Republic of China	Chien Lin (Representative of Yih Heng)	Male	June 14,2017	3 years	June14, 2017	－	－	－	－	－	－	－	－	Director of the company. Director of Fuzhou Koito Tayih automotive Lamp Co., Ltd. Director of Juoku Technology Co., Ltd. General manager of the Company. Department of Mechnical Engineering, Tatung University.	－	－	－	－	Dismissed after re-election on June 12,2020

• Note 1：The institutional shareholder shall list the name and representative of the institutional shareholder (as a representative of the institutional shareholder, the name of the institutional shareholder shall be indicated) and shall be listed in the following table 1.

• Note 2：When filling in as the first timer serving as a director or supervisor of the company, do remark if there is any interruption.

• Note 3：The experience related to the current position, if it has been with the certification accounting firm or related company during the pre-existing period, should state the title and responsibilities.

• Note 4：The chairman and the general manager or equivalent (the top management) of the company are the same person, or are first-degree relatives of each other, such as spouse, should explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors, or more than half of the directors do not serve as employees or managers, etc.).

(1)Table 1：Major shareholders of institutional shareholders

		April 24, 2021 Shareholding ratio Shareholding more than10% Top 10 share holders
Name of institutional shareholders	Major shareholders of institutional shareholders	Shareholding ratio
Ding wan Investment Industrial Co.,	Hui-Er Wu Ma	Shareholding more than10%
	Chun-I Wu
	Yu-Hsien Wu
	Chen-Yi Wu
Koito Manufacturing Co., Ltd.	Toyota Motor Corporation	Top 10 share holders
	Japan Master Trust Bank,Ltd.(trust account)
	CustodyBank of Japan,Ltd..(trust account)
	Sumitomo Mitsui BankingCorporation
	Nippon Life Insurance Company
	Bank of Tokyo-Mitsubishi UFJ,Ltd.
	STATE STREET BANK AND TRUST COMPANY 505223
	Dai-ichi Life Insurance Co.,Ltd.
	Aioi NissayDowa Insurance Co.,Ltd.
	JP MORGAN CHASE BANK 385632

Note 1：If the directors and supervisors are representatives of institutional shareholders, the name of the institutional shareholder shall be filled in.

• Note 2：The name of the principal shareholder of the institutional shareholder (whom holds the top ten shareholding) and its shareholding ratio. If the majority shareholders are institutional shareholders, they should fill in table 2.

9

(2)Table 2：Major shareholders of institutional shareholders

			pril 24, 2021
Name of the Institution(note 1)	Major shareholder of Institutions(note 2)		Note
Toyota Motor Corporation	Japan Trustee Services Bank,Ltd.		Top 10 shareholders
	Toyota Industries Corporation
	Japan Master Trust Bank,Ltd.
	Nippon Life Insurance Company
	JP Morgan Morgan Chase Bank (Standing Attorney Mizuho Bank, Ltd. Settlement Sales Department)
	DENSO CORPORATION
	State Street Bank & Trust Company (Standing Attorney, Inc. Mizuho Bank, Settlement Sales Department)
	Mitsui Sumitomo Insurance Co.,Ltd
	Asset Management Services Trust Bank Ltd.
	Tokio Marine & Nichido Fire Insurance Co.,Ltd.
Japan Post Trust Bank Co., Ltd. (Trust account）	Unable toprovide due to localpractice restrictions		－
Japan Trustee Services Bank, Ltd. (trust account)	Unable to provide due to local practice restrictions		－
Sumitomo Mitsui BankingCorporation	Stock companyMitsui Sumitomo Finance Co.,Ltd.		100%
Nippon Life Insurance Company	Unable toprovide due to localpractice restrictions		－
Bank of Tokyo-Mitsubishi UFJ,Ltd.	Mitsubishi UFJ Finance Corporation		100%
STATE STREET BANK AND TRUST COMPANY 505223	Unable toprovide due to localpractice restrictions		－
Dai-ichi Life Insurance Co., Ltd.	Unable toprovide due to localpractice restrictions		－
Aioi NissayDowa Insurance Co., Ltd.	Unable toprovide due to localpractice restrictions		－
JP MORGAN CHASE BANK 385632	Unable toprovide due to localpractice restrictions		－

Note 1：If the main shareholder of the above table is an institutional shareholder, then name of the institutional shareholder should be filled in. Note 2：The name of the main institutional shareholder (whom holds the top ten shareholding) and its shareholding ratio.

(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：

(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：	(3)Whether the directors and supervisors have more than five years of work experience in business, legal, financial or corporate business, and meet the following：
April 24, 2021
Conditions	Have more than five years of work experience and the following professionalqualifications			In line with independence (Note 1)												No of independent directors of other public offering companies
Name	An instructor or higher 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 specialist 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 area 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

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Chairman： Chun-I Wu(Note 2)			V	V					V	V		V		V	V	0
Vice chairman： Watanabe Masami(Note 3)			V	V	V	V	V		V	V	V	V	V	V	V	0
Director： Yu-Hsien Wu			V	V	V	V		V	V	V		V		V	V	0
Director： Yamamoto Kakuya(Note 3)			V	V	V	V	V		V	V	V	V	V	V	V	0
Director： Konagaya Hideharu(Note 3&4)			V	V	V	V	V		V	V	V	V	V	V	V	0
Director： Cheng-Yuan Wu(Note 4)			V	V	V	V	V	V	V	V	V	V	V	V	V	0
Independent director： Wan-I Wu			V	V	V	V	V	V	V	V	V	V	V	V	V	0
Independent director： Hsiu-Fon Chen	V	V	V	V	V	V	V	V	V	V	V	V	V	V	V	0
Independent director： Ze-XiangTing(Note 4)		V	V	V	V	V	V	V	V	V	V	V	V	V	V	1

• Note 1：Directors and supervisors during the two years before being elected and during the term of office, meet any of the following situations, please tick the appropriate corresponding boxes：

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

• (2)Not a director and supervisor of the Company or affiliated companies (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (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 of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

• (4)Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph (1) above or any of the persons in the preceding subparagraphs (2) or (3).

• (5)Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act.

• (6)Not a director, supervisor, or employee of that other company if a majority of the company's director seats or voting shares and those of any other company are controlled by the same person. (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (7)Not a director (or governor), supervisor, or employee of that other company or institution if the chairperson, president, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses. (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (8)Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company ((but it does not apply to specific companies hold 20 percent or more and no more than

11

50 percent of the total number of issued shares of the public company and in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (9)Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

• (10)Has no relationship with other directors within the scope of spouse or second degree of kinship.

(11)Not been a person of any conditions defined in Article 30 of the Company Act; and

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

Note 2：Chun-I Wu is the representative of Ding Wan Investment Industrial Co., Ltd.

Note 3：Watanabe Masami, Yamamoto Kakuya and Konagaya Hideharu are representatives of Koito Manufacturing Co., Ltd.

• Note 4：3 directors (also independent ones) including Konagaya Hideharu, Cheng-Yuan Wu and Ze-Xiang Ting are successfully re-elected on June 12, 2020.

3-2-2.Information on the branches	3-2-2.Information on the branches	3-2-2.Information on the branches	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	company's president, vice presidents, assistant general	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021	managers, and the managers of all the company’s divisions and April 24, 2021
Job title (Note 1)	Nationality	Name	Gender	Elect Date	Holding shares		Shares held mino	by spouse and r children	Shares he no	ld under other minees	Major work experience (educational background) (Note 2)	Holding a concurrent post in other companies	For those wh managers within	o are the spou the second d	ses of or are egree of kinship.	Note (Note 3)
					Number of shares	shareholding ratio	Number of shares	shareholding ratio	Number of shares	shareholding ratio			Title	Name	Relation
President	Republic of China	Shih-Chung Feng	Male	2019.04.01	－	－	－	－	－	－	Director and vice president of Fuzhou Koito Tayih automotive Lamp Co., Ltd. Vice president of the Company. Senior Assistant Assistant Manager of the Company. Department of Mechanical Engineering, Nanya Institute of Technology.	None	－	－	－	－
Vice President	Republic of China	Ching-Liang Yu (Note 4)	Male	1998.07.31	－	－	－	－	－	－	Senior Assistant Manager of the Company.	Supervisor of Juoku Technology Co., Ltd.	－	－	－	－
Vice President	Japan	Yamamoto Hidetsugu	Male	2016.04.01	－	－	－	－	－	－	Master of Mechanical Engineering, Meiji University, Japan.	None	－	－	－	－
Vice President	Republic of China	Cheng-Yuan Wu (Note 4)	Male	2016.01.01	－	－	－	－	－	－	Director of the company Master of Economics, University of South California	None	－	－	－	－
Senior Assistant	Republic of China	Chin-Wen Chen	Male	2016.01.01	－	－	－	－	－	－	Master of Power Mechanical Engineering, Tsing Hua University.	None	－	－	－	－
Senior Assistant	Republic of China	Hung-Chi Wang	Male	2016.01.01	－	－	－	－	－	－	Department of Accounting, Tunghai University.	Supervisor of Fuzhou Koito Tayih automotive Lamp Co., Ltd.	－	－	－	－
Senior Assistant	Republic of China	Chao-Wen Chang	Male	2016.01.01	－	－	－	－	－	－	Masters of Electro-optical, National Formosa University.	None	－	－	－	－
Assistant Manager	Republic of China	Chun-Hung Chen	Male	2016.01.01	－	－	－	－	－	－	Department of Mechanical engineering, National Pingtung University of Science and Technology.	None	－	－	－	－
Assistant Manager	Republic of China	Chih-Ching Chuang	Male	2016.01.01	－	－	－	－	－	－	Master of Chemical Engineering, Chung Yuan University.	None	－	－	－	－

12

Assistant Manager	Republic of China	Chun-Hao Wang	Male	2016.01.01	－	－	－	－	－	－	Japanese Culture and Language Institute.	None	－	－	－	－
Assistant Manager	Republic of China	Chao-Ching Chuang	Male	2016.01.04	730	0.00	－	－	－	－	Department of Mechanical engineering, Southern Taiwan University of Science and Technology.	None	－	－	－	－
Assistant Manager	Republic of China	Rui-Pin Xu (Note 5)	Male	2016.01.04	－	－	－	－	－	－	EMBA, Department of Business Administration, Tunghai University	None	－	－	－	－
Assistant Manager	Republic of China	Ping-Hsin Yeh	Male	2019.10.4	－	－	－	－	－	－	Senior Assistant GM of Taiwan Mitsui Sales manager of Sinbon Elec. Dept of Japenese Language & Culture, Soochow University.	None	－	－	－	－
Assistant Manager	Republic of China	Chiung-Lun Wang	Female	2020.08.26	－	－	－	－	－	－	Assistant Sales Manager of Juoku Technology Co., Ltd. Sales Department Manager of Ta Yih Industrial Co., Ltd. Tokyo Cosmo Gakuen	None	－	－	－	－

• Note 1：The information including president, vice presidents, associates, department and branch directors, and where the position is equivalent to the general manager, deputy general manager or associate, regardless of the title, should be disclosed.

• Note 2：The experience related to the current position, if it has been with the certification accounting firm or related company during the pre-existing period, should state the title and responsibilities.

• Note 3：Where the chairperson of the board of directors and president or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response. (For example, increase the number of independent directors, and there should be more than half of the directors who do not serve as employees or managers of the Company, etc.)

• Note 4：Ching-Liang Yu, the Vice president, retired and dismissed on June, 2020. The board of directors appointed Cheng-Yuan Wu (former assistant manager) as the new vice president.

• Note 5：Rui-Pin Xu retired on February, 2020.

• 3-3.Remuneration paid during the most recent fiscal year to directors, supervisors, president, and vice presidents：

  • 3-3-1.Remuneration of directors (including independent directors) (with any one of the following circumstances, name and gratuities should be disclosed)：

    • (1)Those who have suffered after-tax losses in individual financial reports in the recent three years; but those who have generated net profits after-tax in the most recent annual individual financial reports and are sufficient to make up for accumulated losses are not subject to this limit：the Company's individual financial reports on 2018, 2019 and 2020 have no after-tax losses.

    • (2)In recent years, the number of stocks holding by directors has been insufficient for more than three consecutive months：the Company did not have this situation in 2020.

    • (3)A company that has had an average ratio of share pledging by directors exceeding 50 percent in any 3 months during the most recent fiscal year shall disclose the remuneration paid to each individual director：there is no such situation in the Company in 2020.

    • (4)All directors receive the directors ’remuneration of all companies in the financial report accounting for more than 2% of the net profit after tax, and individual directors receive remuneration exceeding NT $ 15 million：the directors' remuneration in 2020 accounted for 6.12% of the net profit after tax, but the individual director’s remuneration did not exceed NT $ 15 million.

    • (5)A company listed on the Taiwan Stock Exchange (TWSE) or the Taipei Exchange (TPEx) is ranked in the lowest tier in the corporate governance evaluation for the most recent fiscal year, or in the most recent fiscal year or up to the date of publication of the annual

13

report for that year, the company's securities have been placed under an altered trading method, suspended from trading, delisted from the TWSE or the TPEx, or the Corporate Governance Evaluation Committee has resolved that the company shall be excluded from evaluation：the Company did not have this situation in 2020.

• (6)The average annual salary of the full-time non-supervisory employees in a TWSE or TPEx listed company is less than NT$500,000：the Company did not have this situation in 2020.

3-3-2.Remuneration of directors (including the independent directors) (aggregate remuneration information with the names indicated for each remuneration range)： December 31, 2020 Unit：NT$ thousands

Title	Name	Remuneration of directors	Remuneration of directors	Remuneration of directors	Remuneration of directors	Remuneration of directors	Remuneration of directors	Remuneration of directors	Remuneration of directors	The ratio of the summation of A, B, C and D to the net profit after tax. (Note 10)	The ratio of the summation of A, B, C and D to the net profit after tax. (Note 10)	Part-time employees receive r	Part-time employees receive r	Part-time employees receive r	Part-time employees receive r	elevant remuneration	elevant remuneration	elevant remuneration	elevant remuneration	The ratio of the summation of A, B, C ,D, E, F and G to the net profit after tax. (Note 10)	The ratio of the summation of A, B, C ,D, E, F and G to the net profit after tax. (Note 10)	Whether a remuneration is received from a subsidiary company (Note 11)
		Remuneration (A) (Note 2)		Resignation Pensions (B)		Remuneration of directors (C) (Note 3)		Business execution expenses (D) (Note 4)				Compensation and bonuses payable and special allowances (E) (Note 5)		Resignation Pensions (F)		Employee compensation (G) (Note 6)
		The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company	All companies in the financial report (Note 7)	The Company		All companies in the financial report (Note 7)		The Company	All companies in the financial report (Note 7)
																Cash amount	Amount of shares	Cash amount	Amount of shares
Chairman	Chun-I Wu (Representative of Din Wan)	0	0	0	0	0	0	140	140	0.09%	0.09%	8,761	8,761	114	114	0	0	0	0	5.64%	5.64%	None
Vice chairman	Watanabe Masami (Representative of Koito ManufacturingCo.,Ltd.)
Director	Yu-Hsien Wu
Director	Ching-Liang Yu (Representative of Yuan Hong) (Note)
Director	Yamamoto Kakuya (Representative of Koito ManufacturingCo.,Ltd.)
Director	Yamamoto Hidetsugu (Note) (Representative of Koito ManufacturingCo.,Ltd.)
Director	Konagaya Hideharu (Representative of Koito ManufacturingCo.,Ltd.)
Director	Cheng-Yuan Wu
Independe nt director	Wan-I Wu	0	0	0	0	0	0	760	760	0.48%	0.48%	0	0	0	0	0	0	0	0	0.48%	0.48%	None

14

Independe nt director	Hsiu-Fon Chen
Independe nt director	Ze-Xiang Ting
1.Please state the policy, system, standards and structure of independent directors’ remuneration, and describe the relevance to the amount of remuneration according to the responsibilities, risks and time invested：The remuneration of independent directors of the company is fixed by the board of directors’ meeting. Independent directors do not participate in the distribution of remuneration when the company makes profits. 2.Other than disclosure in the above table, Directors remunerations earned by providing services (e.g. providing consulting services as a non-employee) to the Company in the most recent fiscal year：None

Note：Dismissed after re-election on June 12, 2020. Director (including independent directors) remuneration level table

Range of remuneration paid to each director of the company	Name of directors	Name of directors	Name of directors	Name of directors
	Total remuneration(A+B+C+D)		Total remuneration(A+B+C+D+E+F+G)
	The Company (Note 8)	All companies in the financial report (Note 9)	The Company (Note 8)	All companies in the financial report (Note 9)
Under 1,000,000	Chun-I Wu, Watanabe Masami, Yu-Hsien Wu, Ching-Liang Yu, Yamamoto Kakuya, Yamamoto Hidetsugu, Konagaya Hideharu, Cheng-Yuan Wu, Wan-I Wu, Hsiu-Fon Chen, Ze-XiangTing	Chun-I Wu, Watanabe Masami, Yu-Hsien Wu, Ching-Liang Yu, Yamamoto Kakuya, Yamamoto Hidetsugu, Konagaya Hideharu, Cheng-Yuan Wu, Wan-I Wu, Hsiu-Fon Chen, Ze-XiangTing	Watanabe Masami, Yu-Hsien Wu, Yamamoto Kakuya, Yamamoto Hidetsugu, Konagaya Hideharu, Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting	Watanabe Masami, Yu-Hsien Wu, Yamamoto Kakuya, Yamamoto Hidetsugu, Konagaya Hideharu, Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting
NT$ 1,000,000(included) ～NT$ 2,000,000(excluded)	－	－	Ching-LiangYu	Ching-LiangYu
NT $ 2,000,000(included) ～NT$ 3,500,000(excluded)	－	－	Cheng-Yuan Wu	Cheng-Yuan Wu
NT $ 3,500,000(included) ～NT$ 5,000,000(excluded)	－	－	Chun-I Wu	Chun-I Wu
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	11	11	11	11

Note 1：The names of the directors shall be separately listed (the institutional shareholder shall list the names of the institutional shareholders and the representative separately), and the amount of each payment shall be disclosed. If the director is also the general manager or deputy general

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manager, this form and the table 3 should be filled out. (5) or 3. (6).

• Note 2：Refers to the remuneration of directors in the most recent fiscal year (including directors' remuneration, job allowance, severance pay, various bonuses, and awards etc.).

• Note 3：To fill in the amount of directors' remuneration distributed by the board of directors in the most recent year.

• Note 4：Refers to the relevant business execution expenses of the directors in the most recent fiscal year (including transport expenses, special expenses, various allowances, lodging, company car and other supplies, etc.). In the case of the provision of housing, motor vehicles and other means of transport or exclusive individuals’ expenses, the nature and cost of the assets provided, the actual or at a fair market price, rent, petrol and other payments should be disclosed. If driver is provided, take note to state the salary of the driver paid by the company, and this payment shall not be included in the remuneration.

• Note 5：Refers to the salary of the directors who are also an employees(including president, vice presidents and other managers and employees) in the most recent fiscal year, which includes the salary, job allowance, severance payment, various bonuses, incentives, transport expenses, special expenses, subsidies, dormitories, company car rentals and so on. In the case of the provision of housing, motor vehicles and other means of transport or exclusive individuals expenses, the nature and cost of the assets provided, the actual or at a fair market price, rent, petrol and other payments should be disclosed. If driver is provided, take note to state the salary of the driver paid by the company, and this payment shall not be included in the remuneration. According to IFRS 2 "Share-based Payment", the salary expenses recognized should include obtaining employee stock option certificate, restricted employee share and participating in capital increase shares, etc. Those payment should also be included in the remuneration.

• Note 6：Refers to the director, also an employee, (including president, vice presidents, other managers and employees) who has obtained employee compensation (including stocks and cash) in the most recent fiscal year, and should disclose the amount of compensation paid by the board of directors in the most recent fiscal year. For those who are not able to make an estimation, shall propose the calculation based on the actual distribution of the preceding year, and fill up table 3. (7).

• Note 7：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to the directors of the Company should be disclosed.

• Note 8：The total amount of remuneration the company paid to each director, the names of the directors should be revealed in the respective range of remuneration.

• Note 9：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to the directors of the Company should be disclosed.

• Note 10：The ‘Net profit after tax’ refers to net profit after tax in the most recent individual or individual financial reports.

• Note 11：(1)This column should clearly state the amount of remuneration the directors received from the transfer of investment in the subsidiary.

  • (2)If a director of a company receives remuneration from a subsidiary other than an investment enterprise, the remuneration received should be merged into column I of the remuneration table, and rename that column as "all investment business".

  • (3)Remuneration refers to the remuneration and compensation (including remuneration of employees, directors or supervisors) paid to the directors who are also the directors, supervisors or other managers of the investment business other than its subsidiary, and business execution expenses of the directors, supervisors or managers.

• 3-3-3.Remuneration of supervisors (with any one of the following circumstances should be disclosed individually for the name and the remunerations)：

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• (1)Those who have suffered after-tax losses in individual financial reports in last three years; but those who have generated after-tax net profits in the most recent annual individual financial reports and are sufficient to make up for accumulated losses are not subject to this limit：the Company did not have after-tax losses in 2018, 2019 and 2020 on the individual financial reports.

• (2)If any supervisor has had insufficient shareholding percentage for 3 consecutive months or longer during the most recent fiscal year, it shall disclose the remuneration of supervisor：the Company did not have this situation in 2020.

• (3)A company that has had an average ratio of share pledging by supervisor in excess of 50 percent in any 3 months during the most recent fiscal year shall disclose the remuneration paid to each individual supervisor having a ratio of pledged shares in excess of 50 percent for each such month：there is no such situation for the Company in 2020.

• (4)If the total amount of remuneration received by all of the supervisors in their capacity as supervisors of all of the companies listed in the financial reports exceeds 2 percent of the net income after tax, and the remuneration received by any individual supervisor exceeds NT$15 million, the company shall disclose the remuneration paid to that individual supervisor：there is no such situation for the Company in 2020.

• (5)A company listed on the Taiwan Stock Exchange (TWSE) or the Taipei Exchange (TPEx) is ranked in the lowest tier in the corporate governance evaluation for the most recent fiscal year, or in the most recent fiscal year or up to the date of publication of the annual report for that year, the company's securities have been placed under an altered trading method, suspended from trading, delisted from the TWSE or the TPEx, or the Corporate Governance Evaluation Committee has resolved that the company shall be excluded from evaluation：the Company did not have this situation in 2020.

• (6)The average annual salary of the full-time non-supervisory employees in a TWSE or TPEx listed company is less than NT$500,000：the Company did not have this situation in 2020.

• 3-3-4. Remuneration of supervisors (aggregate remuneration information with the names indicated for each remuneration range)：

December 31, 2020 Unit：NT$ thousands

Title	Name	Remuneration of Supervisors	Remuneration of Supervisors	Remuneration of Supervisors	Remuneration of Supervisors	Remuneration of Supervisors		The ratio of the summation of A, B, and C to the net profit after tax. (Note 8)	The ratio of the summation of A, B, and C to the net profit after tax. (Note 8)	Whether a remuneration is received from a subsidiary company (Note 9)
		Remuneration (A) (Note 2)		Compensation (B) (Note 3)		Business expenses (C) (Note4)	execution
		The Company	All companies in the financial report (Note 5)	The Company	All companies in the financial report (Note 5)	The Company	All companies in the financial report (Note 5)	The Company	All companies in the financial report (Note 5)
Supervisor	Bor-Wen Kerng (Representative of KuoQi Min Co.,Ltd.)	－	－	－	－	470	470	0.29%	0.29%	None
Supervisor	Chien Lin (Representative of Yih HengCo.,Ltd.)
Supervisor	Konagaya Hideharu

Note：All supervirors are dismissed after re-election on June 12, 2020.

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Range of remuneration paid to the supervisors

Range of remuneration paid to the supervisors
Range of remuneration paid to each supervisor of the company	Name of Supervisor
	Total remuneration(A+B+C)
	The Company (note 6)	All companies in the financial report (Note 7) D
Under NT$ 2,000,000	Bor-Wen Kerng, Konagaya Hideharu, Chien Lin	Bor-Wen Kerng, Konagaya Hideharu, Chien Lin
NT$2,000,000(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	3	3

• Note 1：The names of the supervisors shall be separately listed (the institutional shareholder shall list the names of the institutional shareholders and the representative separately), and the amount of each payment shall be disclosed.

• Note 2：Refers to the remuneration of supervisors in the most recent fiscal year (including supervisors' remuneration, job allowance, severance pay, various bonuses, and awards etc.).

• Note 3：To fill in the amount of supervisors' remuneration distributed by the board of supervisors in the most recent year.

• Note 4：Refers to the relevant business execution expenses of the supervisors in the most recent fiscal year (including transport expenses, special expenses, various allowances, lodging, company car and other supplies, etc.). In the case of the provision of housing, motor vehicles and other means of transport or exclusive individuals ‘expenses, the nature and cost of the assets, the actual or at a fair market price, rent, petrol and other payments should be disclosed. If driver is provided, take note to state the salary of the driver paid by the company, and this payment shall not be included in the remuneration.

• Note 5：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to the supervisors of the Company should be disclosed.

• Note 6：The total amount of remuneration the company paid to each supervisor, the names of the supervisors should be revealed in the respective range of remuneration.

• Note 7：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to the supervisors of the Company should be disclosed.

• Note 8：The ‘Net profit after tax’ refers to net profit after tax in the most recent individual or individual financial reports.

• Note 9：(1)This column should clearly list the amount of remuneration received by the Company's supervisor from a subsidiary outside the investment company or the parent company. (If there is no such situation, please fill in "none")

• (2)If the supervisors of a company receive remuneration from a subsidiary other than an investment enterprise or the parent company, the remuneration received should be merged into column I of the remuneration table, and rename that column as "all investment business of the parent company".

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• (3)Remuneration refers to the remuneration and compensation (including remuneration of employees, directors or supervisor) paid to the supervisors who are also the directors, supervisors or other managers of the investment business other than its subsidiary, and business execution expenses of the directors, supervisors or managers.

3-3-5.Remuneration of President and Vice president (aggregate information with names indicated for each remuneration range)：

								December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands	December 31, 2020 Unit：NT$ thousands
Title	Name	Salary (A) (Note 2)		Retirement allowance (B)		Bonuses and special allowances (C) (Note 3)		Employee compensation (D) (Note 4)				The ratio of the summation of A, B, and D to the net profit after tax. (Note 8)		Is there any remuneration from other invested businesses apart from subsidiaries (Note 9)
		The Company	All companies in the financial report (Note 5)	The Company	All companies in the financial report (Note 5)	The Company	All companies in the financial report (Note 5)	The Company		All companies in the financial report (Note 5)		The Company	All companies in the financial report (Note 5)
								Cash amount	Amount of ~~shares~~	Cash amount	Amount of ~~shares~~
President	Shih-ChungFeng	6,530	6,530	65	65	50	50	－	－	－	－	4.16%	4.16%	None
Vicepresident	Ching-LiangYu(Note)
Vicepresident	Yamamoto Hidetsugu
Vice president	Cheng-Yuan Wu (Note)

Note：Ching-Liang Yu, vice president, retired and dismissed on June, 2020. The board of directors appointed Cheng-Yuan Wu (former assistant manager) as the new vice president (effective June 22, 2020).

Range of remuneration paid to President and vice president：

Range of remuneration paid toPresidentand vice president：
Range of remuneration paid to president and vice president	Names of President and vice president
	The Company (note 6)	All companies in the financial report(Note 7)E
Under NT$ 1,000,000	Yamamoto Hidetsugu	Yamamoto Hidetsugu
NT$ 1,000,000 (included) ～NT$ 2,000,000 (excluded)	Ching-Liang, Yu Cheng-Yuan Wu	Ching-Liang, Yu Cheng-Yuan Wu
NT$ 2,000,000(included) ～NT$ 3,500,000(excluded)	－	－

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NT$ 3,500,000 (included) ～NT$ 5,000,000 (excluded)	Shih-Chung Feng	Shih-Chung Feng
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	4	4

• Note 1：The names of president and vice presidents should be separately listed, and disclose the summarized the amount of each payment. If the director is also president or vice president, this form and the table 3 should be filled out. (1) or 3. (2).

• Note 2：To fill in the remuneration, job allowance and severance allowance of president and vice presidents.

• Note 3：To list of the various bonuses, incentives, transport allowances, special allowances, various allowances, dormitory, car and other supplies and other remuneration of president and vice president of the most recent fiscal year. In the case of the provision of housing, motor vehicles and other means of transport or exclusive individuals ‘expenses, the nature and cost of the assets, the actual or at a fair market price, rent, petrol and other payments should be disclosed. If driver is provided, take note to state the salary of the driver paid by the company, and this payment shall not be included in the remuneration. According to IFRS 2 "Share-based Payment", the salary expenses recognized should include obtaining employee stock option certificate, restricted employee share and participating in capital increase shares, etc. Those payments should also be included in the remuneration

• Note 4：To list the amount of compensation (including stocks and cash) assigned to president and vice president by board of directors in the most recent fiscal year. For those who are not able to make an estimation, shall propose the calculation based on the actual distribution of previous year, and fill up table 11-3.

• Note 5：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to president and vice president of the Company should be disclosed.

• Note 6：The total amount of remuneration the company paid to president and vice president, the names of the general manager and the deputy general manager should be revealed in the respective range of remuneration.

• Note 7：The total amount of remuneration paid by all companies shown in the consolidated report (including the Company) to president and vice president of the Company should be disclosed.

• Note 8：After-tax net profit refers to the net profit after tax in the most recent fiscal year; if the international financial reporting standard has been adopted, the net profit after tax is the net profit after tax of individual or individual financial report in the most recent fiscal year.

• Note 9：(1)This column should clearly state the amount of remuneration president and vice president received from the transfer of investment in the subsidiary or the parent company. (If there is no such situation, please fill in "none").

• (2)If president and vice president of a company receive remuneration from a subsidiary other than an investment enterprise or the parent company, the remuneration received should be merged into column I of the remuneration table, and rename that column as "parent company and all investment business".

• (3)Remuneration refers to the remuneration and compensation (including remuneration of employees, directors or supervisors) paid to president and vice president who are also the directors, supervisors or other managers of the parent company and the

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investment business and other subsidiary, and business execution expenses of the directors, supervisors or managers.

• 3-3-6.Disclosure of the remuneration of the top five executives individually：the Company does not has such situation of (1) of 3-3-1 and (5) of 3-3-1 in 2020, so no disclosure is required.

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3-3-7.The 2019 employee profit sharing granted to the management team.

December 31,2020 NT$ thousands

	Title	Name	Stock dividends Amount	Cash: dividends Amount	Total	Proportion of total amount to net profits after tax(%)
Managers	President	Shih-ChungFeng	0	0	0	0.00%
	Vicepresident	Ching-LiangYu
	Vicepresident	Yamamoto Hidetsugu
	Senior Assistant General Manager	Chin-Wen Chen
	Senior Assistant General Manager	Chao-Wen Chang
	Senior Assistant General Manager	Chun-HungChen
	Assistant General Manager	Chih-ChingChuang
	Assistant General Manager	Cheng-Yuan Wu
	Assistant General Manager	Chun-Hao Wang
	Assistant General Manager	Rui-Pin Xu
	Assistant General Manager	Chao-ChingChuang
Financial officer	Senior Assistant General Manager	Hung-Chi Wang

3-3-8.Compare and analyze the total remuneration as a percentage of net income stated in the parent company only financial reports or individual financial reports, paid by this company and by all consolidated entities (including this company) for the most recent 2 fiscal years to each of this company's directors, supervisors, President, and Vice Presidents, and describe the policies, standards, and packages for payment of remuneration, the procedures for determining remuneration, and its linkage to business performance and future risk exposure：

NT$ thousands

	business performance and future risk ex	posure：		NT$ thousands
Year of occurrence	Item	The Company	Consolidated report	Comparative analysis and explanation
2019	Remuneration - Director Supervisor President and Vice president Total	13,361 840 9,516	13,361 840 9,516	The reason why the remuneration of directors, supervisors, President and Vice presidents in 2020 accounted for 10.57% of the net profit after tax, which was higher than that of 6.6% in 2019. The main reason was that The profit in 2020 decreases by 55.68% compared to that in 2019, but most remuneration came from the fixed monthly salary.
		23,717	23,717
	Proportion of total remuneration to net profit after tax	6.6	6.6
2020	Remuneration - Director Supervisor President and Vice president Total	9,774 470 6,645	9,774 470 6,645
		16,890	16,890
	Proportion of total remuneration to net profit after tax	10.57	10.57
	Differences	Increase 3.97%	Increase 3.97%

Policies, standards and combinations for payment of emoluments, procedures for setting emoluments, and correlations with business performance and future risks： The remuneration of the directors and supervisors of the Company shall be determined by the board of directors in accordance with the provisions of Article 26 of the Articles of Incorporation and in accordance with the general standards of the industry. The directors of the Company are paid for the execution of the company's business. The amount depends on the value of the company's participation in the operation and the value of the contribution. As for the independent directors, the directors' meeting will set a fixed remuneration, and all directors and supervisors will not participate in the company's profit distribution. The standard of manager's remuneration payment depends on the performance of the individual's performance and the contribution to the overall operation of the company, taking into account the market rate. The procedures for paying salary, besides considering the overall operational performance, future industry business risks and development trends, the individual participation and the contribution of the individual

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performance and contribution to company performance, will be given reasonable compensation. Relevant performance appraisal and reasonableness of remuneration are reviewed by the Remuneration Committee and the Board of Directors, and the remuneration system is reviewed at times, depending on the actual operating conditions and relevant laws and regulations, in order to balance the company's sustainable management and risk control.

3-4.The state of the company's implementation of corporate governance： 3-4-1.The operation of Board of Directors：

(1)There are five board of directors’ meeting(A) held in 2020. The attendance of the directors and supervisors is as follows：

Title	Name	Actual attendance B	By proxy Actual attendance	Actual Rate of Attendance B/A	Note
Chairman	Chun-I Wu (Representative of Din Wan)	5	0	100%	Re-elected
Vice chairman	Watanabe Masami (Representative of Koito Manufacturing Co. Ltd.)	5	0	100%	Re-elected
Director	, Yu-Hsien Wu	2	1	40%	Re-elected
Director	Ching-Liang Yu (Representative of Yuan Hong)	2	0	100%	Dismissed on June 12, 2020 after re-election and should attend 2 times.
Director	Yamamoto Hidetsugu (Representative of Koito Manufacturing Co., Ltd.)	2	0	100%	Dismissed on June 12, 2020 after re-election and should attend 2 times.
Director	Konagaya Hideharu (Representative of Koito Manufacturing Co., Ltd.)	1	1	33%	Newly assigned on June 12, 2020 after re-election and should attend 3 times.
Director	Yamamoto Kakuya (Representative of Koito Manufacturing Co., Ltd.)	1	1	20%	Re-elected
Director	Cheng-Yuan Wu (Representative of Yuan Hong)	2	0	100%	Dismissed on June 12, 2020 after re-election and should attend 2 times.
Director	Cheng-Yuan Wu	3	0	100%	Newly assigned on June 12, 2020 after re-election and should attend 3 times.
Independen t director	Wan-I Wu	5	0	100%	Re-elected
Independen t director	Hsiu-Fon Chen	3	2	60%	Re-elected
Independen t director	Ze-Xiang Ting	3	0	100%	Newly assigned on June 12, 2020 after re-election and should attend 3 times.
Supervisor	Bor-Wen Kerng (Representative of Guo Qi Min)	1	0	50%	Dismissed on June 12, 2020 after re-election and should attend 2 times.
Supervisor	Konagaya Hideharu	0	0	0%	Dismissed on June 12, 2020 after re-election and should attend 2 times.
Supervisor	Chien Lin (Representative of Yih Heng)	0	0	0%	Dismissed on June 12, 2020 after re-election and should attend 2 times.

The attendance of the independent directors attending the board of directors’meeting in 2020：	The attendance of the independent directors attending the board of directors’meeting in 2020：	The attendance of the independent directors attending the board of directors’meeting in 2020：	The attendance of the independent directors attending the board of directors’meeting in 2020：
Date of Board of Directors’ meeting	Wan-I Wu	Hsiu-Fon Chen	Ze-XiangTing
2020.03.06	Attended inperson	By proxy	Not applicable
2020.05.12	Attended inperson	Attended inperson	Not applicable
2020.06.22	Attended inperson	Attended inperson	Attended inperson
2020.08.06	Attended inperson	Attended inperson	Attended inperson
2020.11.12	Attended inperson	By proxy	Attended inperson

• (2)Other noteworthy matters：

①If the board of directors operates under any of the following circumstances, it

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shall state the date, period, content of the proposal, the opinions of all independent directors and the company's handling of the opinions of independent directors： ❶Matters listed in Article 14.3 of the Securities and Exchange Act：

Board of Directors Date and session	Article 14.3 of the Securities and Exchange Act Matters as listed	Independent director opinion	The Company's response to the opinions of independent directors
March 6, 2020 (15th session the 14th meeting)	1. Salary and Remuneration Committee proposal recognition	No objection or reserved opinion	Not applicable
	2. Nomination of 3 independent directors	No objection or reserved opinion	Not applicable
	3. Revision of the company's regulations - Company policy - Procedures for acquiring or disposing of assets - Management for loaning funds to others - Management for endorsement guarantee - Internal control system – share affairs - Internal control system – procedures for preparing financial statements - Internal control system – procedures for accounting professional judgment, accounting policy and estimating changes	No objection or reserved opinion	Not applicable
	4. Donation of related party.	No objection or reserved opinion	Not applicable
May 12, 2020 (15th session the 15th meeting)	None	None	Not applicable
June 22, 2020 (16th session the 1st meeting)	1. Salary and Remuneration Committee Appointment	No objection or reserved opinion	Not applicable
	2. Resignation and appointment of Vice General Manager	No objection or reserved opinion	Not applicable
Aug 6, 2020 (16th session the 2nd meeting)	None	None	Not applicable
Nov 12, 2020 (16th session the 3rd meeting)	None	None	Not applicable

❷Other than the preceding matters, written record of the objection or retained opinion of the independent directors：No such situation.

②When the directors evade due to conflict of interests, the directors shall state the name of the directors, the content of the proposal, the reasons for the avoidance of interests and the participation in the voting, as shown in the following table. If the motion concerns the interest of any directors present during the meeting of the board, the master of ceremony will once again remind the involved parties to evade the meeting (the directors, independent directors, managers and other attendees and those present) before the motion is read out.

Board of Directors Date and session	Content of Motion	Name of directors	Reason for avoidance	Participation in voting
March 6, 2020 (15th session the 14thmeeting)	Discussion for the directors and managers the year-end bonuses of 2019 and the remuneration for 2020	Chun-I Wu, Ching-Liang Yu, Cheng-Yuan Wu, Yu-Hsien Wu	The content of the motion involves the annual salary of 3 persons, and the director Yu-Hsien Wu and the chairman Chun-I Wu are second-degree relatives.	All four persons evaded during discussion and voting, and did not act as other agents to exercise their voting rights. The case was approved by the chairman in consultation with all other attending directors except for those directors evaded in accordance with the

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				regulations.
	Donation to related party of Wu Jinmao Memorial Culture and Education Foundation	Chun-I Wu, Yu-Hsien Wu	The chairman of the related party is the same person as Chun-I Wu, and the director Yu-Hsien Wu and the chairman Chun-I Wu are second-degree relatives.	Both persons have evaded during discussion and voting, and have not acted as an agent to exercise voting rights. The case was approved by the chairman of the company, except for the other directors who evaded during the discussion and voting.
	Nomination of 3 independent directors	Wan-I Wu, Hsiu-Fon Chen	Two independent directors (Wan-I Wu and Hsiu-Fon Chen ) are the same people as the nominees.	Wan-I Wu (and representing Hsiu-Fon Chen) have evaded during discussion and voting. The case was approved by the chairman of the company, except for the other directors who evaded during the discussion and voting.
May 12, 2020 (15th session the 15thmeeting)	None	None	None	Not applicable
June 22, 2020 (16th session the 1st meeting)	Salary and Remuneration Committee Appointment	Wan-I Wu, Hsiu-Fon Chen	Two independent directors (Wan-I Wu and Hsiu-Fon Chen) are the same people as the appointees.	Both persons have evaded during discussion and voting, and have not acted as an agent to exercise voting rights. The case was approved by the chairman of the company, except for the other directors who evaded during the discussion and voting.
	Resignation and appointment of Vice General Manager	Cheng-Yuan Wu	Cheng-Yuan Wu is the same person as the appointee.	Cheng-Yuan Wu has evaded during discussion and voting, and has not acted as an agent to exercise voting rights. The case was approved by the chairman of the company, except for the other directors who evaded during the discussion and voting.
Aug 6, 2020 (16th session the 2ndmeeting)	None	None	None	Not applicable
Nov 12, 2020 (16th session the 3rdmeeting)	None	None	None	Not applicable

③Public listing and OTC companies should disclose information on the evaluation on the board of directors, such as the evaluation cycle, period, scope, methods, and contents. The executed situations should be listed in the attached table 2-2：

The Company passed the performance evaluation method for the board of directors in the board of directors’ meeting on November 12, 2020. In the first quarter of 2021, the Company handled the self-evaluation or peer evaluation for board members and committee. The results were reported on the board of directors’ meeting on March 24, 2021.

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Item	Description	Note
Evaluation cycle	Once every year
Evaluation period	From re-election on June 12, 2020 to December 31, 2020	Less than one year due to the re-election of directors
Evaluation scope	Evaluation for the overall board of directors and individual board member
Evaluation method	Including self-evaluation or peer evaluation for board members and committee
Evaluation content	Overall board of directors: 1.Participation in the company’s operations 2.Quality of the board’s decision-making 3.Compostion and structure of the board 4.Election of the board directors and continuing education 5.Internal control Individual board member: 1.Understanding of company’s goals and tasks 2.Awareness of directors’ duties 3.Participation in the company’s operations 4.Internal relationship management and communication 5.Expertise of the board directors and continuing education 6.Internal control

  - ④Evaluation of the implementation of the objectives in strengthening the functions of the board of directors in the current year (such as the establishment of an auditing committee, improving information transparency, etc.)： ❶Strengthening the functions of the board of Directors

        - ⒶThe company provides real time information on various courses (such as corporate governance studies) organized by the China Corporate Governance Association or relevant organizations to the board of directors for further study, so as to enhance their professional skills for corporate governance.

        - ⒷThe Company established the Code of Practice for Corporate Governance and the Code of Practice for Corporate Social Responsibility in March 2017.

        - ⒸIn order to strengthen the independence operation of the Board of Directors, the Company has established three independent directors and consisting the auditing committee in June 2020, namely Mr. Wan-I Wu, Mrs. Hsiu-Fon Chen and Mr. Ze-Xiang Ting. The three independent directors all have relevant professional knowledge of accounting and financial analysis and can give advice to the Board regarding business, internal control and finance.

        - ⒹThe Company established organization regulations for the auditing committee in June 2020.

        - ⒺThe Company established performance evaluation method for the board of directors in November 2020.

     - ❷To improve information transparency：

        - ⒶThe Company entrusts Deloitte Touche Tohmatsu Limited to certify on a regular basis. The information required by the decree can be disclosed in a correct and timely manner, and a designated person is responsible for the collection and disclosure of company information.

        - ⒷThe Company has established a spokesperson and acting spokesperson system to ensure that all major information can be promptly disclosed.

        - ⒸThe Company's website has set up a stakeholder area which links to the public information observatory for shareholders and stakeholders to refer to the financial business of the company.

• 3-4-2A.The operation of the Auditing Committee：

• (1)Information regarding the operation of the Auditing Committee：The Company established the auditing committee on June 12 2020 to replace supervisors. ①Authorities and annual work tasks of the Auditing Committee.

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ⒶAdoption or amendment of an internal control system pursuant to Article 14-1.

ⒷAssessment of the effectiveness of the internal control system.

ⒸAdoption or amendment, pursuant to Article 36-1, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.

ⒹA matter bearing on the personal interest of a director.

ⒺA material asset or derivatives transaction.

ⒻA material monetary loan, endorsement, or provision of guarantee.

ⒼThe offering, issuance, or private placement of any equity-type securities.

ⒽThe hiring or dismissal of an attesting CPA, or the compensation given thereto.

ⒾThe appointment or discharge of a financial, accounting, or internal auditing officer.

• ⒿAnnual financial reports and second quarter financial reports that must be audited and attested by a CPA, which are signed or sealed by the chairperson, managerial officer, and accounting officer.

• ⓀAny other material matter so required by the company or the Competent Authority.

• ②The auditing committee held 2 meetings(A) in 2020 and the attendance is as follows：

Title	Name	Actual attendance B	By proxy Times	Actual Rate of Attendance B/A	Note
Independent director	Wan-I Wu	2	0	100%
Independent director	Hsiu-Fon Chen	1	1	50%
Independent director	Ze-Xiang Ting	2	0	100%

③Other noteworthy matters：

• ❶If the operation of the auditing committee encounters one of the following circumstances, the date, session, content of the proposal, the resolution of the audit committee, and the company's handling of the audit committee’s opinions shall all be stated.

• ⒶMatters listed in Article 14-5 of Securities and Exchange Act. After the establishment of the auditing committee on June 12 2020 to December 31 2020, two meetings of auditing committee were held. The contents of the resolutions are as in below chart. The auditing committee passed without objection to the matters listed in Article 14-5 of the Securities and Exchange Act.

Auditing Committee’s meeting Date and session	Content of proposal	Listed in Article 14-5 of the Securities and Exchange Act.	Auditing Committee The resolution of the proposal	The company's handling of the auditing committee's opinion.	Board of Directors’ meeting Date and session	Board of Directors The resolution of the proposal.
Aug 5, 2020 (1st session the 1st meeting)	1. Discussion on Q2 financial statements	No	Passed without objection after the chairman’s consultation	Report to the board of directors	Aug 6, 2020 (16th session the 2nd meeting)	Not applicable
	2. Discussion on internal auditingreport	No	Passed without objection after the chairman’s consultation	Report to the board of directors	Aug 6, 2020 (16th session the 2ndmeeting)	Not applicable
Nov 12, 2020 (1st session the 2nd meeting)	1. Discussion on Q3 financial statements	No	Passed without objection after the chairman’s consultation	Report to the board of directors	Nov 12, 2020 (16th session the 3rdmeeting)	Not applicable
	2. Discussion on internal auditingreport	No	Passed without objection after the chairman’s consultation	Report to the board of directors	Nov 12, 2020 (16th session the 3rdmeeting)	Not applicable

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• ⒷOther than the above matters, other matters that have not been approved by the auditing committee but have been approved by more than two-thirds of the directors：No such situation.

• ❷Implementation of independent directors' avoidance of interest-related proposals, the name of the independent director, content of proposals, reasons for avoidance, participation of the voting shall be stated：No such situation.

• ❸The communication between independent directors and internal audit supervisors and accountants (including the discussion, methods, and results of the company’s financial and business condition)：

• ⒶSummary of the communication between independent directors and internal audit supervisors (discussion when submitting the internal audit reports, frequency：once a month, 12 times in 2020)

Date of communication	Method	Topics for communication	Advice from independent directors	The company's handling results	Participants
2020.01.06 2020.01.13	Discussion	Report on internal audit results of Dec 2019.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.02.04 2020.02.10	Discussion	Report on internal audit results of Jan 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.02.26 2020.02.28	Discussion	Report on internal audit results of Feb 2020. Self-evaluation on internal audit in 2019.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.04.08 2020.04.16	Discussion	Report on internal audit results of Mar 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.05.05 2020.05.06	Discussion	Report on internal audit results of Apr 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.06.02 2020.06.09	Discussion	Report on internal audit results of May 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen. Internal audit supervisor： Chia-Jhen Chen.
2020.07.01 2020.07.06 2020.07.07	Discussion	Report on internal audit results of June 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting. Internal audit supervisor： Chia-Jhen Chen.
2020.07.28 2020.08.06 2020.08.06	Discussion	Report on internal audit results of July 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting. Internal audit supervisor： Chia-Jhen Chen.
2020.09.02 2020.09.04 2020.09.08	Discussion	Report on internal audit results of Aug 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting. Internal audit supervisor： Chia-Jhen Chen.
2020.10.07 2020.10.12 2020.10.14	Discussion	Report on internal audit results of Sep 2020.	No advice	No comments	Independent directors： Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting. Internal audit supervisor： Chia-Jhen Chen.
2020.11.02	Discussion	Report on internal audit	No advice	No comments	Independent directors：

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2020.11.04 results of Oct 2020. Wan-I Wu, 2020.11.12 Description on internal Hsiu-Fon Chen, audit plan in 2021. Ze-Xiang Ting. Internal audit supervisor： Chia-Jhen Chen.

ⒷSummary of the communication between independent directors and

accountants (discussion on the meeting of board of directors, frequency： once every six months, 2 times in 2020)

Date of communication	Method	Topics for communication	Advice from independent directors	The company's handling results	Participants
2020.03.06	Discussion	1.Review the results of the consolidated and individual financial statements in 2019. 2.Summary of audit discrepancies. 3.Summary of key audit matters. 4.Summary of the review on internal control. 5.Revision on the procedures for acquiring or disposing assets. 6.Revision on the procedures for fund lending to others. 7.Revision on the measures for endorsement guarantee. 8.Revision on the internal control system.	No advice	No comments	Independent director： Wan-I Wu Accountant： Chi-Chen Li Financial officer： Hung-Chi Wang
2020.08.06	Discussion	1.Review the results of the consolidated financial statements for Q2 2020. 2.Summary of audit discrepancies.	No advice	No comments	Independent director： Wan-I Wu, Hsiu-Fon Chen, Ze-Xiang Ting. Accountant： Chi-Chen Li Financial officer： Hung-Chi Wang

• 3-4-2B.The supervisor's participation in the operation of the board: The Company established the auditing committee on June 12 2020 to replace supervisors.

(1)The board of directors held 2 meetings(A) in 2020 and the attendance is as follows

：

	：
Title	Name	Actual attendance B	By proxy Times	Actual Rate of Attendance B/A	Note
Supervisor	Bor-Wen Kerng (Representative of Guo Qi Min)	1	0	50%	Dismissed after re-election on June 12 2020
Supervisor	Konagaya Hideharu	0	0	0%
Supervisor	Chien Lin (Representative of Yi Heng)	0	0	0%

(2)Other noteworthy matters：

• ①The composition and responsibilities of the supervisor:

• ❶The communication between the supervisor and the company's employees and shareholders (for example, communication channels, methods)：If necessary, the supervisor can directly communicate with the employees and shareholders.

• ❷Communication between the supervisors and the internal audit supervisor and accountant (for example, communication related the finances and business of the company)：

  • ⓐThe auditing supervisor submits an audit report to the supervisors upon completion of the audit the following month, and the supervisors have no objection.

  • ⓑThe auditing supervisors attended the regular board of directors’ meeting and reported on the audit business. The supervisors have no objections.

  • ⓒIf necessary, the supervisors may communicate with the Certified Public accountant.

• ②When the supervisors have any opinion during the board of directors’ meeting,

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the minute shall record the date, time of the board meeting, the content of the proposal, the outcome of the resolution of the board of directors and the company's handling of the opinions of the supervisor：

Board of Directors’ meeting Date and session	The proposal of the supervisor	Board of Directors The resolution of the proposal.	The company's handling of the supervisor's opinion.
March 6, 2020 (15th session the 14thmeeting)	The supervisors did not express their opinions regardingall the motions.	Not applicable	Not applicable
May 12, 2020 (15th session the 15thmeeting)	The supervisors did not express their opinions regardingall the motions.	Not applicable	Not applicable

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3-4-3.Taiwan Corporate Governance implementation as required by the Taiwan Financial Supervisory Commission：

Items			Implementation status	Taiwan Corporate Governance implementation as required by the Taiwan Financial Supervisory Commission:
	Yes	No	Description of summary
1.Does Company follow “Taiwan Corporate Governance Implementation” to establish and disclose its corporate governance practices?	V		The company has established a code of practice for corporate governance in March 2017 and disclosed it on the company's website.	There is no significant difference from the Code of Practice for Corporate Governance.
2.Shareholder structure and shareholders’ right. (1)Does the company have Internal Operating procedures for handling shareholders' suggestions, concerns, disputes and litigation matters? If yes, have these procedures been implemented accordingly? (2)Does the company possess a list of the major shareholders and beneficial owners of these major shareholders? (3)Has the company built and execute a risk management system and “firewall” between the Company and its affiliates? (4)Has the company established	V V V V		(1)In order to ensure the interests of shareholders, the company has a spokesperson and acting spokesperson system to handle the shareholders' suggestions, concerns and disputes. The litigation matters are referred to the company's legal counsel. (2)The major shareholders are in a position to inform the Company of the increase or decrease of equity, pledge and decontamination according to the regulations. The Company also regularly updates the information of the ultimate controller of the major shareholders and keeps abreast of its final controller list. (3)The Company has established appropriate internal risk control mechanisms and firewalls, pursuant to the rules for specific companies or groups related business operations and financial transactions, supervision measures for subsidiaries, rules of endorsement and guarantee, loans to others and guidelines for acquisition or disposition of assets. Business relations between affiliated enterprises have been evaluated by an independent third party to prevent violations of unlawful transactions. (4)Besides the internal control system, the Company has	(1)There is no significant difference from the Code of Practice for Corporate Governance. (2)There is no significant difference from the Code of Practice for Corporate Governance. (3)There is no significant difference from the Code of Practice for Corporate Governance. (4)There is no significant

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internal rules prohibiting insider trading on undisclosed information?			established operating procedures for the prevention of insider trading, and has established an ethical code of conduct in March, 2016, which prohibits insiders from making personal gains through the use of company property, information or by virtue of their position.	difference from the Code of Practice for Corporate Governance.
3.Composition and responsibilities of Board of Directors (1)Has the Company established a diversification policy for the composition of its board of Directors and has it been implemented accordingly?	V		(1)Board of directors： ①The structure of the board of directors：Directors who concurrently serve as company managers should not exceed 1/3 of the directors' seats. In order to formulate a diversified policy based on the operation, operational style and development, the standard should include but not limited to the following two major categories： ❶Basic conditions and values of the directors: gender, age, nationality and culture. ❷Professional knowledge and skills：professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and business experience. The board of directors should equip with knowledge, skills and accomplishments required for performing their duties. In order to achieve the ideal goal of governance, the overall board of directors should have below competences： ❶operational judgment ❷operational management ❸industry knowledge ❹international market overview ❺accounting and financial analysis ❻financial laws ②The diversification of the board of directors： ❶Basic conditions and values of the directors：gender, age, nationality and culture ⒶThere are 9 directors of the 16th(current) board of directors. One is female director (independent)	(1)There is no significant difference from the Code of Practice for Corporate Governance.

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(2)Has the Company establish other functional committees besides the Remuneration Committee and Auditing Committee?

(3)Has the Company set performance assessment rules and methods for the BOD and does it perform this evaluation

(2)Has the Company establish other functional committees besides the Remuneration Committee and Auditing Committee? (3)Has the Company set performance assessment rules and methods for the BOD and does it perform this evaluation		V V	and the percentage of female is 11%, with an average age at 70. Males take up 89% of the directors, with an average age at 59. The overall average age for all directors is 60. ⒷThere are 3 Japanese directors, which brings multiculture to the company. ❷Professional knowledge and skills： ⒶDirectors： Coming from various professional background including Applied Chemistry, Yamanashi University, Japan; Department of Industrial Chemistry, Shizuoka University, Japan; Faculty of Science and Engineering, Waseda University; Loyola Marymount University, USA; Master of Economics, University of Southern California, USA. ⒷIndependent Directors： Coming from various professional background including Department of Finance and Taxation, Chung Hsing University and director of Accountants and Accounting Firms; Qualifications for Master of Laws and Lawyers in Japan and the United States; Managing Director of the Department of Labor Relations, Chinese Culture University, the director of Automobile and Motorcycle Industry. ③Please refer to Note 1 for details of professional background and competencies of the board of directors. (2)The Company has set up a remuneration committee in December, 2011 and established the Auditing Committee in June 2020. The other functional committees will be set up depending on future needs.	(2)The Company has not set up any other functional committee except the remuneration committee. It is under planning and discussion.
			(3)The company formulated the performance evaluation method for board of directors in November 2020. The performance review for board of directors was conducted in Q1 2021 and the evaluation results were reported to

• V (3)The company formulated the performance evaluation (3)There is no significant method for board of directors in November 2020. The difference from the Code of performance review for board of directors was conducted Practice for Corporate in Q1 2021 and the evaluation results were reported to Governance.

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every year? (4)Does regularly evaluate the independence of the Certified Public Accountant?	V		the board meeting in March 2021. In addition, the evaluation results will be applied to individual directors' remuneration and nomination renewal reference. (4)According to the provisions of Article 29, Paragraph 3 of the “Corporate Governance Best Practice Principles for TWSE/TPEx”, in December 2020, the Finance Department of the Company referred to the independence of Article 47 of the “Certified Public Accountant Act” and set up an independent evaluation project for accountants, which includes whether the accountant has direct or significant indirect financial interest relationship with the company base on the “Integrity, Justice, Objectivity and Independence” of the Bulletin 10 of The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, whether the accountant has financing or guarantee behavior with the company or the directors of the company, whether the accountant has close business relationship with the company and potential employment relationship, etc., reviewing the independence of the company's appointed Certified public accountants on different aspects and the evaluation is found in line with the criteria as set by the company. This proves that the Certified Public Accountant is able to serve as the independent accountant for the company, and the results of this assessment together with the accountant's resume and independence statement (not violated The Ethics Code of Bulletin No. 10) is first reported and approved to the Auditing committee then reported to the Board of Directors in March of the 2020.	(4)There is no significant difference from the Code of Practice for Corporate Governance.
4.Does the company have a dedicated unit/staff member in charge of the Company' corporate governance affairs (including but not limited to providing information required for director/supervisor's operations,	V		The chairman's office, general manager's office and finance department of the company are responsible for handling and promotion of corporate governance related business, and the function is managed by the finance manager. The main responsibilities are as follows： (1)Comprehensively handling all works related to Board of	There is no significant difference from the Code of Practice for Corporate Governance.

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convening board/shareholder meetings in compliance with the law, apply for/change company registry, and producing meeting minutes of board/shareholder meetings)?			Directors’ meeting and remuneration Committee’s meeting, including providing the information needed by the directors to perform their business, scheduling of the agenda, sending of meeting notices, production of meeting affairs and meeting minutes to facilitate the process of the meeting. (2)Handling the shareholder’s meeting related issues：the annual registration date of the shareholders' meeting shall be made according to the law and the notice of the meeting, the handbook and the proceedings shall be filed before the deadline, and any changes must be registered after any amendments of the Articles of Incorporation or the re-election of the directors. (3)Assist directors on board and continuing education, provide information necessary for directors to perform business, assist directors to follow laws and other matters stipulated by laws and regulations, articles of association or contracts, etc. (4)Evaluate and purchase the appropriate "Liability Insurance for Directors, Supervisors and Managers". (5)Maintain the investor relationship section of the company's website. (6)The company also stipulates standard operating procedures for “handling the requirements of directors” to follow. (7)Review the annual corporate governance evaluation indicators issued by the Corporate Governance Center.
5.Does the Company have other important information for better understanding the Company’s corporate governance system (including but not limited to interests and rights of employees, care for employees, relation with investors, relation with suppliers, relation with interested parties,	V		In addition to maintaining good communication with investors, employees, consumers, suppliers, and distributors through the Chairman's mailbox, labor conferences, procurement, finance, and other dedicated units, the company has set up stakeholder areas on the company's website. It serves as a conduit for communication with stakeholders (see note) and is appropriately responded to by the spokespersons on important corporate social responsibility issues of concern to stakeholders.	There is no significant difference from the Code of Practice for Corporate Governance.

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continuing education of directors and supervisors, execution of risk management policies and risk measuring standards, execution of customer policies, liability insurance for the Company’s directors and supervisors)?
6.Has the company appointed a professional stock affairs agency for shareholders affairs?	V		The Company authorized China Trust as stock service agency to handle shareholder transactions since 1997.	There is no significant difference from the Code of Practice for Corporate Governance.
7.Information disclosure (1)Has the Company established a corporate website to disclose information regarding its finance, business and corporate governance status? (2)Does the Company use other information disclosure to channels (e.g. Maintaining an English website, designating staff to handle information collection and disclosure, appointing spokespersons, webcasting investors conference etc)? (3)Does the company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second, and third financial reports and the monthly	V V	V	(1)The Company discloses its financial, business and corporate governance information on its website. (2)The company adopts other methods of information disclosure： ①The company has set up an English website. ②The Company has dedicated a person responsible for the collection and disclosure of company information. ③The Company has established the spokesperson system, one spokesperson and an acting spokesperson as required by the regulations. The communication channel of the spokesperson is very smooth, and the shareholders can call or write to express their opinions or inquiries about the company's business. ④Has disclosed the information of the investor conference on the website. (3)The Company publishes and declares relevant financial reports and operating conditions for each month in accordance with the relevant regulations of the competent authority. It is also expected that through the coordinated efforts of various departments and the strong cooperation of accounting firms, the announcement and declaration of the annual financial report within two months after the	(1)There is no significant difference from the Code of Practice for Corporate Governance. (2)There is no significant difference from the Code of Practice for Corporate Governance. (3)There is no significant difference from the Code of Practice for Corporate Governance.

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operating results within the prescribed time limit?			end of the fiscal year will be the main goal of the Company. It is expected to give shareholders and investors transparent and rapid financial information.
8.Does the Company have other important information for better understanding the Company’s corporate governance system (including but not limited to interests and rights of employees, care for employees, relation with investors, relation with suppliers, relation with interested parties, continuing education of directors and supervisors, execution of risk management policies and risk measuring standards, execution of customer policies, liability insurance for the Company’s directors and supervisors)?	V		Other important information for better understanding the company governance： (1)Maintenance the Interests and rights of employees： ①Handle employee health insurance and labor insurance, and provide group insurance for employees (medical insurance and accident insurance) at no cost. ②In 2020, provided the staff with free health checkups and arranged inspection at the factory by the Tainan Municipal Hospital. ③Provide relevant medical counseling to employees by arranging doctors to station in the factory on a monthly basis. ④Establish a staff welfare committee to handle various employee benefits (such as emergency assistance, wedding and funeral celebrations, and bonuses for three festivals). ⑤Funding for the activities of the Colleague Badminton and Basketball Club in 2020. ⑥Provide the colleagues free flu vaccine injection. ⑦Sign up special domestic stores and to provide complete and high-quality consumer information to the colleagues. ⑧A monthly pension is provided in accordance with the law. ⑨Enhance the professional knowledge of employees and provide on-the-job training for employees. ⑩To avoid the hardships of travelling, free dormitory are provided for employees whom stay far away. ⑪To guarantee the basic human rights of female employees, measures for sexual harassment prevention, appeal and punishment were set up in 2004. ⑫To create a friendly workplace environment, a special room is allocated for breast feeding (or collection milk)	There is no significant difference from the Code of Practice for Corporate Governance.

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for female employees. ⑬To uphold the health of non-smoking colleagues, smoking is completely banned in the factory, and only designated places are allowed for smoking. ⑭A labor-management meeting is held every two months in 2020 to coordinate labor-management relations and to promote labor-management cooperation. (2)Investor Relations：the stakeholders’ area was set up on the website to specifically deal with shareholder proposals. (3)Supplier Relationship: good relations with suppliers are maintained at all times, no disputes and no litigations. It also has a friendship club for organizing fellowships, dinners and golf every year. (4)Relations with stakeholders: stakeholders shall communicate with the Company and put forward proposals to protect their due legal rights and interests. (5)Status of the annual training for directors and supervisors in 2020：please see note 2 for details. (6)Execution of risk management policy and risk measuring standards：various internal regulations are established legally for various risk management and evaluation. (7)Execution of customer policies：stable and good relations with customers are maintained with the view of creating profits. (8)Liability insurance for the Company’s directors and supervisors：liability insurance for directors and supervisors will be covered by end of June, 2020. (9)Information Security Risk Management： The Company takes necessary measures to prevent the leakage or destruction of confidential files, ensures the level of security requirements for various information operations, ensures continuous operation and reduces operational losses to the lowest. All actions comply with relevant laws and regulations,

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• consider the Company's objectives, maintain the security of confidential information, protect important information of the Company,The company's information security policies as follows： ①Should meet the requirements of laws and contracts. ②Maintain the integrity and availability of information. ③Restrict access to confidential information. ④Ensure that authorized users can access files and resources.

• ⑤Prevent unauthorized use. ⑥Prevent accidents from endangering hardware, software and other resources.

• ⑦Prevent incidents of deliberate destruction of hardware, software and other resources.

• ⑧Prevent inappropriate use of network resources. Security risk analysis and specific management plan： (please refer to Note 4 for details)

• Please specify the measures adopted by the Company to improve the items listed in the corporate governance review result from Taiwan Stock Exchange's Corporate Governance Center and the improvement plans for items yet to be improved： ▲Improved situation in 2019 TWSE Evaluation results： Indicator 1.1：Did the articles of incorporation of the company adopt the candidate nomination system for election of all directors/supervisors? (If the company nominated an independent director who has already served for three consecutive terms, the reasons for continuing to nominate the candidate shall be fully and accurately disclosed on the Market Observation Post System (MOPS))? The improvement：The company amended the articles of incorporation in the 2020 shareholders’ meeting to regulate the use of candidate nomination system for election of all directors. Indicator 1.8：Did the company provide its annual report 14 days prior to the day of the AGM? The improvement：The company uploaded the annual report 16 days prior to the shareholders' meeting in 2020. Indicator 2.4：Is it true that there were no more than two directors having a relationship of spouse or of kinship within the second degree? The improvement：The company re-elected the directors in the shareholder’s meeting in 2020 and currently only two directors having a relationship of spouse or of kinship within the second degree. Indicator 2.10：Did the company have an Audit Committee in compliance with regulations? The improvement：The Company set up the Auditing Committee with three independent directors to replace supervisors after the re-election in the shareholder’s meeting in 2020. Indicator 2.22：Have the rules adopted by the company for assessing the performance of the board of directors been passed by the board, and has it furthermore carried out self-assessment at least once a year, and disclosed the assessment results on its website or in its annual report?

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The improvement：The board of directors passed performance evaluation method in November 2020 and implemented the evaluation in Q1 2021. The results of evaluation were reported to the meeting of board of directors in March 2021 and disclosed in the annual report.

Indicator 3.17：Did the company website disclose information related to the company's finances, business and corporate governance? The improvement：The company website disclosed information related to the company's finances, business and corporate governance.

Indicator 4.14：Did the company disclose on its website or in its annual report the identities, issues of concern to, channels of communication with, and means for responding to, stakeholders that it has identified?

The Improvement：The company disclosed on its website or in its annual report the identities, issues of concern to, channels of communication with, and means for responding to, stakeholders that it has identified. ▲Suggestions and measures for priority improvement

Indicator 1.9：Did the company simultaneously provide the Chinese and English versions of the meeting notice 30 days prior to the day of the AGM?

Proposed improvement：The company will simultaneously provide the Chinese and English versions of the meeting notice 30 days prior to the day of the AGM in 2021. Indicator 2.19：In the year being evaluated, did the average rate of actual attendance of all directors at board meetings reach 80% or more? Proposed improvement：The company will encourage directors who are not able to attend the board meetings to join via videoconference in 2021. Indicator 2.20：Were at least two independent directors personally in attendance at each board meeting of the company?

Proposed improvement：The company will invite at least two independent directors personally in attendance at each board meeting. Indicator 2.25：Did all of the company's independent directors complete the number of hours of continuing education required by the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies? Proposed improvement：The company will provide courses for the company's independent directors complete the number of hours of continuing education required by the Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.

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Note 1：The implementation of the company's board of directors’ diversified policy is as follows

Core items for diversity	Core items for diversity	Nationality	gender	Age	Business Judgment	Management	Industry Knowledge	International Market vision	Financial analysis	Financial Law
Chairman	Chun-I Wu	ROC	Male	78	V	V	V	V
Vice Chairman	Watanabe Masami	Japan	Male	67	V	V	V	V
Director	Yu-Hsien Wu	ROC	Male	48		V		V	V	V
Director	Yamamoto Kakuya	Japan	Male	54	V	V	V	V	V	V
Director	Konagaya Hideharu	Japan	Male	58	V	V	V	V	V	V
Director	Cheng-Yuan Wu	ROC	Male	39		V		V	V	V
Independent Director	Wan-I Wu	ROC	Male	68	V	V	V	V
Independent Director	Hsiu-Fon Chen	ROC	Female	70				V		V
Independent Director	Ze-XiangTing	ROC	Male	62	V	V	V	V	V	V

Note 2：Status of education and training for directors and supervisors:

Name of director/supervisor	Date	Organizer	Course	Hours
Chairman : Chun-I Wu	2020/01/16	Taiwan Corporate Governance Association	Global Trend Analysis - Risks and Opportunities	3
	2020/11/06	Taiwan Corporate Governance Association	Responsibilities of Directors and Supervisors under Corporate Governance and Cases and Corporate Social Responsibilities	3
Director : Yu-Hsien Wu	2020/01/16	Taiwan Corporate Governance Association	Global Trend Analysis - Risks and Opportunities	3
	2020/11/06	Taiwan Corporate Governance Association	Responsibilities of Directors and Supervisors under Corporate Governance and Cases and Corporate Social Responsibilities	3
Independent director : Wan-Yi Wu	2020/09/24	Taiwan Stock Exchange Corporation (TWSE)	2020 Annual Seminar on Prevention of Insider Trading and Insider Equity Trading Publicity	3
Independent director :Hsiu-Fon Chen	2020/10/14	Taiwan Stock Exchange Corporation (TWSE)	2020 Annual Seminar on Prevention of Insider Trading and Insider Equity Trading Publicity	3
Independent director :Ze-Xiang Ting	2020/09/25	Taiwan Stock Exchange Corporation (TWSE)	2020 Annual Seminar on Prevention of Insider Trading and Insider Equity Trading Publicity	3
	2020/10.22	CPA Associations R.O.C. (Taiwan)	2020 Tax Symposium	3
	2020/11/24	CPA Associations R.O.C. (Taiwan)	Case Study on Administrative Remedy	3

Note 3：Stakeholder communication

Note 3：Stak	eholder communication
Identification	Important issues	Communication channels, response methods and communication frequency	Unit responsible for feedback
Shareholders/investors	Corporate Governance Investment plan Shareholder participation Operational performance	1. Announce revenue monthly and financial status quarterly. 2. Regularly conduct legal person briefing sessions or online legal briefing sessions 3. Hold annual shareholders’ meeting and publish annual report 4. Irregularly receive visits from domestic and foreign legal persons and analysts	Spokesperson: Hung-Chi Wang Senior Assistant Manager Telephone: 06-2615151 # 220 Email: chi@tayih-ind.com

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		5. Set up stock affairs and investor relations windows for communication
Employees	Living environment Working environment Labor-employer Relations Physical and mental health	1. Human Resource Department (irregularly) 2. The Staff Welfare Committee meeting and the Safety and Health Committee meeting (once every 2 months) 3. Company internal website (irregularly) 4. Company assembly (once a quarter) 5. Set up emergency relief funds, marriage and funeral / hospitalization condolence funds, etc. on the employee welfare committee to release the interaction and caring with employees.	HR manager: Chun-han Tsai Telephone: 06-2615151 # 217 Email: a0600@tayih-ind.com.tw
Customers	Product and service quality Product price competitiveness Fulfillment on the delivery date Customer relationship management Customer privacy protection	1. Telephone (not regular) 2. Email(not regular) 3. Customer visit or factory audit)(not regular)	Sales manager: Chiung-Lun Wang Assistant Manager Telephone: 06-2615151 # 376 Email: nico@tayih-ind.com.tw
Supplier	Management of Suppliers Product quality and safety Operational status	1. Customer visit or factory audit)(not regular) 2. Telephone (not regular) 3. Email(not regular) 4. Yi-you Club Conference and Collaborative Factory Symposium (Once every year)	Procurement manager: Cheng-Yuan Wu Assistant Manager Telephone: 06-2615151 # 245 Email: mikewu@tayih-ind.com.tw

Note 4：The risk analysis on information technology security and specific management procedures：

Assets	Risk Analysis	Risk Analysis	Specific Management Plan
Important hardware and software systems	System / software vulnerabilities	The system is hacked	Perform system bug patching
	No system backup	Reply process and time is too long	Virtualize the system and create backups on different hosts
	No data backup	Data corruption	Regular backupof important data
	No strict account control	Unauthorized use of data stolen	Account passwords need to be increased in complexity and need to be changed regularly
	Natural disaster	System corruption	Build a backupsystem offsite
Personal computer	Operating system vulnerabilities	The system is hacked	Use system update service to cooperate with software system security update
	Computer Virus	Computer virus infection	Centralized anti-virus system, update virus code at any time, scan regularly,monitor virus events and eliminate events
Enterprise Application System	Permissions are not regularly checked	Unauthorized access to information	Regularly review user permissions
	The program is not rigorously tested	Information error	Program modification has rigorous operation flow
Employees	Insufficient securityconcept	Computer virus infection	Irregularpromote information securityconcept

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	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：	3-4-4.The duties, operation and composition of the remuneration committee： (1)Establishment of the committee：The Company has set up a remuneration committee on December 26, 2011, and has adopted the “Regulations for the Organization of Salary Compensation Committee”. (2)Information on the members of the 4th Committee：
Identity (Note 1)	Conditions	Have more than five years of work experience and the following professional qualifications			In line with independence (Note 2)										The number of public companies the member of the remuneration committee is concurrently serving	Note
	Name	An instructor or higher 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 specialist who has passed a national examinatio n and been awarded a certificate in a profession necessary for the business of the company	Have work experience in the area 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
Independent director	Wan-I Wu			v	v	v	v	v	v	v	v	v	v	v	0
Independent director	Hsiu-Fon Chen	v	v	v	v	v	v	v	v	v	v	v	v	v	0
Others	Mei-Ling Zhou			v	v	v	v	v	v	v	v	v	v	v	0

• Note 1：Please fill in as a director, independent director or others.

• Note 2：Any members during the previous two years being elected and during the term of office, meets any of the following situations, please tick the appropriate corresponding boxes:

• (1)Not an employee of the company or any of its affiliates.

• (2)Not a director and supervisor of the Company or affiliated companies (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (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 of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

• (4)Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph (1) above or any of the persons in the preceding subparagraphs (2) or (3).

• (5)Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act.

• (6)Not a director, supervisor, or employee of that other company if a majority of the company's director seats or voting shares and those of any other company are controlled by the same person. (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws);

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• (7)Not a director (or governor), supervisor, or employee of that other company or institution if the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses. (it does not apply in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (8)Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company ((but it does not apply to specific companies hold 20 percent or more and no more than 50 percent of the total number of issued shares of the public company and in case where the person is an independent director of the Company and its parent company, subsidiary company or subsidiary of the same parent company according to this law or local laws)

• (9)Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

• (10)Not been a person of any conditions defined in Article 30 of the Company Act.

(3)Committee duties：

• ①Establish and regularly review the policies, systems, standards and structures for performance evaluation and salary remuneration of directors, supervisors and managers.

• ②Regularly assess and determine the salary remuneration of directors, supervisors and managers.

• (4)Information regarding the operation of the Remuneration Committee：

• ①The remuneration committee comprised of 3 members.

• ②The term of office of the current members: June 22, 2020 to June 11, 2023.

• ③The remuneration committee held 3 meetings (A), the qualifications and the attendance is as follows：

Title	Name	Actual attendance B	By proxy	Actual Rate of Attendance B/A (Note)	Note
Convener	Wan-I Wu	3	0	100%	On June 22 2020, the board of directors appointed the 4th remuneration committee and all three members were re-elected..
Committee member	Hsiu-Fon Chen	3	0	100%
Committee member	Mei-LingZhou	3	0	100%

Other noteworthy matters：

• 1.When the Board of Directors does not adopt or amend the recommendations of the Remuneration Committee, it shall state the date and time of the Board of Directors, the content of the proposal, the results of the resolutions of the Board of Directors and the company's handling of the opinions of the Remuneration Committee (e.g. the salary remuneration approved by the Board of Directors is better than the recommendations of the Remuneration Committee) , should explain the difference and the reasons)：

	Board of Directors Date and session	The Remuneration Committee	Content of Motion and the follow up	The resolution of the proposal.	The salary passed by the board of directors is better than the recommendations made by the remuneration committee.

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2020.03.06 (15th session the 14thmeeting)	2020.01.10 (3rd session the 6thmeeting)	1. Discussion of the year-end bonuses for the directors and managers for 2019 and the annual remuneration for 2020. 2. Discussion of the distribution of compensation for 2020	1. Chun-I Wu, Ching-Liang Yu and Cheng-Yuan Wu have their own interests in this case. In addition, director Yu-Hsien Wu and Chairman Chun-I Wu are the second degree blood relatives. All four of them avoided during the discussion and voting, and did not act as proxy for other directors. The Committee chairman consulted the presenting directors, except for avoiding directors, and passed the case without objection. 2.The Committee chairman consulted the presenting directors and passed the case without objection.	No differences
2020.08.06 (16th session the 2ndmeeting)	2020.08.05 (4th session the 1stmeeting)	Discussion of retired manager's pension payment	The Committee chairman consulted the presenting directors and passed the case without objection.	No differences
2020.11.12 (16th session the 3rdmeeting)	2020.11.11 (4th session the 2ndmeeting)	Discussion of the Performance Evaluation Method of Directors	The Committee chairman consulted the presenting directors and passed the case without objection.	No differences

2.The resolution of the Remuneration Committee, if the member has objections or reservations and has a record or written statement, shall state the date, session, content of the proposal, the opinions of all members and the treatment of the members' opinions：

The remuneration committee Date and session	Content of Motion and the follow up	The resolution of the proposal.	The Company's response to the opinions of remuneration committee
2020.01.10 (3rd session the 6thmeeting)	1.Discussion of the year-end bonuses for the directors and managers for 2019 and the remuneration for 2020. 2. Discussion of the distribution of compensation of employees for 2020.	All directors passed the proposal	Brought to the board of directors and all directors passed the proposal.
2020.08.05 (4th session the 1stmeeting)	Discussion of retired manager's pension payment	When discussing and voting for this case, the general manager and chief financial officer have been invited to leave the meeting first, and then after discussion by all the presenting directors, the Committee chairman consulted the presenting directors again and passed the case without objection.	Brought to the board of directors and all directors passed the proposal.
2020.11.11 (4th session the 2ndmeeting)	Discussion of the Performance Evaluation Method of Directors	When discussing and voting for this case, the general manager and chief financial officer have been invited to leave the meeting first, and then after discussion by all the presenting directors, the Committee chairman consulted the presenting directors again and passed the case without objection.	Brought to the board of directors and all directors passed the proposal.

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Note：

• (1)If the any member of the remuneration committee quit before the end of the year, the date of resignation shall be indicated in the remarks column. The actual attendance rate (%) shall be calculated based on the number of meetings of the remuneration committee during their employment and their actual attendance.

• (2)Before the end of the year, if the remuneration committee is re-elected, the members of the new and old remuneration committees shall be filled in, and indicate the member is new or old, and also indicate if the member is newly elected or re-elected and the re-election date. The actual attendance rate (%) shall be calculated based on the number of meetings of the remuneration committee during their employment and their actual attendance.

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3-4-5.Fulfillment of social responsibility：

3-4-5.Fulfillment of social responsibi	lity：
Items			Implementation status	Differences and Causes of Corporate Social Responsibility Codes with Listed Companies
	Yes	No	Description of summary
1.Does the company conduct risk assessments on environmental, social and corporate governance issues related to the company's operations in accordance with the principle of materiality, and formulate relevant risk management policies or strategies? (Note 1)	V		The company conducts risk assessments on environmental, social and corporate governance issues related to the company's operations in accordance with the principle of materiality, and formulates relevant risk management policies or strategies (Note 2)。	There is no major difference from the code of practice on corporate social responsibility for listed company.
2.Does the company set up a full-time (part-time) unit that promotes corporate social responsibility? Does the board of directors authorizes the senior management to handle the issue and report the handling situation to the board meeting?	V		The Company has been committed to maintain the rights and interests of all interested parties for a long time. At the same time, the Company incorporates the practice of corporate social responsibility into the daily operations and management to fulfill corporate social responsibility. The Company has formulated the "Code of Practice for Corporate Social Responsibility" as the basis to promote the operation of corporate social responsibility. The promotion of corporate social responsibility of the company is mainly responsible by the general manager's office, the chairman's office, and the safety and health room and been overall planned and managed by the financial director. The responsible unites supervise various relevant corporate governance standards, human resource system planning, participating in social welfare, formulating company safety, environmental protection, and energy conservation measures, implementing the progress and promoting performance of relevant government energy saving and carbon conservation plans. The performance and implantation results for corporate social responsibility for 2020 as follows： (1)Strengthen corporate governance and enhance company performance to increase shareholders' rights. (2)Committed to researching and developing green design products, and developing / using low-pollution raw	There is no major difference from the code of practice on corporate social responsibility for listed company.

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			materials to reduce the impact on the environment. (3)Save energy, recycling material, use energy efficiently, and prevent pollution. (4)Enhance the environmental awareness and ability of employees and suppliers actively. (5)Protect employees' rights and benefits, and encourage employees to participate in social welfare activities.
3.Environmental issues： (1)Whether the company establishes an appropriate environmental management system according to its industrial characteristics	V		(1)In terms of promoting environmental safety and health activities, the Company complies with the domestic environmental safety and health regulations. In addition, it is also in line with international standards to implement of environmental safety and health management system. The Company obtained ISO14001 certificates for environmental management system and OHSAS18001 certificates for occupational safety and health management system in December 31, 2002. In August 2020, the company obtained ISO45001 certificates , the newly revision of OHSAS18001. Both certificates (ISO14001 and ISO45001) are valid until December 31, 2023. The Company established an environmental committee in 2018 to integrate and promote the Company's environmental protection, safety and hygiene, energy conservation, water saving and greenhouse gas management related work to enhance sustainable competitiveness. The activity principle for 2020 is to implement pollution management and resource conservation as a means to implement energy management mechanisms and improve the environment. The company also has an environmental and safety as follows： Established on 1964, the Company is engaged in the production of headlights for automobiles and motorcycles. It mainly supplies domestic and foreign major automobile and motorcycle factories. Since its	(1)There is no major difference from the code of practice on corporate social responsibility for listed company.

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inception, it has been adhering to the business philosophy of "contributing to society, seeking the common interests of customers, employees, all cooperators and shareholders, and achieving coexistence and common prosperity for sustainable management" and the business policy of "continuous improvement, enhancement of international competitiveness, and full satisfaction of customers." to produce high-quality products to meet customer needs.

In order to protect the environment, employee health and fulfill social responsibilities, under the guidelines of the environment and safety and health management system, we are committed to：

①Follow the regulations：

• Ensure that the company's business and production activities comply with environmental protection, safety and health laws and other related regulations. Do not use banned substances that are harmful to the environment.

②Continuous improvement：

• ❶Continue energy conservation, waste reduction, pollution prevention and other improvement work, and ensure that no banned substances harmful to the environment are used in the design and manufacturing process.

• ❷Continuously implement the improvement work such as disease and injury prevention, workplace health management to create a safe, bright, healthy and comfortable workplace.

③Full participation：

It engaged in all employees, customers, contractors, suppliers and the outside world to create a win-win relationship to jointly protect the environment and reduce the risk of occupational disasters.

• ④Sustainability：

Implement the energy management mechanism and sustainable use of resources, and gradually build the

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(2)Is the company committed to improving the utilization efficiency of various resources and using recycled materials with low impact on environmental loadings. (3)Does the company assess the potential risks and opportunities for the current and future climate change, and take measures to address climate-related issues? (4)Has the Company counted greenhouse gas emissions, water consumption and total weight of waste in the past two years, and formulated policies for energy conservation and carbon reduction, greenhouse gas reduction, water use reduction or other waste management?	V V	V	concept of green and environmental protection in product planning and manufacturing. (2)The company has established an environmental committee dedicated to improving the efficiency of the use of various resources, reducing energy and resource consumption, and actively reducing raw materials and waste to reduce the impact on the environment. (3)The company has not yet assessed the current and future potential risks and opportunities of the company against climate change, nor has taken measures to deal with climate-related issues, which will gradually improve in the future. (4)The company established a safety and health office in 2014. It is responsible for promotion and implementation of environmental protection, safety and health policy and related business. The Company also sets up a company-wide safety and health committee to help promote and implement various environmental safety and health regulations and activities. ①Set up various environmental management regulations internally for employees to follow： ❶Air pollutant emission management measures ❷Wastewater Discharge Management Measures ❸Waste management Measures ❹Environmental Safety Monitoring and Management Measures ②Since 2007, Co2 reduction and VOC reduction activities have been carried out. In 2021, for each finished products in the manufacturing process, the target is 1% to 3% annual reduction. ③The actual performance in recent years and the target for 2021 are detailed in Note 3.	(2)There is no major difference from the code of practice on corporate social responsibility for listed company. (3)There is no major difference from the code of practice on corporate social responsibility for listed company. (4)There is no major difference from the code of practice on corporate social responsibility for listed company.
4.Social issues (1)Has the company formulated relevant management policies and procedures in accordance with relevant	V		(1) ①Human right policies： The company's human right policy is to abide by the	(1)There is no major difference from the code of practice on corporate social responsibility

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international human rights convention?

• local laws and regulations of Taiwan, and to abide by for listed company. the core labor standards of the basic conventions of the International Labor Organization. It treats and respects current colleagues, contract and temporary staff and interns.

• ②Human rights concerns and practices： ❶Provide a safe and healthy working environment： ⓐThe management goal is zero disaster. ⓑAnalyze the results of health examinations and work-related factors to track and manage specific ethnic groups to prevent potential health risks.

• ⓒGuided by the needs of employees, promote healthy activities, encourage employees to participate independently, to pursuit a healthy life.

• ❷Eliminate unlawful discrimination to ensure equal job opportunities： Abide by Taiwan laws, international norms and company human rights policies, and implement relevant internal regulations

• ❸Child labor is forbidden to be used： The company only accepts applicants who have reached the age of 18. When hiring the employees, double check their ID’s to ensure that there is no omission.

• ❹Prohibition of forced working： Do not force or threaten any unwilling person to perform labor services.

• ❺To help employees maintain physical and mental health and work-life balance： Provide diverse activities such as arts, sports, family participation and parent-child interaction, and also expand the interpersonal interaction of colleagues through community participation.

• ③Actions to reduce the risk of human rights： In order to reduce human rights risks, the company has actively implemented specific improvement plans in recent years to create a high-quality, safe and bright

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working environment.

  - ④Education and training practices on human rights protection：

     - ❶Provide compliance and promotion of relevant regulations during the education and training of newcomers.

• ❷To establishment and promote sexual harassment prevention standards.

• ❸Provide a complete series of occupational safety training.

• V (2)

• (2)Does the company formulate and V (2) implement reasonable employee ①Article 30-1 of the company's articles of association welfare measures (including clearly states that if there is a profit in the current year, compensation, vacation and other no less than 1% shall be set aside as employee benefits), and appropriately reflect the compensation. operating performance or results in ②The company has established work rules and related The company has established work rules and related employee compensation? personnel management regulations, covering the base

  • ②The company has established work rules and related The company has established work rules and related personnel management regulations, covering the base wages, working hours, vacations, retirement benefits, labor and health insurance benefits, occupational disaster compensation, etc. The rules and regulations clearly stipulate that employee compensation includes the company's operating performance bonus, and the calculation of the bonus depends on the company's monthly operating performance.

• (2)There is no major difference from the code of practice on corporate social responsibility for listed company.

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• (3)Does the company provide a safe and V (3)The company has long been committed to providing healthy working environment for employees with safety and health working environment by employees, and regularly implement set up a comfortable and bright workplace. In addition, the safety and health education for Company has received the certificate of OHSAS 18001 (the employees? occupational safety and health management system, later obtained the newly revised version ISO45001) and ISO14001(the environmental management system)： ①For the physical health, regular employee health examinations are held every year. Through various health education and information providing, employees are able to understand their own health status and have better knowledge for self-health management.

  • (3)There is no major difference from the code of practice on corporate social responsibility for listed company.

• ②Arrange physicians to be stationed in the factory every month to provide consulting services related to employee health.

• ③For the mental health, the company occasionally organizes various educational and training courses related to spiritual replenishment to help adjust the work pressure of employees.

• ④For the work safety, the company has proactively discovered and improved potential safety problems in the workplace through activities such as danger prediction and false alarm proposal.

• ⑤In addition, through education and training and case publicity, the Company will develop employees' emergency response capabilities and safety concepts, strengthen employees' cognitive ability, and reduce the occurrence of accidents caused by unsafe behavior.

• (4)Does the company establish an V (4)The company's education and training committee sets up effective career development training a complete training plan for the development of program for employees? colleagues' careers every year, so as to ensure that colleagues can perform tasks in existing positions, and acquire the skills required for promotion and work.

• (4)There is no major difference from the code of practice on corporate social responsibility for listed company.

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(5)With regard to customer health and safety, customer privacy, marketing and labeling products and services, has the company complied with relevant laws and international standards, and formulated relevant consumer protection policies and appeal procedures? (6)Does the company formulate supplier management policies that require suppliers to follow relevant regulations on environmental protection, occupational safety and health, or labor human rights, and their implementation situations?	V V		(5)The Company’s products all meet the international safety regulations such as VSTD in Taiwan, UNECE in Europe, FMVSS in America, JIS in Japan, 3C in Mainland China, AIS in India, and ADR in Australia so as to effectively maintain and guarantee the driving safety of vehicles. In the event of a customer complaint, first at all to provide free product replacement, and then strive to solve the customer's problems within the shortest time. The privacy of customers is subject to be confidential according to relative agreements and personal data protection laws. There is a special stakeholders area set up as stakeholders communication and a complaint channel. (6)In order to enable suppliers to work together to enhance corporate social responsibility, the Company has included relevant corporate social responsibilities such as environmental protection, occupational safety and health or labor human rights compliance in evaluating the qualification of new suppliers, Suppliers who violate the corporate social responsibility policies and have a significant impact on the environment and society may be terminated for the supply contract at any time.	(5)There is no major difference from the code of practice on corporate social responsibility for listed company. (6)There is no major difference from the code of practice on corporate social responsibility for listed company.
5.Does the company make reference to internationally report preparation standards or guidelines to prepare corporate social responsibility reports and other reports that disclose the company's non-financial information? Did the above-mentioned report been ascertained or verified by third-party verification units?		V	The company currently does not fall within the scope of the law stipulating that the corporate social responsibility report should be prepared, so the report has not been prepared. The report will be prepared in the future according to the laws or regulations.	There is no major difference from the code of practice on corporate social responsibility for listed company.
6.If the company has established its corporate social responsibility code of practice according to “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies ” please describe the operational status and differences：The Company has established a Code of Practice for Corporate Social Responsibility and the overall operation has not much difference from the Code.
7.Other important information to facilitate better understanding of the company’s implementation of corporate social responsibility：please refer to Note 4 for details.

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Note 1：The principle of materiality refers to those who have a significant influence on the company's investors and other stakeholders in relation to environmental, social and corporate governance issues. Note 2：according to the principle of materiality, the relevant strategies for corporate social responsibility and risk management policies：

Major issues	Item for risk assessment	Risk management policy or strategy
Environment	Environmental protection	The company is committed to environmental protection and green production. Through the implementation of process safety management and PDCA management cycle, it has effectively reduced the emissions of pollution and the impact on the environment. Implementation plans and policies are set annually. Regular track and review the progress to make sure those relevant goals are achieved.
Social responsibilities	Product safety	All products of the company are in compliance with the government regulations the EU ROHS regulations without any hazardous substances. Through rigorous quality system management, we provide customers with stable product quality. At the same time, in order to ensure customer service quality and improve customer satisfaction, we regularly send staff to visit customers every year, and strengthen cooperation with customers. Relationships have become the cornerstone of the company's sustainable development.
Corporate Governance	Regulatory compliance	Through the internal regulations of relevant governance and the implementation of internal control mechanisms, we ensure that all personnel and operations of the company truly comply with relevant laws and regulations.

Note 3：Energy conservation and carbon reduction performance and target

Items	Performance of 2019	Performance of 2020	Higher (Lower) than the previous period	Plans of 2021	Higher (Lower) than the previous period	Methods of achieving the goal:
Production of business waste	53.87Kg /million revenue	51.73Kg /million revenue	(4.0%)	51.21Kg /million revenue	(1.0%)	1. Strengthen the inspection of waste recycle condition. 2. Study the greatest defects and work on the original source to reduce the defect cause so as to reduce the amount of waste.
Reduction of CO2 emission	2,366Kg /million revenue	2,457Kg /million revenue	3.8%	2,383Kg /million revenue	(3.0%)	1. Improve the performance of various types of electrical equipment, and review the discontinuation or abolition of non-essential equipment to reduce electricity consumption. 2. Continue to inspect electricity usage and pick out unreasonable power for improvement.
Reduction of VOC volatile organic emissions	4.61Kg /million revenue	4.9Kg /million revenue	6.3%	4.85Kg /million revenue	(1.0%)	Strengthen inspection to avoid improper use and dispersion of volatile organic solvents. 1.New development parts without painting design 2.Reduction of poor painting project 3.Improve spraying technology

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Amount of water consumption 12.15liter /million revenue 12.68liter /million revenue 4.4% 12.55liter /million revenue (1.0%) 1. Survey and analysis of water consumption throughout the plant and implementation of reduction measures. 2. Regularly conduct water inspection and improvement of abnormal throughout the whole plant area. Note 4：The corporate social responsibility specific promotion plan and implementation results in 2020：	Amount of water consumption 12.15liter /million revenue 12.68liter /million revenue 4.4% 12.55liter /million revenue (1.0%) 1. Survey and analysis of water consumption throughout the plant and implementation of reduction measures. 2. Regularly conduct water inspection and improvement of abnormal throughout the whole plant area. Note 4：The corporate social responsibility specific promotion plan and implementation results in 2020：	12.15liter /million revenue	12.68liter /million revenue	12.68liter /million revenue	4.4%	12.55liter /million revenue	(1.0%)	1. Survey and analysis of water consumption throughout the plant and implementation of reduction measures. 2. Regularly conduct water inspection and improvement of abnormal throughout the whole plant area.
	Note 4：The corporate social responsibility specific promotion plan and implementation results in 2020：
Item	Project Name			Implementation Results
1	Staff education and training: (1)To organize various trainings inside and outside the factory to improve the quality of human resources, (2)English and Japanese language training to improve the language ability and human resource quality of all colleagues.			1.A total of 77 in-plant education and training courses were held, with 254 hours of training and a total of 4,900 participants in 2020. A total of 78 people participated in 47 training courses outside the factory in 2020. 2.A total of 15 classes on English and Japanese were held with a total of 112 participants in 2020.
2	Employee health check: Organize employee health checks. Provide health related education and information to improve employees’ understanding on their health status, and have knowledge and methods of self-health management.			In October 2020, arrange the Tainan Municipal Hospital to carry out regular health examinations for 320 employees in the factory.
3	Energy conservation and carbon reduction: (1)Reduction of business waste (2)Reduction of CO2 emission (3)Reduction of VOC volatile organic emissions (4)Reduction on water consumption			The actual performance for 2020 as follows： (1)53.87→51.73Kg/million revenue：annual reduction 4.0% (2)2,366→2,457Kg/million revenue：annual increase 3.8% (3)4.61→4.9Kg/million revenue：annual increase 6.3% (4)12.15→12.68liter/million revenue：annual increase 4.4%
4	Sponsor various charity activities:			The actual performance for 2020 as follows： (1)Donation to Ming Hui Social Welfare Charity Foundation. (2)Sponsored the 100thAnniversary of Tainan Cigu Elementary School. (3)Donation to China Body, Mind and Soul Advanced Association. (4)Donation to Wu Ching Mao Cultural Educational Foundation (5)Sponsored Longevity Club Chongyang Festival in Zhongliao Community, Qigu District. (6)Sponsored the Ghost Festival praying ceremony in the an Ping Industry Zone. (7)Sponsored the 18thGolf team of Yizai Association.

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3-4-6.Fulfilling the integrity management situation and adopting measures：

Items	Implementation status	Implementation status	Implementation status	Differences and reasons for the integrity management code of the listed company
	Yes	No	Description of summary
1.Establishment of Corporate Conduct and Ethics Policy and Implementation Measures (1)Does the company set up the integrity policies approved by the board of directors. The integrity policies should be expressed in its regulations and external correspondence, as well as the commitment of the board of directors and high management to actively implement business policies? (2)Whether the company has established risk assessment mechanisms against unethical conduct, regularly analyze and evaluate business activities with a higher risk of dishonesty in the business scope, and establish prevention programs accordingly and review their adequacy and effectiveness on a regular basis. And at least cover the preventive measures for the conduct of the of Article 7 second paragraph of the code of "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"?	V	V	(1)The Company did not set up the integrity policies approved by the board of Directors. However, the contracts signed by the Company in the course of its operation are based on the principle of good faith and mutual benefit to sign a reasonable contract and actively fulfill the contractual commitments. The Company has set up in the rules of procedure of the Board of Directors that the directors may not participate in the discussion and voting and should evade when the content of discussion is harmful to the interests of the company. (2)The company's internal regulations "Prevention of Bribery and Acceptance of Bribes" have clearly prohibited unscrupulous acts such as bribery, acceptance of bribes, illegal political contributions, improper donations or sponsorships, offering or accepting unreasonable gifts, hospitality and other improper benefits. The regulation stipulates the handling procedures when accepting unfair benefits, the disciplinary punishment and appeal system, and regularly assess the risk of dishonesty behavior for business activities with high dishonesty behavior within the business scope, and accordingly revise the plan to prevent dishonesty behavior and related internal control system.	(1)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (2)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies

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(3)Does the company clearly specify the operating procedures, behavior guidelines, disciplinary penalties and grievance system in the plan to prevent dishonesty, implement it, regularly review and revise the plan	V		(3)In order to prevent dishonest behaviors, the Company clearly stated that directors, managers and employees shall not have dishonest behaviors in the "Code of Ethical Conduct" and "Provisions on Preventing Bribery and Acceptance of Bribes", and actively promote them. In addition, the company and its subsidiaries have rigorous accounting systems, internal control and audit systems to prevent dishonesty. A reporting system has been established to encourage internal and external personnel to report illegal and dishonest behavior. The Company regularly evaluates the implementation situation.	(3)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies
2.Corporate Conduct and Ethics Implementation (1)Does the company assess the integrity record of the transaction party and specify the terms of good faith in the contract with the transaction partner? (2)Does the company set up a special full-time unit that promotes the integrity management of the company under the board of directors, and regularly reports its implementation (at least once a year) to the board of directors? (3)Does the company set up a policy to prevent conflicts of interest, provide a proper complaint channel, and its implementation?	V V V		(1)The company will consider the legality of the business party and whether there is a record of dishonesty before having contacts with the business party, and avoid trading with those who have dishonest records. (2)The operation of integrity management related affairs is operated by the general manager's office and the audit office. The responsible units will report to the board of directors for the plans and implementation situation on the integrity management and the prevention of dishonesty behavior, if necessary, (3)The company's "Rules for Board of Directors’ meeting Procedures" stimulates a system for avoiding directors' conflict of interests. Those who are interested in the bills listed by the board of directors and their own legal persons, may express the opinions and answer questions, but may not join the discussion and voting, and shall not act on behalf of other directors to exercise their voting rights.	(1)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (2)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (3)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies

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(4)Whether the company has established an effective accounting system and internal control system for the implementation of integrity management, and the internal audit unit formulates the relevant audit plan based on the assessment results of the risk of dishonesty, and checks the compliance with the plan to prevent dishonesty. Or entrust a CPA to perform the audit?. (5)Does the company regularly hold education training internally and externally of the corporate integrity management?	V V		(4)The Company carries out the inspection of the accounting and the internal control system through the internal auditors, certified public accountant, and self-evaluation in accordance with the law, and reports the results to the Board of Directors. (5)The integrity management has been included in the education and training for the new comer.	(4)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (5)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies
3.Status of implementation of reporting of malpractices (1)Does the company provide incentives and means for employees to report malpractices and provide channels for reporting malpractices? Does the company assign designated personnel to investigate the report malpractice? (2)Has the company established the standard operating procedures for the investigation of the complaint, the follow-up measures to be taken after the investigation is completed, and the relevant confidentiality mechanism? (3)Does the company assure the employees who reported on the malpractices that they will not be	V V V		(1)The Company’s “Employee Code of Conduct” and the “Provisions to prevent bribery” have clearly defined the reward and discipline system, and the personnel unit and the audit office will handle the related matters. (2)The Company’s “Employee code of conduct”, “Provisions to prevent bribery” and “internal control system” have included the relevant procedures and confidentiality mechanisms for investigations of reported malpractices. (3)The company will enforce protective measures to assure that the good faith informer will not be retaliated against.	(1)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (2)There is no significant difference from the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed companies (3)There is no significant difference from the Corporate Social Responsibility Best

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prosecuted for making such reports?					Practice Principles for TWSE/GTSM Listed companies
4.Enhanced information disclosure Has the company disclosed its integrity principles and progress onto its website and MOPS?	V			The company has on its website www.tayih-ind.com.twdisclosed the company’s integrity principles.	There is no significant difference from the Code of Practice for Integrity management.
5.If the company has its own code of conduct in accordance with the Ethical Corporate Management Best Principles for TWSE/GTSM Listed Companies, please describe the difference between its operation and the Code：The Company has not yet established the principles, but will do so when the need arises in future.
6.Other important information to facilitate better understanding of the company’s corporate conduct and ethics compliance practices (e.g. review the company’s corporate conduct and ethics policy)：The company has "employee work rules", which clearly regulates for not accepting gifts, not accepting kickbacks, not accepting commissions, and not leaking confidentiality regarding production or business; and implementing regulations regarding corporate governance based on internal control and auditing systems.

3-4-7.If the company has established a corporate governance code and related regulations, it should disclose its mode of inquiry：

(1)In order to implement corporate governance, the company has established relevant regulations for corporate governance as follows： ①Articles of Incorporation

②Election regulations for Directors ③Shareholders’ meeting Rules and Procedures ④Rules and procedures of the Meeting of Board of Directors ⑤Code of Ethical Behavior ⑥Operating procedures of Acquisition or Disposal of Assets ⑦Operating procedures of Fund lending ⑧Operating procedure of Endorsement and Guarantee ⑨Remuneration Committee Chapter ⑩Corporate Governance Best Practice Principles ⑪Corporate Social Responsibility Principles ⑫Rules Governing the Scope of Powers of the Independent directors ⑬Standard processing procedures for handling directors ’requests ⑭Rules and the Organization of the Auditing Committee

⑮Methods on Evaluation of the Board of Directors

(2)The above-mentioned methods for inquiring about corporate governance：As disclosed in the MOPS and the company's website.

3-4-8.Other key information conductive to the understanding of the implementation of integrity management：None

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• 3-4-9.The status of the implementation of the internal control system shall be disclosed: (1)Statement of Internal Control System：

TA YIH INDUSTRIAL CO., LTD.

Statement of Internal Control System

Date：2021.03.24

The 2020 internal control system of the Company, based on the results of the self-assessment, would like to state the following：

• 1.The Company is aware that the establishment, implementation and maintenance of the internal control system is the responsibility of the board of directors and managers of the Company, the Company has already established the system. The purpose is to provide reasonable results in terms of operational effectiveness and efficiency (including profitability, performance and ensure the safety of assets, etc.), reporting reliability, in time, transparency, to provide reasonable assurance that complies with relevant regulations and relevant laws, and that compliance with relevant laws and regulations is achieved.

• 2.The internal control system has its inherent limitations. Regardless of how perfect the design is, an effective internal control system can only provide reasonable assurance of the achievement of the above three objectives; and, due to changes in the environment and conditions, the effectiveness of the internal control system may change.

• However, the company's internal control system is equipped with a self-monitoring mechanism, and once the fault is identified, the company will take corrective action.

• 3.The Company judges whether the design and implementation of the internal control system is effective based on the judged item of the effectiveness of the internal control system as stipulated in the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as “Regulations”).

• The internal control system judgment project used in the “Regulations” is based on the process of management control, which divides the internal control system into five components: 1. Control environment, 2 risk assessment, 3. control operations, 4. Information and communication, and 5. Monitoring operations. Each component also includes several items. Please refer to the “Regulations” for the above mentioned items.

• 4.The Company has adopted the above mentioned items of the internal control system to evaluate the effectiveness of the design and the implementation of the internal control system.

• 5.Based on the results of the preceding assessment, the Company believes that the internal control system (including supervision and management of subsidiaries) of the Company as on December 31, 2020, including understanding the effectiveness of operations and the achievement of efficiency goals. The design and implementation of the internal control system, such as timely, transparent and in compliance with relevant regulations and relevant laws and regulations, is effective and can reasonably ensure the achievement of the above objectives.

• 6.This statement will become the main content of the company's annual report and public statement, and will be made public. If the contents of the above disclosure are illegal or fake, it will conflict with legal liabilities of Articles 20, 32, 171 and 174 of the Securities Exchange Law.

• 7.This statement was approved by the board of directors of the Company on March 24, 2021. None of the 9 directors present objected, the rest agreed to the content of the statement and hereby declared so.

TA YIH INDUSTRIAL CO., LTD. Chairman：Chun-I Wu President：Shih-Chung Feng

• (2)Where a CPA has been hired to carry out a special audit of the internal control system, furnish the CPA audit report：there is no such situation.

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• 3-4-10.For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, disclose any sanctions imposed in accordance with the law upon the company or its internal personnel, any sanctions imposed by the company upon its internal personnel for violations of internal control system provisions, principal deficiencies, and the state of any efforts to make improvements：None.

• 3-4-11.Significant resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report：

(1)Implementation of important resolutions of the shareholders ‘meeting

Date of meeting	Summary of important proposals	Result of resolution(election)	Review of the implementation of the resolution
2020.06.12	1.Recognized the business report and financial statements of 2019	Passed by voting.	Relevant documents have been submitted to the competent authority for inspection and announcement in accordance with the Company Act and other relevant laws and regulations.
	2.To acknowledge the earnings distribution of 2019. Dividends：Cash dividends of NT$ 4 per share	Passed by voting.	Distribute according to the resolution of the shareholders' meeting. The Board of Directors was convened on June 22, 2020, and the resolution was to set on July 15, 2020 as the benchmark date for the interest-bearing, and July 30, 2020 as the issue date, and all will be distributed by July 30, 2020.
	3.Revision on parts of the Articles of the Incorporation	Passed by voting.	Effective after the resolution of the shareholders’ meeting. The company has been registered with the Ministry of Economic Affairs within 15 days according to laws and regulations. It has been approved by the Ministry of Economic Affairs on August 12, 2020, by the letter of “Economic-Approved-Business” No. 10901153120.
	4.Revision on parts of articles of Shareholders’ meeting Rules and Procedures	Passed by voting.	Effective after the resolution of the shareholders’ meeting.
	5.Revision on parts of articles of the Election regulations for Directors	Passed by voting.	Effective after the resolution of the shareholders’ meeting.
	6.Revision on parts of articles of Operating procedures of Acquisition or Disposal of Assets	Passed by voting.	Effective after the resolution of the shareholders’ meeting. Perform new procedures in accordance with the revisions.
	7.Revision on parts of articles of Operating procedures of Fund lending	Passed by voting.	Effective after the resolution of the shareholders’ meeting. Perform new procedures in accordance with the revisions.
	8.Revision on parts of articles of Operating procedure of Endorsement and Guarantee	Passed by voting.	Effective after the resolution of the shareholders’ meeting. Perform new procedures in accordance with the revisions.
	9.Re-election of 9 directors	Elected list： Directors： 1.Chun-I Wu (Representative of Din Wan) 2.Yu-Hsien Wu 3.Watanabe Masami (Representative of Koito Manufacturing Co., Ltd.) 4.Konagaya Hideharu (Representative of Koito Manufacturing Co., Ltd.) 5.Yamamoto Kakuya (Representative of Koito Manufacturing Co., Ltd.)	Announce the election results in the shareholders’ meeting as important information. Chairman election held on June 22, 2020：Chun-I Wu as the Chairman and Watanabe Masami as the vice president. The company has been registered with the Ministry of Economic Affairs within 15 days according to laws and regulations. It has been approved by the Ministry of Economic Affairs on August 12, 2020, by the letter of “Economic-Approved-Business” No. 10901153120.

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			6.Cheng-Yuan Wu Independent Directors： 1.Wan-I Wu 2.Hsiu-Fon Chen 3.Ze-Xiang Ting
	10.Release the restrictions on Director’s competition in Article 209 of Company Act		Passed by voting.	Effective after the resolution of the shareholders’ meeting.
		(2)Important resolutions of the board:
Date of meeting		Summary of important proposals
2020.03.06		1.Approved the proposal of 2019 distribution of employee compensation Employee compensation is 1%, calculated as NT$4,528,618, and distributed as cash.
		2.Proposal of distribution of surplus of 2019. Bonus of shareholders：Cash dividends of NT$4per share.
		3.Passed the revisions of the Articles of the Incorporation, Shareholders’ meeting Rules and Procedures, Election regulations for Directors, Operating procedures of Acquisition or Disposal of Assets, Operating procedures of Fund lending, Operating procedure of Endorsement and Guarantee.
		4.Re-election of6directors and3independent directors.
		5.Release the restrictions on Director’s competition in Article 209ofCompanyAct.
		6.Nominated Wan-I Wu, Hsiu-Fon Chen and Ze-Xiang Ting as the candidates for independent directors andpassed.
2020.06.22		1.Chairman election：Chun-I Wu as the Chairman and Watanabe Masami as the vice Chairman.
		2.Set July 15, 2020 as the date for calculation of interest of dividends, and July 30, 2020 as the issue date.
		3.Appointment of remuneration committee members： The company appointed Wan-I Wu and Hsiu-Fon Chen, the independent directors, and Mei-Ling Chou as the 4thremuneration committee member.
		4.Established the Rules and organization of the auditingcommittee.
		5.Dismissal and appointment of vice general manager： Ching-Liang Yu vice President retired and appointed Cheng-Yuan Wu (assistant manager) as the new vice President.
2020.11.12		Established Methods on Evaluation of the Board of Directors
2021.03.24		1.Proposal of distribution of compensation for employee for 2020. Employee compensation is 1%, calculated as NT $1,804,472, and distributed as cash.
		2.Proposal of distribution of surplus of 2020. Bonus of shareholders: Cash dividends of NT$ 1.3per share.

• 3-4-12.Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof：No such situation

• 3-4-13.A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company's chairman, general manager, principal accounting officer, principal financial officer, chief internal auditor, corporate governance officer and principal

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2021.04.24

research and development officer.

				2021.04.2
Title	Name	On Board Date	Resignation Date	Reason for Resignation
R&D Director	Ching-Wen Chen	2019.02.01	2020.12.31	Job adjustment

3-5.Information of CPA professional fees：

3-5-1.Information of the CPA：

Year of occurrence	Accounting firm	Name of accountant	Accountant inspection period	Note
2020	Deloitte Touche Tohmatsu Limited	Chi-Chen Li Chao-Chin Yang	January 1, 2020 - December 31, 2020

3-5-2.Information of the range of fees of the public accountant：

Currency : NT$ thousands

	Range Item fee	Audit fee	Non public expenses	Total
1	Under NT$ 2000 thousands
2	NT$2,000 thousands(included)～NT$4,000 thousands(excluded)	3,060	280	3,340
3	NT$ 4,000 thousands(included)～NT$ 6,000 thousands(excluded)
4	NT$ 6,000 thousands(included)～NT$ 8,000 thousands(excluded)
5	NT$ 8,000 thousands(included)～NT$ 10,000 thousands(excluded)
6	Above NT$ 10,000 thousands(included)

• 3-5-3.When non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any affiliated enterprise of such accounting firm is one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees as well as details of non-audit services shall be disclosed： The Amount of audit and non-audit Fee paid in 2020 and Content of Non-Audit Services are listed in the table below.

			Currency：NT$ thousands	Currency：NT$ thousands	Currency：NT$ thousands	Currency：NT$ thousands	Currency：NT$ thousands	Currency：NT$ thousands	Currency：NT$ thousands
Certified public accountant Name of accounting firm	Accountant Name	Public expenses	Non public expenses					Accountant Accountant inspection period	Note
			Design of system	Business registration	Human resources	Others	Subtotal
Deloitte Touche Tohmatsu Limited	Li Chi Chen Yang Chao Chin	3,060 NT$ thousands	0 NT$ thousands	－	－	280 NT$ thousands	280 NT$ thousands	January 2020 ~ December 2020
Note		Content of 1. Transfer 2. Others Total	other services: pricing report			280 NT$ thousands 0 NT$ thousands 280 NT$thousands

• Note：The non- audit fees should be listed separately according to the service items. If the “others” of the non-audit fees reach 25% of the total non-audit fees, the service contents should be listed in the remarks column.

• 3-5-4.When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed：None.

• 3-5-5.When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 15 percent or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed：It is not applicable as the audit fees of 2020 is not lower than the previous year by 15% or more.

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• 3-6.Information on replacement of certified public accountant: If the company has replaced its certified public accountant within the last 2 fiscal years or any subsequent interim period, it shall disclose the following information： The approval of CPA change by the board of directors On March 15, 2019：Due to the internal job responsibilities adjustment of the Deloitte & Touche, the Company’s auditing CPA have been replaced from CPA Hong-Ru Liao and Ji-Zhen Li to CPA Ji-Zhen Li and CPA Chao-Jin Yang.

• 3-6-1.Regarding the former certified public accountant：not applicable.

• 3-6-2.Regarding the successor accountant：not applicable.

• 3-6-3.Reply of the former accountant to the provisions of Article 10, paragraph 6, subparagraph 1 and subparagraph 2.3 of the Guidelines：Not applicable.

• 3-7.Where the company's chairman, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm：No such situation.

• 3-8.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. (1)Changes in shareholder's equity of directors, supervisors, managers and shareholders whose shareholdings exceeding 10%：

Job title	Name	2020	2020	As of the year till 2021.04.24	As of the year till 2021.04.24
		Number of shares held Increase (Decrease) ratio	Number of shares Increase (Decrease) ratio	Number of shares held Increase (Decrease) ratio	Number of shares Increase (Decrease) ratio
Director Chairman	Ding Wan Industrial Co., Ltd. Chun-I Wu (Representative for Din Wan Investment Co., Ltd.)	0 0	0 0	0 0	0 0
Director cum principal shareholder Vice chairman Director Director Director	Koito Manufacturing Co., Ltd. Watanabe Masami (Representative of Koito Manufacturing Co., Ltd.) Yamamoto Kakuya (Representative of Koito Manufacturing Co., Ltd.) Yamamoto Hidetsugu (Representative of Koito Manufacturing Co., Ltd.) (Note 3) Konagaya Hideharu (Representative of Koito Manufacturing Co., Ltd.) (Note 4)	0 0 0 0 0	0 0 0 0 0	0 0 0 0 0	0 0 0 0 0
Director	Yu-Hsien Wu	0	0	0	0
Director Director and vice President Director	Yuan Hong Investment Co., Ltd. (Note 3) Ching-Liang Yu (Representative of Yuan Hong Investment Co., Ltd.) (Note 3, 8) Cheng-Yuan Wu (Representative of Yuan Hong Investment Co., Ltd.) (Note 3)	0 0 0	0 0 0	0 0 0	0 0 0

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Director and vice President	Cheng-Yuan Wu (Note 4,8)	0	0	0	0
Independent	Wan- Wu	0	0	0	0
di Independent	Hsiu-Fon Chen	0	0	0	0
di Independent	Ze-XiangTing	0	0	0	0
di Supervisor Supervisor	Kuo Qi Min Investment Co., Ltd. (Note 3) Bor-Wen Kerng (Kuo Qi Min Investment Co., Ltd.) (Note 3)	0 0	0 0	0 0	0 0
Supervisor Supervisor	Yih Heng Investment Co., Ltd. (Note 3) Chien Lin (Representative of Yih Heng Co., Ltd.) (Note 3)	0 0	0 0	0 0	0 0
Supervisor	Konagaya Hideharu (Note 3)	0	0	0	0
Principal shareholder	Da Wei Investment Enterprise Co., Ltd.	0 0	3,100,000 (1,100,000)	0 (1,726,258)	0 0
President	Shih-ChungFeng	0	0	0	0
Vicepresident	Yamamoto Hidetsugu	0	0	0	0
Senior Assistant Manager	Chin-Wen Chen	0	0	0	0
Senior Assistant Manager	Hung-Chi Wang	0	0	0	0
Senior Assistant Manager	Chao-Wen Chang	0	0	0	0
Assistant	Chun-HungChen	0	0	0	0
Assistant Manager	Chih-Ching Chuang (Note 5)	0	0	0	0
Assistant	Chun-Hao Wang	0	0	0	0
Assistant Manager	Rui-Pin Xu (Note 6)	0	0	0	0
Assistant	Chao-Ching Chuang	0	0	0	0
Assistant	Ping-Hsin Yeh	0	0	0	0
Assistant Manager	Chiung-Lun Wang (Note 7)	0	0	0	0

• Note 1：Shareholders holding more than 10% of the company's shares should be indicated as principal shareholders and listed separately.

• Note 2：The related parties of equity transfer or equity pledge should still be listed in the table below.

• Note 3：Dismissed after re-election on June 12, 2020.

• Note 4：New appointed after re-election on June 12, 2020.

• Note 5：Assistant Manager Chih-Ching Chuang resigned on March 31, 2021.

• Note 6：Assistant Gerenal Manager Rui-Pin Xu retired on Feb 29, 2020.

• Note 7：Asssitant Manager Chiung-Lun Wang newly-appointed on August 26, 2020.

• Note 8：On June 22, 2020, Vice President Ching-Liang Yu retired and dismissed and Cheng-Yuan Wu (assistant manager) promoted as Vice President.

• 3-9.Relationship information, if among the 10 largest shareholders any one is a related party, or is the spouse or a relatives within the second degree of kinship of another：

2021.04.24

							2021.04.24	2021.04.24
Nate (note 1)	Shares owned		Shares held by spouse and minor children currently		Shares held under other nominees		Relationship information, if among the top 10 largest shareholders any one is a related party, or is the spouse or a relative within the second degree of kinship of another: (Note 3)		Note
	Number of shares	Sharehol ding ratio	Number of shares	sharehol ding ratio	Number of shares	shareh olding ratio	Name	Relationship

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Koito Manufacturing Co., Ltd. Representative： Oshima Masahiro	24,774,750	32.50%	－	－	－	－	－	－
Da Wei Investment Enterprise Co., Ltd. Representative： Chun-I Wu	20,797,622	7.28%	－	－	－	－	Chun-I Wu Representative of Yi Heng Investment Co., Ltd：Chun Lang Wu Representative of Kuo Qi Min Investment Co., Ltd：Chun Chi Wu Representative of Yuan Hong Investment Co., Ltd：Chun Lang Wu	Same person Brothers Brothers Brothers
Cathay Life Insurance Representative： Diao-Gui Huang	1,900,000	2.49%	－	－	－	－	－	－
Yi Heng Investment Co., Ltd： Chun-Lang Wu	1,759,258	2.31%	－	－	－	－	Representative of Da Wei Investment Enterprise Co., Ltd： Chun-I Wu Representative of Kuo Qi Min Investment Co., Ltd：Chun-Chi Wu Chun-I Wu Representative of Jin Hao Investment Co., Ltd：Cheng-Yuan Wu Representative of Yuan Hong Investment Co., Ltd.：Chun-Lang Wu	Brothers Brothers Brothers Father and son Same person
Kuo Qi Min Investment Co., Ltd. Representative : Chun-Chi Wu	1,257,601	1.65%	－	－	－	－	Representative of Da Wei Investment Enterprise Co., Ltd： Chun-I Wu Chun-I Wu Representative of Yuan Hong Investment Co., Ltd.：Chun-Lang Wu Representative of Yi Heng Investment Co., Ltd：Chun-Lang Wu	Brothers Brothers Brothers Brothers
Chun-I Wu	1,254,488	1.65%	396,821	0.52%	－	－	Representative of Da Wei Investment Enterprise Co., Ltd： Chun-I Wu Representative of Yi Heng Investment Co., Ltd：Chun-Lang Wu Representative of Kuo Qi Min Investment Co., Ltd：Chun-Chi Wu Representative of Yuan Hong Investment Co., Ltd：Chun-Lang Wu	Same person Brothers Brothers Brothers
Jin Hao Investment Co., Ltd. Representative： Cheng-Yuan Wu	795,000	1.04%	－	－	－	－	Representative of Yi Heng Investment Co., Ltd：Chun-Lang Wu Representative of Yuan Hong Investment Co., Ltd：Chun-LangWu	Father and son Father and son

67

Yuan Hong Investment Co., Ltd. Representative： Chun-Lang Wu	746,000	0.98%	－	－	－	－	Representative of Da Wei Investment Enterprise Co., Ltd： Chun-I Wu Representative of Yi Heng Investment Co., Ltd：Chun-Lang Wu Representative of Kuo Qi Min Investment Co., Ltd：Chun-Chi Wu Chun-I Wu Representative of Jin Hao Investment Co., Ltd：Cheng-Yuan Wu	Brothers Same person Brothers Brothers Father and son
Dong An Investment Co., Ltd.Representative： Mao-Hsiung Huang	543,000	0.71%	－	－	－	－	－	－
Taiwan Life Insurance Co., Ltd. Representative : Si-Guo Huang	411,000	0.54%	－	－	－	－	－	－

• Note 1：All the top ten shareholders should be listed, and those who are institutional shareholders should list the name of the institutional shareholder and the name of the representative separately.

• Note 2：The calculation of the shareholding ratio refers to the calculation of the shareholding ratio in the name of the shareholder, the spouse, the minor child or other nominees.

• Note 3：The shareholders listed in the previous disclosure, including institutional and natural persons, shall disclose their relationship with each other in accordance with the issuer's financial reporting standards.

• 3-10.The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managers, and any companies controlled either directly or indirectly by the company：

Unit : Share; %

					Unit : Share; %	Unit : Share; %
Transfer of Investment (Note)	Investment	of Company	Directors, supervisors, managers and investments directly or indirectly controllingthe business		Comprehensive investment
	Number of shares	% shareholding	Number of shares	% shareholding	Number of shares	% shareholding
Ta Yih International Investment Co., Ltd.	50,000	100﹪	－	－	50,000	100﹪

Note：The company adopts the equity method of investment.

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． 4 Information of Capital Raising

4-1.Company capital and share

4-1-1.Source of shares

(1)Formation of Equity

2021.04.24

Unit：NT thousands

								Unit：	NT thousands
Year	Month	Issue price (NT $)	Approved share capital		Paid-in capital			Note
			Number of shares	Amount	Number of shares	Amount	Source of equity	Those who paid with property other than cash	Date of approval and license number
1976	2	1,000	10,000	10,000	10,000	10,000	Cash increment 10,000	－	－
1979	5	1,000	20,000	20,000	20,000	20,000	Cash increment 10,000	－	－
1980	8	1,000	50,000	50,000	50,000	50,000	Cash increment 30,000	－	－
1981	8	1,000	75,000	75,000	75,000	75,000	Cash increment 2,500 Capital reserve to capital increase 22,500	－	－
1982	7	1,000	105,000	105,000	105,000	105,000	Cash increment 30,000	－	－
1983	12	1,000	135,000	135,000	135,000	135,000	Cash increment 30,000	－	－
1985	11	1,000	165,000	165,000	165,000	165,000	Cash increment 21,000 Cash reserve to capital increase 9,000	－	－
1988	6	1,000	220,000	220,000	220,000	220,000	Cash increment 55,000	－	1988.07.25 MOEAIC Cert. No. 4192
1991	4	1,000	250,000	250,000	250,000	250,000	Surplus convert to capital increase 30,000	－	1991.04.11 MOEAIC Cert. No. 2459
1991	8	1,000	268,000	268,000	268,000	268,000	Surplus convert to capital increase 18,000	－	1991.12.13 MOEAIC Cert. No.9210
1992	7	1,000	289,180	289,180	289,180	289,180	Surplus convert to capital increase 21,180	－	1992.08.17 MOEAIC Cert. No. 5667
1993	11	10	45,000,000	450,000	45,000,000	450,000	Surplus convert to capital increase 61,256 Capital reserve to capital increase 99,564	－	1993.11.29 MOEAIC Cert. No. 7750
1994	9	10	50,000,000	500,000	50,000,000	500,000	Surplus convert to capital increase 30,000 Capital reserve to capital increase 20,000	－	1994.09.27 MOEAIC Cert. No. 5944
1995	9	10	63,000,000	630,000	63,000,000	630,000	Cash increment 49,000 Surplus convert to capital increase 51,000 Capital reserve to capital increase 30,000	－	1995.09.25 MOEAIC Cert. No. 114340
1998	8	10	69,300,000	693,000	69,300,000	693,000	Surplus convert to capital increase 63,000	－	1998.08.26 MOEAIC Cert. No. 123965
1999	8	10	76,230,000	762,300	76,230,000	762,300	Surplus convert to capital increase 69,300	－	1999.08.27 MOEAIC Cert. No. 131554

Note 1：The annual data for the year ending should be filled to the date of publication of the annual report.

• Note 2：The capital increase section should be filled with the effective (approved) date and certificate number.

• Note 3：If shares have been issued at less than par value, such information shall be prominently indicated.

• Note 4：Where equity contributions have been made by conversion of monetary claims against the company, or by the contribution of technical know-how required by the company, indicate this fact, and note the class and dollar amount of the shares paid for in this manner.

Note 5：Prominently indicate any instance of private placement.

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(2)Classes of shares：

2021.04.24

(2)Classes of sh	ares：	ares：		2021.04.24
Classes of shares	Approved share capital			Note
	Circulatingshares	Unissued shares	Total
Common shares	76,230,000	0	76,230,000	Listed stock

Note：Indicate whether the stock is listed at the stock exchange market or listed company at the over the counter market stocks (It should be marked if it is restricted to be listed or traded on the counter).

(3)In the case of the issuance of securities by the self-registration, the relevant information on the approved amount, the scheduled issuance and the issued securities shall be disclosed：The Company does not issue of securities by self-registration, so it does not apply.

4-1-2.Structure of shareholders

2020.04.24

						2020.04.2
Structure of shareholders	Government institution	Financial institution	Other institutions	Foreign institution and foreigner	Individual	Total
Amount
Number ofpeople	0	2	45	27	6,701	6,775
Number of shares held	0	2,311,000	27,403,481	25,515,764	20,999,755	76,230,00
% shareholding	0.00%	3.03%	35.95%	33.47%	27.55%	100.00%

Note：The first listed (over the counter) company and emerging stock company should disclose the proportion of the shares held by the mainland; the mainland capital refers to the people, institutions, organizations and other institutions in the mainland or a company invested by the mainland people in a third region as stipulated in Article 3 of the Measures for Mainland People's Investment in Taiwan.

4-1-3.Dispersion of equity ownership：

(1)Common shares： 2021.4.24

Gradingof shareholding	Number of shareholders	Number of shares held	% shareholding
1 to 999	1,524	114,029	0.15%
1,000 to 5,000	4,439	8,574,121	11.25%
5,001 to 10,000	460	3,618,940	4.75%
10,001 to 15,000	135	1,709,863	2.24%
15,001 to 20,000	81	1,481,000	1.94%
20,001 to 30,000	59	1,489,265	1.95%
30,001 to 50,000	36	1,444,000	1.90%
50,001 to 100,000	21	1,419,000	1.86%
100,001 to 200,000	6	890,681	1.17%
200,001 to 400,000	4	1,250,382	1.64%
400,001 to 600,000	2	954,000	1.25%
600,001 to 800,000	2	1,541,000	2.02%
800,000 to 1,000,000	0	0	0.00%
Above 1,000,0001	6	51,743,719	67.88%
Total	6,775	76,230,000	100.00%

• (2)Preferred shares：The Company does not issue preferred shares.

• 4-1-4.List of principal shareholders

2021.04.24

.List of principal shareholders		2021.04.24
Name of Principal shareholder	Number of shares held	% shareholding
Koito ManufacturingCo., Ltd.	24,774,750	32.50%
Da Wei Investment Enterprise Co.,Ltd.	20,797,622	27.28%

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CathayLife Insurance Co.,Ltd.	1,900,000	2.49%
Yi HengInvestment Co.,Ltd.	1,759,258	2.31%
KuoQi Min Investment Co.,Ltd.	1,257,601	1.65%
Wu Chun I	1,254,488	1.65%
Jin Hao Investment Co.,Ltd.	795,000	1.04%
Yuan HongInvestment Co.,Ltd.	746,000	0.98%
DongAn Investment Co.,Ltd.	543,000	0.71%
Taiwan Life Insurance Co.,Ltd.	411,000	0.54%

Note：The total number of shares held is more than 5% or the proportion of shares accounts for the top ten shareholders.

4-1-5.(1)Price per share, net worth, surplus, dividends and related information in the last two

years

	years	years
	Item Year		2019	2020	The year till March 31,2021 (Note 8)
Per share price (Note 1)	Highest		69.90	65.70	57.00
	Lowest		51.30	46.90	52.30
	Average		62.13	57.29	54.53
Net value per share (Note 2)	Before distribution		24.95	23.09	23.36
	After distribution		20.95	—	—
Earnings per share	Weighted average number of shares		76,230,000	76,230,000	76,230,000
	Earnings per share (note 3)		4.73	2.10	0.28
Dividend per share	Cash dividends		4.0	—	—
	Stock dividends	Dividends from Retained Earnings	—	—
		Dividends from Capital Reserve	—	—	—
	Accumulated unpaid (Note 4)		—	—	—
Investment compensation Analysis	Price to earning ration (note 5)		13.14	27.28	48.69
	Price to dividend ratio (note 6)		15.53	—	—
	Cash dividend yield (note7)		6.44	—	—
	 When carrying out a capital increase out of earnings or capital reserves, it shall disclose information on market price and cash dividends per share adjusted retroactively for the post-increase number of shares.

• Note 1：The highest and lowest market prices for each year are listed, and the average market price for each year is calculated based on the annual transaction value and volume.

• Note 2：Using the number of the outstanding issued shares at year end as the basis and fill in the details based on the resolution passed by the shareholders' meeting regarding distribution in the following year.

• Note 3：If it is necessary to make adjustments retroactively due to situations such as issuance of bonus shares, the earnings per share before and after the adjustments should be listed.

• Note 4：If the conditions of the equity issuance require that dividends not yet distributed for the year be accumulated and paid out in a later year with positive earnings, the dividends that have been accumulated up to the current year and not yet distributed shall be disclosed separately.

• Note 5：Price-earnings ratio＝Year’s average per share closing price / earnings per share.

• Note 6：Price-dividend ratio＝Year’s average per share closing price / cash dividend per share.

• Note 7：Cash dividend yield＝Cash dividend per share / year’s average per share closing price.

• Note 8：The net value per share and earnings per share should be filled in with the information of the account audited (audited) in the most recent quarter of the annual report date; the remaining columns should be filled up to the date of publication of the annual report.

• 4-1-6.Dividend policy and implementation status： Considering the future capital needs and long-term financial planning, if the company

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makes a surplus after the final accounts, besides paying the tax on profit income and making up the losses of the previous year, a provision of 10% is the statutory surplus reserve and a special surplus reserve is provided for the amount of the shareholders' equity deduction in the current year. If there is any balance, the dividend distribution ratio and cash dividend distribution ratio of the preceding paragraph shall be proposed to the board of directors the case of surplus distribution and submitted to the shareholders' general meeting for resolution. More than 50% of the accumulated undistributed surplus in the previous year shall be allocated as shareholder dividends, and the cash dividend portion shall not be lower than the 50% of the total shareholder's dividends.

The dividend policy as above was approved by the board of directors meeting on March 18, 2016, and was passed by the shareholders' meeting on June 13, 2016. The proposed distribution of cash dividends of NT$1.3 per share by the board of directors has yet to be approved at the shareholders' meeting.

• 4-1-7.Effect of the proposed stock dividends to be adopted by the Shareholders' Meeting on the operating performance and earnings per share：Not applicable

• 4-1-8.Employee bonus and remuneration to Directors and Supervisors：

• (1)Percentages and ranges of employee bonus and remuneration to Directors and Supervisors, as specified in the Company's Articles of Association

  • ①Employee compensation：According to Article 31 of the Articles of Association of the Company：

    • If the Company has profit in a given year, it shall distribute no less than 1% as employee bonus and the board of directors shall decide to distribute it as stock or cash. However, if the Company has accumulated losses, such profit shall first go towards offsetting such accumulated losses, and the employee's remuneration will be paid according to the proportion of the preceding paragraph.

  • ②Percentages and ranges of remuneration of Directors and Supervisors： The remuneration of directors, supervisors and the general manager is based on the general standard of the industry.

• (2)The basis for estimating the amount of employee, director, and supervisor compensation, for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period：

  • ①For the current period, the basis for estimating the employee's compensation and the actual distribution amount are calculated, and when there is a difference between the estimated amount and the estimated number：if there is profit every year, no less than one percent shall be distributed as employee compensation and the board of directors shall decide to distribute it as stock or cash. However, if the Company has accumulated losses, such profit shall first go towards offsetting such accumulated losses, and the employee's remuneration will be paid according to the proportion of the preceding paragraph. At the end of the year, if there is no significant change in the distribution amount as resolved by the board of directors, after being reported to the shareholders' meeting, the accounting estimates are treated and adjusted in the resolution of the shareholders' meeting.

  • ②For the current period, the basis for estimating the compensation of the directors and supervisors and the actual distribution amount are calculated, and when there is a difference between the estimated amount and the estimated number：There is no issue of remuneration of directors and supervisors in this current period.

  • ③In the current period, the accounting basis for the calculation of the number of shares distributed to the employees and the actual distribution amount is different from the estimated number of shares：There is no distribution of shares to the employees in the current period.

• (3)The distribution of compensation as passed by the board of directors：

  • ①Employee compensation：

72

  - ❶Distribution of employee compensation：Cash NT$ 1,804,472.

  - ❷If there is a difference between the employee's remuneration and the annual estimated amount, the difference, reason and treatment shall be revealed： In 2021, the Board of Directors proposed to distribute the 2020 employees' compensation of NT$ 1,804,472 and there is no difference between the employee's compensation as set in the 2020 financial statements.

• ②Distribution of remuneration for the directors and supervisors：There is no distribution of remuneration for the directors and supervisors.

• ③The proportion of the employee's remuneration distributed as stock and the total net profit after tax and the total amount of employee compensation in the current period: there is no distribution of stock to the employee.

• (4)The actual distribution of employee bonus and Director/Supervisor compensation for the previous fiscal year (with an indication of the number, value, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee bonuses and Director/Supervisor compensation, additionally the discrepancy, cause, and how it is treated：

• ①The actual distribution of the employees’ compensation of the previous year： Cash of NT$ 4,528,618.

• ②If there is a difference between the distribution of the employee's remuneration and the recognized amount, the difference, reason and treatment shall be revealed：

In 2020, the Board of Directors proposed to distribute the 2019 employees' compensation of NT$ 4,528,618 and there is no difference between the employee's compensation as set in the 2019 financial statements.

     - ③The actual distribution of compensation for the directors and supervisors of the previous year：There is no distribution of compensation for the directors and supervisors.

     - ④If there is a difference between the distribution of the remuneration of the directors and supervisors and the recognized amount, the difference, reason and treatment shall be revealed：There is no such situation.

• 4-1-9.Stock buyback：The Company does not buy back the company shares, therefore it is not applicable.

• 4-2.Issuance of corporate bonds：None

• 4-3.Issuance of Preferred Stocks：None.

• 4-4.Handling of overseas depositary receipts：The Company does not issue overseas depositary receipts, so it is not applicable.

• 4-5.Exercise of Employee Stock Option Plan (ESOP)：None.

• 4-6.Restricting employee rights of getting new shares：None

• 4-7.Mergers, Acquisitions or Issuance of New Shares for Acquisition of Shares of other companies：None.

• 4-8.Implementation of Capital Allocation Plan：None.

• 4-8-1.Project content：The company does not issue or privately raise securities, so it is not applicable.

• 4-8-2.Implementation：

  • (1)The Company does not issue or privately raise securities, so it is not applicable.

  • (2)The company does not acquire or transfer other companies, expand or build new real estate, plant and equipment, so it is not applicable.

  • (3)The company does not use of funds for the transfer investment of other companies, so it does not apply.

  • (4)The company does not use funds for replenishing operating capital or paying off liabilities, so it is not applicable.

73

． 5 An overview of operations

5-1.Business content

5-1-1.Scope of business

• (1)The main contents of the company's business：

①Business operation includes the manufacturing, sales of automobiles, motorcycles and spare parts, as well as import and export trading.

②Manufacturing, processing and sales of parts for both aviation aircraft and ships.

• ③Manufacturing, processing and sales of transportation machinery and its parts.

• ④Manufacturing, sales, processing of machines, molds and related equipment for lighting, and import and export of trading.

• ⑤CD01020 Manufacturing of rail vehicle and its parts.

• ⑥F114080 Wholesales of rail vehicle and its parts.

• ⑦C805050 Manufacturing of industrial plastic products.

• ⑧CE01030 Manufacturing of optical instruments.

• ⑨F113030 Wholesales business of precision instrument.

• (2)The proportion of the company's business： Presently, the company's main business is concentrated in items (1) and (4), which accounts for more than 85% of the business.

• (3)The company's current products (service)：lamps and molds for automobiles, motorcycles, rail, aerospace and ships.

• (4)New products (services) planned by the company：

• ①Advanced headlights of motorcycles.

• ②Mini LED BI PES headlights of motorcycles.

• ③Microstructure optical application lamps.

• ④Hyperboloid lens application lamps.

• ⑤R&D on Adjustable lightness and low-energy LED headlights for MRT vehicles.

• ⑥Product development on Special LED light tube for rail vehicles.

• ⑦Aerospace lighting.

5-1-2.Industry overview：

(1)The present situation and development of the industry： The channels of automotive component sales can be divided as the provision for the use of OEM and ODM markets, and for provision of the after sales maintenance of the AM and OES markets. Due to the stringent quality requirements and control of the original auto parts, coupled with the problem of transportation, and the saturation of the domestic automobile market and it is not easy to expand the domestic demand market, hence, the local auto parts manufacturers are actively expanding their exports. Some companies have managed to become the global spare parts OEM of the international automobiles companies, exporting relatively more competitive products like headlights, metal sheets for the car body, automotive electronics, rims and bumpers. In accordance with the government’s promotion on track construction and in response to Taiwan’s unique urban and rural terrain features, the company hopes to reduce the distance between cities and people through vehicals on railways, rapid transit, light rail transportation, and others. Also hope to reduce the number of cars and motorcycles and the pollution in urban area to conserve more green space. Dayi prepared the technology of R&D and manufacturing on vehicle lamp, trying to expand to the LED lighting for track. The Company intended to uses LED lamps to reduce energy consumption , bring high efficiency and produce friendly products to the environmental protection.

The company continues to comply the government’s promotion and policies on “Indigenous Fighter Plane Program” and the autonomy of the aerospace industry. By obtaining the AS9100D certification for aerospace quality system and ISO9001 quality system, Dayi will actively continue to explore the business opportunities of the aerospace lighting market. Through military-industry cooperation, we analyze the data of international regulations and present overseas products to build solid

74

technological knowledge and competencies. Through industry-government-academic cooperation, we have invested in the development of exclusive lamps for the aviation industry.

• (2)Connection of the upstream, mid-stream and the downstream industry： Automotive components are used by automotive manufacturers and maintenance factories for parts replacement. The materials can be divided into metal and non -metal components, including petrochemical, glass, steel, rubber, motor and electronics industries which cover quite an extensive range of industries. The following picture shows the upstream, middle and downstream industry correlation of the automotive components industry：

Upstream Mid-stream Downstream Plastic Automobile manufacturers Steel industry Spare parts of Petrochemical automobiles Glass Maintenance factories of Electrical automobiles Electronics

• (3)Various development trends of products and competition： Development trends：

• ①To improve the efficiency of the LED light source, and reduce the cost, and the continuous integration of LED into automobile headlights. Due to competition, the near and high beam lights are converted from monocular projection optical systems to multi-eye. In response to the flat streamline shape of the electric vehicle, the miniaturization of (12 X 30mm) matrix LED high / low beam projection has adopted and the physical appearance is more attractive. With the increasing popularity of LED light source and low prices, there is also a trend of using miniature far/near lights in one LED BI PES lamps in low-end locomotives.

• ②Issues of safe driving are being discussed continuously around the world, besides the ADB night-time smart road driving control and safety aid like sequential directional lights, more active functions will be added to the car lights in the future to provide a safer environment for both the drivers and the pedestrians. The use of advanced headlights of motorcycles can also further enhance the lighting effect of motorcycles when turning, and can also achieve a safer driving environment. Corresponding to the future trend of auto driving, the use of ACC automatic car following system, millimeter-wave penetrable materials will be integrated into a large number of vehicle LOGO lamps. The added value of LOGO lamps will be enhanced through changes in the lampshade process.

• ③In response to the market demand for all-LED lights and smart lamps, the research and development of ECU control systems for lamps and car body, combined with the continuous technological accumulation of domestic car manufacturers, in order to compete with international manufacturers. Automotive Software Process Improvement and Capability Determination (ASPICE) has become a necessary condition for makers to asses their suppliers. Therefore, it is necessary to import ASPICE to improve the software design ability in order to obtain the opportunity of receiving orders of software control lamps in the future.

• ④In order to be differentiated, car manufacturers continue to innovate in shape and additional functions for car lights. For example, the logo lights used in backlight modules/microstructure optics are more homogenous than the mainstream diffuser or light guide block design. The logo lights and indoor atmosphere light also provide added value for car lighting fixtures. In addition, the mass production research and development of the hyperboloid lens application lamps

75

can solve the problem of traditional illuminating lamp lenses that are prone to dispersive blue light and long forming time; high cost, and the front fog lamp/corner lamp function can be integrated into a lamp body, and the manufacturing cost can be further reduced.

⑤MRT and Light rail vehicles, with streamlined car body and multi-functions, combined with the idea of road rights, continue to innovate in styling and additional functions, and develop localized business opportunities and marketing power for multi-functional LED lamp.

⑥By implementing localization and breaking through the existing international supply chain, the company develops special lamps for aviation aircraft in the trend of being thin and light, applicability and specificity, and continues to innovate in additional functions.

Competition situation：High-end products compete for technical capabilities, and medium and low-end products compete for cost.

5-1-3.Technology and R&D overview：

Technology and R&D overview：	Technology and R&D overview：	Technology and R&D overview：	Technology and R&D overview：
(1)Research and development expenses incurred for the most recent year and up to the date of publication of the annual report：Unit：NT thousands Year of occurrence 2020 2019 As of the year 2021.03.31 Cost of research and development 178,836 199,992 41,319
Year of occurrence	2020	2019	As of the year 2021.03.31
Cost of research and development	178,836	199,992	41,319

• (2)Technology or products that have been successfully developed in the most recent year and up to the date of publication：

①Minimized (20 X 40mm) matrix LED high/low beam PES motorcycles.

②ADB headlight optical and electronic control system module.

③Indoor atmosphere lighting system.

④Rail vehicles Par56 LED headlights and LED tubes.

⑤LED tube lights and photometric sensors in light rail vehicle compartments.

⑥AC on board LED boat work light / fish collection light.

5-1-4. Long-term and short-term business development plans：

Short-term：

(1)Actively strive for the Koito Group car lights and mold export orders.

(2)Strengthen lamp simulation technology to enhance product competitiveness.

(3)Obtain the international certification of the track quality management system and expand the business opportunities in the international market.

(4)Actively publish new technologies to domestic and foreign automakers to secure new product orders.

Long-term：

(1)Cotinue to improve customers’ satisfaction and to promote European markets.

(2)Develop new technologies, new products, find new customers, and to increase turnover.

• (3)To improve LED optical design and research and development capabilities of electronic component, and shorten the development time of new products.

5-2.The market, production and sales overview

5-2-1.Market analysis

(1)Sales of major commodities (services) (providing) region：The company mainly focuses on OEM customers, and its sales regions mainly include Taiwan, Japan, China and the United States.

(2)Market shares: 80% in Taiwan.

(3)The future supply and demand and the growth of the market：

• ①As the international economic growth tends to be more conservative, the car factory and the lamp factory will be more work closely to enhance the market competitiveness, and phasing out the weak and the strong remains is a new

76

opportunity for Ta Yih.

• ②The popularization of LED headlamps in the future and the characteristics of high-degree-of-freedom design have pushed forward the competitive advantage of Ta Yih, the next round of Advanced Driving Beam (ADB), Ta Yih has made strategic alliances with the car factory-car light source factory-electronic control factory to start the preliminary pilot mass production.

• ③Although the domestic car market has stagnated, but Ta Yih has globalization, and has grown steadily by cooperating with the Japan Koito Manufacturing Co., Ltd.

• (4)Competitive niche：

• ①Quality：

Actively promote various quality improvement activities. From design, development, production to shipment, we have achieved the total comprehensive quality management. The quality has reached the international first-class level presently and achieved high appraisal and consistent recognition from customers.

• ②Cost：

❶Actively promote the low price reduction activities, from the globalization and localization of key materials, improvement of VA/VE to production efficiency and management efficiency, produce good results.

• ❷Strengthen the profitability of the company by the construction of a complete original price management function and establishing a reasonable cost structure for the product.

• ③Delivery：

With accurate delivery and excellent rapid design and development capabilities, and working with the automobiles manufacturers to change with trends and competing with each other leaves Ta Yih the only choice among the automobile manufacturers.

• (5)Advantages and disadvantages of the development of the prospects, and the countermeasures：

• ①Advantages

  • ❶Through the cooperation of design with Koito Group, the design technology and talent development can be strengthened.

  • ❷Expand the integration of technology with the Koito Group, allocation of resources and cooperation, and expand the mainland, North America and other markets.

  • ❸The participation of the each car maker in the development of cars for the Asia and the global, as well as the production and sales strategies of Koito Group, Ta Yih also participated in the development, production and sales of international division of lamps.

  • ❹The light molds that are exported to the United States, Japan, the mainland, South Africa and Southeast Asia won the praises of the customers; from now on, Tai Yih is committed to quality improvement, and to expand the export market.

• ②Disadvantages and countermeasures

  • Disadvantage：Increase in cost. Countermeasure：

  • ❶VA/VE。

  • ❷Globalization and localization of raw materials and spare parts.

  • ❸Expand the scope of the supply chain, and integrate with the collaboration system of Fuzhou Koito Ta Yih, to optimize the adjustment on both sides of the straits and to source for low cost parts to be sold back to Taiwan.

  • ❹Instructions of Koito Group's centralized purchasing system, and to maintain and reduce the purchasing prices of materials.

  • ❺Pre-orders of raw materials.

  • ❻Rationalize the structure and material of the molds, and reuse of idle stock.

77

  - ❼Improvement of team work through the TPS activities and to increase productivity and production efficiency.

  - ❽Continue to reduce defects, reduce energy consumption, reduce the amount of consumables, and reduce production costs.

• 5-2-2.Important application of major products and production processes:

• (1)Important application of major products

Majorproducts	Important application
(1) Lighting for cars	For the car assembling industry.
(2) Lighting for motorcycles	For motorcycle assembling industry

(2)Production of major products

①Manufacturing process of headlight：

	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：	①Manufacturing process of headlight：
Spare parts manufacturing process		PC 、 GL Lamp housing coating		PC forming 、 UV hardening hardening			BMC forming 、 BMC steaming				SPC steaming
Assembling process
						Fast addition				of nut cap
						Assembly of reflection mirror and base
						Coatingof adhesive
						Assembly of light housingand RS
						Pressing
						Assembly of bulb and wire
						Airtight testing
						Assembly of cover and exhaustpipe
						Light test
						Shipment inspection
						Packaging

78

②Manufacturing process of identification lamps (except for small lamps)：

==> picture [454 x 538] intentionally omitted <==

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

Lamp
Spare housing base
forming formin
parts
and
manufacturing 、
coating
process coating
Hot embedding of
screws
Lock reflective lens
and heat shield
Ultras Ultrasonic
onic Rub hot processing
plate
bing
vibrat
ion
Assembling
process Cover of ligh housing
Assembly of wire
Tighten
Airtight test
Drain pipe, seal
decorative strip
Lighting test
Inspection of physical
appearance
Packaging and put
into basket
----- End of picture text -----

79

③Manufacturing process of small lights

==> picture [438 x 358] intentionally omitted <==

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

Lamp base
housing
Spare parts
forming forming
manufacturing 、 、
process coating coating
Locking of Tighten after
Stamping the iron piece
screw bolt framing
Pack heat Locking of ligh
Riveting the iron wire
shield housing
Ultrasonic
Riveting the handle
Assembling processing
process Airtight test Locking of screw bolt
Assembly of wire and
Tighten
light bulb
Inspection of physical
appearance
Packaging and put into
basket
----- End of picture text -----

(3) Supply status of the major raw materials：

	(3) Supply status of the major raw materials：
Items	Supplyarea
PMMA	Local(Chi Mei)
ABS	Local(Chi Mei)
PP	Local(Dynachem,Ginar TechnologyEngineeringPlastics)
AAS	Local(Ginar,Chi Mei)
BMC	Local(Wah HongIndustrial Corp.)
PC	Local(Chi Mei,Toyota Tuosho Corporation),overseas(SABIC from HongKong)
PET+PBT	Foreign(SABIC from HongKong)

80

• (4)Setting forth the names of any suppliers (clients) that have supplied (sold) 10 percent or more of the company's procurements (sales) in the preceding 2 fiscal years, and the monetary amount and the proportion of such procurements (sales) as a percentage of total procurements (sales), and explaining the reason for any change in the amount：

• ①Setting forth the names of any suppliers that have supplied 10 percent or more of the company's procurements in the preceding 2 fiscal years, and the monetary amount and the proportion of such procurements：

Unit：NT thousands

		20	19				2020			Till the fir	st quarter of 202	1
Item	Name	Amount	Net annual net purchase ratio (%)	Relationship with the issuer	Name	Amount	Net annual net purchase ratio (%)	Relationship with the issuer	Name	Amount	Net purchase ratio as of the previous quarter of the current year	Relationship with the issuer
1	Company A	834,107	22	None	Company A	737,370	20	None	Company A	235,705	~~(%)~~ 23	None
2	Company C	364,661	10	Director and major shareholder	Company C	403,969	11	Director and major shareholder	Company C	85,615	8	Director and major shareholder
	Others	2,492,838	68	-	Others	2,552,083	69	-	Others	716,170	69	-
Net purchases		3,691,606	100	-	Net purchases	3,693,422	100	-	Net purchases	1,037,490	100	-

Reasons for the increase or decrease of the purchase amount：The Company maintains a stable cooperative relationship with the suppliers, and the proportion of purchases is adjusted according to the quality, price and conditions of the company's demand.

②A list of any clients accounting for 10 percent or more of the company's total sales) amount in the 2 most recent fiscal years, the amounts sold to each, the percentage of total sales accounted for by each： Unit：NT thousands

		20	19				2020			Till the fir	st quarter of 202	1
Item	Name	Amount	Net annual sales of goods (%)	Relationship with the issuer	Name	Amount	Net annual sales of goods (%)	Relationship with the issuer	Name	Amount	Net sales ratio as of the previous quarter of the currentyear	Relationship with the issuer
1	Company C	1,537,697	29	None	Company C	1,281,609	27	None	Company C	375,879	30	None
2	Company B	1,522,789	28	None	Company B	1,279,655	26	None	Company B	309,511	24	None
3	Company A	911,282	17	Director and major shareholder	Company A	951,920	20	Director and major shareholder	Company A	244,698	19	Director and major shareholder
	Others	1,418,428	26	None	Others	1,283,981	27	None	Others	345,787	27	None
Net sales		5,390,196	100	-	Net sales	4,797,165	100	-	Net sales	1,275,875	100	-

Reasons for changes in sales volume：Due to the results of the company's consideration of market trends, product demand, research and development technology, profits and contracts with customers.

(5) Production value in the most recent two years： Unit：each/NT$ thousands

Year of occurrence		2019			2020
Majorproducts	Production	Yield	Value	Production	Yield	Value
Car lights	7,800,000	5,490,679	2,259,565	7,800,000	5,106,661	2,101,531
Molds	1,036	611	538,810	1,036	758	668,112
Others	－	－	54,981	－	－	14,363
Total	7,801,036	5,491,290	2,853,356	7,801,036	5,107,419	2,784,006

81

(6)Sales volume in the last two years： Unit : each/NT$ thousands

	(6)Sales volume in the last two years：	(6)Sales volume in the last two years：	(6)Sales volume in the last two years：	(6)Sales volume in the last two years：	Unit : each/NT$ thousands	Unit : each/NT$ thousands	Unit : each/NT$ thousands	Unit : each/NT$ thousands
Year	2019				2020
Major products	Domestic sales		Export		Domestic sales		Export
	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value	Sales volume	Sales value
Car lights	2,584,036	1,737,272	13,656,351	2,353,823	2,537,102	1,661,788	11,456,957	1,863,548
Molds	248	522,926	194	190,114	94	293,497	240	440,675
Others	－	349,721	－	236,340	－	321,053	－	216,604
Total	2,584,284	2,609,919	13,656,545	2,780,277	2,537,196	2,276,338	11,457,197	2,520,827

5-3.The number of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, their average years of service, average age, and education levels (including the percentage of employees at each level)： Unit：person/year

Year of occurren	ce	2019	2020	As of the year 2021.03.31
Number of employees	Salesperson	18	20	18
	Management staff	377	372	363
	Factory personnel	441	473	476
	Total	836	865	857
Average age		41	41	41
Average serviceyears		12	12	11
The educational background breakdown	PhD.	0	0	0
	Master degree	102	101	98
	College	404	417	415
	Senior high school	265	281	277
	Below senior high school	65	66	67

5-4.Disbursements for environmental protection

• 5-4-1.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：None.

• 5-4-2.The measures (including corrective measures) and possible disbursements to be made in the future：Not applicable.

5-5.Labor relations

• 5-5-1.Any employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests：

• (1)Implementation of employee benefits：

  • ①All employees participate in labor insurance, national health insurance and group insurance：

    • All employees of the company participate in labor insurance and national health insurance. All employees of the company are free to participate in group insurance. The insurance coverage is personal life insurance (disability payment, death payment, etc.) and accidental injury death payment.

  • ②Regular health inspection for the employees：

    • To ensure the health of the employees, the company not only provides regular free health inspections, but also provides special health checks to certain operators. In October 2020, the Tainan Municipal Hospital was arranged to carry out health inspections for the employees at the factory with 320 employees’ been checked. Two courses related to the health check been held (Physical fitness and Healthy position) with 82 participants.

82

③Free dormitory for employees who stay far away.

• ④Purchase games and fitness equipment and provide the employees to use at no cost.

• ⑤Provide employee meal allowance, set up a restaurant for employees to dine, and have a sales department for colleagues.

• ⑥Distribute meal allowance for the year-end annual dinner.

• ⑦Provide the colleagues free flu vaccine injection on January and December 2020.

⑧Set up a breast feeding room for female worker to breast feed after birth.

⑨To arrange for a doctor to visit the company once a month and to provide medical advice and assistance to colleagues.

⑩Engage a legal consultant to provide colleagues with legal advice and services at any time.

⑪For those on business trips, their travel insurance shall be covered by the company.

⑫Establish a staff welfare committee to handle employee welfare matters：

The Company established the Staff Welfare Committee on July 8, 1980, which is responsible for the welfare of all employees. At present, there are 25 members, except for one of the designated member (executor of business), which is appointed by the company, the rest are elected among the workers. Meeting is held every two months, and an extraordinary meeting will be held when needed, discussing the employee's fringe benefits, and to ensure that the committee is doing a good job.

Weekday activities include：

❶Issuing birthday monetary gifts for employees and vouchers for mother's day.

• ❷Issuing monetary gifts for the Dragon Boat Festival, Mid-Autumn Festival and the Spring Festival.

❸Issue monetary gifts for new weds employees, and subsidies for funerals.

❹Issue employee hospitalization condolences for injuries.

❺Issue maternity grant.

❻Hold free employees' domestic tourism on Aug 2020.

• ❼Sponsor the activitie fee for colleagues’ social activity, such as baseball and basketball club, etc.

❽Sign up special domestic stores and to provide complete and high-quality consumer information to the colleagues.

(2)Implementation of continuous study and training for employee

• ①Continuously cultivate talents, assist colleagues to grow, and improve the quality of human resources.

• ②In order to implement the company's education and training concepts and fully utilize its functions, the company's education and training system is divided as：

• ❶In-plant training: The annual company's education and training program is drawn up by the company's human development department. The company's supervisors or colleagues who receive training outside are appointed as lecturers, and the knowledge of the company's colleagues is passed on. ⓐTraining for new comers.

  • ⓑStrata training: distinguish between managerial level, section class, group level etc.

  • ⓒProfessional training：distinguish between talent development, safety environment, production, quality, original price, development and other types of courses.

• ❷Off-site and overseas training: In addition to the planned education and training in the factory, the staff of each department may send personnel to participate in training courses sponsored by various off-site training institutions.

• ❸On job training：Each department of the company develops departmental

83

training programs every year. The heads of the departments or the peers who have been trained will be appointed as lecturers, and are responsible for the passing on the knowledge.

In 2020, a total of 77 in-plant training courses were conducted, with 254 hours of training and there were 4,900 participants.

In 2020, a total of 78 people participated in 47 training courses outside the factory.

In addition, in order to improve the language proficiency and human quality standards of all colleagues, English and Japanese courses are conducted to equip the staff to meet the needs at work and further explore the international market to achieve sustainable management. In 2020, a total of 15 English and Japenses courses were arranged with total of 112 participants.

• (3)Implementation of retirement system：

In order to ensure a stabilize life for the employees after retirement, the company established the retirement scheme for employees according to law, and established the Labor Retirement Reserve Supervision Committee on August 25, 1987, and set a retirement reserve of 2% per month based on the total salary, which is deposited in a special account at the Bank of Taiwan. This is for protecting the rights and interest of the laborers, and by the end of each year, if the balance of the account is insufficient to pay the amount of the pension calculated in accordance with the above-mentioned retirement conditions for the next year, the difference will be set at the end of March of the following year.

Since July 1st, 2005, the Republic of China has adopted a new government retirement system in parallel with the old. Employees who choose the pension system with the Labor Pensions Regulations are required to pay 6% of their monthly salary to the individual pension account of the Labor Insurance Bureau. Those who wish to pay voluntarily, and the voluntary payment rate is deducted from the employee’s monthly salary to the individual pension account of the Labor Insurance Bureau.

Base on thee applicable provisions of the Labor Pensions, the Regulations of the company are as follows：

• ①Voluntary retire :

Employees meeting any one of the following conditions may opt for voluntary retire (In accordance with the regulations, the person who chooses the labor pension regulations)：

• ❶Those who have worked for more than 15 years and have reached the age of 55.

❷Those who have worked for more than 25 years.

• ❸Ｔhose who have worked for more than 10 years, and have reached the age of 60.

• ②Forced retirement：

The company may not force its employee to retire if the employee does not meet any of the following circumstances.

• ❶Have reached 65 years.

❷Workers who are at a loss of mind or physically disabled to carry the job. The age specified in the first paragraph of the preceding paragraph, for workers capable of handling dangerous or physically fit for special tasks, shall be submitted to the central competent authority for approval and adjustment, but they must not be less than 55 years old.

• ③Criteria for pension grant：

❶The working years before and after the application of Labor Standard Acts, and continuing to apply the Labor Standard Acts pension requirement in accordance with the Labor Pensions Ordinance, the pension given is based on the standards in accordance with Articles 84-2 and 55 of the Labor Standard Acts.

• ❷Those who have the working years of the preceding paragraph and who are

84

forced to retire in accordance with Article 35, paragraph 1 (2) of the Labor Standards Law, loss of mind or physically disabled due to carrying out their duties, in accordance with Article 55, Item 1 of the Labor Standards Law, the provisions will be an addition of 20%.

• ❸For employee who is the subject to the pension provisions of the Labor Pensions Regulations, the company pays a 6% of the monthly salary of the employees’ personal pension accounts.

• ④Payment of pension：

The company shall pay the employee's pension and pay it within 30 days from the employee's retirement date.

(4)Reduce the incidence of occupational disasters among employees： In order to establish a zero-disaster, zero accident, healthy and comfortable working environment, the company passed the OHSAS-18001 Occupational Safety and Health Management System Certification in December of 2002 and obtained revision of ISO45001 in August of 2020, and promised that the company's operation and production activities continue to meet the requirements of the government's occupational safety and health regulations. The company will continue to implement disease and injury prevention, and implementation of workplace health management to ensure employees' physical and mental health The annual safety and health activities for 2019：

①Zero disaster activities

❶Continue inspection of internal safety and health, and improvement.

❷Hold “Sanitation Month event” to enhance the safety awareness of all staff.

❸Strengthening of change management to prevent possible risks and hazards due to changes in personnel, mechanical equipment, raw materials, process technology, operation and maintenance, and operating environment.

②Promotion of physical and mental health

Implementation of the plan on "illness due to abnormal work load, human-induced hazards, prevention of workplace malpractices and maternal protection".

③Prevention of fire and disasters

❶Management of fire prevention of high risk fire and explosion areas.

❷Maintenance and improvement of fire safety facilities.

❸Management of hot work.

• (5)Other important agreements：None

• 5-5-2.Any loss sustained as a result of labor disputes in the most recent fiscal year, and during the current fiscal year up to the date of publication of the annual report, an estimate of losses likely to be incurred in the future, and indicate mitigation measures to be taken：

The relationship between the company's labor and management is still harmonious, because the leaders at all levels of the company take care of their colleagues, and take the initiative to discover problems and solve problems at any time, and all management rules and regulations concerning employee rights and interests are in accordance with the provisions of the Labor Law, so in the recent year and up to the end of the annual report, there is no labor disputes or labor agreement, and the company will continue to work on reducing labor disputes, maintain labor and capital harmony, and create a double win for both. In the case of active promotion and implementation of various employee welfare measures, there should be no loss due to labor disputes.

• 5-6.Important contracts：

Supply/sales contracts, technical cooperation contracts, engineering/construction contracts, long-term loan contracts, and other contracts that would affect shareholders' equity, where said contracts were either still effective as of the date of publication of the annual report, or expired in the most recent fiscal year：

85

Nature of the contract	Litigant	The commencement date of the contract	Major content	The restrictive clauses
Technical cooperation	USA WAVIEN	May 16,2003～ May 31, 2021	Scope of technological offers And related rights and obligations	－
Technical cooperation	Koito Manufacturing Co., Ltd.	April 23, 2019～ April 22, 2022	Scope of technological offers And related rights and obligations	－
Technology transfer	Fuzhou Koito Ta Yih Automotive Lamp	January 1, 2020～ December 31, 2022	Scope of technological offers And related rights and obligations	－
Technology transfer	National Cheng Kung University	January 15, 2014～ January 14, 2021	Scope of technological offers And related rights and obligations	－

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． 6 Financial status

6-1.The recent five-year simplified balance sheet and consolidated income statement － 6-1-1.Information of the condensed balance sheet and consolidated income statement － Adopts the international financial reporting standards consolidated

(1)Condensed balance sheet of the most recent five years Unit：NT$ thousands

Year of occurrence Items Current assets	Year of occurrence Items Current assets	Financial information of the most recent five years (note)	Financial information of the most recent five years (note)	Financial information of the most recent five years (note)	Financial information of the most recent five years (note)	Financial information of the most recent five years (note)	As of the year 2021.03.31 Financial information
		2016	2017	2018	2019	2020
		2,061,395	2,308,382	2,003,960	2,190,901	2,213,313	2,107,516
Investment accounted for usingthe equitymethod		404,770	412,253	406,241	393,213	332,286	327,564
Property, plants and equipment		1,028,495	1,010,568	966,815	976,469	1,026,160	994,737
Intangible assets		－	－	－	－	18,924	17,180
Other non-current assets		145,884	56,480	75,025	76,473	79,093	98,971
Total net assets		3,640,544	3,787,683	3,452,041	3,637,056	3,669,776	3,545,968
Current	Before distribution	1,495,416	1,577,498	1,345,910	1,497,087	1,723,562	1,580,992
liabilities	After distribution	1,891,812	1,973,894	1,635,584	1,802,007	－	－
Non-current liabilities		291,826	275,160	257,526	238,352	185,885	184,623
Total liabilites	Before distribution	1,787,242	1,852,658	1,603,436	1,735,439	1,909,447	1,765,615
	After distribution	2,183,638	2,249,054	1,893,110	2,040,359	－	－
Equity Attributed to Shareholders of the Parent Company		1,853,302					1,780,353
			1,935,025	1,848,605	1,901,617	1,760,329
Share capital		762,300	762,300	762,300	762,300	762,300	762,300
Capital reserve		60,472	60,472	60,605	60,736	60,832	60,924
Reserved	Before distribution	1,046,069	1,134,859	1,054,592	1,119,941	974,660	995,966
earnings	After distribution	649,673	738,463	764,918	815,021	－	－
Other equity		-15,539	-22,606	-28,892	-41,360	-37,463	-38,837
Treasurystock		－	－	－	－	－	－
Non controllinginterest		－	－	－	－	－	－
Total equity	Before distribution	1,853,302	1,935,025	1,848,605	1,901,617	1,760,329	1,780,353
	After distribution	1,456,906	1,538,629	1,558,931	1,596,697	－	－

Note：The financial information of each of the above has been verified by the certified accountant cxcept for the financial information of the first quarter of 2021, which has been reviewed by the accountant.

(2)The condensed comprehensive income statement of the most recent five years

Unit：NT$ thousands

	Unit：N	Unit：N	Unit：N	Unit：N	Unit：N	T$thousands
Year of occurrence Items	Financial information of the most recent fiveyears (note)					As of the year March 31, 2021 ~~Financial~~
	2016	2017	2018	2019	2020
Operating revenue	5,900,257	6,197,390	5,703,811	5,390,196	4,797,165	1,275,875
Operating grossprofit	1,021,242	1,081,191	830,987	967,870	673,534	155,866
Operatingnet income	458,566	504,164	277,019	411,978	186,734	28,838
Non-operating income and expenses	121,455	81,807	93,783	36,373	-8,105	-2,163
Netprofit before tax	580,021	585,971	370,802	448,351	178,629	26,675
Netprofit after tax	497,308	499,364	319,207	360,457	159,750	21,306
Other comprehensive profit and loss (net after tax)	-50,228	-21,245	-9,364	-17,902	3,786	-1,374
Current comprehensive profit and loss	447,080	478,119	309,843	342,555	163,536	19,932
Net income attribute to the shareholder of theparent company	497,308	499,364	319,207	360,457	159,750	21,306
Net profit attributable to non-controlling interests	－	－	－	－	－	－
Comprehensive profit and loss attributed to the shareholders of theparent company	447,080	478,119	309,843	342,555	163,536	19,932
Comprehensive profit and loss attributed to non- controlling interest	－	－	－	－	－	－
Earning per share(NT$)	6.52	6.55	4.19	4.73	2.10	0.28

87

• Note：The financial information of each of the above has been verified by the certified accountant cxcept for the financial information of the first quarter of 2021, which has been reviewed by the accountant.

• 6-1-2.Information of condensed balance sheet and consolidated income statement - Adopt the International Financial Reporting Standards - individual

  • (1)Condensed balance sheet of the most recent five years Unit：NT$ thousands

Year of occurrence	Year of occurrence	Financial information of the most recent fiveyears (note)	Financial information of the most recent fiveyears (note)	Financial information of the most recent fiveyears (note)	Financial information of the most recent fiveyears (note)	Financial information of the most recent fiveyears (note)
Items		2016	2017	2018	2019	2020
Current assets		2,060,237	2,307,356	2,002,940	2,189,941	2,212,453
Investment accounted for using the
		405,928	413,279	407,261	394,173	333,146
equitymethod
Property, plants and equipment		1,028,495	1,010,568	966,815	976,469	1,026,160
Intangible assets		－	－	－	－	18,924
Other non-current assets		145,884	56,480	75,025	76,473	79,093
Total net assets		3,640,544	3,787,683	3,452,041	3,637,056	3,669,776
Current	Before distribution	1,495,416	1,577,498	1,345,910	1,497,087	1,723,562
liabilities	After distribution	1,891,812	1,973,894	1,635,584	1,802,007	－
Non-current liabilities		291,826	275,160	257,526	238,352	185,885
	Before	1,787,242	1,852,658	1,603,436	1,735,439	1,909,447
Tl libilii
ota ates	After distribution	2,183,638	2,249,054	1,893,110	2,040,359	－
Equity Attributed to Shareholders
		1,853,302	1,935,025	1,848,605	1,901,617	1,760,329
of the Parent Company
Capital stocks		762,300	762,300	762,300	762,300	762,300
Capital reserve		60,472	60,472	60,605	60,736	60,832
Reserved	Before distribution	1,046,069	1,134,859	1,054,592	1,119,941	974,660
earnings	After distribution	649,673	738,463	764,918	815,021	－
Other equity		-15,539	-22,606	-28,892	-41,360	-37,463
Treasurystock		－	－	－	－	－
Non-controllinginterest		－	－	－	－	－
	Before distribution	1,853,302	1,935,025	1,848,605	1,901,617	1,760,329
l i
Tota equty	After distribution	1,456,906	1,538,629	1,558,931	1,596,697	－

Note：The financial information of the above years is certified by by certified public accountant.

• (2)The condensed comprehensive income statement of the most recent five years

Unit：NT$ thousands

	Unit：NT$thousands	Unit：NT$thousands	Unit：NT$thousands	Unit：NT$thousands	Unit：NT$thousands
Year of occurrence Items	Financial information of the most recent five years (note)
	2016	2017	2018	2019	2020
Operating revenue	5,900,257	6,197,390	5,703,811	5,390,196	4,797,165
Operating grossprofit	1,021,242	1,081,191	830,987	967,870	673,534
Net income	458,614	504,211	277,060	412,020	186,789
Non-operatingincome and expenses	121,407	81,760	93,742	36,331	-8160
Netprofit before tax	580,021	585,971	370,802	448,351	178,629
Netprofit after tax	497,308	499,364	319,207	360,457	159,750
Other comprehensiveprofit and loss(net after tax)	-50,228	-21,245	-9,364	-17,902	3,786
Current total comprehensive income	447,080	478,119	309,843	342,555	163,536
Earningsper share(NT $)	6.52	6.55	4.19	4.73	2.10

Note：The financial information of the above years is certified by an accountant.

• 6-1-3.The name of the certified public accountant in the past five years and the verification opinions

opinions
Year of	2016	2017	2018	2019	2020
Accountant Name	Hung-Ju Liao	Hung-Ju Liao	Hung-Ju Liao	Chi-Chen Li	Chi-Chen Li
	Chi-Chen Li	Chi-Chen Li	Chi-Chen Li	Chao-Chin Yang	Chao-Chin Yang
Checked opinion	Unqualified opinion	Unqualified opinion	Unqualified opinion	Unqualified opinion	Unqualified opinion

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6-2.Financial analysis for the past five years

6-2-1.Financial analysis－adopts international financial reporting standard－Consolidated：

6-2-1.Financial analysis－adopts inte	6-2-1.Financial analysis－adopts inte	rnational financial reporting standard－Cons	rnational financial reporting standard－Cons	rnational financial reporting standard－Cons	rnational financial reporting standard－Cons	rnational financial reporting standard－Cons	olidated：
Year (Note 1) Item analysed(note 2)		Financial analysis of the most recent fiveyears					As of the year 2021.03.31
		2016	2017	2018	2019	2020
Financial structure (%)	Debt to asset ratio:	49.09	48.91	46.45	47.72	52.03	49.79
	Long term fund to property, plant and Equipment Ratio	208.57	218.71	217.84	219.15	189.66	197.54
Debt service ability	Current ratio	137.85	146.33	148.89	146.34	128.42	133.30
	Quick ratio	81.07	83.78	73.88	67.89	67.55	61.54
	Interest coverage folds	811.09	578.88	443.48	278.27	65.35	35.69
Operational ability	Account receivables’ turnover rate (times)	5.35	5.80	6.16	6.51	5.11	6.24
	Average sales days	68	63	59	56	71	58
	Inventory turnover rate(times)	7.30	6.95	5.87	5.49	4.65	4.80
	Account payables turnover rate(times)	5.03	5.33	5.76	5.73	4.83	5.72
	Average sales days	50	53	62	66	78	76
	Property, plants and equipment turnover rate (times)	5.87	6.08	5.77	5.55	4.79	5.20
	Turnover rate of total assets(times)	1.62	1.67	1.58	1.52	1.31	1.46
Profittability	Return on assets(%)	13.65	13.47	8.84	10.21	4.43	2.52
	Return of equity (%)	27.32	26.36	16.87	19.22	8.72	4.68
	Proportion of pre-tax profit to paid up capital(%)	76.09	76.87	48.64	58.82	23.43	3.50
	Net income margin(%)	8.43	8.06	5.60	6.69	3.33	1.67
	Earnings per share (NT$)	6.52	6.55	4.19	4.73	2.10	0.28
Cash flow	Cash flow ratio	32.49	36.85	33.67	26.00	11.16	0.84
	Fund flow adequacy ratio	84.15	77.83	79.47	83.58	71.34	78.38
	Cash reinvestment ratio(%)	2.98	4.93	1.51	2.89	-3.37	0.39
Leverage	Operational leverage	1.92	1.85	2.41	1.92	2.95	4.40
	Financial leverage	1.00	1.00	1.00	1.00	1.02	1.03
Reasons for the changes in various financial ratios in the last two years: (If the increase or decrease does not reach 20%, the analysis is exempted) 1.Reasons for the change in interest protection multiples：Mainly due to the decrease in the profit. 2.Reasons for the change in account receivables’ turnover rate (times) and average sales days：There’s a mass production of new models of car lights in Q4 2020, resulting in the huge increase of receivables. 3.Reasons for the change in the return on assets：Mainly due to the decrease in the profit. 4.Reasons for the change in the return on equity：Mainly due to the decrease in the profit. 5.Reasons for the change in proportion of pre-tax profit to paid up capital：Mainly due to the decrease of net profit before tax. 6.Reasons for the change in net income margin：Mainly due to the decrease in the profit. 7.Reasons for the change in earnings per share：Mainly due to the decrease in the profit. 8.Reasons for changes in cash flow ratio：Mainly due to the decrease in net cash inflows from business operations during the period. 9.Reasons for changes in cash reinvestment ratio：Mainly due to the decrease in working capital. 10.Reasons for changes in operating leverage：Mainly due to the decrease in operating profit this year compared to the previous period.

Note 1：The financial information of the past years has been certified by the certified public accountant exceptfor the financial information of the first quarter of 2021, which has been reviewed by the accountants.

Note 2：The calculation formula is as follows：

• 1.Financial structure

• (1) Ratio of liabilities to assets. = total liabilities / total assets.

• (2)Ratio of long-term capital to property, plant and equipment= (total equity + non-current liabilities) / net property, plant and equipment.

• 2.Debt service ability：

• (1)Current ratio = Current asset/current liabilities

• (2)Quick ratio= (Current assets-stock-prepaid expenses)/current liabilities.

• (3) Interest coverage folds = Earnings before income tax and interest expenses /current

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interest expenses

• 3.Operational ability：

• (1)Accounts receivables (including accounts receivable and notes receivable due to business) turnover rate= Net sales/average receivables for each period (including accounts receivable and notes receivable due to business)

• (2)Average days for cash receipts= 365/account receivables turnover rate

• (3)Inventory turnover rate = Cost of goods sold / average inventory

• (4)Payables (including accounts payable and bills payable due to business) turnover rate = cost of goods sold / average payables for each period (including accounts payable and notes payable due to business).

• (5)Average days for sales of goods = 365/stock turnover rate

• (6)Turnover rate for property, plant and equipment = Net sales / average net of real estate, plant and equipment

• (7)Total assets’ turnover rate=Net sales/average of total assets

• 4.Profitability

• (1)Assets return ratio = [After-tax profit and loss + interest expense × (1 - tax rate)] / average total assets.

• (2)Equity return ratio = Net income/Average equity

• (3)Net Margin = Net Income / Net Sales

• (4)Earnings per share= (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding

• 5.Cash flow

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

• (2)Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

• (3)Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital) (Note 5)

• 6.Leverage

• (1)Operating Leverage = (Net Sales - Variable Cost) / Income from Operations (note 6) (2)Financial Leverage = Income from Operations / (Income from Operations - Interest Expenses)

• Note 3：The formula for calculating the earnings per share, the following should be paid when measuring：

• 1.It is based on the weighted average number of ordinary shares, not based on the number of shares issued at the end of the year.

• 2.Where there is a cash increase or treasury stock trader, the weighted average number of shares shall be calculated taking into account the circulation period.

• 3.The surplus or capital increase being transferred to capital increase will be retrospectively adjusted according to the proportion of capital increase when calculating the earnings per share of the previous year and the semi-annual period, and there is no need to consider the issue period of the capital increase.

• 4.If the preferred shares are non-convertible accumulated preferred shares, their annual dividends (whether issued or not) shall be the after-tax net profit reducing, or increasing after-tax net loss. If the preferred stock is non-cumulative, in the case of net profit after tax, the preferred stock dividend shall be deducted from the net profit after tax; if it is a loss, it shall not be adjusted.

• Note 4：When analyzing the cash flow analysis, special attention should be paid to the following items when measuring：

• 1.Net cash amount of operating activities refers to the net cash inflow of business activities in the cash flow statement.

• 2.Capital expenditure refers to the number of cash outflows of capital investment per year.

• 3.The increase in inventory is only included when the ending balance is greater than the beginning balance. If the inventory is reduced at the end of the year, it is calculated as zero.

• 4.Cash dividends include cash dividends for ordinary shares and preferred shares.

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• 5.Gross property, plant and equipment refers to the total amount of property, plant and equipment before deducting accumulated depreciation.

• Note 5：The issuer shall classify various operating costs and operating expenses into fixed and variable terms according to their nature. If it involves any estimation or subjective judgment, they shall pay attention to their rationality and maintain the consistency.

• Note 6：If the company's stock has no par value or a par value other than NT$10, the calculation of the aforesaid capital ratio will be based on the equity ratio of the balance sheet to the parent company.

6-2-2.Financial Analysis - Adopting International Financial Reporting Standards – Individuals：

Individuals：	Individuals：
Year (Note 1) Item analysed (note 2)		Financial analysis of the most recent five years
		2016	2017	2018	2019	2020
Financial structure (%)	Debt to asset ratio:	49.09	48.91	46.45	47.72	52.03
	Long term fund to property, plant and Equipment Ratio	208.57	218.71	217.84	219.15	189.66
Debt service ability	Current ratio	137.77	146.27	148.82	146.28	128.37
	Quick ratio	80.99	83.71	73.80	67.83	67.50
	Interest coverage folds	811.09	578.88	443.48	278.27	65.35
Operational ability	Account receivables’turnover rate (times)	5.35	5.80	6.16	6.51	5.11
	Average sales days	68	63	59	56	71
	Inventory turnover rate(times)	7.30	6.95	5.87	5.49	4.65
	Account payables turnover rate(times)	5.03	5.33	5.76	5.73	4.83
	Average sales days	50	53	62	66	78
	Property, plants and equipment turnover rate (times)	5.87	6.08	5.77	5.55	4.79
	Turnover rate of total assets(times)	1.62	1.67	1.58	1.52	1.31
Profittability	Return on assets(%)	13.65	13.47	8.84	10.21	4.43
	Return of equity (%)	27.32	26.36	16.87	19.22	8.72
	Proportion of pre-tax profit to paid up capital (%)	76.09	76.87	48.64	58.82	23.43
	Net income margin (%)	8.43	8.06	5.60	6.69	3.33
	Earnings per share (NT$)	6.52	6.55	4.19	4.73	2.10
Cash flow	Cash flow ratio	32.49	36.85	33.67	26.00	11.17
	Fund flow adequacy ratio	84.17	77.84	82.36	82.18	69.96
	Cash reinvestment ratio (%)	2.98	4.93	1.51	2.89	-3.37
Leverage	Operational leverage	1.92	1.85	2.41	1.92	2.95
	Financial leverage	1.00	1.00	1.00	1.00	1.02
Reasons for the changes in various financial ratios in the last two years：(If the increase or decrease does not reach 20%, the analysis is exempted) 1.Reasons for the change in interest protection multiples：Mainly due to the decrease in the profit. 2.Reasons for the change in account receivables’ turnover rate (times) and average sales days：There’s a mass production of new models of car lights in Q4 2020, resulting in the huge increase of receivables. 3.Reasons for the change in the return on assets：Mainly due to the decrease in the profit. 4.Reasons for the change in the return on equity：Mainly due to the decrease in the profit. 5.Reasons for the change in proportion of pre-tax profit to paid up capital：Mainly due to the decrease of net profit before tax. 6.Reasons for the change in net income margin：Mainly due to the decrease in the profit. 7.Reasons for the change in earnings per share：Mainly due to the decrease in the profit. 8.Reasons for changes in cash flow ratio：Mainly due to the decrease in net cash inflows from business operations during the period. 9.Reasons for changes in cash reinvestment ratio：Mainly due to the decrease in working capital. 10.Reasons for changes in operating leverage：Mainly due to the decrease in operating profit this year compared to the previous period.

• Note 1：The financial information of the above years has been certified by the certified public accountant.

Note 2：The calculation formula is as follows：

• 1.Financial structure

• (1) Ratio of liabilities to assets. = total liabilities / total assets.

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• (2)Ratio of long-term capital to property, plant and equipment= (total equity + non-current liabilities) / net property, plant and equipment.

• 2.Debt service ability：

• (1)Current ratio = Current asset/current liabilities

• (2)Quick ratio= (Current assets-stock-prepaid expenses)/current liabilities.

• (3) Interest coverage folds = Earnings before income tax and interest expenses /current interest expenses

• 3.Operational ability：

• (1)Accounts receivables (including accounts receivable and notes receivable due to business) turnover rate= Net sales/average receivables for each period (including accounts receivable and notes receivable due to business)

• (2)Average days for cash receipts= 365/account receivables turnover rate

• (3)Inventory turnover rate = Cost of goods sold / average inventory

• (4)Payables (including accounts payable and bills payable due to business) turnover rate = cost of goods sold / average payables for each period (including accounts payable and notes payable due to business).

• (5)Average days for sales of goods = 365/stock turnover rate

• (6)Turnover rate for property, plant and equipment = Net sales / average net of real estate, plant and equipment

• (7)Total assets’ turnover rate=Net sales/average of total assets

• 4.Profitability

• (1)Assets return ratio = [After-tax profit and loss + interest expense × (1 - tax rate)] / average total assets.

• (2)Equity return ratio = Net income/Average equity

• (3)Net Margin = Net Income / Net Sales

• (4)Earnings per share= (Net Income Attributable to Shareholders of the Parent - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding

• 5.Cash flow

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

• (2)Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

• (3)Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/ (Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital) (Note 5)

• 6.Leverage

• (1)Operating Leverage = (Net Sales - Variable Cost) / Income from Operations (note 6)

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

• Note 3：The formula for calculating the earnings per share, the following should be paid when measuring：

• 1.It is based on the weighted average number of ordinary shares, not based on the number of shares issued at the end of the year.

• 2.Where there is a cash increase or treasury stock trader, the weighted average number of shares shall be calculated taking into account the circulation period.

• 3.The surplus or capital increase being transferred to capital increase will be retrospectively adjusted according to the proportion of capital increase when calculating the earnings per share of the previous year and the semi-annual period, and there is no need to consider the issue period of the capital increase.

• 4.If the preferred shares are non-convertible accumulated preferred shares, their annual dividends (whether issued or not) shall be the after-tax net profit reducing, or increasing after-tax net loss. If the preferred stock is non-cumulative, in the case of net profit after tax, the preferred stock dividend shall be deducted from the net profit after tax; if it is a loss, it shall not be adjusted.

• Note 4：When analyzing the cash flow analysis, special attention should be paid to the following items when measuring：

• 1.Net cash amount of operating activities refers to the net cash inflow of business activities in the cash flow statement.

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• 2.Capital expenditure refers to the number of cash outflows of capital investment per year.

• 3.The increase in inventory is only included when the ending balance is greater than the beginning balance. If the inventory is reduced at the end of the year, it is calculated as zero.

• 4.Cash dividends include cash dividends for ordinary shares and preferred shares.

• 5.Gross property, plant and equipment refers to the total amount of property, plant and equipment before deducting accumulated depreciation.

• Note 5：The issuer shall classify various operating costs and operating expenses into fixed and variable terms according to their nature. If it involves any estimation or subjective judgment, they shall pay attention to their rationality and maintain the consistency.

• Note 6：If the company's stock has no par value or a par value other than NT$10, the calculation of the aforesaid capital ratio will be based on the equity ratio of the balance sheet to the parent company.

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6-3.Report by auditing committee for the most recent year's financial statement

TA YIH INDUSTRIAL CO., LTD. Audit Committee’s review report

The financial statements of 2020 (including the consolidated financial statements) prepared by the board of directors have been certified by Chao-Chin Yang and Chi-Chen Li, CPAs of Deloitte Taiwan. We have audited these statements as well as the business report and the statement of earning distribution, and believe that they are prepared in accordance with applicable laws. Therefore, we hereby submit these documents for approval in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

This is submitted to

Annual Shareholders' Meeting of Ta Yih Industrial Co., Ltd. in 2021

Ta Yih Industrial Co., Ltd.

Convenor of Audit Committee：Wan-I Wu

Mar. 24, 2021

• 6-4.Finalcial statements of the most recent fiscal year：Refer to P.103 Appendix 1.

• 6-5.Certified Individual Financial Statements：Refer to P.104 Appendix 2.

• 6-6.If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ：None.

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． 7 Analysis of its financial position and financial performance, and risks ：

7-1.Review and analysis of financial status Unit：NT thousands；%

Year of occurrence Items	2020	2019	Differences	Differences
			Amount	%
Current assets	2,213,313	2,190,901	22,412	1
Investments accounted for using the equitymethod	332,286	393,213	-60,927	-15
Property, plants,and equipment	1,026,160	976,469	49,691	5
Intangible assets	18,924	－	18,924	－
Other non-current assets	79,093	76,473	2,620	3
Total net assets	3,669,776	3,637,056	32,720	1
Current liabilities	1,723,562	1,497,087	226,475	15
Non-current liabilities	185,885	238,352	-52,467	-22
Total liabilities	1,909,447	1,735,439	174,008	10
Capital stocks	762,300	762,300	0	－
Capital surplus	60,832	60,736	96	0
Retained Earnings	974,660	1,119,941	-145,281	-13
Other equity	-37,463	-41,360	3,897	9
Total equity	1,760,329	1,901,617	-141,288	-7
The annual report shall list the main reasons for any material change in the company's assets, liabilities, or shareholders’ equity during the past 2 fiscal years, and describe the effect thereof. 1.Main reasons for major changes：changes greater than 20%, and the amount of change was over NT $ 10 million： (1)Changes in intangible assets：Mainly due to the increase of software and patent. (2)Decrease in non-current liabilities：Mainly due to the decrease of non defined benefit liabilities – non-current. 2.Significant effect：None. 3.Measures for future response：Not applicable.

Notes：If the change is less than 20% and the amount of change does not reach NT$10 million, it will not be explained.

7-2.Review and analysis of financial performance Unit：NT thousands

Year of occurrence Item	2020	2019	Amount increased(decre ased)	Change ratio (%)	Change Analysis
Operatingrevenue	4,797,165	5,390,196	-593,031	-11
Operating grossprofit	673,534	967,870	-294,336	-30	1
Operatingexpenses	486,800	555,892	-69,092	-12
Net income	186,734	411,978	-225,244	-55	1
Non-operating income and expenses	-8,105	36,373	-44,478	-122	2
Netprofit before tax	178,629	448,351	-269,722	-60	1
Income tax expense	18,879	87,894	-69,015	-79	3
Net income for this reporting period	159,750	360,457	-200,707	-56	1
Other comprehensive income	3,786	-17,902	21,688	-121	4
Total comprehensive income	163,536	342,555	-179,019	-52
Net income attributable to: the owner of the company	159,750	360,457	-200,707	-56	1
Total comprehensive income (loss) attributable to: the owner of the company	163,536	342,555	-179,019	-52	4

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The annual report shall list the main reasons for any material change (increase or decrease of the change rate of more than 20%) in operating revenues, operating income, or income before tax during the past 2 fiscal years, provide a sales volume forecast for the next year and the basis therefor, and describe the effect upon the company's financial operations as well as measures to be taken in response：

• 1.Main reasons for major changes：

• (1)The decrease in profit：mainly due to COVID-19 pandemic effects, the revenue decreased and the fixed cost control did not reduced at the same ratio, which resulted in the decrease on overall profit.

• (2)Decrease in non-operating income and expenses：mainly due to the decrease in benefits adopting the equity method.

• (3)The decrease in income tax expense：mainly due to the decrease in net profit before tax.

• (4)Decrease in other comprehensive profit and loss：mainly due to the increase in the exchange difference in the conversion of the financial statements of foreign operating units from the previous period.

• 2.Expected sales volume in the next year and its basis：

Base on the orders negotiated with the car manufacturers for the next year and the assessment of the future environment, the company expects the sales volume to increase in 2021 compared to 2020.

• 3.Possible impact on future financial business：No significant impact.

• 4.Measures for future response：Not applicable.

7-3.Analysis of cash flow

7-3-1.Analysis of changes in recent annual cash flow, improvement plan for insufficient

liquidity：

liquidity：
Year of occurrence Item	2020	2019	Increase (Decrease) ratio
Cash flow ratio	11.16%	26.00%	-57%
Fund Flow AdequacyRatio	71.34%	83.58%	-15%
Cash reinvestment ratio	-3.37%	2.89%	-217%
1.Analysis of changes in recent annual cash flow： (1)Decrease in cash flow ratio： Mainly due to the decrease in net cash inflow from business operation. (2)Decrease in fund flow adequacy ratio： Mainly due to the decrease in the cash flow in the recent five fiscal years. (3)Increase in cash reinvestment ratio： Mainly the working capital for this period decreased compared to the previous period. 2.Corrective measures to be taken in response to illiquidity：Not applicable.

7-	3-2.Analysis of cash flow for the	3-2.Analysis of cash flow for the	coming year		Unit：NT thousands	Unit：NT thousands
	Initial stage Balance (1)	Throughout the year Net cash flow (2)	Annual cash Outflow (3)	Balance (insufficient) amount (1)+(2)-(3)	Cash deficiency remedy
					Investment plans	Financial plan
	108,164	5,201,495	5,225,238	84,421	－	－

Analysis of cash flow for the coming year (2021)：

(1)Operating activities：

The sales revenue for 2021 is estimated to be stable, so business activities can generate net cash inflows.

(2)Investment activities：mainly paying for the purchase of fixed assets.

• (3)Financing activities：mainly estimated cash dividends of NT$ 99,099 thousand.

• 7-4.The effect upon financial operations of any major capital expenditures during the most recent fiscal year.

• 7-4-1.Review and analysis of major capital expenditures and the funds sources：No significant capital expenditure in the recent years.

• 7-4-2.Expected income：Not applicable.

• 7-5.The company's reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby, the plan for improving re-investment profitability, investment plans for the coming year：

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7-5-1.Reinvestment policy：

The current investment scope of the Company is mainly manufacturing of lamps for automobiles and motorcycle industry.

7-5-2.Main cause for gains or losses：

The company's annual recognition losses of the affiliated companies adopting the equity method in the year 2020 was about NT $ 67,628 thousand, which came from the recognition of the losses of Fuzhou Koito Dayi Auto Lamp Co., Ltd. influences. The main reason for the losses in 2020 was due to the decline in capacity utilization.

7-5-3.Improvement plan for losses：

Continuous implementation of various cut cost activities.

• 7-5-4.Investment plan for the coming year：None.

7-6.Risk analysis and evaluation

• 7-6-1.The effect upon the company's profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future for the most recent fiscal year and as they stood on the date of publication of the annual report：

• (1)The impact of changes in interest rates on the company's profit and loss and the

measures of future responses：

measures of future responses：
Item	Financial report for 2020
Interest expense	NT$2,776 thousand
Net income ratio	0.06%
Net profit before tax ratio	1.55%

①Effect on profit and loss

The interest expenses in 2020 was NT$ 2,776 thousand, which accounts for 0.05% of the revenue, and it has no significant impact on the company. The market interest rate for the first quarter of this year was comparable to last year, and the change is small.

②Measures for future response

The interest rate has little effect on the company's profit and loss, but the company usually maintains a good relationship with the bank, keeps abreast of interest rate changes, and adjusts the bank loan amount according to the capital cost of each bank.

• (2)The effect upon the company's profits (losses) of exchange rate fluctuations and

response measures to be taken in the future：

esponse measures to be taken in the future：
Item	Financial report for 2020
Net gain/loss on foreign currency exchange	(NT$10,193 thousand)
Net income ratio	0.21%
Net profit before tax ratio	5.71%

The exchange rate fluctuations of the New Taiwan Dollar against the US dollar, Renminbi and the Japanese Yen have little impact on the Company's profit and loss. The Company has always paid attention to the exchange rate fluctuations in the international market and has continued to implement the following response measures：

• ①The foreign currency received from sales of foreign products is used to pay up for the purchase of materials to generate foreign currency payables, using the nature of natural hedging to avoid most of the exchange risk Therefore, only financial instruments are needed to apply for the foreign currency net assets (liabilities) to avoid exchange rate fluctuation risks.

• ②Keeps a close contact with the foreign exchange departments of financial institutions, collect relevant information on exchange rate changes at any time, fully grasp the international exchange rate trends and changes in information, and actively respond to the negative impact of exchange rate fluctuations.

• ③In accordance with the Order of the Securities and Futures Commission, Ministry

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of Finance on December 10, 2002 (2002), the Banking Certificate (1), No. 0910000610 "Regulations governing the Acquisition or Disposal of Assets by Public Companies" standardizes the procedures for trading financial derivatives and strengthens the risk control management system.

• (3)The impact of changes in inflation on the company's profit and loss and the measures of future responses：

• ①Effect on profit and loss

Inflation has no impact on the company's profit and loss. It is the company's consistent policy to maintain close and good cooperation with suppliers. Even if there is any inflation, the company can still obtain the most affordable price and the most adequate supply of raw material.

• ②Future response measures

The inflation has not much impact on the finished products and raw materials of the company, but it will still pay close attention to the inflation situation, if necessary, appropriate action will be apply to the price of the finished products or pre-purchase raw materials, in order to reduce the impact of inflation on the company.

• 7-6-2.The most recent fiscal year and as they stood on the date of publication of the annual report of the company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future：

Risk factor	Policy	Gains or losses Main cause	Future measures
High risk, high leverage investment	The company focuses on its own operations and does not engage in high-risk, highly leveraged investments.	The Company has not engaged in high-risk, high-leverage investment in the recent years, so it does not apply.	Not applicable
Loans to others	They are all handled in accordance with the “Measures for the Management of Funds and Others”, and the relevant information is announced in accordance with regulations.	There is no fund loan to others in 2020, so it is not applicable.	Not applicable
Endorsement/guarantee	They are handled in accordance with the Company's “Management of Endorsements and Guarantees” and the relevant information is announced in accordance with regulations.	There is no endorsement or guarantees made for the recent years, so it is not applicable..	Not applicable
Derivatives trading	The derivative trading executed by the Company in the most recent year are not for trading purposes, and only hedge foreign currency operations are taken to reduce exchange rate fluctuations.	There is no derivative trading in 2020, so it is not applicable.	Not applicable

7-6-3.Future Research & Development plans and estimated investment in Research &

Development： Unit：NT$1,000

	Development：			Unit：NT$1,000
Item	Topic	Research and development expenses	Expected to be completed Production time	Future research and development is successful Main influencing factors
1	R&D and the mass production of Advanced headlights of motorcycles	10,000	2021	Function demand of the market trend
2	R&D and the mass production of Mini LED BI PES headlights of motorcycles	400	2021	Display effect and cost structure

98

Item	Topic	Research and development expenses	Expected to be completed Production time	Future research and development is successful Main influencing factors
3	R&D and the mass production of Microstructure optical application lamps	400	2021	Function demand of the market trend
4	R&D and the mass production of Hyperboloid lens application lamps	400	2021	Demand for changes in shapes of car lights
5	R&D and the mass production of Millimeter wave transparent materials	600	2021	Function demand of the market trend
6	R&D of Electronic ASPICE import	1.230	2022	Function demand of the market trend
7	R&D of Adjustable lightness and low-energy LED headlights for MRT vehicles	500	2021	Market expands or shrinks on the changing market
8	Product development on Special LED light tube for rail vehicles	500	2021	Display effect and cost structure
9	R&D of aerospace lighting	2,000	2022	Break through on technology know-how

• 7-6-4.The impact of important changes in domestic and overseas policies and laws on the company's financial business and the corresponding measures：

There is no significant change in the domestic and overseas policies and laws. Response measures：The Company will continue to pay attention to relevant policy and legal changes and response immediately to the impact of changes.

• 7-6-5.Effect on the company's financial operations of developments and measures to be taken in response in science and technology as well as industrial change： There is no obvious manufacturing or related technology change in the industry or market of the company, so there is no impact on the financial business. Response measures：

The Company will monitor the technological and industrial changes in technology, and will respond appropriately if there is any impact.

• 7-6-6.Effect on the company's crisis management of changes in the company's corporate image, and measures to be taken in response：

• The company's corporate image is good, with good profit in 2020 and the first quarter of 2021 and there is no bad image of the corporation.

• Response measures：

The spokesperson of the company wholeheartedly welcomes calls from shareholders or the media.

• 7-6-7.Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken： There is no acquisition or merging in the Company.

• 7-6-8.Expected benefits and possible risks associated with any plant expansion and mitigation measures being or to be taken： The Company has no expansion of plant.

• 7-6-9.Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken：None.

99

• 7-6-10.Effect upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken：None.

• 7-6-11.Effect upon and risk to company associated with any change in governance personnel or top management, and mitigation measures being or to be taken：

• There is no change in the governance of the top management or personnel.

• 7-6-12.Litigious and non-litigious matters. List major litigious, non-litigious or administrative disputes that: (1) involve the company and/or any company director, any company supervisor, the general manager, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the company; and (2) have been concluded by means of a final and unappeasable judgment, or are still under litigation. Where such a dispute could materially affect shareholders' equity or the prices of the company's securities, the annual report shall disclose the facts of the dispute, amount of money at stake in the dispute, the date of litigation commencement, the main parties to the dispute, and the status of the dispute as of the date of publication of the annual report：None.

• 7-6-13.Other important risk management measures：None.

• 7-7.Other important matters：None.

100

． 8 Special items

8-1.Information related to the company's affiliates

The consolidated business report of the Affiliated Enterprise

8-1-1.The organizational chart of the affiliated enterprise

TA YIH INDUSTRIAL CO., LTD. Investment ratio 100％ Shares holding Amount of investment US$ 50,000 Ta Yih International Investment Co., Ltd.

8-1-2.Basic information of each affiliates： Unit：$

Name of Enterprise	A. Date of Establishment	Address	Paid-in capital	Primary business items or Production
Ta Yih International Investment Co., Ltd.	1995.11.17	Omar Hodge Building, Wickhams Cay I.P.O. Box 362, Road Town, Tortola, British Virgin Islands	USD 50,000 (1：28.1)	~~Items~~ Production business investment

• 8-1-3.Information of shareholders of companies presumed to have a relationship of control and subordination：None.

• 8-1-4.The industries covered by the business operated by the affiliates overall： British Virgin Islands Ta Yih International Investment Company.

8-1-5.The information of the directors, supervisors, and president of each affiliate：

Unit：$；Shares：%

Name of Enterprise	Job title	Name or representative	Shares holding	Shares holding	Note
			Number of shares (contribution)	Shareholding ratio (Contribution ratio)
Ta Yih International Investment Co., Ltd.	Chairman	TA YIH INDUSTRIAL CO.,LTD Representative – Chun-I Wu	USD 50,000	100%

8-1-6.The overview of the operations of the affiliates： Unit：NT$1,000

Name of Enterprise	Paid-in capital	Assets Total value	Total liabilities Total equity	Net value	Business revenue	Current other comprehensive income Amount after tax	Earnings per share ($) Amount after tax
Ta Yih International Investment Co., Ltd.	1,405	860	0	860	0	(53)	(1.07)

101

  - 8-1-7.The Consolidated Financial Statements of Affiliated Enterprises： Please refer to the preceding item 6 of the “Financial Overview subparagraph 4 of (the certified consolidated financial statements of the 2020).

  - 8-1-8.Affiliation Report：None.

• 8-2.Where the company has carried out a 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.

• 8-3.The subsidiaries holding or disposal of the company’s shares in the company during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report：None.

• 8-4.Additional description of other matters：None.

• ．

• 9 If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ： None.

102

Appendix 1

2020 Consolidate Financial Statements

103

Ta Yih Industrial Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

• 1 -

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Ta Yih Industrial Co., Ltd.

By

JUN YI WU Chairman March 24, 2021

• 2 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Ta Yih Industrial Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Ta Yih Industrial Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 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 Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the audit of the Group’s consolidated financial statements for the year ended December 31, 2020 is as follows:

• 3 -

Sales Revenue

The operating revenue of Ta Yih Industrial Co., Ltd. and its subsidiaries mainly comes from the sale of automobile and locomotive lamps. As revenue from a particular customer changed significantly from the previous year, and whether revenue actually occurred is a predetermined risk in accordance with the Statement of Auditing Standards; therefore, the validity of revenue from the particular customer has been identified as a key audit matter. For the accounting policies related to operating revenue, refer to Table 4.

Our main audit procedures performed in respect of the above-mentioned key audit matter are as follows:

1. We understood the internal controls related to revenue recognition and tested the operating effectiveness of the controls.

2. We performed substantive tests on sales revenue, checked the customer's delivery records and other transaction vouchers and bank collection records, and checked whether the counterparty of the sales transactions is the same as the counterparty making payment, in order to determine that the sales transactions actually occurred.

Other Matter

We have also audited the standalone financial statements of Ta Yih Industrial Co., Ltd. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

• 4 -

As part of an audit 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:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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

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

From the matters communicated with those charged with governance, we determine a matter that was of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and is therefore the key audit matter. We describe this matter in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

• 5 -

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

Deloitte & Touche Taipei, Taiwan Republic of China

March 24, 2021

Notice to Readers

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

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

• 6 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash (Notes 4 and 6) Notes receivable (Notes 4 and 7) Accounts receivable (Notes 4, 7 and 20) Accounts receivable from related parties (Notes 4, 7, 20 and 27) Other receivables (Notes 4 and 7) Other receivables from related parties (Notes 4, 7 and 27) Inventories (Notes 4 and 8) Prepayments (Notes 22 and 27) Other current assets (Notes 14 and 22) Total current assets NON-CURRENT ASSETS Investments accounted for using the equity method (Notes 4 and 10) Property, plant and equipment (Notes 4, 11 and 27) Right-of-use assets (Notes 4 and 12) Intangible assets (Notes 4, 13 and 27) Deferred tax assets (Notes 4 and 22) Other non-current assets (Notes 4, 14 and 27) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 15) Contract liabilities - current (Notes 4, 20 and 27) Notes payable (Note 16) Notes payable to related parties (Notes 16 and 27) Accounts payable (Note 16) Accounts payable to related parties (Notes 16 and 27) Other payables (Note 17) Other payables to related parties (Notes 17 and 27) Current tax liabilities (Notes 4 and 22) Lease liabilities - current (Notes 4 and 12) Other current liabilities (Note 17) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 22) Lease liabilities - non - current (Notes 4 and 12) Net defined benefit liabilities (Notes 4 and 18) Other non-current liabilities (Note 17) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 19) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company TOTAL		December 31, 2020 Amount % $ 108,164 3 2,116 - 763,064 21 239,878 6 2,320 - 19,804 - 943,021 26 105,994 3 28,952 1 2,213,313 60 332,286 9 1,017,826 28 8,334 - 18,924 1 43,000 1 36,093 1 1,456,463 40 $ 3,669,776 100 $ 342,400 9 158,868 4 95,488 3 - - 716,314 20 71,045 2 200,217 5 69,987 2 64,112 2 4,508 - 623 - 1,723,562 47 104,158 3 3,905 - 75,056 2 2,766 - 185,885 5 1,909,447 52 762,300 21 60,832 2 651,251 17 68,264 2 255,145 7 974,660 26 (37,463) (1) 1,760,329 48 $ 3,669,776 100		December 31, 2019
				Amount % $ 90,914 2 4,969 - 749,794 21 104,896 3 3,484 - 31,578 1 812,523 22 361,970 10 30,773 1 2,190,901 60 393,213 11 957,283 26 19,186 1 - - 36,337 1 40,136 1 1,446,155 40 $ 3,637,056 100 $ - - 313,094 9 236,059 6 1,005 - 530,730 15 56,230 2 230,588 6 66,526 2 49,383 1 13,042 - 430 - 1,497,087 41 117,403 4 6,333 - 111,888 3 2,728 - 238,352 7 1,735,439 48 762,300 21 60,736 1 615,205 17 68,264 2 436,472 12 1,119,941 31 (41,360) (1) 1,901,617 52 $ 3,637,056 100

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

• 7 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 20 and 27) OPERATING COSTS (Notes 8, 18, 21 and 27) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 7, 18, 21 and 27) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 21 and 27) Interest income Other income Other gains and losses Share of profit or loss of associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 22) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 18)		2020 Amount % $ 4,797,165 100 4,125,419 86 671,746 14 (1,327) - 3,115 - 673,534 14 159,570 3 147,240 3 178,836 4 1,154 - 486,800 10 186,734 4 173 - 104,697 2 (45,347) (1) (67,628) (1) (8,105) - 178,629 4 18,879 1 159,750 3 (138) -		2019
				Amount % $ 5,390,196 100 4,423,289 82 966,907 18 (3,008) - 3,971 - 967,870 18 184,519 4 170,716 3 199,992 4 665 - 555,892 11 411,978 7 420 - 76,113 2 (41,676) (1) 1,516 - 36,373 1 448,351 8 87,894 1 360,457 7 (6,792) - (Continued)

• 8 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 22) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss (Notes 4 and 22) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company EARNINGS PER SHARE (New Taiwan dollars, Note 23) Basic Diluted		2020 Amount % 27 - (111) - 4,866 - (969) - 3,897 - 3,786 - $ 163,536 3 $ 159,750 3 $ 163,536 3 $ 2.10 $ 2.09		2019
				Amount % 1,358 - (5,434) - (15,530) (1) 3,062 - (12,468) (1) (17,902) (1) $ 342,555 6 $ 360,457 7 $ 342,555 6 $ 4.73 $ 4.72
		$		$
		$		$
		$		$

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

(Concluded)

• 9 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

BALANCE AT JANUARY 1, 2019 Appropriation of the 2018 earnings (Note 19) Legal reserve Cash dividends distributed by the Company - NT$3.8 per share Unclaimed cash dividends overdue transferred to capital surplus Net profit for the year ended December 31, 2019 Other comprehensive income for the year ended December 31, 2019, net of income tax Total comprehensive income for the year ended December 31, 2019 BALANCE AT DECEMBER 31, 2019 Appropriation of the 2019 earnings (Note 19) Legal reserve Cash dividends distributed by the Company - NT$4 per share Unclaimed cash dividends overdue transferred to capital surplus Net profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 BALANCE AT DECEMBER 31, 2020		Share Capital Number of Shares Amount Capital Surplus 76,230 $ 762,300 $ 60,605 - - - - - - - - 131 - - - - - - - - - 76,230 762,300 60,736 - - - - - - - - 96 - - - - - - - - - 76,230 $ 762,300 $ 60,832		Retained Earnings Legal Reserve Special Reserve Unappropriated Earning $ 583,285 $ 68,264 $ 403,043 31,920 - (31,920) - - (289,674) - - - - - 360,457 - - (5,434) - - 355,023 615,205 68,264 436,472 36,046 - (36,046) - - (304,920) - - - - - 159,750 - - (111) - - 159,639 $ 651,251 $ 68,264 $ 255,145	Other Equity Exchange Differences on Translating Foreign Operations $ (28,892) - - - - (12,468) (12,468) (41,360) - - - - 3,897 3,897 $ (37,463)	Total Equity $ 1,848,605 - (289,674) 131 360,457 (17,902) 342,555 1,901,617 - (304,920) 96 159,750 3,786 163,536 $ 1,760,329
		Number of Shares 76,230 - - - - - - 76,230 - - - - - - 76,230

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

• 10 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain on fair value changes of financial assets at fair value through profit or loss Finance costs Interest income Share of profits of associates Loss on disposal of property, plant and equipment, net Provision for loss on inventories Unrealized gain on transactions with associates Realized gain on transactions with associates Net loss on foreign currency exchange Gain on disposal of right-of-use assets Changes in operating assets and liabilities: Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Other current assets Contract liabilities Notes payable Notes payable to related parties Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Other non-current assets Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Payments for property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets	2020 $ 178,629 137,185 11,251 1,154 - 2,776 (173) 67,628 125 5,356 1,327 (3,115) 395 (2) 3,163 (15,551) (135,571) 1,164 12,004 (135,854) 240,905 (6,992) (154,226) (140,571) (1,005) 185,407 14,491 (30,448) 3,461 193 (36,970) 38 206,174 173 (2,699) (11,240) 192,408 - - (181,939) (1,603) 3,303 (20,051)	2019 $ 448,351 131,369 - 665 (1) 1,617 (420) (1,516) 157 2,744 3,008 (3,971) 13,825 (11) 1,354 (188,336) 97,812 709 16,627 (29,298) (138,302) 9,843 (9,925) 50,246 (5,432) 46,893 14,608 7,024 (2,211) 194 (29,925) 81 437,779 420 (1,277) (47,688) 389,234 (10,000) 10,001 (111,101) (3,624) 4,502 - (Continued)

• 11 -

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from short - term bills payable Repayments from short - term bills payable Proceeds from guarantee deposits received Refunds of guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends Unclaimed cash dividends overdue transferred to capital surplus Net cash generated from (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET INCREASE (DECREASE) IN CASH CASH AT THE BEGINNING OF THE YEAR CASH AT THE END OF THE YEAR	2020 (200,290) 2,146,454 (1,802,772) 420,000 (420,000) - - (13,679) (304,920) 96 25,179 (47) 17,250 90,914 $ 108,164	2019 (110,222) 836,026 (836,026) - - 80 (30) (12,842) (289,674) 131 (302,335) (23) (23,346) 114,260 $ 90,914

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

(Concluded)

• 12 -

Ta Yih Industrial Co., Ltd. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Ta Yih Industrial Co., Ltd. (the “Company”) was incorporated in 1964. It was formerly known as Ta Yih Industrial Corp. and changed to its present name in 1976. The Company mainly sells, manufactures and processes automobile parts, motorcycle parts, railway vehicle parts, transportation machineries, industrial plastic parts, as well as invests in related industries.

The Company’s shares have been trading on the Taiwan Stock Exchange since October 1997.

The consolidated financial statements of the Company and its subsidiaries (collectively known as the “Group”) are presented in the Company’s functional currency, the New Taiwan dollar.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors and authorized for issue on March 24, 2021.

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

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

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

Amendments to IAS 1 and IAS 8 “Definition of Material”

The Group adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the consolidated financial statements do not include immaterial information that may obscure material information.

• b. The IFRSs endorsed by the FSC for application starting from 2021

Effective Date New IFRSs Announced by IASB

Amendments to IFRS 4 “Extension of the Temporary Exemption Effective immediately upon from Applying IFRS 9” promulgation by the IASB Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19-Related Rent Concessions” June 1, 2020

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

Effective Date New IFRSs Announced by IASB (Note 1) “Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 4) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 5) Contract”

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for the asset or liability.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

• 3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

• d. Basis of consolidation

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

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

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Refer to Note 9 and Table 3 for detailed information on subsidiaries (including percentages of ownership and main businesses).

• e. Foreign currencies

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

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purposes of presenting the consolidated financial statements, the investments of the Group’s foreign operations (including subsidiaries and associates in other countries that use currencies which are different from the Company) are translated into the New Taiwan dollar using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

• f. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the standard cost on the balance sheet date. The difference between actual costs and normal standard costs is allocated in proportion to inventory and operational costs on fiscal year-end, in order to approach the amount of weighted-average cost.

• g. Investments in associates

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

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

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

The entire carrying amount of an investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

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

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• h. Property, plant and equipment

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

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

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

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

• i. Intangible assets

• 1) Intangible assets acquired separately

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

• 2) Derecognition of intangible assets

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

• j. Impairment of property, plant and equipment, right-of-use assets, intangible assets and assets related to contract costs

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

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

Before the Group recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories related to the contract applicable under IFRS 15 shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Group expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that

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cash-generating unit.

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

• k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

• 1) Financial assets

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

• a) Measurement categories

Financial assets are classified into the following categories: financial assets at FVTPL and financial assets at amortized cost.

• i. Financial assets at FVTPL

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

Financial assets at FVTPL are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in other gains or losses.

• ii. Financial assets at amortized cost

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

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash, accounts receivable at amortized cost (including related parties), notes receivable (including related parties), other receivables (including related parties), and refundable deposits (classified under other non-current assets), are measured at amortized cost, which equals the gross

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carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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

• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

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

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

• i) Significant financial difficulty of the issuer or the borrower;

• ii) Breach of contract, such as a default;

• iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

• iv) The disappearance of an active market for that financial asset because of financial difficulties.

• b) Impairment of financial assets

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

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

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

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

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

• ii. When a financial asset is more than 365 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

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

• c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

• 2) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

• l. Revenue recognition

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

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of car lamps and molds. Sales of goods are recognized as revenue and accounts receivable when the goods are delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

• 2) Royalty revenue

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement and provided that it is probable that the economic benefits will flow to the Group and that the amount of revenue can be measured reliably. Royalty arrangements that are based on sales are recognized with reference to the underlying arrangement.

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m. Leases

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

The Group as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

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

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

• n. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Group recognizes as expenses the related costs that the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they are received.

• o. Employee benefits

• 1) Short-term employee benefits

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

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

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

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• 3) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss.

• p. Taxation

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

• 1) Current tax

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

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

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

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

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

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

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

• 3) Current and deferred taxes

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH

Cash on hand Checking accounts and demand deposits		December 31	December 31
		2020 $ 756 107,408 $ 108,164	2019 $ 943 89,971 $ 90,914

7. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES), AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

Notes receivable At amortized cost Gross carrying amount - operating Less: Allowance for impairment loss		December 31 2020 2019 $ 2,207 $ 5,370 91 401 $ 2,116 $ 4,969 (Continued)
		2020 $ 2,207 91 $ 2,116

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Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Accounts receivable from related parties At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Tariff refund receivables Others Other receivables from related party Royalty receivables Others		December 31	December 31
		2020 $ 768,841 5,777 $ 763,064 $ 240,122 244 $ 239,878 $ 241 2,079 $ 2,320 $ 19,803 1 $ 19,804	2019 $ 754,641 4,847 $ 749,794 $ 104,997 101 $ 104,896 $ 712 2,772 $ 3,484 $ 31,171 407 $ 31,578

(Concluded)

The average credit period of sales of goods was 60 to 90 days. No interest was charged on accounts receivable.

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

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

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

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost			No indication of default of debtor	No indication of default of debtor	Individual identification 13% $ 34,048 (4,505 ) $ 29,543	Total $ 1,011,170 (6,112
		Not Past Due 0%～0.08% $ 956,157 (1,590 ) $ 954,567	Up to 60 Days 0.08%～0.1% $ 20,923 (17 ) $ 20,906	61 to 90 Days 0.1%～0.91% $ 42 - $ 42
						$ 1,005,058

December 31, 2019

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		No indication of default of debtor	No indication of default of debtor	No indication of default of debtor	ver 365 Days T 50%～100% $ 3,652 (1,825) $ 1,827	he debtor has defaulted 100% $ 391 (391) $ -	Total $ 865,008 (5,349) $ 859,659
		Not Past Due Up to 60 Days 6 0%～0.97% 0.97%～1.1% 1 $ 817,832 $ 41,511 (2,500) (454) $ 815,332 $ 41,057	1 to 90 Days 9 .1%～7.47% $ 1,090 (81) $ 1,009	1 to 365 Days O 7.47%～50% $ 532 (98) $ 434

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Balance at December 31		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,349 1,154 (391) $ 6,112	2019 $ 4,684 665 - $ 5,349

8. INVENTORIES

Merchandise Finished goods Work in progress Raw materials		December 31	December 31
		2020 $ 161,926 405,847 105,649 269,599 $ 943,021	2019 $ 95,944 323,265 211,500 181,814 $ 812,523

The nature of the cost of goods sold is as follows:

Cost of inventories sold Inventory write-downs		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,120,063 5,356 $ 4,125,419	2019 $ 4,420,545 2,744 $ 4,423,289

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9. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements

Investor Investee Nature of Activities The Company Ta Yih International Investment Co., Ltd. (BVI) Investment	Proportion ofOwnership (%)
	December 31
	2020 2019 100 100

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Material associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.		December 31	December 31
		2020 $ 332,286	2019 $ 393,213

As of December 31, 2020 and 2019, the Company’s percentages of ownership and voting rights in Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd. were both 49%

The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.

Current assets Non-current assets Current liabilities Equity Proportion of the Group’s ownership Equity attributable to the Group Unrealized gain or loss with associates Carrying amount Operating revenue Net profit for the year Total comprehensive income for the year		December 31	December 31
		2020 2019 $ 1,802,684 $ 2,203,533 1,192,665 1,201,867 (2,307,429) (2,589,490) $ 687,920 $ 815,910 49% 49% $ 337,080 $ 399,795 (4,794) (6,582) $ 332,286 $ 393,213 For the Year Ended December 31
		2020 $ 1,871,311 $ (138,013) $ (138,013)	2019 $ 2,708,164 $ 3,095 $ 3,095

Refer to Table 4 “Information on Investments in Mainland China” for the nature of activities, principal places of business and countries of incorporation of the associates.

The investments in associates accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2020 and 2019 were

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based on the associates’ financial statements which have been audited for the same years.

11. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2019 Additions Disposals Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expenses Disposals Balance at December 31, 2019 Carrying amount at December 31, 2019 Cost Balance at January 1, 2020 Additions Disposals Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Disposals Balance at December 31, 2020 Carrying amount at December 31, 2020	Land $ 601,050 - - $ 601,050 $ - - - $ - $ 601,050 $ 601,050 - - $ 601,050 $ - - - $ - $ 601,050	Buildings $ 256,501 4,150 (4,666) $ 255,985 $ 209,527 8,816 (4,663) $ 213,680 $ 42,305 $ 255,985 2,530 - $ 258,515 $ 213,680 8,803 - $ 222,483 $ 36,032	Machinery Equipment $ 1,039,152 45,147 (33,255) $ 1,051,044 $ 810,384 57,617 (33,132) $ 834,869 $ 216,175 $ 1,051,044 51,577 (11,611) $ 1,091,010 $ 834,869 56,607 (11,487) $ 879,989 $ 211,021	Molding Equipment Transportation Equipment $ 304,435 $ 22,097 27,244 949 (284,522) (5,743) $ 47,157 $ 17,303 $ 288,128 $ 14,869 17,650 2,338 (284,522) (5,743) $ 21,256 $ 11,464 $ 25,901 $ 5,839 $ 47,157 $ 17,303 106,375 280 (22,029) - $ 131,503 $ 17,583 $ 21,256 $ 11,464 26,780 2,129 (22,029) - $ 26,007 $ 13,593 $ 105,496 $ 3,990	Other Equipment $ 408,947 31,802 (158,537) $ 282,212 $ 342,459 32,246 (158,506) $ 216,199 $ 66,013 $ 282,212 23,520 (8,574) $ 297,158 $ 216,199 29,295 (8,573) $ 236,921 $ 60,237	Total $ 2,632,182 109,292 (486,723) $ 2,254,751 $ 1,665,367 118,667 (486,566) $ 1,297,468 $ 957,283 $ 2,254,751 184,282 (42,214) $ 2,396,819 $ 1,297,468 123,614 (42,089) $ 1,378,993 $ 1,017,826

All property, plant and equipment are used by the Group.

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings	40 - 60 years
Factory and other buildings	5 - 40 years
Machinery equipment	3 - 12 years
Molding equipment	2 - 3 years
Transportation equipment	5 years
Other equipment	3 - 8 years

• 27 -

12. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Buildings Office equipment Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings Office equipment Transportation equipment Lease liabilities Carrying amount Current Non-current Range of discount rate for lease liabilities was as follows: Buildings Office equipment Transportation equipment		December 31
		2020 2019 $ - $ 5,745 2,090 2,612 6,244 10,829 $ 8,334 $ 19,186 For the Year Ended December 31
		2020 2019 $ 2,775 $ 8,570 $ 5,745 $ 5,745 522 523 7,304 6,434 $ 13,571 $ 12,702 December 31
		2020 2019 $ 4,508 $ 13,042 $ 3,905 $ 6,333 December 31
		2020 2019 - 1.44% 1.44% 1.44% 1.25% - 1.45% 1.44% - 1.45%

b. Lease liabilities

• c. Material leasing activities and terms

The Group leases certain company cars and office equipment with lease terms of 2 to 5 years. These arrangements do not contain renewal or purchase options.

The Group also leases land and buildings for the use of plants with lease terms of 2 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

• 28 -

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,409 $ 148 $ (16,455)	2019 $ 5,186 $ 254 $ (18,396)

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

13. INTANGIBLE ASSETS

Cost Balance at January 1, 2020 Additions Reclassification Balance at December 31, 2020 Accumulated amortization Balance at January 1, 2020 Amortization expense Balance at December 31, 2020 Carrying amount at December 31, 2020	Computer Software $ - 19,551 9,839 $ 29,390 $ - 10,866 $ 10,866 $ 18,524	Patents $ - 500 285 $ 785 $ - 385 $ 385 $ 400	Total $ - 20,051 10,124
			$ 30,175
			$ - 11,251
			$ 11,251
			$ 18,924

The above other intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Computer software	2	-	3	years
Patents	5	-	7	years

• 29 -

14. OTHER ASSETS

Current Input tax Tax refund receivable Payment on behalf of others Non-current Refundable deposits Prepayments for property, plant, and equipment		December 31	December 31
		2020 $ 28,846 - 106 $ 28,952 $ 14,301 21,792 $ 36,093	2019 $ 21,604 8,813 356 $ 30,773 $ 16,001 24,135 $ 40,136

15. SHORT-TERM BORROWINGS

Borrowings

Unsecured borrowings Bank unsecured loans		December 31	December 31
		2020 $ 342,400	2019 $ -

The range of interest rates on bank loans was 0.75%-1.11% per annum at December 31, 2020.

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

Both notes payable and accounts payable were generated from operating activities. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

• 30 -

17. OTHER LIABILITIES

Current Other payables Payables for salaries or bonuses Payables for molding equipment Payables for annual leave Payables for employees’ compensation Payables for utilities expense Others Other payables to related parties Payables for royalty Payables for inspection expense Payables for molds Payables for design expense Others Other current liabilities Receipts under custody Non-current Other non-current liabilities Provision for employee benefits Guarantee deposits received		December 31	December 31
		2020 $ 134,988 19,327 17,358 6,333 5,306 16,905 $ 200,217 $ 60,603 3,635 1,105 440 4,204 $ 69,987 $ 623 $ 2,526 240 $ 2,766	2019 $ 169,261 16,940 17,061 8,274 4,592 14,460 $ 230,588 $ 60,715 3,386 2,125 - 300 $ 66,526 $ 430 $ 2,488 240 $ 2,728

Provision for employee benefits is the estimate of long-term bonus for senior employees.

18. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the Republic of China (ROC). Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 11% and 8% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee and a manager pension fund administered by the manager pension fund managing committee. Pension contributions are deposited respectively in

• 31 -

the Bank of Taiwan and Taiwan Business Bank in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

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

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31
	2020 2019 $ 318,954 $ 341,705 (243,898) (229,817) $ 75,056 $ 111,888

Movements in net defined benefit liabilities were as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2019 $ 371,377 $ (236,357) Service cost Current service cost 4,003 - Net interest expense (income) 4,178 (2,696) Recognized in profit or loss 8,181 (2,696) Remeasurement Return on plan assets (excluding amounts included in net interest) - (7,030) Actuarial loss - changes in demographic assumptions 1,467 - Actuarial loss - changes in financial assumptions 13,369 - Actuarial profit - experience adjustments (1,014) - Recognized in other comprehensive income 13,822 (7,030) Contributions from the employer - (35,409) Benefits paid (51,675) 51,675 Balance at December 31, 2019 341,705 (229,817) Service cost Current service cost 3,111 - Net interest expense (income) 2,563 (1,764) Recognized in profit or loss 5,674 (1,764) Remeasurement Return on plan assets (excluding amounts included in net interest) - (7,492) Actuarial loss - changes in demographic assumptions 875 -

Net Defined Benefit Liabilities (Assets) $ 135,020 4,003 1,482 5,485 (7,030) 1,467 13,369 (1,014) 6,792 (35,409) - 111,888 3,111 799 3,910 (7,492) 875

(Continued)

• 32 -

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Actuarial loss - changes in financial assumptions $ 8,088 $ - Actuarial profit - experience adjustments (1,333) - Recognized in other comprehensive income 7,630 (7,492) Contributions from the employer - (40,880) Benefits paid (36,055) 36,055 Balance at December 31, 2020 $ 318,954 $ (243,898)	Net Defined Benefit Liabilities (Assets) $ 8,088 (1,333) 138 (40,880) - $ 75,056 (Concluded)

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

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,811 39 651 409 $ 3,910	2019 $ 4,014 45 925 501 $ 5,485

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

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

Discount rate Expected rate of salary increase	December 31
	2020 2019 0.500% 0.750% 2.000% 2.000%

• 33 -

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

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase/decrease 0.25% increase 0.25% decrease		December 31	December 31
		2020 $ (8,092) $ 8,398 $ 8,128 $ (7,874)	2019 $ (9,004) $ 9,353 $ 9,074 $ (8,782)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plans for the next year Average duration of the defined benefit obligation UITY Share capital Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Ordinary shares Shares issued Ordinary shares		December 31	December 31
		2020 $ 4,896 10.3 years	2019 $ 10,771 10.7 years 76,230 $ 762,300 76,230 $ 762,300

19. EQUITY

a. Share capital

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

b. Capital surplus

Issuance of ordinary shares Capital surplus from gain on disposal of assets Donations (dividends expired)		December 31	December 31
		2020 $ 56,330 4,142 360 $ 60,832	2019 $ 56,330 4,142 264 $ 60,736

Such capital surplus from issuance of ordinary shares and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year). Capital surplus from gain on disposal of assets may only be used to offset a deficit.

• 34 -

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors before and after amendment, refer to Note 21(f) “Employees’ compensation and remuneration of director and supervisors in for 2020 and 2019”.

In order to take the future needs of funding and long-term financial plan into consideration, when the board of directors drafts the surplus distribution, more than 50% of accumulated unappropriated earnings will be allocated as shareholders’ dividends, and the cash dividends shall not be lower than the 50% of the shareholders’ dividends. The said proportion of allocation of dividends and cash dividends shall be resolved by the resolution of the shareholders in their meeting.

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

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

The appropriations of earnings for 2019 and 2018, which were approved in the shareholders’ meetings on June 12, 2020 and June 18, 2019, respectively, were as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		Appropriation of Earnings	Appropriation of Earnings
		For the Year Ended December 31
		2019 $ 36,046 $ 304,920 $ 4	2018 $ 31,920 $ 289,674 $ 3.8

The appropriations of earnings for 2020 were proposed by the Company’s board of directors on March 24, 2021. The appropriations were as follows:

	Appropriation of	Appropriation of
		Earnings
Legal reserve	$	15,964
Cash dividends	$	99,099
Cash dividends per share (NT$)	$	1.3

The appropriations of earnings for 2020 are subject to the resolution of the shareholders in their meeting.

• 35 -

20. REVENUE

Revenue from contracts with customers Revenue from sale of goods		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,797,165	2019 $ 5,390,196

• a. Contract information

Revenue from sale of goods

The Group’s primary products are car lamps and molds. Car lamps and molds are sold at their respective fixed amounts as agreed in the contracts.

• b. Contract balances

Accounts receivable (including related parties) (Note 7) Contract liabilities - current Deferred revenue	December 31, 2020 $ 1,002,942 $ 158,868	December 31, 2019 $ 854,690 $ 313,094	January 1, 2019 $ 780,046
			$ 323,019

The changes in the balance of contract assets and contract liabilities primarily resulted from the timing differences between the Group’s satisfaction of performance obligations and the respective customer’s payment.

Revenue recognized in the current year from the contract liabilities at the beginning of the year is as follows:

From the contract liabilities at the beginning of the year Sale of goods		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 231,987	2019 $ 276,527

c. Disaggregation of revenue

Type of goods Car lamps Molds Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,525,336 734,172 537,657 $ 4,797,165	2019 $ 4,091,095 713,040 586,061 $ 5,390,196

• 36 -

21. PROFIT BEFORE INCOME TAX

a. Interest income

Bank deposits b. Other income Royalty revenue Government grants revenue (Note 28) Others		For the Year Ended December 31	For the Year Ended December 31
		2020 2019 $ 173 $ 420 For the Year Ended December 31
		2020 $ 46,031 42,506 16,160 $ 104,697	2019 $ 70,203 - 5,910 $ 76,113

c. Other gains and losses

Fair value changes of financial assets and financial liabilities Financial assets classified as at FVTPL Interest on bank loans Interest on lease liabilities Net foreign exchange losses Royalty expense Loss on disposal of property, plant and equipment Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ - (2,557) (219) (10,193) (15,098) (125) (17,155) $ (45,347)	2019 $ 1 (1,277) (340) (3,376) (26,813) (157) (9,714) $ (41,676)

d. Depreciation and amortization

Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating costs Operating expenses		For the Year Ended December 31 2020 2019 $ 123,614 $ 118,667 13,571 12,702 11,251 - $ 148,436 $ 131,369 $ 117,834 $ 113,919 19,351 17,450 $ 137,185 $ 131,369 (Continued)
		2020 $ 123,614 13,571 11,251 $ 148,436 $ 117,834 19,351 $ 137,185

• 37 -

An analysis of amortization by function Operating costs Operating expenses		For the Year Ended December 31 2020 2019 $ 2,565 $ - 8,686 - $ 11,251 $ - (Concluded)
		2020 $ 2,565 8,686 $ 11,251

• e. Employee benefits expense

Short-term benefits Salaries Directors’ remuneration Labor and health insurance Others Post-employment benefits Defined contribution plans Defined benefit plans (Note 18) Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 506,998 900 49,899 23,702 581,499 21,141 3,910 25,051 $ 606,550 $ 386,252 220,298 $ 606,550	2019 $ 581,610 690 53,939 25,379 661,618 22,244 5,485 27,729 $ 689,347 $ 442,022 247,325 $ 689,347

• f. Employees’ compensation and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrued employees’ compensation at the rates of no less than 1% of net profit after offsetting previous fiscal deficits, and before income tax, and employees’ compensation. The employees’ compensation for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on March 24, 2021 and March 6, 2020, respectively, were as follows:

Accrual rate

Employees’ compensation Amount Employees’ compensation - cash	For the Year Ended December 31
	2020 2019 1% 1% For the Year Ended December 31
	2020 2019 $ 1,804 $ 4,529

• 38 -

Remuneration of directors and supervisors was not issued over the years.

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of employees’ compensation paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2019 and 2018.

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

• g. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 38,536 (48,729) $ (10,193)	2019 $ 40,031 (43,407) $ (3,376)

22. INCOME TAX

• a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustment for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 48,371 703 (9,345) 39,729 (20,850) $ 18,879	2019 $ 86,437 - 60 86,497 1,397 $ 87,894

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

Profit before tax Income tax expense calculated at the statutory rate Tax-exempt income Unrecognized deductible temporary differences Income tax on unappropriated earnings Adjustments for prior years’ tax Income tax expense recognized in profit or loss		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 178,629 $ 35,726 (8,501) 296 703 (9,345) $ 18,879	2019 $ 448,351 $ 89,670 - (1,836) - 60 $ 87,894

• 39 -

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

b. Income tax recognized in other comprehensive income

					For	the Year Ended December 31	the Year Ended December 31	the Year Ended December 31	the Year Ended December 31	the Year Ended December 31
						2020				2019
	Deferred tax
	In respect of the current year
	Remeasurement of defined benefit plans				$	27		$		1,358
	Exchange differences on translating foreign operations					(969)				3,062
					$	(942)		$		4,420
	Current tax assets and liabilities
						December			31
						2020				2019
	Current tax assets
	Tax refund receivable (classified	under other current assets)			$		-	$		8,813
	Prepaid income tax (classified under prepayments)						-			4,947
					$		-	$		13,760
	Current tax liabilities
	Income tax payable				$	64,112		$		49,383
	Deferred tax assets and liabilities
	The movements of deferred tax assets and deferred tax			liabilities were		as follows:
	For the year ended December 31, 2020
						Recognized in
						Other
				Recognized in		Comprehensive
		Opening	Balance	Profit or Loss		Income			Closing Balance
	Deferred Tax Assets
	Temporary differences
	Allowance for reduction of inventory to	$	1,498	$	1,071	$		-	$	2,569
	market
	Unrealized gain or loss with associates		1,316		(357 )			-		959
	Long-term employee benefit liability		498		7			-		505
	Deferred revenue		-		14,185			-		14,185
	Defined benefit plans		22,377		(7,393 )			27		15,011
	Payables for annual leave		3,412		60			-		3,472
	Unrealized exchange losses		1,863		32			-		1,895
										(Continued)

c. Current tax assets and liabilities

d. Deferred tax assets and liabilities

• 40 -

Opening Balance Exchange differences on translating the financial statements of foreign operations $ 5,373 $ 36,337 Deferred Tax Liabilities Temporary differences Unappropriated earnings of associates $ 40,667 Land value tax 76,736 $ 117,403	Recognized in Profit or Loss $ - $ 7,605 $ (13,425 ) - $ (13,245)	Recognized in Other Comprehensive Income $ (969 ) $ (942) $ - - $ -	Closing Balance $ 4,404 $ 43,000 $ 27,422 76,736 $ 104,158 (Concluded)

For the year ended December 31, 2019

Opening Balance Deferred Tax Assets Temporary differences Allowance for reduction of inventory to market $ 949 Unrealized gain or loss with associates 1,509 Long-term employee benefit liability 481 Defined benefit plans 27,004 Payables for annual leave 3,566 Unrealized exchange losses - Exchange differences on translating the financial statements of foreign operations 2,311 $ 35,820 Deferred Tax Liabilities Temporary differences Unappropriated earnings of associates $ 42,207 Unrealized exchange gains 966 Land value tax 76,736 $ 119,909	Recognized in Profit or Loss $ 549 (193 ) 17 (5,985 ) (154 ) 1,863 - $ (3,903) $ (1,540 ) (966 ) - $ (2,506)	Recognized in Other Comprehensive Income $ - - - 1,358 - - 3,062 $ 4,420 $ - - - $ -	Closing Balance $ 1,498 1,316 498 22,377 3,412 1,863 5,373
			$ 36,337
			$ 40,667 - 76,736
			$ 117,403

• e. Income tax assessments

The tax returns of the Company through 2018 have been assessed by the tax authorities.

23. EARNINGS PER SHARE

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

Net profit for the year		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 159,750	2019 $ 360,457

• 41 -

Shares

Unit: In Thousands of Shares

Weighted average number of ordinary shares used in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		For the Year Ended December 31	For the Year Ended December 31
		2020 76,230 45 76,275	2019 76,230 82 76,312

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

24. CASH FLOW INFORMATION

• a. Non-cash transactions

In addition to those disclosed in other notes, the Group entered into the following non-cash investing and financing activities that were not reflected in the consolidated statements of cash flows for the years ended December 31, 2020 and 2019:

Increase in property, plant and equipment Increase (decrease) in prepayments for equipment		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 184,282 (2,343) $ 181,939	2019 $ 109,292 1,809 $ 111,101

• b. Changes in liabilities arising from financing activities

For the year ended December 31, 2020

Balance at January 1, 2020 Net cash flows from financing activities Non-cash changes New leases Lease modifications Effect of foreign currency exchange differences Balance at December 31, 2020	Short-term borrowings $ - 343,682 - - (1,282) $ 342,400	Lease liabilities $ 19,375 (13,679) 2,775 (58) - $ 8,413

• 42 -

For the year ended December 31, 2019

Balance at January 1, 2019 Adjustments on initial application of IFRS 16 Restated on January 1, 2019 Net cash flows from financing activities Non-cash changes New leases Lease modifications Balance at December 31, 2019	Lease liabilities $ - 25,543 25,543 (12,842) 8,570 (1,896) $ 19,375

25. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Group consists of net debt (borrowings offset by cash) and equity of the Group. The Group is not subject to any externally imposed capital requirements.

26. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

The carrying amounts of the Group’s financial instruments that are not measured at fair value, such as cash, accounts receivable (including related parties), refundable deposits (classified under other non-current assets), accounts payable (including related parties), and guarantee deposits received (classified under other non-current liabilities) approximate their fair values.

• b. Categories of financial instruments

Financial assets Financial assets at amortized cost (1) Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2020 2019 $ 1,149,647 $ 1,001,636 1,495,691 1,121,378

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

• 2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, notes and accounts payable (including related parties), other payables (including related parties), and guarantee deposits received (classified under non-current liabilities).

• 43 -

• c. Financial risk management objectives and policies

The Group’s major financial instruments include equity investments, accounts receivable, accounts payable, borrowings and lease liabilities

The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks are market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

a) Foreign currency risk

The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities exposed to foreign currency risk at the end of the reporting period are set out in Note 29.

Sensitivity analysis

The Group was mainly exposed to the USD.

The following table details the Group’s sensitivity to an increase and decrease of 1% in the functional currency against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items. A positive number below indicates an increase in pre-tax profit. For a 1% weakening of the functional currency against the relevant foreign currency, there would be an equal and opposite impact on pre-tax profit, and the balances below would be negative.

Profit or loss	USD Impact
	For the Year Ended December 31
	2020 2019 $ 1,508 $ 2,437

Exchange rate fluctuations are mainly attributable to the exposure on outstanding cash, accounts receivable, short-term borrowings and accounts payable in foreign currency which were not hedged at the end of the reporting period.

In management’s opinion, the sensitivity analysis was unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period did not reflect the exposure during the period. Sales quoted in USD may change with the fluctuation of client orders.

• 44 -

b) Interest rate risk

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

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	For the Year Ended December 31
	2020 2019 $ 3,905 $ 6,333 104,693 82,556 342,400 -

Sensitivity analysis

For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the year was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased by $2,377 thousand and $0 thousand, respectively, which was mainly a result of variable-rate borrowings.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Group, could be equal to the total of the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The Group’s credit risk primarily arose from sales of the top 3 clients, which contributed more than 10% of the operating revenue in the statements of comprehensive income. The total percentages of accounts receivable (include related parties) from the above clients for the years ended December 31, 2020 and 2019 were 64% and 70%, respectively.

3) Liquidity risk

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

All of the financial liabilities of the Group had original maturities of less than one year, except the lease liabilities. Because equity was greater than liabilities in the Group’s capital structure, and the unused bank quotas and working capital were abundant, there was no material liquidity risk.

• 45 -

Additional information about the maturity analysis for lease liabilities:

December 31, 2020

Less than 1 Year Lease liabilities $ 4,593 December 31, 2019 Less than 1 Year Lease liabilities $ 13,235	1-5 Years $ 3,963
	1-5 Years $ 6,441

27. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Company and other related parties are disclosed below.

• a. Related party name and category

Related Party Name Related Party Category Koito Manufacturing Co., Ltd. Investors with significant influence over the Company Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Associates Guangzhou Koito Automotive Lamp Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd. India Japan Lighting Private Limited Subsidiary of Koito Manufacturing Co., Ltd. PT. Indonesia Koito Subsidiary of Koito Manufacturing Co., Ltd. Thai Koito Company Limited Subsidiary of Koito Manufacturing Co., Ltd. Hubei Koito Automotive Lamp Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd. North American Lighting Inc. Subsidiary of Koito Manufacturing Co., Ltd. NAL DO BRASIL INDUSTRIA E COMERCIO DE Subsidiary of Koito Manufacturing Co., COMPONENTES DE ILUMINACAO LTDA Ltd. TYC Brother Industrial Co., Ltd. Substantive related party DBM Reflex of Taiwan Co., Limited Substantive related party Mai Huang Enterprise Co., Ltd. Substantive related party Juoku Technology Co., Ltd. Substantive related party Ta Yih Investment Co., Ltd. Substantive related party Ta Yih International Hotel Co., Ltd. Substantive related party Nai Yi Entertainment Company Ltd. Substantive related party Wu Jinmao Culture and Education Foundation Substantive related party Ta Yih Kenmos Auto Parts Co., Ltd. Substantive related party Ta Mao Operating Consultant Co., Ltd. Substantive related party

• 46 -

b. Sales of goods

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 951,920 186,517 63,976 194 $ 1,202,607	2019 $ 911,282 162,734 61,722 649 $ 1,136,387

The prices of sales of goods with related parties did not have substantive difference compared to non-related parties, except the prices of sales of goods with associates were added based on the costs. The collection term of domestic sales with related parties is 90 days, the collection term of export sales with related parties apart from associates, according to the term of individual transaction, is 120 to 180 days, and the collection term does not have substantive difference compared to non-related parties.

The unrealized gains on sales with associates for the years ended December 31, 2020 and 2019 were $4,794 thousand and $6,582 thousand, respectively, and had been recognized as a reduction of investments accounted for using the equity method.

c. Purchases of goods

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 403,969 20,807 678 26,880 $ 452,334	2019 $ 364,661 3,062 465 15,776 $ 383,964

The payment term and price of goods purchased do not have substantive difference between related and non-related parties. The payment term for related parties depends on individual transaction, which is normally 90 days, and does not have substantive difference from non-related parties.

d. Contract liabilities - 2019

Related Party Category/Name Investors with significant influence over the Company Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.	December 31, 2019 $ 3,652 46,117
	$ 49,769

• 47 -

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

December 31 Line Item Related Party Category/Name 2020 2019 Accounts receivable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. $ 186,041 $ 98,473 Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd 29,408 6,512 Subsidiary of Koito Manufacturing Co., Ltd. 24,673 - Substantive related party - 12 240,122 104,997 Less: Allowance for impairment loss 244 101 $ 239,878 $ 104,896 Other receivables Investors with significant influence over the Company Koito Manufacturing Co., Ltd. $ - $ 76 Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd 19,803 31,502 Subsidiary of Koito Manufacturing Co., Ltd. 1 - $ 19,804 $ 31,578 The outstanding trade receivables from related parties are unsecured. f. Payables to related parties (excluding loans from related parties) December 31 Line Item Related Party Category/Name 2020 2019 Notes payable Substantive related party $ - $ 1,005 Accounts payable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. $ 61,540 $ 46,751 Associates 2,273 417 Substantive related party 7,232 9,062 $ 71,045 $ 56,230 Other payable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. $ 67,190 $ 64,392 Associates 454 9 Subsidiary of Koito Manufacturing Co., Ltd. 1,239 - Substantive related party 1,104 2,125 $ 69,987 $ 66,526		December 31	December 31
		2020 $ - $ 61,540 2,273 7,232 $ 71,045 $ 67,190 454 1,239 1,104 $ 69,987	2019 $ 1,005 $ 46,751 417 9,062 $ 56,230 $ 64,392 9 - 2,125 $ 66,526

The outstanding payables to related parties are unsecured.

• 48 -

g. Prepayments

Line Item Related Party Category/Name Prepayments to suppliers Subsidiary of Koito Manufacturing Co., Ltd. Prepaid expenses Investors with significant influence over the Company Prepayments for equipment (classified under other non-current assets) Substantive related party		December 31	December 31
		2020 $ 55 175 $ 230 $ 880	2019 $ - 1,419 $ 1,419 $ -

• h. Acquisition of property, plant and equipment

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Acquisition of other assets (classified under intangible assets) Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd.		Purchase Price	Purchase Price
		For the Year Ended December 31
		2020 2019 $ 8,910 $ - Purchase Price
		For the Year Ended December 31
		2020 $ 554	2019 $ -

• i. Acquisition of other assets (classified under intangible assets)

j. Other transactions with related parties

1) Royalty expenses

The Group entered into a royalty expense contract with its investor with significant influence - Koito Manufacturing Co., Ltd. from April 23, 2016 to April 22, 2022. The royalty expenses were $86,342 thousand and $96,574 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as operating costs and operating expenses.

2) Examination expenses

The Group entrusted its investor with significant influence - Koito Manufacturing Co., Ltd. for assistance on the examination of the headlight products. The examination expenses were $15,199 thousand and $20,092 thousand the years ended December 31, 2020 and 2019, respectively, and had been recognized as selling and marketing expenses.

• 49 -

3) Royalty revenue

The Group entered into a royalty revenue contract with its associate - Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd. from April 1, 2019 to March 31, 2024. The royalty revenues were $39,762 thousand and $62,847 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as other income of non-operating income and expenses. According to the contract, 50% of the royalty revenue should be paid to its investor with significant influence - Koito Manufacturing Co., Ltd. which amounted to $15,098 thousand and $26,813 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as other losses, net of non-operating income and expenses.

The Group entered into a contract with subsidiary of Koito Manufacturing Co., Ltd - Hubei Koito Automotive Lamp Co., Ltd. from December 25, 2015 to December 24, 2020. The royalty revenues were $4,235 thousand and $7,193 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as other income of non-operating income and expenses.

The Group entered into a contract with subsidiary of Koito Manufacturing Co., Ltd - Guangzhou Koito Automotive Lamp Co., Ltd. from November 11, 2019 to December 31, 2020. The royalty revenue was $2,034 thousand and $163 thousand for the year ended December 31, 2020, and 2019, respectively, and had been recognized as other income of non-operating income and expenses.

• k. Donations (classified under general and administrative expenses)

Related Party Category/Name Substantive related party l. Remuneration of key management personnel		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 53	2019 $ 1,000

Short-term employee benefits Post-employment benefits		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 13,860 132 $ 13,992	2019 $ 18,806 165 $ 18,971

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

28. OTHER ITEMS

As a result of the COVID-19 pandemic, the Group’s major U.S. client suspended operations starting from the end of March 2020 to the end of May 2020, leading to delayed shipments and a reduction in order volume, resulting in a substantial decline of 36% in operating revenue from April 2020 to June 2020 compared to the same period of the previous year. In response, the Group has successively applied to the government for salary subsidies, and obtained up to $42,506 thousand in funding (refer to Note 21). Since the end of May 2020, the U.S. client has gradually resumed operations. As of the date the consolidated financial statements were authorized for issue, the Group continues to evaluate the economic impact of the COVID-19 pandemic.

• 50 -

29. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

December 31, 2020

		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
USD	$	10,147	28.100	$	285,120
CNY		17,964	4.316		77,532
JPY		816,722	0.2725		222,557
Non-monetary items
Investments accounted for using the equity
method
CNY		77,227	4.365		337,080
Financial liabilities
Monetary items
USD		4,779	28.100		134,278
CNY		6,670	4.316		28,789
JPY		251,528	0.2725		68,541
December 31, 2019
		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
USD	$	8,769	30.005	$	263,105
CNY		20,089	4.299		86,363
JPY		390,852	0.2758		107,797
Non-monetary items
Investments accounted for using the equity
method
CNY		93,030	4.297		399,795
Financial liabilities
Monetary items
USD		647	30.005		19,412
CNY		4,285	4.299		18,420
JPY		202,742	0.2758		55,916

The carrying amount of investments accounted for using the equity method does not contain the reduction of unrealized gains.

• 51 -

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

For the Year Ended December 31

Foreign Currency USD CNY JPY	2020 Exchange Rate Net Foreign Exchange Gains (Losses) 29.408 (USD:NTD) $ (36,171) 4.26 (CNY:NTD) 696 0.2762 (JPY:NTD) 25,282 $ (10,193)	2019
		Exchange Rate Net Foreign Exchange Gains (Losses) 30.85 (USD:NTD) $ (5,279) 4.47 (CNY:NTD) (3,226) 0.2828 (JPY:NTD) 5,129 $ (3,376)

30. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:

• 1) Financing provided to others (None)

• 2) Endorsements/guarantees provided (None)

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (None)

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 1)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 2)

• 9) Trading in derivative instruments (None)

• 10) Intercompany relationships and significant intercompany transactions (None)

• b. Information on investees (Table 3)

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 4)

• 52 -

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Table 5):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period

  • c) The amount of property transactions and the amount of the resultant gains or losses

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services

• d. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 6)

31. SEGMENT INFORMATION

• a. Segment revenue, results, total assets and liabilities

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group is considered one segment by the chief operating decision maker. The basis for such measurement is the same as that for the preparation of financial statements. Refer to the consolidated statements of comprehensive income for the related segment revenue and operating results.

• b. Revenue from major products and services

The following is an analysis of the Group’s revenue from continuing operations from its major products and services.

Car lamps Molds Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,525,336 734,172 537,657 $ 4,797,165	2019 $ 4,091,095 713,040 586,061 $ 5,390,196

• c. Geographical information

The Group mainly operates in one principal geographical area - Taiwan.

• 53 -

The Group’s revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below.

Taiwan Japan China USA Others Taiwan		Revenue from External Customers	Revenue from External Customers
		For the Year Ended December 31
		2020 2019 $ 2,276,338 $ 2,609,919 957,426 930,818 203,599 264,970 1,205,471 1,441,893 154,331 142,596 $ 4,797,165 $ 5,390,196 Non-current Assets
		December 31
		2020 $ 1,399,162	2019 $ 1,393,817

Non-current assets exclude financial instruments and deferred tax assets.

• d. Information about major customers

Single customers contributing 10% or more to the Group’s revenue were as follows:

Customer A Customer B Investors with significant influence over the Company		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,279,655 1,281,609 951,920 $ 3,513,184		% 27 27 20 74	2019 $ 1,522,789 1,536,520 911,282 $ 3,970,591	% 28 29 17 74

• 54 -

TABLE 1

Ta Yih Industrial Co., Ltd. And Subsidiaries

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

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

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
The Company	Koito Manufacturing Co., Ltd. Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Investors with significant influence over the Company Associates accounted for using the equity method	Sales Purchases Sales	$ (951,920) 403,969 (186,517)	(20) 11 (4)	90 days 90 days 120 to 180 days	No significant differences No significant differences Cost plus pricing	No significant differences No significant differences 120 to 180 days. Generally 90 days.	Accounts receivable $ 186,041 Accounts payable (61,540) Accounts receivable 29,408	19 (7) 3

• 55 -

TABLE 2

Ta Yih Industrial Co., Ltd. And Subsidiaries

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance (Note 1)	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The Company	Koito Manufacturing Co., Ltd.	Investors with significant influence over the Company	$ 186,041	6.69	$ -	－	$ 186,041	$ 94

• 56 -

TABLE 3

Ta Yih Industrial Co., Ltd. And Subsidiaries

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
The Company	Ta Yih International Investment Co., Ltd.	Omar Hodge Building, Wickhams Cay I P.O. Box 362, Road Town, Tortola, British Virgin Islands	Investment	$ 1,367	$ 1,367	50,000	100	$ 860	$ (53)	$ (53)

Note: Information on investments in mainland China, refer to Table 4.

• 57 -

TABLE 4

Ta Yih Industrial Co., Ltd. And Subsidiaries

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2019 (Note 5)	Remittance of Funds	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020 (Note 4)
						Outward		Inward
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Import, export and sale of automobile lamps in mainland China	US $9 million (Note 2) (NT $252,900 thousand) (Note 3)	Entrusting Ta Yih International Investment Co., Ltd. which was established in third region to invest in mainland China. Items referred to Rule No. 84022220 issued by the Investment Commission,MOEA.		$ 42,470	$	-	$ -	$ 42,470	$ (138,013)	49	$ (67,628)	$ 332,286	$ 238,605
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020				Investment Amount Authorized by The Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by The Investment Commission, MOEA (Note 6)
$ 42,470				US$4.41 million (Note 2) (NT$123,921 thousand) (Note 3)			$1,760,329×60%＝$1,056,197

Note 1： Amount was recognized based on the audited financial statements.

Note 2： On January 18, 1996, the Investment Commission, MOEA approved the investment of US$2.5 million (including cash investment of US$1.76 million and machinery investment of US$740,000) through the approval of the Rule No. 84022220. On February 20, 2001, according to the Rule No. 90003791, approved by the Investment Commission, MOEA, the Company entrusted Ta Yih Investment Co., Ltd. which was established in the third region to invest US$500,000 on machinery equipment. However, there was still US$150,000 left unpaid. Therefore, the amount of capital owned by Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was only US$2.85 million. However, at the end of November 2005, the Company transferred 51% of the investment to Koito Manufacturing Co., Ltd. In December 2007, Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd resolved to issue share dividends from capital surplus of US$2.45 million , of which the investment amount belonged to the Company was US$2.45 million × 49% = US$1.205 million, and had been approved by the Investment Commission, MOEA on March 24, 2008. In August 2008, the Company applied for issuing share dividends from capital surplus of US$1.5 million, of which the amount of investment belonged to the company was US$1.5 million × 49% = US$735,000, and had been approved by the Investment Commission, MOEA on August 6, 2008. In May 2010, the Company applied for issuing share dividends from capital surplus of US$2.2 million, of which the amount of investment belonged to the Company was US$2.2 million × 49% = US$1.078 million. As of December 31, 2020, the paid-in capital of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was US$9 million. The registration was completed in July 2010 and had been approved by the Investment Commission, MOEA on November 30, 2010.

Note 3： The amount in the table should be shown in NTD (exchange rate was 28.1 at reporting date).

Note 4： Inward cash dividends.

Note 5： The original amount of investment was NT$86,673 thousands. 51% equity of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was sold for NT$44,203 thousands.

Note 6： The upper limit according to “Principle of Investment or Technical Cooperation in Mainland China” issued by the Investment Commission, MOEA on August 29, 2008.

• 58 -

TABLE 5

Ta Yih Industrial Co., Ltd. And Subsidiaries

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investee Company	Transaction Type	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized Gain	Note
		Amount		Payment Terms	Comparison with Normal Transactions	Ending Balance	%
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Sales Royalty revenue	$ 186,517 39,762	Cost plus pricing According to the contract	120 to 180 days Every 180 days.	90 days N/A	Accounts receivable $ 29,408 Other receivables 19,803	3 90	$ 1,327 -

• 59 -

TABLE 6

Ta Yih Industrial Co., Ltd. And Subsidiaries

INFORMATION OF MAJOR SHAREHOLDERS December 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Koito Manufacturing Co., Ltd. Ta Wei Investment Co., Ltd.	24,774,750 22,523,880	32.50% 29.54%

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers their shareholdings to a trust, the above information will be disclosed by the individual trustee who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Securities and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to the Market Observation Post System website of the Taiwan Stock Exchange.

• 60 -

Appendix 2

2020 Individual Financial Statements

104

Ta Yih Industrial Co., Ltd.

Standalone Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

• 1 -

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Ta Yih Industrial Co., Ltd.

Opinion

We have audited the accompanying standalone financial statements of Ta Yih Industrial Co., Ltd. (the “Company”), which comprise the standalone balance sheets as of December 31, 2020 and 2019, and the standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the standalone financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying standalone financial statements present fairly, in all material respects, the standalone financial position of the Company as of December 31, 2020 and 2019, and its standalone financial performance and its standalone cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the audit of the Company’s standalone financial statements for the year ended December 31, 2020 is as follows:

s

• 2 -

Sales Revenue

The operating revenue of Ta Yih Industrial Co., Ltd. mainly comes from the sale of automobile and locomotive lamps. As revenue from a particular customer changed significantly from the previous year, and whether the revenue actually occurred is a predetermined risk in the Statement of Auditing Standards; therefore, the validity of revenue from the particular customer has been identified as a key audit matter. For the accounting policies related to operating revenue, refer to Table 4.

Our main audit procedures performed in respect of the above-mentioned key audit matter are as follows:

1. We understood the internal controls related to revenue recognition and tested the operating effectiveness of the controls.

2. We performed substantive tests on sales revenue, checked the customer's delivery records and other transaction vouchers and bank collection records, and checked whether the counterparty of the sales transactions is the same as the counterparty making payment, in order to determine that the sales transactions actually occurred.

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

Management is responsible for the preparation and fair presentation of the standalone financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of standalone financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Standalone Financial Statements

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

As part of an audit 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:

1. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures

3. 3 -

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• 4 -

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

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

• Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision, and performance of the Company audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine a matter that was of most significance in the audit of the standalone financial statements for the year ended December 31, 2020 and is therefore the key audit matter. We describe this matter in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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

Deloitte & Touche Taipei, Taiwan Republic of China

March 24, 2021

Notice to Readers

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

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

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Ta Yih Industrial Co., Ltd.

STANDALONE BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash (Notes 4 and 6) Notes receivable (Notes 4 and 7) Accounts receivable (Notes 4, 7 and 19) Accounts receivable from related parties (Notes 4, 7, 19 and 26) Other receivables (Notes 4 and 7) Other receivables from related parties (Notes 4, 7 and 26) Inventories (Notes 4 and 8) Prepayments (Notes 21 and 26) Other current assets (Notes 13 and 21) Total current assets NON-CURRENT ASSETS Investments accounted for using the equity method (Notes 4 and 9) Property, plant and equipment (Notes 4, 10 and 26) Right-of-use assets (Notes 4 and 11) Intangible assets (Notes 4, 12 and 26) Deferred tax assets (Notes 4 and 21) Other non-current assets (Notes 4, 13 and 26) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 14) Contract liabilities - current (Notes 4, 19 and 26) Notes payable (Note 15) Notes payable to related parties (Notes 15 and 26) Accounts payable (Note 15) Accounts payable to related parties (Notes 15 and 26) Other payables (Note 16) Other payables to related parties (Notes 16 and 26) Current tax liabilities (Notes 4 and 21) Lease liabilities - current (Notes 4 and 11) Other current liabilities (Note 16) Total current liabilities NON-CURRENT LIABILITIES Deferred tax liabilities (Notes 4 and 21) Lease liabilities - non-current (Notes 4 and 11) Net defined benefit liabilities (Notes 4 and 17) Other non-current liabilities (Note 16) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 18) Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company TOTAL		December 31, 2020 Amount % $ 107,304 3 2,116 - 763,064 21 239,878 6 2,320 - 19,804 - 943,021 26 105,994 3 28,952 1 2,212,453 60 333,146 9 1,017,826 28 8,334 - 18,924 1 43,000 1 36,093 1 1,457,323 40 $ 3,669,776 100 $ 342,400 9 158,868 4 95,488 3 - - 716,314 20 71,045 2 200,217 5 69,987 2 64,112 2 4,508 - 623 - 1,723,562 47 104,158 3 3,905 - 75,056 2 2,766 - 185,885 5 1,909,447 52 762,300 21 60,832 2 651,251 17 68,264 2 255,145 7 974,660 26 (37,463) (1) 1,760,329 48 $ 3,669,776 100		December 31, 2019
				Amount % $ 89,954 2 4,969 - 749,794 21 104,896 3 3,484 - 31,578 1 812,523 22 361,970 10 30,773 1 2,189,941 60 394,173 11 957,283 26 19,186 1 - - 36,337 1 40,136 1 1,447,115 40 $ 3,637,056 100 $ - - 313,094 9 236,059 6 1,005 - 530,730 15 56,230 2 230,588 6 66,526 2 49,383 1 13,042 - 430 - 1,497,087 41 117,403 4 6,333 - 111,888 3 2,728 - 238,352 7 1,735,439 48 762,300 21 60,736 1 615,205 17 68,264 2 436,472 12 1,119,941 31 (41,360) (1) 1,901,617 52 $ 3,637,056 100

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

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 19 and 26) OPERATING COSTS (Notes 8, 17, 20 and 26) GROSS PROFIT UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 7, 17, 20 and 26) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 20 and 26) Interest income Other income Other gains and losses Share of profit or loss of subsidiaries and associates Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 21) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 17)		2020 Amount % $ 4,797,165 100 4,125,419 86 671,746 14 (1,327) - 3,115 - 673,534 14 159,570 3 147,185 3 178,836 4 1,154 - 486,745 10 186,789 4 171 - 104,697 2 (45,347) (1) (67,681) (1) (8,160) - 178,629 4 18,879 1 159,750 3 (138) -		2019
				Amount % $ 5,390,196 100 4,423,289 82 966,907 18 (3,008) - 3,971 - 967,870 18 184,519 4 170,674 3 199,992 4 665 - 555,850 11 412,020 7 415 - 76,113 2 (41,676) (1) 1,479 - 36,331 1 448,351 8 87,894 1 360,457 7 (6,792) - (Continued)

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 21) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss (Notes 4 and 21) Other comprehensive income (loss) for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (New Taiwan dollars, Note 22) Basic Diluted		2020 Amount % 27 - (111) - 4,866 - (969) - 3,897 - 3,786 - $ 163,536 3 $ 2.10 $ 2.09		2019
				Amount % 1,358 - (5,434) - (15,530) (1) 3,062 - (12,468) (1) (17,902) (1) $ 342,555 6 $ 4.73 $ 4.72
		$		$

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

(Concluded)

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

BALANCE AT JANUARY 1, 2019 Appropriation of the 2018 earnings (Note 18) Legal reserve Cash dividends distributed by the Company - NT$3.8 per share Unclaimed cash dividends overdue transferred to capital surplus Net profit for the year ended December 31, 2019 Other comprehensive loss for the year ended December 31, 2019, net of income tax Total comprehensive income for the year ended December 31, 2019 BALANCE AT DECEMBER 31, 2019 Appropriation of the 2019 earnings (Note 18) Legal reserve Cash dividends distributed by the Company - NT$4 per share Unclaimed cash dividends overdue transferred to capital surplus Net profit for the year ended December 31, 2020 Other comprehensive income for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 BALANCE AT DECEMBER 31, 2020		Share Capital Number of Shares Amount Capital Surplus 76,230 $ 762,300 $ 60,605 - - - - - - - - 131 - - - - - - - - - 76,230 762,300 60,736 - - - - - - - - 96 - - - - - - - - - 76,230 $ 762,300 $ 60,832		Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 583,285 $ 68,264 $ 403,043 31,920 - (31,920) - - (289,674) - - - - - 360,457 - - (5,434) - - 355,023 615,205 68,264 436,472 36,046 - (36,046) - - (304,920) - - - - - 159,750 - - (111) - - 159,639 $ 651,251 $ 68,264 $ 255,145	Other Equity Exchange Differences on Translating Foreign Operations $ (28,892) - - - - (12,468) (12,468) (41,360) - - - - 3,897 3,897 $ (37,463)	Total Equity $ 1,848,605 - (289,674) 131 360,457 (17,902) 342,555 1,901,617 - (304,920) 96 159,750 3,786 163,536 $ 1,760,329
		Number of Shares 76,230 - - - - - - 76,230 - - - - - - 76,230

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

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized on trade receivables Net gain on fair value changes of financial assets at fair value through profit or loss Finance costs Interest income Share of profits of subsidiaries and associates Loss on disposal of property, plant and equipment, net Provision for loss on inventories Unrealized gain on transactions with associates Realized gain on transactions with associates Net loss on foreign currency exchange Gain on disposal of right-of-use assets Changes in operating assets and liabilities: Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Other current assets Contract liabilities Notes payable Notes payable to related parties Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Other non-current assets Cash generated from operations Interest received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES	2020 $ 178,629 137,185 11,251 1,154 - 2,776 (171) 67,681 125 5,356 1,327 (3,115) 395 (2) 3,163 (15,551) (135,571) 1,164 12,004 (135,854) 240,905 (6,992) (154,226) (140,571) (1,005) 185,407 14,491 (30,448) 3,461 193 (36,970) 38 206,229 171 (2,699) (11,240) 192,461	2019 $ 448,351 131,369 - 665 (1) 1,617 (415) (1,479) 157 2,744 3,008 (3,971) 13,825 (11) 1,354 (188,336) 97,812 709 16,627 (29,298) (138,302) 9,843 (9,925) 50,246 (5,432) 46,893 14,608 7,024 (2,211) 194 (29,925) 81 437,821 415 (1,277) (47,688) 389,271

(Continued)

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese)

Ta Yih Industrial Co., Ltd.

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Payments for property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Payments for intangible assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from short-term bills payable Repayments of short-term bills payable Proceeds from guarantee deposits received Refunds of guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends Unclaimed cash dividends overdue transferred to capital surplus Net cash generated from (used in) financing activities NET INCREASE (DECREASE) IN CASH CASH AT THE BEGINNING OF THE YEAR CASH AT THE END OF THE YEAR	2020 - - (181,939) (1,603) 3,303 (20,051) (200,290) 2,146,454 (1,802,772) 420,000 (420,000) - - (13,679) (304,920) 96 25,179 17,350 89,954 $ 107,304	2019 (10,000) 10,001 (111,101) (3,624) 4,502 - (110,222) 836,026 (836,026) - - 80 (30) (12,842) (289,674) 131 (302,335) (23,286) 113,240 $ 89,954

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

(Concluded)

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NOTES TO STANDALONE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Ta Yih Industrial Co., Ltd.

1. GENERAL INFORMATION

Ta Yih Industrial Co., Ltd. (the “Company”) was incorporated in 1964. It was formerly known as Ta Yih Industrial Corp. and changed to its present name in 1976. The Company mainly sells, manufactures and processes automobile parts, motorcycle parts, railway vehicle parts, transportation machineries, industrial plastic parts, as well as invests in related industries.

The Company’s shares have been trading on the Taiwan Stock Exchange since October 1997.

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

2. APPROVAL OF FINANCIAL STATEMENTS

The standalone financial statements were approved by the Company’s board of directors and authorized for issue on March 24, 2021.

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

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

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

Amendments to IAS 1 and IAS 8 “Definition of Material”

The Company adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the standalone financial statements do not include immaterial information that may obscure material information.

• b. The IFRSs endorsed by the FSC for application starting from 2021

Effective Date New IFRSs Announced by IASB

Amendments to IFRS 4 “Extension of the Temporary Exemption from Effective immediately upon Applying IFRS 9” promulgation by the IASB Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19-Related Rent Concessions” June 1, 2020

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

Effective Date New IFRSs Announced by IASB (Note 1)

“Annual Improvements to IFRS Standards 2018-2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets To be determined by IASB between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2023 Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 (Note 6) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7) Amendments to IAS 16 “Property, Plant and Equipment - Proceeds January 1, 2022 (Note 4) before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a January 1, 2022 (Note 5) Contract”

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

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

• b. Basis of preparation

The standalone financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

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

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for the asset or liability.

When preparing the standalone financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the standalone financial statements to be the same as the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the standalone basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates and the related equity items, as appropriate, in the standalone financial statements.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

• 3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

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d. Foreign currencies

In preparing the standalone financial statements of the Company, transactions in currencies other than the Company’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

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

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purposes of presenting the standalone financial statements, the investments of the Company’s foreign operations (including subsidiaries and associates in other countries that use currencies which are different from the Company) are translated into the New Taiwan dollar using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

e. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the standard cost on the balance sheet date. The difference between actual costs and normal standard costs is allocated in proportion to inventory and operational costs on fiscal year-end, in order to approach the amount of weighted-average cost.

• f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

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

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years.

• g. Investments in associates

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

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

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

The entire carrying amount of an investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s standalone financial statements only to the extent of interests in the associate that are not related to the Company.

• h. Property, plant and equipment

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

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

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

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

• i. Intangible assets

• 1) Intangible assets acquired separately

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

• 2) Derecognition of intangible assets

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

• j. Impairment of property, plant and equipment, right-of-use assets, intangible assets and assets related to contract costs

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

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

Before the Company recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories related to the contract applicable under IFRS 15 shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

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

k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: financial assets at FVTPL and financial assets at amortized cost.

i. Financial assets at FVTPL

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

Financial assets at FVTPL are subsequently measured at fair value, and any dividends, interest earned and remeasurement gains or losses on such financial assets are recognized in other gains or losses.

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• ii. Financial assets at amortized cost

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

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash, accounts receivable at amortized cost (including related parties), notes receivable (including related parties), other receivables (including related parties), and refundable deposits (classified under other non-current assets), are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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

• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

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

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

• i) Significant financial difficulty of the issuer or the borrower;

• ii) Breach of contract, such as a default;

• iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or

• iv) The disappearance of an active market for that financial asset because of financial difficulties.

• b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable).

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

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

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

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

• ii. When a financial asset is more than 365 days past due unless the Company has reasonable and corroborative information to support a more lagged default criterion.

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

• c) Derecognition of financial assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

• 2) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

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

• l. Revenue recognition

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

For contracts where the period between the date on which the Company transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Company does not adjust the promised amount of consideration for the effects of a significant financing component.

• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of car lamps and molds. Sales of goods are recognized as revenue and accounts receivable when the goods are delivered to the customer’s specific location because it is the time when the customer has full discretion over the manner of

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distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2) Royalty revenue

Royalty revenue is recognized on an accrual basis in accordance with the substance of the relevant agreement and provided that it is probable that the economic benefits will flow to the Company and that the amount of revenue can be measured reliably. Royalty arrangements that are based on sales are recognized with reference to the underlying arrangement.

m. Leases

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

The Company as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

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

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

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

• n. Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Company recognizes as expenses the related costs that the grants are intended to compensate.

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Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they are received.

• o. Employee benefits

• 1) Short-term employee benefits

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

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

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

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• 3) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss.

• p. Taxation

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

• 1) Current tax

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

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

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

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

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

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

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

3) Current and deferred taxes

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

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH

Cash on hand Checking accounts and demand deposits		December 31	December 31
		2020 $ 756 106,548 $ 107,304	2019 $ 943 89,011 $ 89,954

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7. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES), AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

Notes receivable At amortized cost Gross carrying amount - operating Less: Allowance for impairment loss Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Accounts receivable from related parties At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Tariff refund receivables Others Other receivables from related party Royalty receivables Others		December 31	December 31
		2020 $ 2,207 91 $ 2,116 $ 768,841 5,777 $ 763,064 $ 240,122 244 $ 239,878 $ 241 2,079 $ 2,320 $ 19,803 1 $ 19,804	2019 $ 5,370 401 $ 4,969 $ 754,641 4,847 $ 749,794 $ 104,997 101 $ 104,896 $ 712 2,772 $ 3,484 $ 31,171 407 $ 31,578

The average credit period of sales of goods was 60 to 90 days. No interest was charged on accounts receivable.

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

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The Company writes off trade receivables when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

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

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost			**No indication of default of debtor **	**No indication of default of debtor **	Individual identification 13% $ 34,048 (4,505 ) $ 29,543	Total $ 1,011,170 (6,112 ) $ 1,005,058
		Not Past Due 0%~0.08% $ 956,157 (1,590 ) $ 954,567	Up to 60 Days 0.08%~0.1% $ 20,923 (17 ) $ 20,906	61 to 90 Days 0.1%~0.91% $ 42 - $ 42

December 31, 2019

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		No indicati	on of default of deb	**tor **	ver 365 Days T 50%~100% $ 3,652 (1,825) $ 1,827	he debtor has defaulted 100% $ 391 (391) $ -	Total $ 865,008 (5,349) $ 859,659
		Not Past Due Up to 60 Days 6 0%~0.97% 0.97%~1.1% $ 817,832 $ 41,511 (2,500) (454) $ 815,332 $ 41,057	1 to 90 Days 9 1.1%~7.47% $ 1,090 (81) $ 1,009	1 to 365 Days O 7.47%~50% $ 532 (98) $ 434

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Balance at December 31		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,349 1,154 (391) $ 6,112	2019 $ 4,684 665 - $ 5,349

8. INVENTORIES

Merchandise Finished goods Work in progress Raw materials		December 31	December 31
		2020 $ 161,926 405,847 105,649 269,599 $ 943,021	2019 $ 95,944 323,265 211,500 181,814 $ 812,523

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The nature of the cost of goods sold is as follows:

Cost of inventories sold Inventory write-downs		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,120,063 5,356 $ 4,125,419	2019 $ 4,420,545 2,744 $ 4,423,289

9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates a. Investments in subsidiaries Ta Yih International Investment Co., Ltd. (BVI)		December 31	December 31
		2020 2019 $ 860 $ 960 332,286 393,213 $ 333,146 $ 394,173 December 31
		2020 $ 860	2019 $ 960

As of December 31, 2020 and 2019, the Company’s percentage of ownership and voting rights in Ta Yih International Investment Co., Ltd. (BVI) were both 100%

• b. Investments in associates

Material associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.		December 31	December 31
		2020 $ 332,286	2019 $ 393,213

As of December 31, 2020 and 2019, The Company’s percentage of ownership and voting rights in Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd. were both 49%

The summarized financial information below represents amounts shown in the associates’ financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

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Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.

Current assets Non-current assets Current liabilities Equity Proportion of the Company’s ownership Equity attributable to the Company Unrealized gain or loss with associates Carrying amount Operating revenue Net profit for the year Total comprehensive income for the year		December 31	December 31
		2020 2019 $ 1,802,684 $ 2,203,533 1,192,665 1,201,867 (2,307,429) (2,589,490) $ 687,920 $ 815,910 49% 49% $ 337,080 $ 399,795 (4,794) (6,582) $ 332,286 $ 393,213 For the Year Ended December 31
		2020 $ 1,871,311 $ (138,013) $ (138,013)	2019 $ 2,708,164 $ 3,095 $ 3,095

Refer to Table 3 “Information on Investees” and Table 4 “Information on Investments in Mainland China” for the nature of activities, principal places of business and countries of incorporation of the associates.

The investments in subsidiaries and associates accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2020 and 2019 were based on the subsidiaries and associates’ financial statements which have been audited for the same years.

10. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2019 Additions Disposals Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expenses Disposals Balance at December 31, 2019 Carrying amount at December 31, 2019	Land $ 601,050 - - $ 601,050 $ - - - $ - $ 601,050	Buildings $ 256,501 4,150 (4,666) $ 255,985 $ 209,527 8,816 (4,663) $ 213,680 $ 42,305	Machinery Equipment $ 1,039,152 45,147 (33,255) $ 1,051,044 $ 810,384 57,617 (33,132) $ 834,869 $ 216,175	Molding Equipment Transportation Equipment $ 304,435 $ 22,097 27,244 949 (284,522) (5,743) $ 47,157 $ 17,303 $ 288,128 $ 14,869 17,650 2,338 (284,522) (5,743) $ 21,256 $ 11,464 $ 25,901 $ 5,839	Other Equipment Total $ 408,947 $ 2,632,182 31,802 109,292 (158,537) (486,723) $ 282,212 $ 2,254,751 $ 342,459 $ 1,665,367 32,246 118,667 (158,506) (486,566) $ 216,199 $ 1,297,468 $ 66,013 $ 957,283 (Continued)

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Cost Balance at January 1, 2020 Additions Disposals Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expenses Disposals Balance at December 31, 2020 Carrying amount at December 31, 2020	Land $ 601,050 - - $ 601,050 $ - - - $ - $ 601,050	Buildings $ 255,985 2,530 - $ 258,515 $ 213,680 8,803 - $ 222,483 $ 36,032	Machinery Equipment $ 1,051,044 51,577 (11,611) $ 1,091,010 $ 834,869 56,607 (11,487) $ 879,989 $ 211,021	Molding Equipment Transportation Equipment $ 47,157 $ 17,303 106,375 280 (22,,029) - $ 131,503 $ 17,583 $ 21,256 $ 11,464 26,780 2,129 (22,029) - $ 26,007 $ 13,593 $ 105,496 $ 3,990	Other Equipment $ 282,212 23,520 (8,574) $ 297,158 $ 216,199 29,295 (8,573) $ 236,921 $ 60,237	Total $ 2,254,751 184,282 (42,214) $ 2,396,819 $ 1,297,468 123,614 (42,089) $ 1,378,993 $ 1,017,826

(Concluded)

All property, plant and equipment are used by the Company.

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings	40 - 60 years
Factory and other buildings	5 - 40 years
Machinery equipment	3 - 12 years
Molding equipment	2 - 3 years
Transportation equipment	5 years
Other equipment	3 - 8 years

11. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amount Buildings Office equipment Transportation equipment		December 31	December 31
		2020 $ - 2,090 6,244 $ 8,334	2019 $ 5,745 2,612 10,829 $ 19,186

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Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings Office equipment Transportation equipment Lease liabilities Carrying amount Current Non-current Range of discount rate for lease liabilities was as follows: Buildings Office equipment Transportation equipment		For the Year Ended December 31
		2020 2019 $ 2,775 $ 8,570 $ 5,745 $ 5,745 522 523 7,304 6,434 $ 13,571 $ 12,702 December 31
		2020 2019 $ 4,508 $ 13,042 $ 3,905 $ 6,333 December 31
		2020 2019 - 1.44% 1.45% 1.44% 1.25%-1.45% 1.44%-1.45%

b. Lease liabilities

c. Material leasing activities and terms

The Company leases company cars and office equipment with lease terms of 2 to 5 years. These arrangements do not contain renewal or purchase options.

The Company also leases land and buildings for the use of plants with lease terms of 2 years. The Company does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Company is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,409 $ 148 $ (16,455)	2019 $ 5,186 $ 254 $ (18,396)

The Company’s leases of certain machinery qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

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12. INTANGIBLE ASSETS

Cost Balance at January 1, 2020 Additions Reclassification Balance at December 31, 2020 Accumulated amortization Balance at January 1, 2020 Amortization expense Balance at December 31, 2020 Carrying amount at December 31, 2020 The above other intangible assets are amortized follows: Computer software Patents	Computer Software Patents Total $ - $ - $ - 19,551 500 20,051 9,839 285 10,124 $ 29,390 $ 785 $ 30,175 $ - $ - $ - 10,866 385 11,251 $ 10,866 $ 385 $ 11,251 $ 18,524 $ 400 $ 18,924 on a straight-line basis over their estimated useful lives as 2 - 3 years 5 - 7 years

13. OTHER ASSETS

Current Input tax Tax refund receivable Payment on behalf of others Non-current Refundable deposits Prepayments for property, plant, and equipment		December 31	December 31
		2020 $ 28,846 - 106 $ 28,952 $ 14,301 21,792 $ 36,093	2019 $ 21,604 8,813 356 $ 30,773 $ 16,001 24,135 $ 40,136

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14. SHORT-TERM BORROWINGS

Borrowings

Unsecured borrowings Bank unsecured loans		December 31	December 31
		2020 $ 342,400	2019 $ -

The range of interest rates on bank loans was 0.75%-1.11% per annum at December 31, 2020.

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

Both notes payable and accounts payable were generated from operating activities. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

16. OTHER LIABILITIES

Current Other payables Payables for salaries or bonuses Payables for molding equipment Payables for annual leave Payables for employees’ compensation Payables for utilities expense Others Other payables to related parties Payables for royalty Payables for inspection expense Payables for molds Payables for design expense Others Other current liabilities Receipts under custody		December 31 2020 2019 $ 134,988 $ 169,261 19,327 16,940 17,358 17,061 6,333 8,274 5,306 4,592 16,905 14,460 $ 200,217 $ 230,588 $ 60,603 $ 60,715 3,635 3,386 1,105 2,125 440 - 4,204 300 $ 69,987 $ 66,526 $ 623 $ 430 (Continued)
		2020 $ 134,988 19,327 17,358 6,333 5,306 16,905 $ 200,217 $ 60,603 3,635 1,105 440 4,204 $ 69,987 $ 623

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Non-current Other non-current liabilities Provision for employee benefits Guarantee deposits received		December 31 2020 2019 $ 2,526 $ 2,488 240 240 $ 2,766 $ 2,728 (Concluded)
		2020 $ 2,526 240 $ 2,766

Provision for employee benefits is the estimate of long-term bonus for senior employees.

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the Republic of China (ROC). Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 11% and 8% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee and a manager pension fund administered by the manager pension fund managing committee. Pension contributions are deposited respectively in the Bank of Taiwan and Taiwan Business Bank in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

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

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31
	2020 2019 $ 318,954 $ 341,705 (243,898) (229,817) $ 75,056 $ 111,888

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Movements in net defined benefit liabilities were as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2019 $ 371,377 $ (236,357) Service cost Current service cost 4,003 - Net interest expense (income) 4,178 (2,696) Recognized in profit or loss 8,181 (2,696) Remeasurement Return on plan assets (excluding amounts included in net interest) - (7,030) Actuarial loss - changes in demographic assumptions 1,467 - Actuarial loss - changes in financial assumptions 13,369 - Actuarial profit - experience adjustments (1,014) - Recognized in other comprehensive income 13,822 (7,030) Contributions from the employer - (35,409) Benefits paid (51,675) 51,675 Balance at December 31, 2019 341,705 (229,817) Service cost Current service cost 3,111 - Net interest expense (income) 2,563 (1,764) Recognized in profit or loss 5,674 (1,764) Remeasurement Return on plan assets (excluding amounts included in net interest) - (7,492) Actuarial loss - changes in demographic assumptions 875 - Actuarial loss - changes in financial assumptions 8,088 - Actuarial profit - experience adjustments (1,333) - Recognized in other comprehensive income 7,630 (7,492) Contributions from the employer - (40,880) Benefits paid (36,055) 36,055 Balance at December 31, 2020 $ 318,954 $ (243,898)

Net Defined Benefit Liabilities (Assets) $ 135,020 4,003 1,482 5,485 (7,030) 1,467 13,369 (1,014) 6,792 (35,409) - 111,888 3,111 799 3,910 (7,492) 875 8,088 (1,333) 138 (40,880) - $ 75,056

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

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,811 39 651 409 $ 3,910	2019 $ 4,014 45 925 501 $ 5,485

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

Discount rate Expected rate of salary increase	December 31
	2020 2019 0.500% 0.750% 2.000% 2.000%

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

Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase/decrease 0.25% increase 0.25% decrease		December 31	December 31
		2020 $ (8,092) $ 8,398 $ 8,128 $ (7,874)	2019 $ (9,004) $ 9,353 $ 9,074 $ (8,782)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December 31	December 31
		2020 $ 4,896 10.3 years	2019 $ 10,771 10.7 years

18. EQUITY

a. Share capital

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Ordinary shares Shares issued Ordinary shares	76,230
	$ 762,300
	76,230
	$ 762,300

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

b. Capital surplus

Issuance of ordinary shares Capital surplus from gain on disposal of assets Donations (dividends expired)		December 31	December 31
		2020 $ 56,330 4,142 360 $ 60,832	2019 $ 56,330 4,142 264 $ 60,736

Such capital surplus from issuance of ordinary shares and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year). Capital surplus from gain on disposal of assets may only be used to offset a deficit.

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors before and after amendment, refer to Note 20(f)“ Employees’ compensation and remuneration of director and supervisors for 2020 and 2019”.

In order to take the future needs of funding and long-term financial plan into consideration, when the board of directors drafts the surplus distribution, more than 50% of accumulated unappropriated earnings will be allocated as shareholders’ dividends, and the cash dividends shall not be lower than the 50% of the shareholders’ dividends. The said proportion of allocation of dividends and cash dividends shall be resolved by the resolution of the shareholders in their meeting.

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

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

The appropriations of earnings for 2019 and 2018, which were approved in the shareholders’ meetings on June 12, 2020 and June 18, 2019, respectively, were as follows:

Legal reserve Cash dividends Cash dividends per share (NT$)		Appropriation of Earnings	Appropriation of Earnings
		For the Year Ended December 31
		2019 $ 36,046 $ 304,920 $ 4	2018 $ 31,920 $ 289,674 $ 3.8

The appropriations of earnings for 2020 were proposed by the Company’s board of directors on March 24, 2021. The appropriations were as follows:

	Appropriation of	Appropriation of
		Earnings
Legal reserve	$	15,964
Cash dividends	$	99,099
Cash dividends per share (NT$)	$	1.3

The appropriations of earnings for 2020 are subject to the resolution of the shareholders in their meeting.

19. REVENUE

Revenue from contracts with customers Revenue from sale of goods		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,797,165	2019 $ 5,390,196

a. Contract information Revenue from sale of goods

The Company’s primary products are car lamps and molds. Car lamps and molds are sold at their respective fixed amounts as agreed in the contracts.

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b. Contract balances

Accounts receivable (including related parties) (Note 7) Contract liabilities - current Deferred revenue	December 31, 2020 $ 1,002,942 $ 158,868	December 31, 2019 $ 854,690 $ 313,094	January 1, 2019 $ 780,046
			$ 323,019

The changes in the balance of contract liabilities primarily resulted from the timing differences between the Company’s satisfaction of performance obligations and the respective customer’s payment.

Revenue recognized in the current year from the contract liabilities at the beginning of the year is as follows:

From the contract liabilities at the beginning of the year Sale of goods c. Disaggregation of revenue		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 231,987	2019 $ 276,527

Type of goods Car lamps Molds Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,525,336 734,172 537,657 $ 4,797,165	2019 $ 4,091,095 713,040 586,061 $ 5,390,196

20. PROFIT BEFORE INCOME TAX

a. Interest income

Bank deposits		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 171	2019 $ 415

• b. Other income

Royalty revenue Government grants revenue (Note 27) Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 46,031 42,506 16,160 $ 104,697	2019 $ 70,203 - 5,910 $ 76,113

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c. Other gains and losses

Fair value changes of financial assets and financial liabilities Financial assets classified as at FVTPL Interest on bank loans Interest on lease liabilities Net foreign exchange losses Royalty expense Loss on disposal of property, plant and equipment Others		For the Year Ended December 31	For the Year Ended December 31
		2020 $ - (2,557) (219) (10,193) (15,098) (125) (17,155) $ (45,347)	2019 $ 1 (1,277) (340) (3,376) (26,813) (157) (9,714) $ (41,676)

d. Depreciation and amortization

Property, plant and equipment Right-of-use assets Intangible assets An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 123,614 13,571 11,251 $ 148,436 $ 117,834 19,351 $ 137,185 $ 2,565 8,686 $ 11,251	2019 $ 118,667 12,702 - $ 131,369 $ 113,919 17,450 $ 131,369 $ - - $ -

e. Employee benefits expense

Short-term benefits Salaries Directors’ remuneration Labor and health insurance Others		For the Year Ended December 31 2020 2019 $ 506,998 $ 581,610 900 690 49,899 53,939 23,702 25,379 581,499 661,618 (Continued)
		2020 $ 506,998 900 49,899 23,702 581,499

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Post-employment benefits Defined contribution plans Defined benefit plans (Note 17) Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses		For the Year Ended December 31 2020 2019 21,141 22,244 3,910 5,485 25,051 27,729 $ 606,550 $ 689,347 $ 386,252 $ 442,022 220,298 247,325 $ 606,550 $ 689,347 (Concluded)
		2020 21,141 3,910 25,051 $ 606,550 $ 386,252 220,298 $ 606,550

f. Employees’ compensation and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrued employees’ compensation at the rates of no less than 1% of net profit after offsetting previous fiscal deficits, and before income tax, and employees’ compensation. The employees’ compensation for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on March 24, 2021 and March 6, 2020, respectively, were as follows:

Accrual rate

Employees’ compensation Amount Employees’ compensation - cash	For the Year Ended December 31
	2020 2019 1% 1% For the Year Ended December 31
	2020 2019 $ 1,804 $ 4,529

Remuneration of directors and supervisors was not issued over the years.

If there is a change in the amounts after the annual standalone financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of employees’ compensation paid and the amounts recognized in the standalone financial statements for the year ended December 31, 2019 and 2018.

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

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• g. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 38,536 (48,729) $ (10,193)	2019 $ 40,031 (43,407) $ (3,376)

21. INCOME TAX

• a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current year Income tax on unappropriated earnings Adjustment for prior years Deferred tax In respect of the current period Income tax expense recognized in profit or loss		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 48,371 703 (9,345) 39,729 (20,850) $ 18,879	2019 $ 86,437 - 60 86,497 1,397 $ 87,894

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

Profit before tax Income tax expense calculated at the statutory rate Tax-exempt income Unrecognized deductible temporary differences Income tax on unappropriated earnings Adjustments for prior years’ tax Income tax expense recognized in profit or loss		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 178,629 $ 35,726 (8,501) 296 703 (9,345) $ 18,879	2019 $ 448,351 $ 89,670 - (1,836) - 60 $ 87,894

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Company only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

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b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Remeasurement of defined benefit plans Exchange differences on translating foreign operations		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 27 (969) $ (942)	2019 $ 1,358 3,062 $ 4,420

c. Current tax assets and liabilities

Current tax assets Tax refund receivable (classified under other current assets) Prepaid income tax (classified under prepayments) Current tax liabilities Income tax payable		December 31	December 31
		2020 $ - - $ - $ 64,112	2019 $ 8,813 4,947 $ 13,760 $ 49,383

d. Deferred tax assets and liabilities

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

For the year ended December 31, 2020

Opening Balance Deferred Tax Assets Temporary differences Allowance for reduction of inventory to market $ 1,498 Unrealized gain or loss with associates 1,316 Long-term employee benefit liability 498 Deferred revenue - Defined benefit plans 22,377 Payables for annual leave 3,412 Unrealized exchange losses 1,863 Exchange differences on translating the financial statements of foreign operations 5,373 $ 36,337 Deferred Tax Liabilities Temporary differences Unappropriated earnings of associates $ 40,667 Land value tax 76,736 $ 117,403	Recognized in Profit or Loss $ 1,071 (357 ) 7 14,185 (7,393 ) 60 32 - $ 7,605 $ (13,245 ) - $ (13,245)	Recognized in Other Comprehensive Income $ - - - - 27 - - (969 ) $ (942) $ - - $ -	Closing Balance $ 2,569 959 505 14,185 15,011 3,472 1,895 4,404
			$ 43,000
			$ 27,422 76,736
			$ 104,158

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For the year ended December 31, 2019

Opening Balance Deferred Tax Assets Temporary differences Allowance for reduction of inventory to market $ 949 Unrealized gain or loss with associates 1,509 Long-term employee benefit liability 481 Defined benefit plans 27,004 Payables for annual leave 3,566 Unrealized exchange losses - Exchange differences on translating the financial statements of foreign operations 2,311 $ 35,820 Deferred Tax Liabilities Temporary differences Unappropriated earnings of associates $ 42,207 Unrealized exchange gains 966 Land value tax 76,736 $ 119,909	Recognized in Profit or Loss $ 549 (193 ) 17 (5,985 ) (154 ) 1,863 - $ (3,903) $ (1,540 ) (966 ) - $ (2,506)	Recognized in Other Comprehensive Income $ - - - 1,358 - - 3,062 $ 4,420 $ - - - $ -	Closing Balance $ 1,498 1,316 498 22,377 3,412 1,863 5,373
			$ 36,337
			$ 40,667 - 76,736
			$ 117,403

• e. Income tax assessments

The tax returns of the Company through 2018 have been assessed by the tax authorities.

22. EARNINGS PER SHARE

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

Net profit for the year Shares Weighted average number of ordinary shares used in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		For the Year Ended December 31	For the Year Ended December 31
		2020 2019 $ 159,750 $ 360,457 Unit: In Thousands of Shares For the Year Ended December 31
		2020 76,230 45 76,275	2019 76,230 82 76,312

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

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the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

23. CASH FLOW INFORMATION

• a. Non-cash transactions

In addition to those disclosed in other notes, the Company entered into the following non-cash investing and financing activities that were not reflected in the consolidated statements of cash flows for the years ended December 31, 2020 and 2019:

Increase in property, plant and equipment Increase (decrease) in prepayments for equipment Changes in liabilities arising from financing activities For the year ended December 31, 2020 Balance at January 1, 2020 Net cash flows from financing activities Non-cash changes New leases Lease modifications Effect of foreign currency exchange differences Balance at December 31, 2020 For the year ended December 31, 2019 Balance at January 1, 2019 Adjustments on initial application of IFRS 16 Restated on January 1, 2019 Net cash flows from financing activities Non-cash changes New leases Lease modifications Balance at December 31, 2019		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 184,282 (2,343) $ 181,939 Short-term borrowings $ - 343,682 - - (1,282) $ 342,400	2019 $ 109,292 1,809 $ 111,101 Lease liabilities $ 19,375 (13,679) 2,775 (58) - $ 8,413 Lease liabilities $ - 25,543 25,543 (12,842) 8,570 (1,896) $ 19,375

• b. Changes in liabilities arising from financing activities

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24. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash) and equity of the Company. The Company is not subject to any externally imposed capital requirements.

25. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

The carrying amounts of the Company’s financial instruments that are not measured at fair value, such as cash, accounts receivable (including related parties), refundable deposits (classified under other non-current assets), accounts payable (including related parties), and guarantee deposits received (classified under other non-current liabilities) approximate their fair values.

• b. Categories of financial instruments

Financial assets Financial assets at amortized cost (1) Financial liabilities Financial liabilities at amortized cost (2)	December 31
	2020 2019 $ 1,148,787 $ 1,000,676 1,495,691 1,121,378

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

• 2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, notes and accounts payable (including related parties), other payables (including related parties), and guarantee deposits received (classified under non-current liabilities).

• c. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, accounts receivable, accounts payable, borrowings and lease liabilities.

The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks are market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

• 1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

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a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are set out in Note 28.

Sensitivity analysis

The Company was mainly exposed to the USD.

The following table details the Company’s sensitivity to an increase and decrease of 1% in the functional currency against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items. A positive number below indicates an increase in pre-tax profit. For a 1% weakening of the functional currency against the relevant foreign currency, there would be an equal and opposite impact on pre-tax profit, and the balances below would be negative.

Profit or loss	USD Impact
	For the Year Ended December 31
	2020 2019 $ 1,508 $ 2,437

Exchange rate fluctuations are mainly attributable to the exposure on outstanding cash, accounts receivable, short-term borrowings and accounts payable in foreign currency which were not hedged at the end of the reporting period.

In management’s opinion, the sensitivity analysis was unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period did not reflect the exposure during the period. Sales quoted in USD may change with the fluctuation of client orders.

b) Interest rate risk

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

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	For the Year Ended December 31
	2020 2019 $ 3,905 $ 6,333 103,833 81,596 342,400 -

Sensitivity analysis

For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the year was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

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If interest rates had been 1% higher and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2020 and 2019 would have decreased by $2,386 thousand and $0 thousand, respectively, which was mainly a result of variable-rate borrowings.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of the counterparty to discharge its obligation and due to the financial guarantees provided by the Company, could be equal to the total of the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The Company’s credit risk primarily arose from sales of the top 3 clients, which contributed more than 10% of the operating revenue in the statements of comprehensive income. The total percentages of accounts receivable (include related parties) from the above clients for the years ended December 31, 2020 and 2019 were 64% and 70%, respectively.

3) Liquidity risk

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

All of the financial liabilities of the Company had original maturities of less than one year, except the lease liabilities. Because equity was greater than liabilities in the Company’s capital structure, and the unused bank quotas and working capital were abundant, there was no material liquidity risk.

Additional information about the maturity analysis for lease liabilities:

December 31, 2020 Less than 1 Year Lease liabilities $ 4,593 December 31, 2019 Less than 1 Year Lease liabilities $ 13,235	1-5 Years $ 3,963
	1-5 Years $ 6,441

• 46 -

26. TRANSACTIONS WITH RELATED PARTIES

Details of transactions between the Company and other related parties are disclosed below.

• a. Related party name and category

Related Party Name

Related Party Category

Koito Manufacturing Co., Ltd.

Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Guangzhou Koito Automotive Lamp Co., Ltd.

India Japan Lighting Private Limited

PT. Indonesia Koito

Thai Koito Company Limited

Hubei Koito Automotive Lamp Co., Ltd. North American Lighting Inc.

Investors with significant influence over the Company Associates Subsidiary of Koito Manufacturing Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd.

Subsidiary of Koito Manufacturing Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd. Subsidiary of Koito Manufacturing Co., Ltd.

NAL DO BRASIL INDUSTRIA E COMERCIO DE Subsidiary of Koito Manufacturing Co., COMPONENTES DE ILUMINACAO LTDA Ltd. TYC Brother Industrial Co., Ltd. Substantive related party DBM Reflex of Taiwan Co., Limited Substantive related party Mai Huang Enterprise Co., Ltd. Substantive related party Juoku Technology Co., Ltd. Substantive related party Ta Yih Investment Co., Ltd. Substantive related party Ta Yih International Hotel Co., Ltd. Substantive related party Nai Yi Entertainment Company Ltd. Substantive related party Wu Jinmao Culture and Education Foundation Substantive related party Ta Yih Kenmos Auto Parts Co., Ltd. Substantive related party Ta Mao Operating Consultant Co., Ltd. Substantive related party

b. Sales of goods

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 951,920 186,517 63,976 194 $ 1,202,607	2019 $ 911,282 162,734 61,722 649 $ 1,136,387

The prices of sales of goods with related parties did not have substantive difference compared to non-related parties, except the prices of sales of goods with associates were added based on the costs. The collection term of domestic sales with related parties is 90 days, the collection term of export sales with related parties apart from associates, according to the term of individual transaction, is 120 to 180 days, and the collection term does not have substantive difference compared to non-related parties.

• 47 -

The unrealized gains on sales with associates for the years ended December 31, 2020 and 2019 were $4,794 thousand and $6,582 thousand, respectively, and had been recognized as a reduction of investments accounted for using the equity method.

c. Purchases of goods

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 403,969 20,807 678 26,880 $ 452,334	2019 $ 364,661 3,062 465 15,776 $ 383,964

The payment term and price of goods purchased do not have substantive difference between related and non-related parties. The payment term for related parties depends on individual transaction, which is normally 90 days, and does not have substantive difference from non-related parties.

• d. Contract liabilities - 2019

Related Party Category/Name Investors with significant influence over the Company Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.	December 31, 2019 $ 3,652 46,117
	$ 49,769

• e. Receivables from related parties (excluding loans to related parties)

Line Item Related Party Category/Name Accounts receivable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party Less: Allowance for impairment loss		December 31	December 31
		2020 $ 186,041 29,408 24,673 - 240,122 244 $ 239,878	2019 $ 98,473 6,512 - 12 104,997 101 $ 104,896 (Continued)

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Line Item Related Party Category/Name Other receivables Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd Subsidiary of Koito Manufacturing Co., Ltd.		December 31	December 31
		2020 $ - 19,803 1 $ 19,804	2019 $ 76 31,502 - $ 31,578 (Concluded)

The outstanding trade receivables from related parties are unsecured.

f. Payables to related parties (excluding loans from related parties)

Line Item Related Party Category/Name Notes payable Substantive related party Accounts payable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Substantive related party Other payable Investors with significant influence over the Company Koito Manufacturing Co., Ltd. Associates Subsidiary of Koito Manufacturing Co., Ltd. Substantive related party		December 31	December 31
		2020 $ - $ 61,540 2,273 7,232 $ 71,045 $ 67,190 454 1,239 1,104 $ 69,987	2019 $ 1,005 $ 46,751 417 9,062 $ 56,230 $ 64,392 9 - 2,125 $ 66,526

The outstanding payables to related parties are unsecured.

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g. Prepayments

Line Item Related Party Category/Name Prepayments to suppliers Subsidiary of Koito Manufacturing Co., Ltd. Prepaid expenses Investors with significant influence over the Company Prepayments for equipment (classified under other non-current assets) Substantive related party		December 31	December 31
		2020 $ 55 175 $ 230 $ 880	2019 $ - 1,419 $ 1,419 $ -

• h. Acquisition of property, plant and equipment

Related Party Category / Name

Investors with significant influence over the Company Koito Manufacturing Co., Ltd.

	Purchase Price	Purchase Price
	For the Year Ended December 31
	2020 $ 8,910	2019 $ -

• i. Acquisition of other assets (classified under intangible assets)

Related Party Category/Name Investors with significant influence over the Company Koito Manufacturing Co., Ltd.		Purchase Price	Purchase Price
		For the Year Ended December 31
		2020 $ 554	2019 $ -

• j. Other transactions with related parties

1) Royalty expenses

The Company entered into a royalty expense contract with its investor with significant influence - Koito Manufacturing Co., Ltd. from April 23, 2016 to April 22, 2022. The royalty expenses were $86,342 thousand and $96,574 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as operating costs and operating expenses.

• 2) Examination expenses

The Company entrusted its investor with significant influence - Koito Manufacturing Co., Ltd. for assistance on the examination of the headlight products. The examination expenses were $15,199 thousand and $20,092 thousand the years ended December 31, 2020 and 2019, respectively, and had been recognized as selling and marketing expenses.

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3) Royalty revenue

The Company entered into a royalty revenue contract with its associate - Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd. from April 1, 2019 to March 31, 2024. The royalty revenues were $39,762 thousand and $62,847 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as other income of non-operating income and expenses. According to the contract, 50% of the royalty revenue should be paid to its investor with significant influence - Koito Manufacturing Co., Ltd. which amounted to $15,098 thousand and $26,813 thousand for the years ended December 31, 2020 and 2019, respectively, and had been recognized as other losses, net of non-operating income and expenses.

The Company entered into a contract with subsidiary of Koito Manufacturing Co., Ltd - Hubei Koito Automotive Lamp Co., Ltd. from December 25, 2015 to December 24, 2020. The royalty revenue were $4,235 thousand and $7,193 thousand for the year ended December 31, 2020 and 2019, respectively, and had been recognized as other income of non-operating income and expenses.

The Company entered into a contract with subsidiary of Koito Manufacturing Co., Ltd - Guangzhou Koito Automotive Lamp Co., Ltd. from November 11, 2019 to December 31, 2020. The royalty revenues was $2,034 thousand and 163 thousand for the years ended December 31, 2020, and 2019, respectively, and had been recognized as other income of non-operating income and expenses.

• k. Donations (classified under general and administrative expenses)

Related Party Category/Name Substantive related party		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 53	2019 $ 1,000

l. Remuneration of key management personnel

Short-term employee benefits Post-employment benefits		For the Year Ended December 31	For the Year Ended December 31
		2020 $ 13,860 132 $ 13,992	2019 $ 18,806 165 $ 18,971

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

27. OTHER ITEMS

As a result of the COVID-19 pandemic, the Company’s major U.S. client suspended operations starting from the end of March 2020 to the end of May 2020, leading to delayed shipments and a reduction in order volume, resulting in a substantial decline of 36% in operating revenue from April 2020 to June 2020 compared to the same period of the previous year. In response, the Company has successively applied to the government for salary subsidies, and obtained up to $42,506 thousand in funding (refer to Note 20). Since the end of May 2020, the US client has gradually resumed operations. As of the date the consolidated financial statements were authorized for issue, the Company continues to evaluate the economic impact of the COVID-19 pandemic.

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28. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

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

December 31, 2020

		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
USD	$	10,147	28.100	$	285,120
CNY		17,963	4.316		77,529
JPY		816,722	0.2725		222,557
Non-monetary items
Investments accounted for using the equity
method
CNY		77,227	4.365		337,080
USD		30	28.480		860
Financial liabilities
Monetary items
USD		4,779	28.100		134,278
CNY		6,670	4.316		28,789
JPY		251,528	0.2725		68,541
December 31, 2019
		Foreign			Carrying
		Currency	Exchange Rate		Amount
Financial assets
Monetary items
USD	$	8,769	30.005	$	263,105
CNY		20,089	4.299		86,363
JPY		390,852	0.2758		107,797
Non-monetary items
Investments accounted for using the equity
method
CNY		93,030	4.297		399,795
USD		32	29.9816		960
Financial liabilities
Monetary items
USD		647	30.005		19,412
CNY		4,285	4.299		18,420
JPY		202,742	0.2758		55,916

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The carrying amount of investments accounted for using the equity method does not contain the reduction of unrealized gains.

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

Foreign Currency USD CNY JPY	For the Year Ended December 31	For the Year Ended December 31
	2020 Exchange Rate Net Foreign Exchange Gains (Losses) 29.408 (USD:NTD) $ (36,171) 4.26 (CNY:NTD) 696 0.2762 (JPY:NTD) 25,282 $ (10,193)	2019
		Exchange Rate Net Foreign Exchange Gains (Losses) 30.85 (USD:NTD) $ (5,279) 4.47 (CNY:NTD) (3,226) 0.2828 (JPY:NTD) 5,129 $ (3,376)

29. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions:

• 1) Financing provided to others (None)

• 2) Endorsements/guarantees provided (None)

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (None)

• 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (None)

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 1)

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 2)

• 9) Trading in derivative instruments (None)

• b. Information on investees (Table 3)

• c. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area (Table 4)

• 53 -

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (Table 5):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period

  • c) The amount of property transactions and the amount of the resultant gains or losses

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services

• d. Information of major shareholders: list all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (Table 6)

• 54 -

TABLE 1

Ta Yih Industrial Co., Ltd.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

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

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
The Company	Koito Manufacturing Co., Ltd. Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Investors with significant influence over the Company Associates accounted for using the equity method	Sales Purchases Sales	$ (951,920) 403,969 (186,517)	(20) 11 (4)	90 days 90 days 120 to 180 days	No significant differences No significant differences Cost plus pricing	No significant differences No significant differences 120 to 180 days. Generally 90 days.	Accounts receivable $ 186,041 Accounts payable (61,540) Accounts receivable 29,408	19 (7) 3

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TABLE 2

Ta Yih Industrial Co., Ltd.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance (Note 1)	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
The Company	Koito Manufacturing Co., Ltd.	Investors with significant influence over the Company	$ 186,041	6.69	$ -	－	$ 186,041	$ 94

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TABLE 3

Ta Yih Industrial Co., Ltd.

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
The Company	Ta Yih International Investment Co., Ltd.	Omar Hodge Building, Wickhams Cay I P.O. Box 362, Road Town, Tortola, British Virgin Islands	Investment	$ 1,367	$ 1,367	50,000	100	$ 860	$ (53)	$ (53)

Note: Information on investments in mainland China, refer to Table 4.

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TABLE 4

Ta Yih Industrial Co., Ltd.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2019 (Note 5)	Remittance of Funds	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020 (Note 4)
						Outward		Inward
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Import, export and sale of automobile lamps in mainland China	US $9 million (Note 2) (NT $252,900 thousand) (Note 3)	Entrusting Ta Yih International Investment Co., Ltd. which was established in third region to invest in mainland China. Items referred to Rule No. 84022220 issued by the Investment Commission,MOEA.		$ 42,470	$	-	$ -	$ 42,470	$ (138,013)	49	$ (67,628)	$ 332,286	$ 238,605
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020				Investment Amount Authorized by The Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by The Investment Commission, MOEA (Note 6)
$ 42,470				US$4.41 million (Note 2) (NT$123,921 thousand) (Note 3)			$1,760,329×60%＝$1,056,197

Note 1： Amount was recognized based on the audited financial statements.

• Note 2： On January 18, 1996, the Investment Commission, MOEA approved the investment of US$2.5 million (including cash investment of US$1.76 million and machinery investment of US$740,000) through the approval of the Rule No. 84022220. On February 20, 2001, according to the Rule No. 90003791, approved by the Investment Commission, MOEA, the Company entrusted Ta Yih Investment Co., Ltd. which was established in the third region to invest US$500,000 on machinery equipment. However, there was still US$150,000 left unpaid. Therefore, the amount of capital owned by Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was only US$2.85 million. However, at the end of November 2005, the Company transferred 51% of the investment to Koito Manufacturing Co., Ltd. In December 2007, Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd resolved to issue share dividends from capital surplus of US$2.45 million , of which the investment amount belonged to the Company was US$2.45 million × 49% = US$1.205 million, and had been approved by the Investment Commission, MOEA on March 24, 2008. In August 2008, the Company applied for issuing share dividends from capital surplus of US$1.5 million, of which the amount of investment belonged to the company was US$1.5 million × 49% = US$735,000, and had been approved by the Investment Commission, MOEA on August 6, 2008. In May 2010, the Company applied for issuing share dividends from capital surplus of US$2.2 million, of which the amount of investment belonged to the Company was US$2.2 million × 49% = US$1.078 million. As of December 31, 2020, the paid-in capital of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was US$9 million. The registration was completed in July 2010 and had been approved by the Investment Commission, MOEA on November 30, 2010.

Note 3： The amount in the table should be shown in NTD (exchange rate was 28.1 at reporting date).

Note 4： Inward cash dividends.

Note 5： The original amount of investment was NT$86,673 thousands. 51% equity of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was sold for NT$44,203 thousands.

Note 6： The upper limit according to “Principle of Investment or Technical Cooperation in Mainland China” issued by the Investment Commission, MOEA on August 29, 2008.

• 58 -

TABLE 5

Ta Yih Industrial Co., Ltd.

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD PARTY, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investee Company	Transaction Type	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized Gain	Note
		Amount		Payment Terms	Comparison with Normal Transactions	Ending Balance	%
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	Sales Royalty revenue	$ 186,517 39,762	Cost plus pricing According to the contract	120 to 180 days Every 180 days.	90 days N/A	Accounts receivable $ 29,408 Other receivables 19,803	3 90	$ 1,327

• 59 -

TABLE 6

Ta Yih Industrial Co., Ltd.

INFORMATION OF MAJOR SHAREHOLDERS December 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Koito Manufacturing Co., Ltd. Ta Wei Investment Co., Ltd.	24,774,750 22,523,880	32.50 29.54

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers their shareholdings to a trust, the above information will be disclosed by the individual trustee who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Securities and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to the Market Observation Post System website of the Taiwan Stock Exchange.

• 60 -

• 61 -

TA YIH INDUSTRIAL CO.,LTD

Chairman ： Chun-I Wu