TA YIH — Audit Report / Information 2019

Nov 13, 2019

Standalone Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors' Report

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, 2019 and 2018, 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, 2019 and 2018, 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 Matter

Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the standalone financial statements for the year ended December 31, 2019. This matter was 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 this matter.

Key audit matter in the audit of the Company's standalone financial statements for the year ended December 31, 2019 is as follows:

Sales Revenue from Hub Warehouse

Ta Yih Industrial Co., Ltd. mainly manufactures and sells automobile and locomotive lamps. The Company also sells its products to overseas markets. The sales model of overseas markets depends on the delivery of goods from hub warehouse. Ta Yih Industrial Co., Ltd. usually relies on the statements or other information from the external custodians of hub warehouse when making important strategic decisions. The inventory change related to the delivery from hub warehouse is used as the basis for recognizing revenue, and sales revenue is recognized when the customer picks up the goods (transfer of risks and rewards).

The sales revenue generated from the hub warehouse was \$1,348,678 thousand for the year ended December 31, 2019, which accounted for 25% of the total operating revenue. Considering the fact that transaction volume of revenue from the hub warehouse is significant to the standalone financial statements of Ta Yih Industrial Co., Ltd. for the year ended December 31, 2019; therefore, the revenue recognition of sales from hub warehouse needs to be verified through multiple internal controls and has been identified as a key audit matter.

Our audit procedures performed in respect of the above key audit matter included the following:

• 1. We sampled and examined the operating effectiveness of the relevant controls during the current fiscal year.
• 1. We confirmed the existence of revenue by sampling the sales revenue from shipment of hub warehouse and checked the corresponding documents such as export declarations and bills of lading.

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.

• 1. 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 Company's internal control.
• 1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• 1. 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.
• 1. 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.
• 1. 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, 2019 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.

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

Deloitte & Touche Taipei, Taiwan Republic of China

March 6, 2020

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.

STANDALONE BALANCE SHEETS
DECEMBER 31, 2019 AND 2018
(In Thousands of New Taiwan Dollars)

	December 31, 2019		December 31, 2018
ASSETS	Amount	$\frac{6}{6}$	Amount	$\frac{0}{2}$
CURRENT ASSETS
Cash (Notes 4 and 6)	\$ 89,954	$\overline{2}$	s 113,240	3
Notes receivable (Notes 4 and 7)	4.969	$\overline{\phantom{a}}$	6,609	$\overline{\phantom{a}}$
Accounts receivable (Notes 4, 7 and 17)	749,794	21	572,455	17
Accounts receivable from related parties (Notes 4, 7, 17 and 23) Other receivable (Notes 4 and 7)	104,896	3	207,591	6
Other receivables from related parties (Notes 4, 7 and 23)	3,484	$\overline{\phantom{a}}$	4,193	ä,
Inventories (Notes 4, 5 and 8)	31,578	$\mathbf{1}$	48,599	$\mathbf{I}$
Prepayments (Notes 19 and 23)	812,523 361,970	22 10	785,969 223,668	23 $\overline{7}$
Other current assets (Notes 12 and 19)	30,773	$\mathbf 1$	40.616	$\perp$
Total current assets	2,189,941	$-60$	2,002.940	$-58$
NON-CURRENT ASSETS
Investments accounted for using the equity method (Notes 4 and 9)	394,173	11	407,261	12
Property, plant and equipment (Notes 4, 10 and 23)	957,283	26	966,815	28
Right-of-use assets (Notes 3, 4 and 11)	19,186	А		$\overline{a}$
Deferred tax assets (Notes 4 and 19)	36,337	1	35,820	$\mathbf{I}$
Other non-current assets (Notes 4 and 12)	40.136	-1	39,205	$\perp$
Total non-current assets	1,447,115	40	1,449,101	$-42$
TOTAL	\$3,637,056	100	3,452,041	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Contract liabilities - current (Notes 4, 17 and 23)	S 313,094	9	s 323,019	9
Notes payable (Note 13)	236,059	6	185,813	6
Notes payable to related parties (Notes 13 and 23)	1,005	$\overline{\phantom{a}}$	6,437
Accounts payable (Note 13)	530,730	15	484,440	14
Accounts payable to related parties (Notes 13 and 23)	56,230	$\overline{\mathbf{c}}$	43,089	$\mathbf{I}$
Other payables (Note 14) Other payables to related parties (Notes 14 and 23)	230,588	6	223,564	$\overline{7}$
Current tax liabilities (Notes 4 and 19)	66,526	$\overline{2}$	68,737	$\sqrt{2}$
Lease liabilities - current (Notes 3, 4 and 11)	49,383	1	10,575	$\tilde{\phantom{a}}$
Other current liabilities (Note 14)	13,042 430		236	÷
		$\overline{\phantom{a}}$
Total current liabilities	1.497.087	$-41$	1,345,910	$-39$
NON-CURRENT LIABILITIES
Deferred tax liabilities (Notes 4 and 19) Lease liabilities - non-current (Notes 3, 4 and 11)	117,403	4	119,909	3
Net defined benefit liabilities (Note 4, 5, and 15)	6,333	÷		ù, $\overline{4}$
Other non-current liabilities (Note 14)	111,888 2.728	3 $\overline{\phantom{a}}$	135,020 2.597	$\overline{\phantom{a}}$
Total non-current liabilities
Total liabilities	238,352	$\overline{1}$	257,526	$\overline{7}$
	1.735,439	48	1.603,436	46
EQUITY ATTRIBUTED TO OWNERS OF THE COMPANY (Note 16) Ordinary shares
Capital surplus	762,300	21	762.300	22
Retained earnings	60.736	$\mathbf{1}$	60.605	$\overline{2}$
Legal reserve
Special reserve	615,205 68,264	17 $\overline{2}$	583,285 68,264	17 $\overline{2}$
Unappropriated earnings	436.472	12	403,043	12
Total retained earnings	1.119,941	31	1,054,592	31
Other equity	(41, 360)	(1)	(28, 892)	(1)
Total equity attributable to owners of the Company	1.901.617	$-52$	1,848,605	$-54$
TOTAL	\$3,637,056	100	\$3,452,041	100

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

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
OPERATING REVENUE (Notes 4, 17 and 23)	5,390,196 \$	100	5,703,811 \$	100
OPERATING COSTS (Notes 8, 15, 18 and 23)	4,423,289	82	4,872,472	85
GROSS PROFIT	966,907	18	831,339	15
UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	(3,008)		(4, 565)
REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES	3,971		4,213
REALIZED GROSS PROFIT	967,870	18	830,987	15
OPERATING EXPENSES (Notes 7, 15, 18 and 23) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss (gain)	184,519 170,674 199,992 665	$\overline{4}$ 3 $\overline{4}$	180,785 171,798 205,809 (4, 465)	3 $\overline{3}$ $\overline{4}$
Total operating expenses	555,850	11	553,927	10
PROFIT FROM OPERATIONS	412,020	$\overline{7}$	277,060	5
NON-OPERATING INCOME AND EXPENSES (Notes 18 and 23)
Other income Other gains and losses Share of profit of subsidiaries and associates	76,528 (41, 676) 1,479	2 (1) $\overline{\sigma}$	97,036 (5,626) 2,332	1
Total non-operating expenses	36,331	1	93,742	1
PROFIT BEFORE INCOME TAX	448,351	8	370,802	6
INCOME TAX EXPENSE (Notes 4 and 19)	87,894		51,595
NET PROFIT FOR THE YEAR	360,457	7	319,207	$\overline{5}$
OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 15)	(6, 792)		(8,033)
Income tax relating to items that will not be reclassified subsequently to profit or loss (Notes 4 and 19)	1,358		4,955
	(5, 434)		(3,078)	(Continued)

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	$\frac{0}{0}$	Amount	$\frac{0}{0}$
Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial
statements of foreign operations	\$ (15, 530)	(1)	\$ (7,998)
Income tax relating to items that may be reclassified subsequently to profit or loss (Notes 4 and 19)	3,062 (12, 468)		1,712 (6, 286)
Other comprehensive loss for the year, net of income tax	(17,902)	(1)	(9,364)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	342,555		309,843
	2019		2018
EARNINGS PER SHARE (New Taiwan dollars, Note 20) Basic Diluted	4.73 4.72		4.19

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

(Concluded)

STANDALONE STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
(In Thousands of New Taiwan Dollars, Except Dividends Per Share)

		Share Capital			Retained Earnings		Other Equity
	Shares	Amount	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Differences on Translating Operations Exchange Foreign	Total Equity
BALANCE AT JANUARY 1, 2018	76,230	762,300 \$	60,472 69	533,348 S	68,264 S	533,247 \$	(22, 606) S	\$1,935,025
Cash dividends distributed by the Company - NTS5.2 per share Appropriation of the 2017 earnings (Note 16) Legal reserve				49,937		$(49, 937)$ $(396, 396)$		(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus			133					133
Net profit for the year ended December 31, 2018						319,207		319,207
Other comprehensive loss for the year ended December 31, 2018, net of income tax						(3.078)	(6.286)	(9.364)
Total comprehensive income loss for the year ended December 31, 2018						316,129	(6, 286)	309,843
BALANCE AT DECEMBER 31, 2018	76,230	762,300	60,605	583,285	68,264	403,043	(28, 892)	1,848,605
Cash dividends distributed by the Company - NTS3.8 per share Appropriation of the 2018 earnings (Note 16) Legal reserve				31,920		$(31,920)$ $(289,674)$		(289, 674)
Unclaimed cash dividends overdue transferred to capital surplus			$\overline{131}$					131
Net profit for the year ended December 31, 2019						360,457		360,457
Other comprehensive loss for the year ended December 31, 2019, net of income tax						(5, 434)	(12.468)	(17.902)
Total comprehensive income loss for the year ended December 31, 2019						355,023	(12.468)	342,555
BALANCE AT DECEMBER 31, 2019	76,230	762,300 ω.	60,736 S	615,205 59	68,264 s,	436,472 59	(41,360) 49	1,901,617 s,

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

$-8-$

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 448,351	\$ 370,802
Adjustments for:
Depreciation expenses	131,369
Expected credit loss recognized (reversed) on trade receivables	665	151,702
Net gain on fair value changes of financial assets at fair value		(4, 465)
through profit or loss
Finance costs	(1)	(10)
Interest income	1,617	838
Share of profits of subsidiaries and associates	(415)	(358)
Loss on disposal of property, plant and equipment, net	(1, 479) 157	(2, 332)
Provision for loss on inventories		424
Unrealized gain on transactions with associates	2,744
Realized gain on transactions with associates	3,008	4,565
Net loss (gain) on foreign currency exchange	(3,971)	(4,213)
Gain on disposal of right-of-use assets	13,825	(7,262)
Changes in operating assets and liabilities:	(11)
Notes receivable	1,354	397
Accounts receivable	(188, 336)
Accounts receivable from related parties	97,812	200,831
Other receivables	709	77,953 4,541
Other receivables from related parties	16,627	(965)
Inventories	(29, 298)	76,147
Prepayments	(138, 302)	(98, 971)
Other current assets	9,843	(710)
Contract liabilities	(9, 925)	123,934
Notes payable	50,246	(49, 589)
Notes payable to related parties	(5, 432)	(8,601)
Accounts payable	46,893	(177, 843)
Accounts payable to related parties	14,608	(18, 221)
Other payables	7,024	(50, 254)
Other payables to related parties	(2,211)	(8,172)
Other current liabilities	194	(779)
Net defined benefit liabilities	(29, 925)	(32, 385)
Other non-current assets	81	210
Cash generated from operations	437,821	547,214
Interest received	415	358
Interest paid	(1,277)	(838)
Income tax paid	(47,688)	(93, 504)
Net cash generated from operating activities	389,271	453,230
		(Continued)

STANDALONE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
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	\$ (10,000)	\$ (50,000)
loss	10,001	50,010
Payments for property, plant and equipment	(111, 101)	(122, 834)
Increase in refundable deposits	(3,624)	(7, 919)
Decrease in refundable deposits	4,502	5,613
Net cash used in investing activities	(110, 222)	(125, 130)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	836,026	718,400
Repayments of short-term borrowings	(836, 026)	(718, 400)
Proceeds from guarantee deposits received	80
Refunds of guarantee deposits received	(30)	(50)
Repayment of the principal portion of lease liabilities	(12, 842)
Cash dividends	(289, 674)	(396, 396)
Unclaimed cash dividends overdue transferred to capital surplus	131	133
Net cash used in financing activities	(302, 335)	(396,313)
NET DECREASE IN CASH	(23, 286)	(68, 213)
CASH AT THE BEGINNING OF THE YEAR	113,240	181,453
CASH AT THE END OF THE YEAR	89,954	113,240

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

(Concluded)

NOTES TO STANDALONE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (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 the 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 traded 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 6, 2020.

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

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRIC (IFRIC), and Interpretations of SIC (SIC) (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission $(FSC)$

Except for the following, whenever applied, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC would not have any material impact on the Company's accounting policies:

IFRS 16 "Leases"

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 "Leases", IFRIC 4 "Determining whether an Arrangement contains a Lease", and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Company elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases on the standalone balance

sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the standalone statements of comprehensive income, the Company presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the standalone statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts, were recognized as expenses on a straight-line basis. Prepaid lease payments were recognized as prepayments for leases. Cash flows for operating leases were classified within operating activities on the standalone statements of cash flows.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments. The Company applies IAS 36 to all right-of-use assets.

The Company applies the following practical expedients:

The Company accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

The lessee's weighted average lessee's incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 was 1.44%. The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on December 31, 2018	27,221
Less: Recognition exemption for short-term leases	(1,210)
Undiscounted amounts on January 1, 2019	26,011
Discounted amounts using the incremental borrowing rate and lease liabilities recognized on January 1, 2019	25,543

The Company as lessor

The Company does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

	As Originally Stated on January 1, 2019		Adjustments Arising from Initial Application	Restated on January 1, 2019
Right-of-use assets			25,543	25,543
Total effect on assets			25,543	25,543
Lease liabilities - current Lease liabilities - non-current	\$	$\frac{1}{2}$	\$ 11,289 14,254	\$ 11,289 14,254
Total effect on liabilities			25,543	25,543

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020

$T = C_1 + C_2 + C_3$

New IFRSs	Lifective Date Announced by IASB
Amendments to IFRS 3 "Definition of a Business"	January 1, 2020 (Note 1)
Amendments to IFRS 9, IAS 39 and IFRS 7 "Interest Rate January 1, 2020 (Note 2)
Benchmark Reform"
Amendments to IAS 1 and IAS 8 "Definition of Material"	January 1, 2020 (Note 3)

• Note 1: The Company shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.
• Note 2: The Company shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.
• Note 3: The Company shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

Amendments to IAS 1 and IAS 8 "Definition of material"

The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRSs. The concept of "obscuring" material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from "could influence" to "could reasonably be expected to influence".

Except for the above impact, as of the date the standalone 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.

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

New IFRSs	Effective Date Announced by IASB (Note)
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, 2021
Amendments to IAS 1 "Classification of Liabilities as Current or January 1, 2022
Non-current"

Note: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Except for the above impact, as of the date the standalone 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.

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 with 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.

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 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.

Investments in associates $\sigma$ .

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.

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 a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company' standalone financial statements only to the extent that interests in the associate 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.

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. Impairment of tangible assets and assets related to contract costs

At the end of each reporting period, the Company reviews the carrying amounts of its tangible 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.

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.

i. 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 a financial asset is 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. Fair value is determined in the manner described in Note 22.

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 (i.e. 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.

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.

k. 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 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.

l. Leases

2019

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.

2018

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

The Company as lessee

Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

m. Borrowing costs

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

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

• n. Employee benefits
• 1) Short-term employee benefits

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

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as 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.

o. Taxation

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

1) Current tax

According to the Income Tax Law, 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 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.

Key Sources of Estimation Uncertainty

a. Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business

less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

b. Recognition and measurement of defined benefit plans

The net defined benefit liabilities (assets) and the resulting defined benefit costs under the defined benefit pension plans are calculated using the projected unit credit method. Actuarial assumptions comprise the discount rates, rates of employee turnover, future salary increases, etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of related expenses and liabilities.

6. CASH

	December 31
		2019		2018
Cash on hand Checking accounts and demand deposits	S	943 89,011		1,297 111,943
		89,954		113,240

7. NOTES RECEIVABLE, ACCOUNTS RECEIVABLE (INCLUDING RELATED PARTIES), AND OTHER RECEIVABLES (INCLUDING RELATED PARTIES)

		December 31
	2019	2018
Notes receivable
At amortized cost
Gross carrying amount - operating	\$ 5,370	\$ 6,724
Less: Allowance for impairment loss	401	115
	4,969	6,609
Accounts receivable
At amortized cost
Gross carrying amount	\$ 754,641	\$ 576,807
Less: Allowance for impairment loss	4,847	4,352
	749,794	572,455
Accounts receivable from related parties
At amortized cost
Gross carrying amount	\$ 104,997	\$ 207,808
Less: Allowance for impairment loss	101	217
	104,896	207,591
		(Continued)

		December 31
	2019	2018
Other receivables
Tariff refund receivables Others	$\mathbb{S}$ 712 2,772	\$ 1,554 2,639
	3,484 S	4,193
Other receivables from related party
Royalty receivables Others	\$ 31,171 407	\$ 48,599
	31,578	48,599 (Concluded)

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 past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Company's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company's different customer base.

The Company writes off a 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, 2019

			No indication of default of debtor
	Not Past Due	Less than 60 Days	61 to 90 Days	91 to 365 Days	Over 365 Days	The debtor has defaulted	Total
Expected credit loss rate	$0\% - 0.97\%$	$0.97\% - 1.1\%$	$1.1\% - 7.47\%$	$7.47\% - 18.48\%$	18.48%~100%	100%
Gross carrying amount Loss allowance (Lifetime ECL)	817,832 (2,500)	41,511 s (454)	090. (81)	532 (98)	3,652 (1,825)	391 s (391)	865,008 (5,349)
Amortized cost	\$815.332	41,057	1,009	434	1.827		\$859,659

December 31, 2018

		No indication of default of debtor
	Not Past Due	Less than 60 Days	61 to 90 Days	91 to 365 Days	The debtor has defaulted	Total
Expected credit loss rate	$0\%$ ~0.78%	$0.78\% - 0.9\%$	$0.9\% - 5.85\%$	5.85%~87.72%	100%
Gross carrying amount Loss allowance (Lifetime ECL)	788,009 S (1, 844)	30 (1)	126 s (7)	2,783 (2, 441)	S 391 (391)	791.339 S (4,684)
Amortized cost	786,165	29	119	342		786,655

The movements of the loss allowance of trade receivables were as follows:

	For the Year Ended December 31
	2019	2018
Balance at January 1	4,684	9,149
Add: Net remeasurement of loss allowance	665
Less: Net remeasurement of loss allowance		(4, 465)
Balance at December 31	5.349	4.684

8. INVENTORIES

	December 31
	2019	2018
Merchandise	\$ 95,944	84,116
Finished goods	323,265	317,302
Work in progress	211,500	206,200
Raw materials	181,814	178,351
	812,523	785,969

The costs of inventories recognized as cost of goods sold for the years ended December 31, 2019 and 2018 were \$4,423,289 thousand and \$4,872,472 thousand, respectively. The cost of goods sold included inventory write-down for the year ended December 31, 2019 of \$2,744 thousand.

9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	December 31
	2019			2018
Investments in subsidiaries Investments in associates	\$	960 393,213		1,020 406,241
		394,173		407,261

a. Investments in subsidiaries

	December 31
		2019		2018
Ta Yih International Investment Co., Ltd. (BVI)		960		,020

As of December 31, 2019 and 2018, The Company's percentage of ownership and voting rights in Ta Yih International Investment Co., Ltd. (BVI) were both 100%

b. Investments in associates

	December 31
		2019		2018
Material associates
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.		393,213		406,241

In December 31, 2019 and 2018, 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.

Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.

		December 31
		2019		2018
Current assets Non-current assets Current liabilities Non-current liabilities Lamp Co., Ltd.	\$	2,203,533 1,201,867 (2,589,490)	\$	2,402,310 1,123,316 (2,665,526) (15, 639)
Equity		815,910		844,461
Proportion of the Company's ownership		49%		49%
Equity attributable to the Company Unrealized gain or loss with associates	S	399,795 (6, 582)	$\mathbf S$	413,786 (7, 545)
Carrying amount		393,213		406,241
		For the Year Ended December 31
		2019		2018
Operating revenue Net profit for the year Total comprehensive income for the year Dividends received from Fuzhou Koito Ta Yih Automotive		2,708,164 3,095 3,095		3,045,038 4,835 4,835

Refer to Table 2 "Information on Investees" and Table 3 "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, 2019 and 2018 were based on the subsidiaries and associates' financial statements which have been audited for the same years.

10. PROPERTY, PLANT AND EQUIPMENT

	Land	Buildings	Machinery Equipment	Molding Equipment	Transportation Equipment	Other Equipment	Total
Cost
Balance at January 1, 2018 Additions Disposals	S 601,050	s 235,666 20,835 $\overline{\phantom{a}}$	S 1,024,114 35,408 (20, 370)	s 291,112 13,591 (268)	\$ 17,797 4,300 -	S 381,437 34,239 (6, 729)	S 2,551,176 108,373 (27, 367)
Balance at December 31, 2018	601,050	256,501 S	1.039.152 S	304.435	22,097	408.947	2,632,182
Accumulated depreciation
Balance at January 1, 2018 Depreciation expenses Disposals	S ۰ $\overline{\phantom{a}}$	s 203,638 5,889 $\rightarrow$	s 777,088 53,277 (19.981)	S 234.617 53,779 (268)	s 12,155 2,714 $\overline{\phantom{a}}$	$\overline{\mathbf{s}}$ 313,110 36,043 (6, 694)	s 1,540,608 151,702 (26, 943)
Balance at December 31. 2018		209.527	810,384	288,128	14.869	342,459	1.665.367
Carrying amount at December 31, 2018	601,050	46.974	228,768	16,307	7.228	66.488	S. 966,815
Cost
Balance at January 1, 2019 Additions Disposals	s 601,050	s 256,501 4,150 (4,666)	s 1,039,152 45,147 (33, 255)	\$ 304,435 27,244 (284, 522)	S 22.097 949 (5,743)	S 408,947 31,802 (158, 537)	2,632,182 S 109,292 (486, 723)
Balance at December 31. 2019	601,050	255.985	1,051,044 s	47,157	17.303	282,212	2,254,751
Accumulated depreciation
Balance at January 1, 2019 Depreciation expenses Disposals	S ÷	s 209,527 8,816 (4,663)	s 810,384 57,617 (33, 132)	S 288,128 17,650 (284, 522)	S 14.869 2,338 (5.743)	S 342.459 32,246 (158, 506)	S 1,665,367 118,667 (486, 566)
Balance at December 31. 2019	s	213,680	834,869	21.256	11.464	216,199	1,297,468
Carrying amount at December 31, 2019	601.050	42,305	216.175	25,901	5.839	66,013	957,283

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	$5 - 12$ years
Other equipment	$3 - 8$ years

11. LEASE ARRANGEMENTS

$b.$

a. Right-of-use assets - 2019

	December 31, 2019
Carrying amounts
Buildings Office equipment Transportation equipment	\$ 5,745 2,612 10,829
	19,186
	For the Year Ended December 31, 2019
Additions to right-of-use assets	S 8,570
Depreciation charge for right-of-use assets Buildings Office equipment Transportation equipment Lease liabilities - 2019	\$ 5,745 523 6,434 12,702 S
	December 31, 2019
Carrying amounts
Current Non-current	13,042 \$ 6,333
Range of discount rate for lease liabilities was as follows:
	December 31, 2019
Buildings Office equipment Transportation equipment	1.44% 1.44% 1.44%-1.45%

c. Material lease-in activities and terms

The Company leases certain company car 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

2019

	For the Year Ended December 31, 2019
Expenses relating to short-term leases	5,186
Expenses relating to low-value asset leases	254
Expenses relating to variable lease payments not included in the measurement of lease liabilities
Total cash outflow for leases	(18, 396)

The Company leases certain machinery which 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.

12. OTHER ASSETS

	December 31
	2019		2018
Current
Input tax	\$ 21,604	\$	30,481
Tax refund receivable	8,813		8,813
Payment on behalf of others	356		1,322
	30,773		40,616
Non-current
Refundable deposits	\$ 16,001	S	16,879
Prepayment for properties, plant, and equipment	24,135		22,326
	40,136		39,205

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

Notes payable and accounts payable were both resulted 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.

14. OTHER LIABILITIES

	December 31
		2019		2018
Current
Other payables Payables for salaries or bonuses Payables for molding equipment Payables for annual leave Payables for employee's compensation Payables for utilities expense Others	\$ \$	169,261 16,940 17,061 8,274 4,592 14,460 230,588	\$ \$	158,847 18,558 17,831 9,665 4,489 14,174 223,564
Other payables to related parties Payables for royalty Payables for inspection expense Payables for molds Others	$\mathbb{S}$ \$	60,715 3,386 2,125 300 66,526	\$ \$	64,427 4,036 274 68,737
Other current liabilities Receipts under custody Non-current		430		236
Other non-current liabilities Provision for employee benefits Guarantee deposits received	\$	2,488 240 2,728	\$	2,407 190 2,597

Provision for employee benefits is the estimate of long-term bonus for senior employees.

15. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (the "LPA"), which is a state-managed defined contribution plan. Under the LPA, 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 Law 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 contribute 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:

	December 31
		2019		2018
Present value of defined benefit obligation Fair value of plan assets		341,705 (229, 817)		371,377 (236, 357)
Net defined benefit liabilities		111.888		135,020

Movements in net defined benefit liabilities were as follows:

		Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liabilities (Assets)
Balance at January 1, 2018	S	372,343	\$ (212,971)	\$ 159,372
Service cost
Current service cost		4,913		4,913
Net interest expense (income)		4,654	(2,736)	1,918
Recognized in profit or loss		9,567	(2, 736)	6,831
Remeasurement
Return on plan assets (excluding amounts included in net interest)			(5,104)	(5,104)
Actuarial loss - changes in demographic assumptions		6,897		6,897
Actuarial loss - changes in financial assumptions		4,890		4,890
Actuarial loss - experience adjustments		1,350		1,350
Recognized in other comprehensive income		13,137	(5, 104)	8,033
Contributions from the employer			(39, 216)	(39, 216)
Benefits paid		(23,670)	23,670
Balance at December 31, 2018		371,377	(236, 357)	135,020
Service cost
Current service cost		4,003		4,003
Net interest expense (income)		4,178	(2,696)	1,482
Recognized in profit or loss Remeasurement		8,181	(2,696)	5,485
Return on plan assets (excluding amounts included in net interest)			(7,030)	(7,030)
Actuarial loss - changes in demographic assumptions		1,467		1,467
				(Continued)

	Present Value of the Defined Benefit Obligation		Fair Value of the Plan Assets		Net Defined Benefit Liabilities (Assets)
Actuarial loss - changes in financial assumptions	\$ 13,369	S		\$	13,369
Actuarial profit - experience adjustments	(1,014)				(1,014)
Recognized in other comprehensive income	13,822		(7,030)		6,792
Contributions from the employer Benefits paid	(51, 675)		(35, 409) 51,675		(35, 409)
Balance at December 31, 2019	341,705	S	(229, 817)	S	111,888 (Concluded)

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

		For the Year Ended December 31
		2019		2018
Operating costs	S	4,014	S	4,561
Selling and marketing expenses		45		116
General and administrative expenses		925		1,561
Research and development expenses		501		593
		5,485		6,831

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

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
• 2) Interest risk: A decrease in the government 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:

	December 31
	2019	2018
Discount rate	0.750%	1.125%
Expected rate of salary increase	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:

		December 31
	2019	2018
Discount rate
0.25% increase	(9,004)	(9,875)
$0.25%$ decrease	9,353	10,264
Expected rate of salary increase
0.25% increase	9,074	9.990
$0.25%$ decrease	(8, 782)	(9,661)

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.

	December 31
	2019	2018
Expected contributions to the plans for the next year	10.771	6,610
Average duration of the defined benefit obligation	$10.7$ years	10.9 years

16. EQUITY

Ň,

a. Shares capital

Number of shares authorized (in thousands)	76.230
Shares authorized	762,300
Number of shares issued and fully paid (in thousands)
Ordinary shares	76,230
Shares issued
Ordinary shares	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

	December 31
	2019	2018
Issuance of ordinary shares	56,330	\$ 56,330
Capital surplus from gain on disposal of assets	4,142	4,142
Donations (dividends expired)	264	133
	60 736	60.605

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 18(e) " Employees' compensation and remuneration of director and supervisors for 2019 and 2018".

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.

The appropriation of earnings to a 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, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs" should be appropriated to or reversed from a special reserve by the Company.

The appropriations of earnings for 2018 and 2017 were approved in the shareholders' meetings on June 18, 2019 and June 11, 2018, respectively, as follows:

	Appropriation of Earnings		Dividends Per Share (NTS)
	For the Year Ended December 31		For the Year Ended December 31
	2018	2017	2018	2017
Legal reserve	31,920	49,937
Cash dividends	289,674	396,396	3.8

The appropriation of earnings for 2019 were proposed by the Company's board of directors on March 6, 2020. The appropriations were as follows:

	Appropriation of Earnings	Dividends Per Share (NTS)
Legal reserve Cash dividends	36,046 S 304,920

The appropriations of earnings for 2019 are subject to the resolution of the shareholders in their meeting to be held on June 12, 2020.

17. REVENUE

		For the Year Ended December 31
	2019	2018
Revenue from contracts with customers
Revenue from sale of goods	5.390.196	5,703,811

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. Revenue from sale of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods.

b. Contract balances

c.

	December 31, 2019		December 31, 2018		January 1, 2018
Accounts receivable (including related parties) (Note 7)	854,690		780,046		1,045,052
Contract liabilities - current Deferred revenue	313.094		323,019		199,085

The changes in the balance of contract liabilities primarily result from the timing differences between the Company's performance and the respective customer's payment.

Revenue of the reporting period recognized from the beginning contract liabilities and from the performance obligations which were satisfied in the previous period is as follows:

	For the Year Ended December 31
		2019		2018
From the beginning contract liabilities Sale of goods	S	276,527	S	199,085
Disaggregation of revenue
		For the Year Ended December 31
		2019		2018
Type of goods
Car lamps Molds	\$	4,091,095 713,040	$\mathbb{S}$	4,488,820 603,582
Others		586,061		611,409
		5,390,196		5,703,811

18. PROFIT BEFORE INCOME TAX

a. Other income

		For the Year Ended December 31
	2019		2018
Bank deposit interest income	\$	415	358
Royalty revenue		70,203	86,639
Others		5,910	10,039
		76.528	97,036

b. Other gains and losses

	For the Year Ended December 31
	2019		2018
Fair value changes of financial assets and financial liabilities
Financial assets classified as at FVTPL	\$ 1	S	10
Interest on bank loans	(1,277)		(838)
Interest on lease liabilities	(340)
Net foreign exchange gains (losses)	(3,376)		30,097
Royalty expense	(26, 813)		(27, 955)
Loss on disposal of property, plant and equipment	(157)		(424)
Others	(9, 714)		(6, 516)
	(41, 676)	S	(5,626)
Depreciation
	For the Year Ended December 31
	2019		2018
An analysis of depreciation by function
Operating costs	\$ 113,919	$S$ .	137,498
Operating expenses	17,450		14,204
	131,369		151,702
Employee benefits expense
	For the Year Ended December 31
	2019		2018
Short-term benefits
Salaries	\$ 581,610	\$	567,805

Labor and health insurance Others

$\mathbf{c}.$

${\bf d}.$

648,438 (Continued)

54,072

25,871

53,939

25,379

661,618

	For the Year Ended December 31
		2019		2018
Post-employment benefits
Defined contribution plans		22,244		22,289
Defined benefit plans (Note 15)		5,485		6,831
		27,729		29,120
Total employee benefits expense		689,347	S	677,558
An analysis of employee benefits expense by function
Operating costs	\$	442,022	\$	446,339
Operating expenses		247,325		231,219
		689,347		677,558
				(Concluded)

e. 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 and remuneration of directors and supervisors for the years ended December 31, 2019 and 2018, which were approved by the Company's board of directors on March 6, 2020 and March 15, 2019, respectively, were as follows:

Accrual rate

			For the Year Ended December 31
	2019		2018
Employees' compensation		1%	$1\%$
Amount
			For the Year Ended December 31
	2019		2018
Employees' compensation - cash	S	4,529	\$ 3,746

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 and remuneration of directors and supervisors paid and the amounts recognized in the standalone financial statements for the year ended December 31, 2018 and 2017.

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

f. Gains or losses on foreign currency exchange

	For the Year Ended December 31
	2019	2018
Foreign exchange gains Foreign exchange losses	\$ 40,031 (43, 407)	59,217 (29, 120)
	(3,376)	30,097

19. INCOME TAX

a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

		For the Year Ended December 31
Current tax In respect of the current period Income tax on unappropriated earnings Adjustment for prior periods Deferred tax In respect of the current period Adjustments to deferred tax attributable to changes in tax rates and laws		2019		2018
	S	86,437	S	50,352
				3,885
		60		(14,089)
		86,497		40,148
		1,397		7,540
				3,907
Income tax expense recognized in profit or loss		87.894		51,595

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

	For the Year Ended December 31
		2019		2018
Profit before tax		448,351		370,802
Income tax expense calculated at the statutory rate Unrecognized deductible temporary differences Income tax on unappropriated earnings Adjustments for prior years' tax	\$	89,670 (1, 836) 60	S	74,160 (12, 361) 3,885 (14,089)
Income tax expense recognized in profit or loss		87,894		51,595

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%.

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.

b. Income tax recognized in other comprehensive income

		For the Year Ended December 31
			2019		2018
	Deferred tax
	Effect of change in tax rate
	Remeasurement of defined benefit plans	S		S	3,348
	Exchange differences on translating foreign operations In respect of the current year				106
	Remeasurement of defined benefit plans		1,358		1,607
	Exchange differences on translating foreign operations		3,062		1,606
			4,420		6,667
c.	Current tax assets and liabilities
			December 31
			2019		2018
	Current tax assets
	Tax refund receivable (classified under other current assets)	\$	8,813	\$	8,813
	Prepaid income tax (classified under prepayments)		4,947
			13,760		8,813
	Current tax liabilities
	Income tax payable	\$	49,383		10,575

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, 2019

		Opening Balance		Recognized in Profit or Loss		Recognized in Other Comprehensive Income		Closing Balance
Deferred Tax Assets
Temporary differences
Allowance for reduction of inventory to market	S	949	S	549	S	$\blacksquare$	S	1,498
Unrealized gain or loss with associates		1,509		(193)				1.316
Long-term employee benefit liability		481		17				498
Defined benefit plans		27,004		(5,985)		1,358		22,377
Payables for annual leave		3,566		(154)				3,412
Unrealized exchange losses				1,863				1,863
Exchange differences on translating the financial of statements foreign operations		2,311				3,062		5,373
		35,820		(3.903)		4,420		36,337
								(Continued)

		Opening Balance		Recognized in Profit or Loss	Recognized in Other Comprehensive Income		Closing Balance
Deferred Tax Liabilities
Temporary differences Unappropriated earnings of associates Unrealized exchange gains Land value tax	s	42,207 966 76,736 119,909	S	(1, 540) (966) (2,506)	\$ ٠ ۰	S	40,667 76,736 117,403 (Concluded)

For the year ended December 31, 2018

	Opening Balance	Tax Rate Change (Recognized in Profit or Loss)	Tax Rate Change (Recognized in Other Comprehen- sive Income)	Recognized in Profit or Loss	Recognized in Other Comprehen- sive Income	Closing Balance
Deferred Tax Assets
Temporary differences
Allowance for reduction of inventory to market	1.285	S 227	\$.	S (563)	\$	S 949
Unrealized gain or loss with associates	1,223	216		70		1,509
Long-term employee benefit liability	374	66		41		481
Defined benefit plans	27,093	1.433	3,348	(6, 477)	1,607	27,004
Payables for annual leave	2,956	522		88		3,566
Unrealized exchange losses	512	90		(602)
Exchange differences on translating the financial statements of foreign operations	599		106		1,606	2,311
	\$34,042	2,554	3,454	(7, 443)	3,213	\$35,820
Deferred Tax Liabilities
Temporary differences
Unappropriated earnings of associates	36,615 S.	S 6,461	S	(869) s	S	S 42,207
Unrealized exchange gains				966		966
Land value tax	76,736 \$113,351	6,461		97		76,736 \$119,909

e. Income tax assessments

The tax returns of the Company through 2017 have been assessed by the tax authorities.

20. 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:

	For the Year Ended December 31
	2019		2018
Net profit for the year	360.457		319,207

Unit: In Thousands of Shares

Shares

		For the Year Ended December 31
	2019	2018
Weighted average number of ordinary shares used in computation
of basic earnings per share	76,230	76,230
Effect of potentially dilutive ordinary shares:
Employees' compensation	82	87
Weighted average number of ordinary shares used in the
computation of diluted earnings per share	76,312	76,317

If the Company offered to settle 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 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.

21. 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 (cash) and equity of the Company. The Company is not subject to any externally imposed capital requirements.

22. 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 deposit received (classified under other non-current liabilities) approximate their fair values.

b. Categories of financial instruments

	December 31
		2019		2018
Financial assets
Financial assets at amortized cost (1)	\$	1,000,676	S	969,566
Financial liabilities
Financial liabilities at amortized cost (2)		1,121,378		1,012,270

• 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 notes and accounts

payable (including related parties), other payables (including related parties), and guarantee deposit 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 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).

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 24.

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.

	USD Impact
		For the Year Ended December 31
		2019		2018
Profit or loss		2,437

Exchange rate fluctuations are mainly attributable to the exposure on outstanding cash, accounts receivable, other receivables and accounts payable in foreign currency which were not hedged at the end of the reporting period.

In management's opinion, 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 the USD may change with the fluctuation of client's order.

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:

	For the Year Ended December 31
		2019		2018
Fair value interest rate risk Financial liabilities Cash flow interest rate risk	\$	19.375	S	$\overline{\phantom{a}}$
Financial assets		81,596		111,324

As of December 31, 2019 and 2018, there were no floating interest rate liabilities in the standalone financial statements. Hence, no significant interest rate risk was identified.

2) Credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company's maximum exposure to credit risk, which would cause a financial loss to the Company due to the failure of 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, 2019 and 2018 were 70% and 59%, 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:

	Less than 1 Year	1-5 Years
Lease liabilities	13,235	6.441

23. 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.
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
Kenmos Auto Parts (USA) LLC	Substantive related party
Wu Jinmao Culture and Education Foundation	Substantive related party

b. Sales of goods

	For the Year Ended December 31
Related Party Category/Name	2019			2018
Investors with significant influence over the Company
Koito Manufacturing Co., Ltd.	\$	911,282	S	1,250,831
Associates
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd		162,734		235,265
Subsidiary of Koito Manufacturing Co., Ltd.		61,722		25,646
Substantive related party		649		2,557
		1,136,387		1,514,299

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, 2019 and 2018 were \$ 6,582 thousand and \$7,545 thousand, respectively, and had been recognized as a reduction of investments accounted for using the equity method.

c. Purchases of goods

	For the Year Ended December 31
Related Party Category/Name	2019		2018
Investors with significant influence over the Company
Koito Manufacturing Co., Ltd.	\$	364,661	S	278,565
Associates		3,062		2,870
Subsidiary of Koito Manufacturing Co., Ltd.		465		602
Substantive related party		15,776		33,044
		383.964		315,081

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

Related Party Category/Name		December 31, 2019
Investors with significant influence over the Company Associates	S	3,652
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd.		46,117
		49,769

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

		December 31
Line Item	Related Party Category/Name	2019		2018
Accounts receivable	Investors with significant influence over the Company
	Koito Manufacturing Co., Ltd. Associates	\$	98,473	\$	147,783
	Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd		6,512		57,875
	Substantive related party		12		2,150
			104,997		207,808
	Less: Allowance for impairment loss		101		217
			104,896		207,591
Other receivables	Investors with significant influence over the Company
	Koito Manufacturing Co., Ltd.	\$	76	\$
	Associates Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd		31,502		48,599
		\$	31,578	\$	48,599

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	2019	2018
Notes payable	Substantive related party	1,005	6,437
Accounts payable	Investors with significant influence over the Company
	Koito Manufacturing Co., Ltd.	\$ 46,751	\$ 41,820
	Associates	417	636
	Substantive related party	9,062	633
		56,230 S	43,089 S
Other payable	Investors with significant influence over the Company
	Koito Manufacturing Co., Ltd.	\$ 64,392	$\mathbb{S}$ 68,463
	Associates	9	109
	Substantive related party	2,125	165
		S 66,526	68,737
	The outstanding payables from related parties are unsecured.
Prepayments
		December 31
Line Item	Related Party Category/Name	2019	2018
Prepaid expenses	Investors with significant influence over the Company	S 1,419	2,444
	Acquisitions of property, plant and equipment
		Purchase Price
		For the Year Ended December 31
	Related Party Category/Name	2019	2018
	Investors with significant influence over the Company Koito Manufacturing Co., Ltd.	\$	\$ 6,584

$\ddot{\phantom{a}}$

6,584

$\frac{\mathbb{S}}{2}$

• i. Other transactions with related parties
• 1) Rental expenses

g.

h.

The Company entered into a contract with substantive related party to rent land, factory and a plant from May 1, 2017 to December 31, 2020. The total rental expenses were \$112 thousand and \$5,887 thousand for the years ended December 31, 2019 and 2018, respectively.

2) 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 \$96,574 thousand and \$103,562 thousand for the years ended December 31, 2019 and 2018, respectively, and had been recognized as operating costs and operating expenses.

3) 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 \$20,092 thousand and \$22,429 thousand the years ended December 31, 2019 and 2018, respectively, and had been recognized as selling and marketing expenses.

4) Royalty revenue

The Company entered into a royalty revenue contract with its associate - Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd. from January 1, 2017 to December 31, 2019. The royalty revenues were \$62,847 thousand and \$77,763 thousand for the years ended December 31, 2019 and 2018. 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 \$26,813 thousand and \$27,955 thousand for the years ended December 31, 2019 and 2018, 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 \$7,193 thousand and \$8,876 thousand for the year ended December 31, 2019 and 2018, 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 \$163 thousand for the years ended December 31, 2019, and had been recognized as other income of non-operating income and expenses.

j. Donations (classified under general and administrative expenses)

	For the Year Ended December 31
Related Party Category/Name	2019	2018
Substantive related party	1.000	800
Compensation of key management personnel

k.

		For the Year Ended December 31
		2019	2018
Short-term employee benefits Post-employment benefits	\$.	18,806 165	21,566 128
			21.694

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

24. 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 foreign currencies and respective functional currencies were as follows:

December 31, 2019

	Foreign Currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	\$ 8,769	30.005	$\mathbb{S}$ 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
December 31, 2018
	Foreign Currencies	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	\$ 9,460	30.71	\$ 290,509
CNY	29,305	4.473	131,082
JPY	548,611	0.2780	152,514
Non-monetary items Investments accounted for using the equity method
CNY	92,460	4.475	413,786
USD		33 30.72	1,020
Financial liabilities
Monetary items
USD		475 30.71	14,597
CNY	5,987	4.473	26,780
JPY

The carrying amount of investments accounted for using the equity method does not contain the reduction of unrealized gains.

		For the Year Ended December 31
	2019		2018
Foreign Currencies	Exchange Rate	Net Foreign Exchange Gains (Losses)	Exchange Rate	Net Foreign Exchange Gains (Losses)
USD CNY JPY	30.85 (USD:NTD) 4.47 (CNY:NTD) 0.2828 (JPY:NTD)	(5,279) S (3,226) 5,129	30.14 (USD:NTD) 4.551 (CNY:NTD) 0.2730 (JPY:NTD)	13,289 \$ (4, 516) 21,324
		(3,376)		30,097

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

25. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and investees:
• 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 and 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 (None)
• 9) Trading in derivative instruments (None)
• 10) Information on investees (Table 2)
• b. 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 3)

• 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 4):

• 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

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NTS100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2019
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

INFORMATION ON INVESTEES
FOR THE YEAR ENDED DECEMBER 31, 2019
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

	Note
Share of Profit	$L$ oss $)$	(37)
Net Income	Carrying the Investee \mount the Investee $(Loss)$ of	$(37)$ \$
		960 \$
As of December 31, 2019		$\boldsymbol{0}$
	Number of Shares	50,000
Iriginal Investment Imount	31,2019 31,2018	1,367
		$1,367$ \$
Main Businesses and Products		nvestment
Location		Omar Hodge Building, Wickhams Cay I P.O. Box 362, Road Town, Tortola, British Virgin slands
Investee Company		Investment Co., Ltd Ta Yih International
Investor	mpany	The Company

Note: Information on investments in mainland China, refer to Table 3.

TABLE₂

INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Repatriation of Accumulated December 31, Income as of Investment	2019 (Note 4)	238,605
December 31, 2019 (Note 1) Amount as of Carrying		393,213 S
Investment Gain (Loss) (Note 1)		1,516
Ownership of Direct or Investment Indirect $\frac{9}{6}$		49
Net Income (Loss) of the Investee		3,095
December 31, 2019 Investment from Remittance for Accumulated Taiwan as of Outward		42,470	Upper Limit on the Amount of Investment Stipulated by The Investment Commission, MOEA (Note 6)	$$1,901,617\times 60\% = $1,140,970$
Remittance of Funds	Inward	69
	Outward
Outward Remittance for Investment from December 31, 2018 Taiwan as of Accumulated	(Note 5)	42,470
Method of Investment		established in third region to invest tems referred to Rule No. 84022220 Investment Co., Ltd. which was Entrusting Ta Yih International issued by the Investment Commission, MOEA. in mainland China.	Investment Amount Authorized by The Investment Commission, MOEA	(NTS132,322 thousand) (Note 3) US\$4.41 million (Note 2)
Paid-in Capital		thousand) (Note 3) US \$9 million (NT \$270,045 (Note 2)
Main Businesses and Products		Fuzhou Koito Import, export and mainland China automobile lamps in sale of	Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2019	42,470
Company Investee		Automotive Lamp Co., Ta Yih Ltd

Note 1: Amount was recognized based on the audited financial statements.

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 USS500,000 on machin 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, 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. 8402 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 USS2.45 million, of which the investment anount belonged 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, 2019, the paid-in capital of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd amount of investment belonged to the company was USS1.5 million × 49% = USS735,000, and had been approved by the Investment Commission, MOEA on August 6, 2008. In May 2010, the Company applied for issuing share dividends f The registration was completed in July 2010 and had been approved by the Investment Commission, MOEA on November 30, 2010. The amount in the table should be shown in NTDS (exchange rate was 30.005 at reporting date). Note 2: Note 3:

Note 4: Inward cash dividends.

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. Note 5: The original amount of investment was NT\$86,673 thousand 51% equity of Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd was sold for NT\$44,203 thousand.

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
(In Thousands of New Taiwan Dollars,

Unrealized Gain 3,008 ijΑ R Accounts receivable Ending Balance Other receivables 6,512 31,502 Comparison with Normal Transactions 90 days N/A Payment Terms 120 to 180 days Every 180 days. 62,847 According to the contract 162,734 Cost plus pricing Amount i,A Royalty revenue Sales Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd			Purchase/Sale		Transaction Details	Notes/Accounts Receivable (Payable)
	Investee Company	Transaction Type		Price				Note

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

ITEM	STATEMENT INDEX
MAJOR ACCOUNTING ITEMS IN ASSETS, LIABILITIES
AND EQUITY
STATEMENT OF CASH	$\mathbf{1}$
STATEMENT OF NOTES RECEIVABLE
STATEMENT OF ACCOUNTS RECEIVABLE	$\frac{2}{3}$
STATEMENT OF OTHER RECEIVABLES	$\overline{4}$
STATEMENT OF INVENTORIES	5
STATEMENT OF PREPAYMENTS	6
STATEMENT OF OTHER CURRENT ASSETS	Note 12
STATEMENT OF CHANGES IN INVESTMENTS	$\overline{7}$
ACCOUNTED FOR USING THE EQUITY METHOD
STATEMENT OF CHANGES IN PROPERTY, PLANT AND	Note 10
EQUIPMENT
STATEMENT OF CHANGES IN ACCUMULATED	Note 10
DEPRECIATION AND ACCUMULATED IMPAIRMENT
OF PROPERTY, PLANT AND EQUIPMENT
STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS	$\bf 8$
STATEMENT OF CHANGES IN ACCUMULATED	9
DEPRECIATION FOR RIGHT-OF-USE ASSETS
STATEMENT OF DEFERRED TAX ASSETS	Note 19
STATEMENT OF OTHER NON-CURRENT ASSETS	Note 12
STATEMENT OF NOTES PAYABLE	10
STATEMENT OF ACCOUNTS PAYABLE	11
STATEMENT OF OTHER PAYABLES	Note 14
STATEMENT OF OTHER CURRENT LIABILITIES STATEMENT OF LEASE LIABILITIES	Note 14
	12
STATEMENT OF DEFERRED INCOME TAX LIABILITIES STATEMENT OF OTHER NON-CURRENT LIABILITIES	Note 19
MAJOR ACCOUNTING ITEMS IN PROFIT OR LOSS	Note 14
STATEMENT OF OPERATING REVENUES
STATEMENT OF OPERATING COSTS	13 14
STATEMENT OF OPERATING EXPENSES	15
STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION	16
AND AMORTIZATION

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF CASH DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Amount
Cash on hand and petty cash	\$ 943
Cash in banks Checking accounts and demand deposits	37,432
Foreign currency deposits (Note)	51,579
	89,954

Note: Including the USD 725,778.92, JPY 32,986,743, RMB 3,078,072.77, THB 2.27 and EUR 141,600.32(US\$1=NT\$30.005, JPY1=NT\$0.2758, RMB1=NT\$4.299, THB1=NT\$1.000 and EUR1=NT\$33.63)

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF NOTES RECEIVABLE DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Customer Name	Amount
Company A	\$ 3,455
Company B	861
Company C	354
Company D	278
Company E	249
Others (Note)	173
	5,370
Less: Allowance for impairment loss	401
	4,969

The amount of individual customer included in others does not exceed 5% of the account Note: balance.

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Customer Name	Amount
Not from related third parties
Company H	\$ 291,730
Company I	211,073
Company J	51,069
Company K	46,945
Others (Note 1)	153,824
	754,641
Less: Allowance for impairment loss	4,847
	749,794
From related third parties
Koito Manufacturing Co., Ltd.	\$ 98,473
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	6,512
TYC Brother Industrial Co., Limited	12
	104,997
Less: Allowance for impairment loss	101
	104,896

Note1: The amount of individual customer included in others does not exceed 5% of the account balance.

The amount of accounts receivable of the company with aging schedule more than one year was Note2: \$4,043 thousand, of which \$3,652 thousand was to be collected on the agreed date of collection with the customer of more than one year, and 100% allowance for impairment loss was recognized.

÷,

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF OTHER RECEIVABLES DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Customer Type	Abstract	Amount
Tax refund receivables Others	Custom duty refundable Receivables from other companies for defective products and advances	712 2,772
		3.484

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF INVENTORIES DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

		Amount
Item	Cost			Net Realizable Value (Note)
Raw materials Work in process Finished goods Merchandise	\$	181,814 211,500 323,265 95,944	S	184,238 254,573 395,693 111,550
		812,523		946,054

Note: Refer to Note 4 to the standalone financial statements.

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF PREPAYMENTS DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Customer Name	Abstract	Amount
Prepayments for inventories	Prepayments for raw materials, merchandise, and molds.	337,070
Prepayments for expenses	Prepayments for insurance fees and software maintenance fees.	24,900
		361,970

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2019

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

			Balance at January 1, 2019 Increase (Note 2)							Balance at December 31, 2019
Name	Shares	Amount	Shares	Amount	Net Income (Loss) of the Investee		Exchange differences on translating foreign operations (Note 1)		Shares	% of Ownership	Amount		Net Value		Collateral
Ta Yih International Investment Co., Ltd. Investments in subsidiaries	50,000	1,020	į,			(37)		(23)	50,000	$\frac{8}{2}$		960		960	None
Fuzhou Koito Ta Yih Co., Ltd. Investments in associates	r.	406,241	Ë	963		1.516	(15, 507)				393,213			599,795	None
		\$407,261		963		1,479	S(15,530)				\$394,173		\$ 400,755

The difference between exchange differences on translating foreign operations of \$15,530 thousand and the standalone statements of changes in equity was due to adjustment of deferred tax liabilities recognized which amount Note₁:

Unrealized gain on downstream transactions with investments in associates was increased by \$963 thousand. Note₂:

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS
FOR THE VEAR ENDED DECEMBER 31, 2019
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION FOR RIGHT-OF-USE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 2019
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

	insportation equipmen Office equipment
Item
Ignuary $ne$ $21$ . alon	$\overline{\phantom{a}}$ S
Increase	5,744 6,434	'2.702
Decrease	303	i
salance at December 31
	$5,744$ $6,434$

ä,

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF NOTES PAYABLE DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Customer Name/Type	Amount
Not from related third parties
Company M	\$ 92,238
Company N	38,397
Others (Note)	105,424
	236,059
From related third parties
Ta Yih Investment Co., Ltd.	\$ 503
Ta Yih International Hotel Co., Ltd.	289
TYC Brother Industrial Co., Ltd.	118
Nai Yi Entertainment Company Ltd.	95
	1,005

Note: The amount of individual vendor in others does not exceed 5% of the account balance

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF ACCOUNTS PAYABLE DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Customer Name	Amount
Not from related third parties
Company O	\$ 51,449
Company P	61,432
Company Q	31,052
Company R	26,750
Others (Note)	360,047
	530,730
From related third parties
Koito Manufacturing Co., Ltd.	\$ 46,751
DBM Reflex of Taiwan Co., Limited	8,915
Fuzhou Koito Ta Yih Automotive Lamp Co., Ltd	417
Juoku Technology Co., Ltd.	147
	56,230

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF LEASE LIABILITIES DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Lease Term	Discount Rate $(\%)$	Balance, End of Year
Buildings	$2019.01.01 -$ 2020.12.31	1.44	\$ 5,866
Transportation equipment	$2019.01.01$ ~ 2023.04.28	$1.44 \sim 1.45$	10,892
Office equipment	$2019.01.01$ ~ 2024.12.31	1.44	2,617
			19,375

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF OPERATING REVENUES FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Unit	Weight	Amount
Car lamps Molds Others (Note)	Thousands of Pcs Pcs	16,240 442	\$ 4,144,909 713,588 587,719 5,446,216
Sales return and allowance			56,020
			5,390,196

Note: The amount of each item included in others does not exceed 10% of the account balance.

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item	Amount
Raw materials, beginning of year	\$ 178,351
Raw materials purchased	2,369,399
Raw materials sold	(358, 279)
Transferred to manufacturing or operating expenses	(34,999)
Scrapped	(1, 913)
Raw materials, end of year	(181, 814)
Raw materials used	1,970,745
Direct labor	228,428
Manufacturing expenses	628,253
Manufacturing cost	2,827,426
Work in process, beginning of year	206,200
Other adjustments	(126)
Work in process, end of year	(211,500)
Cost of finished goods	2,822,000
Finished goods, beginning of year	317,302
Finished goods purchased	911,778
Other adjustments	83
Transferred to manufacturing or operating expenses	(2,601)
Transferred to equipment	(28, 894)
Scrapped	(10, 734)
Finished goods, end of year	(323, 265)
Cost of production and marketing	3,685,669
Merchandise, beginning of year	84,116
Merchandise purchased	410,429
Merchandise, end of year	(95, 944)
Transferred to manufacturing or operating
expenses Other adjustments	(63)
Cost of merchandise sold	(25, 595)
Cost of raw materials sold	372,943
Scrapped	358,279 12,647
Revenue from sale of scraps	(6, 249)
Total	\$ 4,423,289

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

Item	Selling Expenses	General and Administra- tive Expenses	Research and Development Expenses	Expected Credit Gain	Total
Payroll expense	17,094 \$	82,130 $\mathbb{S}$	\$113,739	\$ $\overline{\phantom{a}}$	\$212,963
Export fee	88,254				88,254
Traveling expense	4,777	3,956	10,140		18,873
Freight expense	20,828	21	1,486	$\qquad \qquad \blacksquare$	22,335
Examination expense	$\overline{\phantom{m}}$		23,873		23,873
Entertainment expenses	9,749	6,324	167		16,240
Insurance expenses	1,375	5,857	10,627	$\overline{\phantom{a}}$	17,859
Depreciation expenses	$\frac{1}{2}$	16,272	1,178	$\overline{\phantom{a}}$	17,450
Royalty expenses		8,603	715	$\frac{1}{2}$	9,318
Pension expense	699	3,065	5,407	-	9,171
ECLs write-off	۰			665	665
Others	41,743	44,446	32,660		118,849
	\$184,519	\$170,674	\$199,992	S 665	\$555,850

TA YIH INDUSTRIAL CO., LTD.

STATEMENT OF EMPLOVEE BENEFITS, DEPRECIATION AND AMORTIZATION
FOR THE YEAR ENDED DECEMBER 31, 2019
(In Thousands of New Taiwan Dollars)

		Year Ended December 31, 2019			Year Ended December 31, 2018
	Operating Costs Classified as	Operating Expenses Classified as	Total	Operating Costs Classified as	Operating Expenses Classified as	Total
Employee benefits
Salaries
Labor and health insurance			581,610 53,939 27,729	370,590 36,604 19,694
Post-employment benefits	368,647 36,080 18,558	212,963 17,855 9,171			197,215 17,468 9,426	567,805 54,072 29,120 690
Remuneration of directors			69C
Others	18,737	6.642	25.379	19.45	6,420	25,871
	442,022	247,32	689,34	446.33	231,219	677,558
Depreciation	$-113,919$		131,369	137.498	14.20

Note:

• 1. As of December 31, 2019 and 2018, the Company had 892 and 918 employees, respectively. There were 6 non-employee directors in both years.
• 1. The Company's shares are traded on the Taiwan Stock Exchange. Additional disclosures are as follows:
• (1) Average labor costs for the years ended December 31, 2019 and 2018 were NT\$777 thousand and NT\$742 thousand, respectively.
• (2) Average salaries and bounes for the years ended December 31, 2019 and 2018 were NT\$656 thousand and NT\$623 thousand, respectively.
• (3) The average salaries and bounes increased by 5% year over year.